UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 


FORM 8-K
 


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: May 10, 2018
 


CINCINNATI BELL INC.
(Exact Name of Registrant as Specified in its Charter)
 

 
Ohio
 
001-8519
 
31-1056105
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)

221 East Fourth Street
Cincinnati, OH 45202
(Address of Principal Executive Office)

(513) 397-9900
(Registrant’s telephone number, including area code)
 

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
   
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act.­­ ☐


 

 
ITEM 1.01– ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Amended Receivables Securitization Program

On May 10, 2018 (the “Closing Date”), Cincinnati Bell Inc. (the “Company”) and certain of its U.S. and Canadian subsidiaries amended the Company’s accounts receivables securitization program with certain lenders, letter of credit participants, group agents, and PNC Bank, National Association (the “Amended Receivables Securitization Program”).  Pursuant to the Amended Receivables Securitization Program, (a) the Company and certain of its U.S. subsidiaries will sell, convey, transfer and assign certain accounts receivables and related rights (the “U.S. Accounts Receivable”) to Cincinnati Bell Funding LLC, a Delaware limited liability company and a wholly owned special purpose subsidiary of the Company (“CB Funding”) and (b) certain Canadian subsidiaries of the Company will sell, convey, transfer and assign certain accounts receivables and related rights (the “Canadian Accounts Receivable”) to Cincinnati Bell Funding Ltd., an Ontario corporation and a wholly owned special purpose subsidiary of the Company (“CB Funding Canada”).  Each of CB Funding and CB Funding Canada will in turn borrow loans and obtain letters of credit from certain lenders, with such loans and letters of credit being secured by a grant of a security interest in the pooled U.S. Accounts Receivable and the Canadian Accounts Receivable (the “Receivables Pool”) to PNC Bank, National Association.  In addition, CB Funding may, from time to time, sell certain U.S. Accounts Receivable directly to PNC Bank, National Association at a discount.  The borrowing availability under the Amended Receivables Securitization Program for loans and letters of credit will be $250,000,000 in the aggregate, and the outstanding principal amount of U.S. Accounts Receivable sold directly to PNC Bank, National Association by CB Funding shall not exceed $80,000,000 in the aggregate at any time.

The purchase of the U.S. Accounts Receivable by CB Funding will be pursuant to a Second Amended and Restated Purchase and Sale Agreement dated as of the Closing Date (the “U.S. Purchase and Sale Agreement”), among the Company as Servicer, CB Funding and the Originators identified therein (the “U.S. Originators”).  The U.S. Purchase and Sale Agreement amends and supersedes the Company’s Amended and Restated Purchase and Sale Agreement originally dated as of June 6, 2011, among the Company as Servicer, CB Funding and the Originators identified therein, and adds OnX USA LLC as an Originator.  The purchase price for the U.S. Accounts Receivable will be based on an agreed upon discount to the face value of the U.S. Accounts Receivable.  The performance of the U.S. Originators is guaranteed by the Company.  The U.S. Purchase and Sale Agreement contains representations, warranties, covenants and indemnities customary for agreements of this type.

The purchase of the Canadian Accounts Receivable by CB Funding Canada will be pursuant to a Canadian Purchase and Sale Agreement dated as of the Closing Date (the “Canadian Purchase and Sale Agreement”), among CB Funding Canada, as Purchaser, OnX Enterprise Solutions Ltd., as Servicer, and the Originators identified therein (the “Canadian Originators”).  The purchase price for the Canadian Accounts Receivable will be based on an agreed upon discount to the face value of the Canadian Accounts Receivable.  The performance of the Canadian Originators is guaranteed by the Company.  The Canadian Purchase and Sale Agreement contains representations, warranties, covenants and indemnities customary for agreements of this type.

The creation of the Receivables Pool and the funding of the Amended Receivables Securitization Program will be pursuant to a Receivables Financing Agreement dated as of the Closing Date (the “Receivables Financing Agreement”), among CB Funding and CB Funding Canada, as Borrowers, the Company and OnX Enterprise Solutions Ltd., as Servicers, the Lenders, Letter of Credit Participants and Group Agents from time to time party thereto, PNC Bank, National Association, as Administrator and Letter of Credit Bank, and PNC Capital Markets LLC, as Structuring Agent.  The Receivables Financing Agreement amends and supersedes the Company’s Amended and Restated Receivables Purchase Agreement originally dated as of June 6, 2011, among the Company as Servicer, CB Funding as Seller, the various Purchaser Groups from time to time party thereto, PNC Bank, National Association, as Administrator, Swingline Lender and Letter of Credit Bank,  and PNC Capital Markets LLC as Structuring Agent by, among other things, adding CB Funding Canada as a Borrower, adding OnX Enterprise Solutions Ltd. as a Servicer, increasing the borrowing availability from $120,000,000 to $250,000,000, and extending the termination date to May 10, 2021.  The obligations under the Receivables Financing Agreement are secured by granting PNC Bank, National Association, in their capacity as Administrator under the Receivables Financing Agreement, a first priority interest in (a) the U.S. Accounts Receivable owned by CB Funding and (b) the Canadian Accounts Receivable owned by CB Funding Canada.
 


 
Any sales of U.S. Accounts Receivables directly to PNC Bank, National Association at a discount will be pursuant to a Receivables Purchase Agreement dated as of the Closing Date (the “Receivables Purchase Agreement”), among CB Funding as Seller, the Company as Servicer, PNC Bank, National Association as Buyer, and PNC Capital Markets LLC, as Structuring Agent.  The Receivables Purchase Agreement contains representations, warranties, covenants and indemnities customary for agreements of this type.

The foregoing descriptions of each of (a) the U.S. Purchase and Sale Agreement, (b) the Canadian Purchase and Sale Agreement, (c) the Receivables Financing Agreement and (d) the Receivables Purchase Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of each, copies of which are filed as Exhibit 99.1, Exhibit 99.2, Exhibit 99.3 and Exhibit 99.4, respectively, and are incorporated herein by reference.

ITEM 2.03– CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

The disclosure set forth under Item 1.01 above is incorporated herein by reference.

ITEM 9.01– FINANCIAL STATEMENTS AND EXHIBITS

(d)
Exhibit No.
 
Description
99.1
 
Second Amended and Restated Purchase and Sale Agreement dated as of May 10, 2018, among Cincinnati Bell Inc., as Servicer, Cincinnati Bell Funding LLC, and the Originators identified therein.
99.2
 
Canadian Purchase and Sale Agreement dated as of May 10, 2018, among Cincinnati Bell Funding Canada Ltd., as Purchaser, OnX Enterprise Solutions Ltd., as Servicer, and the Originators identified therein.
99.3
 
 
Receivables Financing Agreement dated as of May 10, 2018, among Cincinnati Bell Funding LLC and Cincinnati Bell Funding Canada Ltd., as Borrowers, Cincinnati Bell Inc. and OnX Enterprise Solutions Ltd., as Servicers, the Lenders, Letter of Credit Participants and Group Agents from time to time party thereto, PNC Bank, National Association, as Administrator and Letter of Credit Bank, and PNC Capital Markets LLC, as Structuring Agent.
99.4
 
Receivables Purchase Agreement dated as of May 10, 2018, among Cincinnati Bell Funding LLC, as Seller, Cincinnati Bell Inc., as Servicer, PNC Bank, National Association, as Buyer, and PNC Capital Markets LLC, as Structuring Agent.
 

 
EXHIBIT INDEX
 
Exhibit No.
 
Description
 
 
 
 
 

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  CINCINNATI BELL INC.  
     
       
Date: May 10, 2018
By:
/s/ Christopher J. Wilson       
    Christopher J. Wilson  
    Vice President, General Counsel  
       
 
 

 
Exhibit 99.1
 
 
SECOND AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT


Dated as of May 10, 2018


among


VARIOUS ENTITIES LISTED ON SCHEDULE I,
as the Originators


CINCINNATI BELL FUNDING LLC,


and


CINCINNATI BELL INC.,
as Servicer
 
 

TABLE OF CONTENTS
 
 
Clause
Subject Matter
Page
 
ARTICLE I                AGREEMENT TO PURCHASE AND SELL
3
 
SECTION 1.1
 
Agreement To Purchase and Sell
3
 
SECTION 1.2
 
Timing of Purchases
4
 
SECTION 1.3
 
Consideration for Purchases and Contributions
4
 
SECTION 1.4
 
Purchase and Sale Termination Date
4
 
SECTION 1.5
 
Intention of the Parties
5
ARTICLE II               PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
5
 
SECTION 2.1
 
Purchase Report
5
 
SECTION 2.2
 
Calculation of Purchase Price
6
ARTICLE III              PAYMENT OF PURCHASE PRICE
6
 
SECTION 3.1
 
Contribution of Receivables and Initial Purchase Price Payment
6
 
SECTION 3.2
 
Subsequent Purchase Price Payments
7
 
SECTION 3.3
 
Settlement as to Specific Securitized Receivables and Dilution
8
 
SECTION 3.4
 
Settlement as to Specific Monetized Receivables
9
 
SECTION 3.5
 
Reconveyance of Receivables
10
 
SECTION 3.6
 
Letters of Credit
10
ARTICLE IV             CONDITIONS PRECEDENT 11
 
SECTION 4.1
 
Conditions Precedent to Effectiveness of this Agreement
11
 
SECTION 4.2
 
Certification as to Representations and Warranties
12
 
SECTION 4.3
 
Additional Originators
12
ARTICLE V               REPRESENTATIONS AND WARRANTIES OF THE TRANSFERORS
13
 
SECTION 5.1
 
Existence and Power
13
 
SECTION 5.2
 
Company and Governmental Authorization, Contravention
13
 
SECTION 5.3
 
Binding Effect of Agreement
13
 
SECTION 5.4
 
Accuracy of Information
13
 
SECTION 5.5
 
Actions, Suits
14
 
SECTION 5.6
 
Taxes
14
 
SECTION 5.7
 
Compliance with Applicable Laws
14
 
SECTION 5.8
 
Reliance on Separate Legal Identity
14
 
 
-i-

 
 
Clause
Subject Matter
Page
 
 
SECTION 5.9
 
Investment Company
14
 
SECTION 5.10
 
Perfection
14
 
SECTION 5.11
 
Creation of Receivables
15
 
SECTION 5.12
 
Credit and Collection Policy
15
 
SECTION 5.13
 
Enforceability of Contracts
15
 
SECTION 5.14
 
Location and Offices
15
 
SECTION 5.15
 
Good Title
15
 
SECTION 5.16
 
Names
15
 
SECTION 5.17
 
Nature of Receivables
15
 
SECTION 5.18
 
Bulk Sales, Margin Regulations, No Fraudulent Conveyance, Investment Company
16
 
SECTION 5.19
 
Financial Condition
16
 
SECTION 5.20
 
Licenses, Contingent Liabilities, and Labor Controversies
16
 
SECTION 5.21
 
Anti-Money Laundering/International Trade Law Compliance
16
ARTICLE VI              COVENANTS OF THE TRANSFERORS
16
 
SECTION 6.1
 
Affirmative Covenants
16
 
SECTION 6.2
 
Reporting Requirements
18
 
SECTION 6.3
 
Negative Covenants
19
 
SECTION 6.4
 
Substantive Consolidation
21
ARTICLE VII            ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF RECEIVABLES
22
 
SECTION 7.1
 
Rights of the Company
22
 
SECTION 7.2
 
Responsibilities of the Transferors
23
 
SECTION 7.3
 
Further Action Evidencing Purchases
23
 
SECTION 7.4
 
Application of Collections
24
ARTICLE VIII           PURCHASE AND SALE TERMINATION EVENTS
24
 
SECTION 8.1
 
Purchase and Sale Termination Events
24
 
SECTION 8.2
 
Remedies
25
ARTICLE IX             INDEMNIFICATION
26
 
SECTION 9.1
 
Indemnities by the Transferors
26
ARTICLE X               MISCELLANEOUS
26
 
 
-ii-

 
 
Clause
Subject Matter
Page
 
 
SECTION 10.1
 
Amendments, etc.
26
 
SECTION 10.2
 
Notices, etc.
27
 
SECTION 10.3
 
No Waiver; Cumulative Remedies
27
 
SECTION 10.4
 
Binding Effect; Assignability
27
 
SECTION 10.5
 
Governing Law
27
 
SECTION 10.6
 
Costs, Expenses and Taxes
27
 
SECTION 10.7
 
SUBMISSION TO JURISDICTION
28
 
SECTION 10.8
 
WAIVER OF JURY TRIAL
28
 
SECTION 10.9
 
Captions and Cross References; Incorporation by Reference
29
 
SECTION 10.10
 
Execution in Counterparts
29
 
SECTION 10.11
 
Acknowledgment and Agreement
29
 
SECTION 10.12
 
No Proceeding
29
 
SECTION 10.13
 
Limited Recourse
30

 
-iii-

 
 
SCHEDULES
Schedule I
List of Originators
Schedule II
State of Organization of Each Transferor
Schedule III
Location of Books and Records of Transferors
Schedule IV
Trade Names
   
 
EXHIBITS
Exhibit A
Form of Purchase Report
Exhibit B
Form of Company Note
Exhibit C
Form of Joinder Agreement
 
-iv-

 
THIS SECOND AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT dated as of May 10, 2018 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is entered into among the VARIOUS ENTITIES LISTED ON SCHEDULE I HERETO (each, an “Originator”; and collectively, “Originators”), CINCINNATI BELL FUNDING LLC, a Delaware limited liability company (the “Company”) and CINCINNATI BELL INC., an Ohio corporation (“CB”) as Servicer (in such capacity, the “Servicer”).
 
DEFINITIONS
 
Unless otherwise indicated herein, capitalized terms used and not otherwise defined in this Agreement are defined in Exhibit I to the Receivables Financing Agreement dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Receivables Financing Agreement”), among the Company and Cincinnati Bell Funding Canada Ltd., as Borrowers, CB and Onx Enterprise Solutions Ltd., as initial Servicers, the various Lenders and Group Agents from time to time party thereto, and PNC Bank, National Association, as Administrator and LC Bank or, if not defined therein or if the context so requires, the Receivables Purchase Agreement dated as of the date hereof (as amended, restated, modified or otherwise supplemented from time to time, the “Receivables Purchase Agreement”), among the Company, as Seller thereunder, CB, as Servicer thereunder, and PNC Bank, National Association, as Buyer thereunder (in such capacity, the “Receivables Buyer”).  For purposes of this Agreement, the following capitalized terms shall have the following meanings assigned thereto:
 
Agent” means the Administrator and the Receivables Buyer.
 
Agreement” has the meaning assigned to such term in the preamble hereto.
 
Collections” shall mean all amounts constituting “Collections” (as such term is defined in the Receivables Financing Agreement) or “Monetized Receivable Collections” (as such term is defined in the Receivables Financing Agreement).
 
CB” has the meaning assigned to such term in the preamble hereto.
 
Company” has the meaning assigned to such term in the preamble hereto.
 
Contributed Receivables” has the meaning assigned to such term in Section 1.1(a).
 
Event of Repurchase” has the meaning assigned to such term in Section 3.4(b).
 
Merged Entity” has the meaning assigned to such term in Section 1.1(b).
 
Original Closing Date” has the meaning assigned to such term in Section 4 of the Background hereto.
 
Originator” has the meaning assigned to such term in the preamble hereto.
 

 
Restated Purchase Agreement” has the meaning assigned to such term in Section 5 of the Background hereto.
 
Securitized Receivable” means, at any time of determination, any Receivable that is not then a Monetized Receivable.
 
Servicer” has the meaning assigned to such term in the preamble hereto.
 
Transaction Documents” shall mean any documentation constituting a “Transaction Document” (as such term is defined in the Receivables Financing Agreement) or a “Transaction Document” (as such term is defined in the Receivables Purchase Agreement).
 
Transferor” has the meaning assigned to such term in Section 4 of the Background hereto.
 
All references herein to months are to calendar months unless otherwise expressly indicated.
 
BACKGROUND:
 
1.            The Company is a bankruptcy-remote special purpose limited liability company, all of the issued and outstanding limited liability company interests of which are owned by CB or an entity directly or indirectly owned by CB;
 
2.            The Originators generate Receivables in the ordinary course of their businesses;
 
3.            The Originators wish to sell Receivables to the Company, and the Company is willing to purchase Receivables from the Originators, on the terms and subject to the conditions set forth herein;
 
4.            Each of the Originators and CB (each a “Transferor”) and the Company intend this transaction to be a true sale or true contribution, as the case may be, of Receivables by each Transferor to the Company, providing the Company with the full benefits of ownership of the Receivables, and the Transferors and the Company do not intend the transactions hereunder to be a loan from the Company to any Transferor; and
 
5.            The parties hereto are parties to that certain Amended and Restated Purchase and Sale Agreement dated as of June 6, 2011 (as amended, the “Restated Purchase Agreement”), which itself restated that certain Purchase and Sale Agreement, dated as of March 23, 2007 (the “Original Closing Date”).  This Agreement amends and restates in its entirety, as of the Closing Date, the Restated Purchase and Sale Agreement.  Upon the effectiveness of this Agreement, the terms and provisions of the Restated Purchase and Sale Agreement shall, subject to this paragraph, be superseded hereby in their entirety.  Notwithstanding the amendment and restatement of the Restated Purchase and Sale Agreement by this Agreement, (a) the Transferors shall continue to be liable to the Company and any other Purchase and Sale Indemnified Party (as such term is defined in the Restated Purchase and Sale Agreement) for fees and expenses which are accrued and unpaid under the Restated Purchase and Sale Agreement on the date hereof (collectively, the “Restated Purchase and Sale Agreement Outstanding Amounts”) and all
 
2


agreements to indemnify such parties in connection with events or conditions arising or existing prior to the effective date of this Agreement and (b) the security interest created under the Restated Purchase and Sale Agreement shall remain in full force and effect as security for such Restated Purchase and Sale Agreement Outstanding Amounts until such Restated Purchase and Sale Agreement Outstanding Amounts shall have been paid in full.  Upon the effectiveness of this Agreement, each reference to the Restated Purchase and Sale Agreement in any other document, instrument or agreement shall mean and be a reference to this Agreement.  Nothing contained herein, unless expressly herein stated to the contrary, is intended to amend, modify or otherwise affect any other instrument, document or agreement executed and/or delivered in connection with the Restated Purchase and Sale Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows:
 
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
 
SECTION 1.1  Agreement To Purchase and Sell.  On the terms and subject to the conditions set forth in this Agreement, each Originator, severally and for itself, agrees to sell to the Company, and the Company agrees to purchase from such Originator, from time to time on or after the Closing Date, but before the Purchase and Sale Termination Date (as defined in Section 1.4) with respect to such Originator, all of such Originator’s right, title and interest in and to:
 
(a)            each Receivable of such Originator that existed and was owing to such Originator at the closing of such Originator’s business on the Closing Date other than those Receivables originated by Cincinnati Bell Wireless, LLC that have been, prior to the Original Closing Date, assigned by Cincinnati Bell Wireless, LLC to Cincinnati Bell Wireless Company, and then assigned by Cincinnati Bell Wireless Company to CB and have been contributed by CB on the Original Closing Date to the Company (such assigned Receivables being herein referred to as, the “Contributed Receivables”);
 
(b)            each Receivable generated by such Originator after the Closing Date to, but excluding the Purchase and Sale Termination Date with respect to such Originator;
 
(c)            all rights to, but not the obligations of, such Originator under all Related Security with respect to any of the foregoing Receivables;
 
(d)            all monies due or to become due to such Originator with respect to any of the foregoing;
 
(e)            all books and records of such Originator to the extent related to any of the foregoing;
 
(f)            all Collections and other proceeds and products (as such terms are defined in the UCC) of any of the foregoing that are or were received by such Originator on or after the Closing Date, including, without limitation, all funds which either are
 
3


received by such Originator, the Company or the Servicer from or on behalf of the Obligors in payment of any amounts owed (including, without limitation, invoice price, finance charges, interest and all other charges) in respect of any of the above Receivables or are applied to such amounts owed by the Obligors (including, without limitation, any insurance payments that such Originator, the Company or the Servicer applies in the ordinary course of its business to amounts owed in respect of any of the above Receivables, and net proceeds of sale or other disposition of repossessed goods or other collateral or property of the Obligors in respect of any of the above Receivables or any other parties directly or indirectly liable for payment of such Receivables); and

(g)            all right, title and interest (but not obligations) in and to the Lock-Box Accounts, into which any Collections or other proceeds with respect to such Receivables may be deposited, and any related investment property acquired with any such collections or other proceeds (as such term is defined in the applicable UCC).
 
All purchases and contributions, as the case may be, hereunder shall be made without recourse, but shall be made pursuant to, and in reliance upon, the representations, warranties and covenants of the Transferors set forth in this Agreement and each other Transaction Document.  No obligation or liability to any Obligor on any Receivable is intended to be assumed by the Company hereunder, and any such assumption is expressly disclaimed.  The Company’s foregoing commitment to purchase Receivables and the proceeds and rights described in clauses (c) through (g) with respect to such Receivables (collectively, the “Related Rights”) is herein called the “Purchase Facility.”  For the avoidance of doubt, the “Related Rights” with respect to the Contributed Receivables, shall include the proceeds and rights described in clauses (c) through (g) above.
 
For the avoidance of doubt, the parties hereto hereby ratify and confirm each purchase, sale and contribution made under the Restated Purchase and Sale Agreement prior to the Closing Date.
 
SECTION 1.2  Timing of Purchases.
 
(a)            Closing Date Purchases.  Each Originator’s entire right, title and interest in (i) each Receivable that existed and was owing to such Originator at the Closing Date (other than Contributed Receivables) and (ii) all Related Rights with respect thereto automatically shall be deemed to have been sold by such Originator to the Company on the Closing Date.
 
(b)            Subsequent Purchases.  After the Closing Date, until the Purchase and Sale Termination Date with respect to an Originator, each Receivable and the Related Rights generated by such Originator shall be deemed to have been sold by such Originator to the Company immediately (and without further action) upon the creation of such Receivable.
 
SECTION 1.3  Consideration for Purchases and Contributions.  On the terms and subject to the conditions set forth in this Agreement, the Company agrees to make Purchase Price payments to the Originators in accordance with Article III and to reflect all contributions in accordance with Section 3.1.
 
SECTION 1.4  Purchase and Sale Termination Date.  The “Purchase and Sale Termination Date” shall mean with respect to a Transferor, the earlier to occur of (a) the date the
 
4

 
Purchase Facility is terminated (or deemed terminated) with respect to such Transferor pursuant to Section 8.2 and (b) the Payment Date immediately following the day on which such Transferor, if such Transferor is an Originator, shall have given written notice to the Company, each Agent and each Group Agent at or prior to 10:00 a.m. (New York City time) that such Transferor desires to terminate the Purchase Facility with respect to such Transferor and terminate its rights, obligations and liabilities under this Agreement (other than those which expressly survive termination of this Agreement).
 
SECTION 1.5  Intention of the Parties.  It is the express intent of each Transferor and the Company (a) that each conveyance by such Transferor to the Company pursuant to this Agreement of the Receivables and Related Rights, including without limitation, all Receivables, if any, constituting general intangibles as defined in the UCC, and all Related Rights be construed as a valid and perfected sale or contribution, as applicable, and absolute assignment of such Receivables and Related Rights by such Transferor to the Company (rather than the grant of a security interest to secure a debt or other obligation of such Transferor) without recourse to such Transferor; provided, that each Transferor shall be liable to the Company for all representations, warranties and covenants made by such Transferor pursuant hereto and (ii) such sale or contribution, as applicable, does not constitute and is not intended to result in an assumption by the Company or any assignee thereof of any obligation of any Transferor or any other Person arising in connection with the Receivables and Related Rights or any other obligations of any Transferor and (b) that the right, title and interest in and to such Receivables and Related Rights conveyed to the Company be prior to the rights of and enforceable against all other Persons at any time, including, without limitation, lien creditors, secured lenders, purchasers and any Person claiming through such Transferor.  Each Transferor hereby authorizes the Company (and each Agent, as assignees of the Company) to file financing statements, continuation statements and amendments to financing statements in connection with the sales and contributions, as applicable, contemplated by this Agreement, and agrees and acknowledges that this Agreement is an authenticated record for purposes of the UCC.
 
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
 
SECTION 2.1  Purchase Report.  On the 20th day of each calendar month (or if such day is not a Business Day, the next occurring Business Day) (each such date, a “Monthly Purchase Report Date”), the Servicer shall deliver to the Company and each Transferor a report in substantially the form of Exhibit A (each such report being herein called a “Purchase Report”) setting forth, among other things:
 
(a)            Receivables purchased by the Company from each Originator during the calendar month immediately preceding the calendar month in which such Monthly Purchase Report Date occurs; and
 
(b)            the calculations of reductions of the Purchase Price or Contributed Value for any Receivables as provided in Sections 3.3 (a) and (b).
 
5

 
SECTION 2.2  Calculation of Purchase Price.  The “Purchase Price” to be paid to each Originator for the Receivables that are purchased hereunder from such Originator shall be determined in accordance with the following formula:
 
PP
=
OB x FMVD
     
where:
   
     
PP
=
Purchase Price for each Receivable as calculated on the relevant Payment Date.
     
OB
=
The Outstanding Balance of such Receivable on the relevant Payment Date.
     
FMVD
=
A Fair Market Value Discount percentage, initially equal to ninety-seven and a half percent (97.5%) of the Outstanding Balance of such Receivable on the relevant Payment Date; provided, however, that the Fair Market Value Discount percentage may be revised prospectively with the consent of the parties hereto (and, for the avoidance of doubt, without affecting the Purchase Price of Receivables previously sold hereunder) to the extent any such revision is necessary to have the Fair Market Value Discount percentage reflect the fair market value of Receivables to be sold hereunder after giving effect to such revision.
 
Payment Date” means (i) the Original Closing Date and (ii) each Business Day thereafter that the Originators are open for business.
 
ARTICLE III
PAYMENT OF PURCHASE PRICE
 
SECTION 3.1  Contribution of Receivables and Initial Purchase Price Payment.
 
(a)            On the Original Closing Date, CB contributed to the capital of the Company, Contributed Receivables having an aggregate principal amount at least equal to $4,325,682, together with the associated Related Rights, and the Company accepted such contribution.
 
(b)            On the terms and subject to the conditions set forth in this Agreement, the Company paid to each Originator the Purchase Price for the purchases made from such Originator after the Original Closing Date partially in cash (in an amount agreed between the Company and such Originator and set forth in the initial Purchase Report) and partially by issuing a promissory note (it being understood that the Company paid such Purchase Price on the Original Closing Date solely by issuing such a promissory note) in the form of Exhibit B to such Originator with an initial principal balance equal to the remaining Purchase Price (each such promissory note, as it may be amended, supplemented, endorsed or otherwise modified from time to time, together with all promissory notes issued from time to time in substitution therefor
 
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or renewal thereof in accordance with the Transaction Documents, each being herein called a “Company Note”).
 
SECTION 3.2  Subsequent Purchase Price Payments.  On each Payment Date subsequent to the Closing Date, on the terms and subject to the conditions set forth in this Agreement, the Company shall pay to each Originator the Purchase Price for the Receivables generated by such Originator on such Payment Date:
 
(i)            First, in cash to the extent the Company has cash available therefor (and such payment is not prohibited under the Receivables Financing Agreement or Receivables Purchase Agreement) and/or, if requested by such Originator, by causing the LC Bank to issue one or more Letters of Credit in accordance with Section 3.6 and on the terms and subject to the conditions of this Article III and each of the Receivables Financing Agreement and Receivables Purchase Agreement;  and
 
(ii)            Second, to the extent any portion of the Purchase Price remains unpaid, the principal amount outstanding under the applicable Company Note shall be automatically increased by an amount equal to such remaining Purchase Price in accordance with the applicable Company Note.
 
Notwithstanding the foregoing, all amounts paid by the Company to any Originator shall be allocated first to the payment of accrued and unpaid interest on the Company Note of such Originator and second to the repayment of the principal outstanding on the Company Note of such Originator to the extent of such outstanding principal thereof as of the date of such payment before such amounts may be allocated for any other purpose.  The applicable Servicer shall make all appropriate record keeping entries with respect to each of the Company Notes to reflect the foregoing payments and reductions made pursuant to Section 3.3, reductions on account of repayments of the principal amount of the Company Notes and accrued interest on the Company Notes and the applicable Servicer’s books and records shall constitute rebuttable presumptive evidence of the principal amount of, and accrued interest on, each of the Company Notes at any time.  Each Originator hereby irrevocably authorizes the applicable Servicer to mark the Company Notes “CANCELED” and to return such Company Notes to the Company upon the final payment thereof after the occurrence of the Purchase and Sale Termination Date with respect to such Originator.
 
Notwithstanding the foregoing, if, as of any date (the “Determination Date”), after giving effect to payments of such Purchase Price in accordance with Section 3.2, (x) the sum of the aggregate stated amount of Letters of Credit issued on behalf of any Originator or its designee during the period from the Original Closing Date to the Determination Date plus any related fees and expenses payable by the Company in connection with the issuance of such Letters of Credit plus the aggregate of the amounts of indebtedness under the Company Note payable to such Originator that remain unpaid for more than ninety (90) days during such period (the “Aged Amounts”) would exceed (y) an amount equal to 25% of the aggregate Purchase Price payable by the Company to such Originator for all Receivables generated by such Originator during such period, the Company shall pay the Purchase Price for such Receivable in cash and/or make a prepayment of such Aged Amounts to the extent necessary such that the sum of the amounts described in clause (x) above would not exceed the amount in clause (y) above.
 
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In the event an Originator requests that any purchases be paid for by issuance of a Letter of Credit, such Originator shall on a timely basis provide the Company with such information as is necessary for the Company to obtain such Letter of Credit from the LC Bank.  None of CB, any Originator nor any Affiliate thereof (other than the Company) shall have any reimbursement or recourse obligations in respect of any Letter of Credit.
 
SECTION 3.3  Settlement as to Specific Securitized Receivables and Dilution.
 
(a)            If, on the day of purchase or contribution, as the case may be, of any Securitized Receivable from a Transferor hereunder, any of the representations or warranties set forth in Sections 5.10, 5.15 and 5.17 was untrue with respect to such Securitized Receivable, then the Purchase Price (or in the case of a Contributed Receivable, the Outstanding Balance of such Securitized Receivable (the “Contributed Value”)), with respect to such Securitized Receivable shall be reduced by an amount equal to the Outstanding Balance of such Securitized Receivable and shall be accounted to such Transferor as provided in paragraph (c) or (d), as applicable, below; provided, that if the Company thereafter receives payment on account of Collections due with respect to such Securitized Receivable, the Company promptly shall deliver such funds to such Transferor.
 
(b)            If, on any day, the Outstanding Balance of any Securitized Receivable (including any Contributed Receivable) purchased or contributed hereunder is reduced or adjusted as a result of any defective, rejected or returned goods or services, or any revision, cancellation, allowance, discount or other adjustment made by a Transferor or any Affiliate of such Transferor (other than the Company), or the Servicer or any Affiliate of the Servicer (other than the Company), or any setoff or dispute between a Transferor or any Affiliate of such Transferor (other than the Company), or the Servicer or any Affiliate of the Servicer (other than the Company) and an Obligor (except any such revision, cancellation, allowance, discount or other adjustment made in settlement of such Securitized Receivable resulting from the financial inability of the applicable Obligor to pay such Securitized Receivable and, in the case of all Securitized Receivables (other than Specified Receivables), made in accordance with the Credit and Collection Policies), then the Purchase Price or Contributed Value, as the case may be, with respect to such Securitized Receivable shall be reduced by the amount of such net reduction and shall be accounted to such Transferor as provided in paragraph (c) or (d), as applicable, below.
 
(c)            In the case of any Securitized Receivable sold by an Originator to the Company hereunder, any reduction in the Purchase Price of such Securitized Receivable pursuant to paragraph (a) or (b) above shall be applied as a credit for the account of the Company against the Purchase Price of Receivables subsequently purchased by the Company from such Originator hereunder; provided, however if there have been no purchases of Receivables from such Originator (or insufficiently large purchases of Receivables) to create a Purchase Price sufficient to so apply such credit against, the amount of such credit:
 
(i)            to the extent of any outstanding principal balance under the Company Note payable to such Originator, shall be deemed to be a payment under, and shall be deducted from the principal amount outstanding under, the Company Note payable to such Originator; and
 
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(ii)            after making any deduction pursuant to clause (i) above, shall be paid in cash to the Company by such Originator in the manner and for application as described in the following proviso;
 
provided, further, that at any time (y) when a Event of Default exists under the Receivables Financing Agreement or (z) on or after the Purchase and Sale Termination Date with respect to such Originator, the amount of any such credit shall be paid by such Originator to the Company by deposit in immediately available funds into a Lock-Box Account for application by the Servicer to the same extent as if Collections of the applicable Receivable in such amount had actually been received on such date.
 
(d)            In the case of any Receivable contributed by CB to the Company hereunder, the amount of any reduction in the Contributed Value of such Receivable pursuant to paragraph (a) or (b) above, shall be paid by CB in cash, in immediately available funds, into a Lock-Box Account for application by the Servicer in accordance with the terms of the Receivables Financing Agreement.
 
SECTION 3.4  Settlement as to Specific Monetized Receivables.
 
(a)            If on any day the outstanding balance of a Monetized Receivable is reduced (but not cancelled) as a result of any Dilution, the Purchase Price for such Receivable shall be reduced by an amount equal to the amount of such reduction.  If on any day a Monetized Receivable is cancelled (or reduced to zero) as a result of any Dilution, the Purchase Price for such Receivable shall be reduced by an amount equal to the amount of the Outstanding Purchase Amount of such Monetized Receivable (as determined immediately prior to such Dilution).  In the event of any such reduction in the Purchase Price, such Originator shall deposit an amount equal to the amount by which the Purchase Price which reduced into the account so designated by the Receivables Buyer by no later than the next Weekly Settlement Date after such Originator or Servicer obtains knowledge or notice thereof.
 
(b)            If any of the following events (each, an “Event of Repurchase”) occurs with respect to a Monetized Receivable or Related Monetized Assets:
 
(i)            any representation or warranty made by such Originator with respect to such Monetized Receivable or Related Monetized Assets shall be materially inaccurate, incorrect or untrue on any date as of which it is made or deemed to be made;
 
(ii)            such Originator or Servicer fails to perform or observe any other term, covenant or agreement with respect to such Monetized Receivable set forth in any Transaction Document and such failure shall or could reasonably be expected to have an adverse effect on the ability to collect the Net Invoice Amount of such Monetized Receivable on the Due Date thereof;
 
(iii)            any (A) such Originator or Servicer instructs the related Account Debtor to pay any amount with respect to such Monetized Receivable to an account other than the applicable Lock-Box Account or the Buyer’s Account or (B) the related Account Debtor refuses to make any payment to the applicable Lock-Box Account or the Buyer’s Account; or
 
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(iv)            a Dispute has arisen with respect to any Monetized Receivable (it being understood that if a Monetized Receivable remains unpaid for thirty (30) days beyond its Due Date and such delay is not caused by the bankruptcy, insolvency, or financial inability of the relevant Account Debtor to pay, a Dispute shall be deemed to have arisen with respect to such Monetized Receivable),
 
then, such Originator shall immediately deliver notice thereof to the Receivables Buyer and, at the time, in the manner and otherwise as hereinafter set forth, repurchase such Monetized Receivable and Related Monetized Assets (or, if the Receivables Buyer agrees in writing, the portion subject to Dispute) at the Receivables Buyer’s option and demand.  The repurchase price for a Monetized Receivable shall be the amount equal to the Outstanding Purchase Amount relating to such Monetized Receivable at such time and shall be paid to the account so designated by the Receivables Buyer by no later than the next Weekly Settlement Date following demand therefor by the Receivables Buyer.  Upon the payment in full of the repurchase price with respect to a Monetized Receivable and Related Monetized Assets, such Monetized Receivable and Related Monetized Assets shall hereby be, and be deemed to be, repurchased by the Company from the Receivables Buyer without recourse to or warranty by the Receivables Buyer.
 
SECTION 3.5    Reconveyance of Receivables.  In the event that a Transferor has paid to the Company the full Outstanding Balance of any Receivable pursuant to Section 3.3 or Section 3.4, the Company shall reconvey such Receivable to such Transferor, without representation or warranty, but free and clear of all liens, security interests, charges, and encumbrances created by the Company.
 
SECTION 3.6    Letters of Credit.
 
(a)            Upon the request of CB (acting as agent for the Originators as described in subsection (b) below), and on the terms and conditions for issuing Letters of Credit under the Receivables Financing Agreement (including any limitations therein on the amount of any such issuance), the Company agrees to cause the LC Bank to issue, on the Purchase Dates specified by CB (on behalf of the Originators), Letters of Credit on behalf of any Originator or any Originator’s designee, including CB (which designee shall be an Affiliate of the Company, the Originators and CB) in favor of the beneficiaries specified by CB (on behalf of the Originators).  The aggregate stated amount of the Letters of Credit being issued on any Purchase Date on behalf of any Originator or its designee plus any related fees and expenses payable by the Company in connection with the issuance of the Letters of Credit shall constitute a credit against the aggregate Purchase Price payable by the Company to such Originator on such Purchase Date pursuant to Section 3.1.  To the extent that the aggregate stated amount of the Letters of Credit being issued on any Payment Date plus any related fees and expenses payable by the Company in connection with the issuance of the Letters of Credit exceeds the aggregate Purchase Price payable by the Company to any Originator on such Payment Date, such excess shall be deemed to be a reduction in the outstanding principal balance of (and, to the extent necessary, the accrued but unpaid interest on) the applicable Company Note payable to such Originator.  The aggregate stated amount of Letters of Credit to be issued on any Payment Date plus any related fees and expenses payable by the Company in connection with the issuance of the Letters of Credit shall not exceed the sum of the aggregate Purchase Price payable on such Payment Date to the
 
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Originators plus the aggregate outstanding principal balance of, and accrued but unpaid interest on, the Company Notes payable to the Originators on such Payment Date.  In the event that any such Letter of Credit issued pursuant to this Section 3.6 (i) expires or is cancelled or otherwise terminated with all or any portion of its stated amount undrawn, (ii) has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the Company’s Reimbursement Obligation in respect thereof is reduced for any reason other than by virtue of a payment made in respect of a drawing thereunder, then an amount equal to such undrawn amount, such decrease or such reduction, as the case may be, shall either be paid in cash to such Originator on the next Payment Date or, if the Company does not then have cash available therefor, shall be added to the outstanding principal balance of the Company Note issued to such Originator.  Under no circumstances shall any Originator (or any Affiliate thereof (other than the Company)) have any reimbursement or recourse obligations in respect of any Letter of Credit.
 
(b)            Each Originator appoints CB as its agent (on which appointment the Company, each Agent, the Group Agents and the Secured Parties may rely until such Originator provides contrary written notice to all of such Persons) to act on such Originator’s behalf to take all actions and to make all decisions in respect of the issuance, amendment and administration of the Letters of Credit, including requests for the issuance and extension of Letters of Credit and the allocation of the stated amounts of Letters of Credit against the Purchase Price owed to particular Originators and against the Company Notes issued to particular Originators.  In the event that CB requests a Letter of Credit hereunder, CB shall on a timely basis provide the Company with such information as is necessary for the Company to obtain such Letter of Credit from the LC Bank, and shall notify the relevant Originators, the Company and the Administrator of the allocations described in the preceding sentence.  Such allocations shall be binding on the Company and each Originator, absent manifest error.
 
(c)            Each Originator agrees to be bound by the LC Bank’s interpretations of any Letter of Credit issued for the Company and by the LC Bank’s written regulations and customary practices relating to letters of credit, in each case subject to the terms and conditions set forth in the Receivables Financing Agreement.
 
ARTICLE IV
CONDITIONS PRECEDENT
 
SECTION 4.1  Conditions Precedent to Effectiveness of this Agreement.  The effectiveness of this Agreement is subject to the condition precedent that the Company and the each Agent (as the Company’s assignees) and each Group Agent shall have received, on or before the Closing Date, the following, each (unless otherwise indicated) dated on or before the Closing Date, and each in form and substance reasonably satisfactory to the Company and the each Agent (as the Company’s assignees) and each Group Agent:
 
(a)            A copy of the resolutions of the board of directors or managers of each Originator approving this Agreement and the other Transaction Documents to be executed and delivered by it and the transactions contemplated hereby and thereby, certified by the Secretary or Assistant Secretary of such Originator;
 
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(b)            Good standing certificates for each Originator issued as of a recent date acceptable to the Company and each Agent (as the Company’s assignees) by the Secretary of State of the jurisdiction of such Originator’s organization;
 
(c)            A certificate of the Secretary or Assistant Secretary of each Originator certifying the names and true signatures of the officers authorized on such Person’s behalf to sign this Agreement and the other Transaction Documents to be executed and delivered by it (on which certificate the Servicer, the Company and each Agent (as the Company’s assignees) may conclusively rely until such time as the Servicer, the Company and each Agent (as the Company’s assignees) shall receive from such Person a revised certificate meeting the requirements of this paragraph (c));
 
(d)            The certificate or articles of incorporation or other organizational document of each Originator, together with a copy of the by-laws of such Originator, each duly certified by the Secretary or an Assistant Secretary of such Originator; and
 
(e)            Evidence (i) of the execution and delivery by each of the parties thereto of each of the other Transaction Documents to be executed and delivered by it in connection herewith and (ii) that each of the conditions precedent to the execution, delivery and effectiveness of such other Transaction Documents has been satisfied to the Company’s and each Agent’s (as the Company’s assignees) satisfaction.
 
SECTION 4.2  Certification as to Representations and Warranties.  Each Originator, by accepting the Purchase Price related to each purchase of Receivables generated by such Originator, shall be deemed to have certified that the representations and warranties contained in Article V, as from time to time amended in accordance with the terms hereof, are true and correct in all material respects on and as of such day as though made on and as of such day, except for representations and warranties which apply as to an earlier date (in which case such representations and warranties shall be true and correct as of such date).
 
SECTION 4.3  Additional Originators.  Additional Persons may be added as Originators hereunder, with the prior written consent of the Company, each Agent and each Group Agent; provided that the following conditions are satisfied on or before the date of such addition:
 
(a)            The Servicer shall have given the Company, each Agent and each Group Agent at least thirty (30) days prior written notice of such proposed addition and the identity of the proposed additional Originator and shall have provided such other information with respect to such proposed additional Originator as any Agent or any Group Agent may reasonably request;
 
(b)            such proposed additional Originator has executed and delivered to the Company, each Agent and each Group Agent an agreement substantially in the form attached hereto as Exhibit C (a “Joinder Agreement”);
 
(c)            such proposed additional Originator has delivered to the Company and each Agent (as the Company’s assignees) and each Group Agent each of the documents with respect to such Originator described in Section 4.1 and, to the extent requested by the any Agent or any Group Agent, such opinions covering matters similar to the matters covered by the
 
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opinions delivered on the Closing Date, in form and substance reasonably satisfactory to the Company, each Agent (as the Company’s assignees) and each Group Agent, from external counsel reasonably satisfactory to each Agent and each Group Agent (it being understood that external counsel that delivered opinions on the Closing Date shall be satisfactory to each Agent and each Group Agent for purposes of delivering similar opinions under this clause (c));
 
(d)            [reserved]; and
 
(e)            the Purchase and Sale Termination Date shall not have occurred and be continuing with respect to all Transferors then party to this Agreement.
 
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE TRANSFERORS
 
In order to induce the Company to enter into this Agreement and to make purchases and accept the contribution hereunder, each Transferor hereby makes the representations and warranties set forth in this Article V.
 
SECTION 5.1  Existence and Power.  Such Transferor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has all power and authority and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted, unless the failure to have such power, authority, licenses, authorizations, consents or approvals would not reasonably be expected to have a Material Adverse Effect.
 
SECTION 5.2  Company and Governmental Authorization, Contravention.  The execution, delivery and performance by such Transferor of this Agreement are within such Transferor’s company powers, have been duly authorized by all necessary company action, require no action by or in respect of, or filing with (other than the filing of the UCC financing statements and continuation statements contemplated hereunder), any governmental body, agency or official, and, do not contravene, or constitute a default under, any provision of applicable law or regulation or of the organizational documents of such Transferor or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Transferor (unless such contravention or default would not reasonably be expected to have a Material Adverse Effect) or result in the creation or imposition of any lien (other than liens in favor of the Company or any Agent under the Transaction Documents or other Permitted Adverse Claims) on assets of such Transferor or any of its Subsidiaries.
 
SECTION 5.3  Binding Effect of Agreement.  This Agreement and each of the other Transaction Documents to which it is a party constitutes the legal, valid and binding obligation of such Transferor enforceable against such Transferor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law.
 
SECTION 5.4  Accuracy of Information.  All information heretofore furnished in writing by such Transferor to the Company, any Agent or any Group Agent pursuant to or in connection with this Agreement or any other Transaction Document or any transaction contemplated hereby
 
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or thereby is, and all such information hereafter furnished by such Transferor to the Company, any Agent or any Group Agent in writing pursuant to this Agreement or any Transaction Document will be, true and accurate in all material respects on the date such information is stated or certified.
 
SECTION 5.5  Actions, Suits.  There are no actions, suits or proceedings pending or, to the best of such Transferor’s knowledge, threatened against or affecting such Transferor or any of its Affiliates or their respective properties, in or before any court, arbitrator or other body, which would reasonably be expected to have a Material Adverse Effect upon the ability of such Transferor (or such Affiliate) to perform its obligations under this Agreement or any other Transaction Document to which it is a party.
 
SECTION 5.6  Taxes.  Such Transferor has filed or caused to be filed all U.S. federal income tax returns and all other returns, statements, forms and reports for taxes, domestic or foreign, required to be filed by it and has paid all taxes payable by it which have become due or any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except (a) any taxes, fees, assessments and other charges that are being contested in good faith by appropriate proceedings and for which such Transferor has set aside on its books adequate reserves or (b) to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.
 
SECTION 5.7  Compliance with Applicable Laws.  Such Transferor is in compliance with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject if the failure to comply would reasonably be expected to have a Material Adverse Effect.  In addition, no Receivable sold or contributed, as the case may be, hereunder contravenes in any material respect any laws, rules or regulations applicable thereto or to such Transferor.
 
SECTION 5.8  Reliance on Separate Legal Identity.  Such Transferor acknowledges that each of the Credit Parties, the Group Agents and each Agent are entering into the Transaction Documents to which they are parties in reliance upon the Company’s identity as a legal entity separate from such Transferor.
 
SECTION 5.9  Investment Company.  Such Transferor is not an “investment company,” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
 
SECTION 5.10  Perfection.  Immediately preceding its sale or contribution, as applicable, of each Receivable hereunder, such Transferor was the owner of such Receivable sold or contributed or purported to be sold or contributed, as the case may be, free and clear of any Adverse Claims other than Permitted Adverse Claims, and each such sale or contribution, as applicable, hereunder constitutes a valid sale (or contribution), transfer and assignment of all of such Transferor’s right, title and interest in, to and under the Receivables sold or contributed, as applicable, by it, free and clear of any Adverse Claims other than Permitted Adverse Claims. On or before the date hereof and before the generation by such Originator of any new Receivable to be sold, contributed or otherwise conveyed hereunder, all financing statements and other documents, if any, required to be recorded or filed in order to perfect and protect the Company’s
 
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ownership interest in such Receivable against all creditors of and purchasers from such Transferor will have been duly filed in each filing office necessary for such purpose, and all filing fees and taxes, if any, payable in connection with such filings shall have been paid in full.
 
SECTION 5.11  Creation of Receivables.  If such Transferor is an Originator, it has exercised at least the same degree of care and diligence in the creation of the Receivables sold or otherwise transferred hereunder as it has exercised in connection with the creation of receivables originated by it and not so transferred hereunder.
 
SECTION 5.12  Credit and Collection Policy.  If such Transferor is an Originator, it has complied in all material respects with its Credit and Collection Policy in regard to each Receivable (other than Specified Receivables) sold by it hereunder and each related Contract, if any.
 
SECTION 5.13  Enforceability of Contracts.  Each Contract related to any Receivable sold or contributed, as applicable, by such Transferor hereunder is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the outstanding balance of such Receivable, enforceable against the Obligor in accordance with its terms, without being subject to any defense, deduction, offset or counterclaim, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law, and such Transferor has fully performed its obligations, if any, under such Contract.
 
SECTION 5.14  Location and Offices.  As of the date hereof, such Transferor’s location (as such term is defined in the applicable UCC) is at the address set forth on Schedule II hereto, and such location has not been changed for at least four months before the date hereof.  The offices where such Transferor keeps all records concerning the Receivables (other than Specified Receivables) are located at the addresses set forth on Schedule III hereto or such other locations of which the Company and each Agent (as the Company’s assignees) has been given written notice in accordance with the terms hereof.
 
SECTION 5.15  Good Title.  Upon the sale or other conveyance hereunder by such Transferor and on the Closing Date for then existing Receivables, the Company shall have a valid and perfected first priority ownership interest in each Receivable sold or contributed, as the case may be, to it hereunder, free and clear of any Adverse Claim other than Permitted Adverse Claims.
 
SECTION 5.16  Names.  Except as described in Schedule IV, such Transferor has not, within the past five (5) years, used any corporate or company names, tradenames or assumed names other than its name set forth on the signature pages of this Agreement.
 
SECTION 5.17  Nature of Receivables.  Each Receivable sold, transferred, contributed or assigned hereunder is an Eligible Receivable on the date of sale, transfer, contribution or assignment, unless otherwise specified in the first Information Package or Purchase Request that includes such Receivable.
 
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SECTION 5.18  Bulk Sales, Margin Regulations, No Fraudulent Conveyance, Investment Company.  No transaction contemplated hereby requires compliance with any bulk sales act or similar law.  No use of funds obtained by such Transferor hereunder will conflict with or contravene Regulation T, U or X of the Federal Reserve Board.  No purchase or contribution, as applicable, hereunder constitutes a fraudulent transfer or conveyance under any United States federal or applicable state bankruptcy or insolvency laws or is otherwise void or voidable under such or similar laws or principles or for any other reason.
 
SECTION 5.19  Financial Condition.
 
(a)            The consolidated balance sheet of CB and subsidiaries as of December 31, 2017, and the related consolidated statements of operations, shareowners’ equity (deficit) and comprehensive income (loss), and cash flows for the year ended December 31, 2017, copies of which have been furnished to the Company and each Agent (as the Company’s assignees), present fairly, in all material respects, the financial position of CB and subsidiaries as of such date, and the results of their operations and their cash flows for the period then ended, prepared pursuant to the rules and regulations of the Securities and Exchange Commission in accordance with accounting principles generally accepted in the United States of America.
 
(b)            On the date hereof, and on the date of each purchase or contribution, as the case may be, hereunder (both before and after giving effect to such purchase or contribution), such Transferor shall be Solvent.
 
SECTION 5.20  Licenses, Contingent Liabilities, and Labor Controversies.
 
(a)            Such Transferor has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, unless such failure would not reasonably be expected to have a Material Adverse Effect.
 
(b)            There are no labor controversies pending against such Transferor that have had (or would not reasonably be expected to have) a Material Adverse Effect.
 
SECTION 5.21  Anti-Money Laundering/International Trade Law Compliance.  No Covered Entity is a Sanctioned Person.  No Covered Entity, either in its own right or through any third party, (i) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (iii) engages in any dealings or transactions prohibited by any Anti-Terrorism Law.
 
ARTICLE VI
COVENANTS OF THE TRANSFERORS
 
SECTION 6.1  Affirmative Covenants.  From the date hereof until (i) in the case of an Originator, the first date following the Purchase and Sale Termination Date with respect to such Originator when all obligations of such Originator to the Company and its assigns have been satisfied in full or (ii) in the case of CB, the first date following the Purchase and Sale
 
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Termination Date with respect to all Transferors when all obligations of CB and each Originator to the Company and its assigns have been satisfied in full, each Transferor agrees that it will, unless each Agent and the Company shall otherwise consent in writing, perform the following:
 
(a)            General Information.  Such Transferor shall furnish to the Company, any Agent and each Group Agent such information as such Person may from time to time reasonably request.
 
(b)            Furnishing of Information and Inspection of RecordsSuch Transferor will furnish each Agent and each Group Agent from time to time such information with respect to the Receivables as any Agent or such Group Agent may reasonably request, except to the extent prohibited by applicable law or licenses.  Such Transferor will, at any time and from time to time during regular business hours with reasonable prior written notice, (i) at such Transferor’s expense, permit any Agent or any Group Agent, or their respective agents or representatives, (A) to examine and make copies of and abstracts from all books and records relating to the Receivables or Related Rights and (B) to visit the offices and properties of such Transferor for the purpose of examining such books and records, and to discuss matters relating to the Receivables, other Related Rights or such Transferor’s performance hereunder or under the other Transaction Documents to which it is a party with any of the officers, directors, employees or independent public accountants of such Transferor (provided that representatives of such Transferor are present during such discussions) having knowledge of such matters and (ii) without limiting the provisions of clause (i) above, from time to time during regular business hours, upon reasonable prior written notice from any Agent or the Group Agents, permit certified public accountants or other auditors acceptable to such Agent to conduct a review of its books and records with respect to the Receivables; provided, however, that such Transferor shall not be obligated to permit such examinations, visits or reviews under clauses (i) and (ii) above, together with any examinations, visits or reviews pursuant to Section 1(e) of Exhibit IV of the Receivables Financing Agreement or pursuant to the Receivables Purchase Agreement, more than three times per year (commencing upon and including the Closing Date) during such time that no Event of Default pursuant to the Receivables Financing Agreement or Purchase Termination Event pursuant to the Receivables Purchase Agreement has occurred and is continuing and no Transferor shall be obligated to pay or reimburse any Person for the expenses of more than one such examination or visit pursuant to clause (i) above (together with any examination or visit pursuant to Section 1(e)(i) of Exhibit IV of the Receivables Financing Agreement or pursuant to the Receivables Purchase Agreement) per year (commencing upon and including the Closing Date) during such time that no Event of Default pursuant to the Receivables Financing Agreement or Purchase Termination Event pursuant to the Receivables Purchase Agreement has occurred and is continuing.
 
(c)            Keeping of Records and Books.  If such Transferor is also an Originator, it will have and maintain (i) administrative and operating procedures (including an ability to recreate records if originals are destroyed), (ii) adequate facilities, personnel and equipment and (iii) all records and other information reasonably necessary for collection of the Receivables originated by such Transferor if it is also an Originator (including records adequate to permit the daily identification of each new such Receivable and all Collections of, and adjustments to, each existing such Receivable).  Such Transferor will give the Company, each Agent and each Group Agent prior notice of any change in such administrative and operating procedures that causes
 
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them to be materially different from the procedures described to the Company, each Agent and each Group Agent on or before the date hereof as such Transferor’s then existing or planned administrative and operating procedures for collecting Receivables.
 
(d)            Performance and Compliance with Receivables and ContractsSuch Transferor will at its expense timely and fully perform and comply with all provisions, covenants and other promises required to be observed by it under all Contracts or other documents or agreements related to the Receivables if the failure to perform or comply would reasonably be expected to have a Material Adverse Effect.
 
(e)            Credit and Collection PolicyIf such Transferor is also an Originator, it will comply in all material respects with its Credit and Collection Policy with regard to each Receivable (other than Specified Receivables) originated by such Transferor.
 
(f)            Receivable Purchase AgreementIf such Transferor is also an Originator, such Transferor will perform and comply with each covenant and other undertaking in the Receivables Financing Agreement or Receivables Purchase Agreement that the Company undertakes to cause such Originator to perform, subject to any grace periods for such performance provided for in the Receivables Financing Agreement or Receivables Purchase Agreement, as applicable.
 
(g)            Preservation of Existence.  Such Transferor shall preserve and maintain its existence as a corporation, partnership or limited liability company, as applicable, and all rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign corporation, partnership or limited liability company, as applicable, in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification would be reasonably expected to have a Material Adverse Effect.
 
(h)            Location of Records.  Such Transferor will keep its location (as such term is defined in the applicable UCC), and the offices where it keeps its records concerning or related to Receivables (other than Specified Receivables), at the address(es) referred to in Schedule II or Schedule III, respectively, or, upon thirty (30) days’ prior written notice to the Company, each Agent (as the Company’s assignees) and each Group Agent, at such other locations in jurisdictions where all action required by Section 7.3 shall have been taken and completed.
 
SECTION 6.2  Reporting Requirements.  From the date hereof until (i) in the case of an Originator, the first date following the Purchase and Sale Termination Date with respect to such Originator when all obligations of such Originator to the Company and its assigns have been satisfied in full or (ii) in the case of CB, the first date following the Purchase and Sale Termination Date with respect to all Transferors when all obligations of CB and each Originator to the Company and its assigns have been satisfied in full, each Transferor agrees that it will, unless the Company, each Agent and the Majority Group Agents shall otherwise consent in writing, furnish to the Company, each Agent and the Majority Group Agents:
 
(a)            Purchase and Sale Termination Events.  As soon as possible, and in any event within three (3) Business Days after such Transferor becomes aware of the occurrence of each Purchase and Sale Termination Event with respect to such Transferor or each event which
 
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with notice or the passage of time or both would become a Purchase and Sale Termination Event (an “Unmatured Purchase and Sale Termination Event”) with respect to such Transferor, a written statement of the chief financial officer, treasurer or chief accounting officer of such Transferor describing such Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination Event and any action that such Transferor proposes to take with respect thereto, in each case in reasonable detail;
 
(b)            Proceedings.  As soon as possible and in any event within three (3) Business Days after such Transferor becomes aware thereof, written notice of (i) any litigation, investigation or proceeding of the type described in Section 5.5 not previously disclosed to the Company, each Agent or each Group Agent which would reasonably be expected to have a Material Adverse Effect, and (ii) all material adverse developments that have occurred with respect to any previously disclosed litigation, proceedings and investigations; and
 
(c)            Other.  Promptly, from time to time, such other information, documents, records or reports respecting the Receivables or the conditions or operations, financial or otherwise, of such Transferor as the Company, any Agent or any Group Agent may from time to time reasonably request in order to protect the interests of the Company, any Agent, the Credit Parties, the Group Agents under or as contemplated by the Transaction Documents.
 
(d)            Other Documents.  Promptly after the execution and delivery thereof, written notice of the effectiveness of any written agreement, instrument, document or other arrangement to which such Transferor becomes a party after the effectiveness of this Agreement that restricts the right of such Transferor to amend, supplement, amend and restate or otherwise modify, or to extend or renew, or to waive any right under, this Agreement or any other Transaction Document.
 
SECTION 6.3  Negative Covenants.  From the date hereof until the latest of the Final Payout Date under the Receivables Financing Agreement or the Final Collection Date under the Receivables Purchase Agreement, each Transferor agrees that, unless the Company, each Agent and the Majority Group Agents shall otherwise consent in writing, it shall not:
 
(a)            Sales, Liens, Etc.  Except as otherwise provided herein or in any other Transaction Document, sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim other than Permitted Adverse Claims upon or with respect to, any Receivable sold, contributed or otherwise conveyed or purported to be sold, contributed or otherwise conveyed hereunder or related Contract or Related Security, or any interest therein, or any Collections thereon, or assign any right to receive income in respect thereof.
 
(b)            Extension or Amendment of Receivables.  Except as the Servicer is otherwise permitted in each of the Receivables Financing Agreement and Receivables Purchase Agreement and the applicable Credit and Collection Policy, extend, amend or otherwise modify in any material respect the terms of any Securitized Receivable (other than Specified Receivables) generated or contributed, as applicable, by it that is sold, contributed or otherwise conveyed hereunder, or amend, modify or waive, in any material respect, the provisions of any Contract related thereto.
 
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(c)            Change in Business or Credit and Collection Policy.  (i) Make any change in the character of its business, which change could impair the collectibility of any Receivable sold or contributed, as the case may be, by such Transferor hereunder or (ii) make any change in its Credit and Collection Policy that would reasonably be expected to adversely affect the collectibility of the Receivables, the enforceability of any related Contract or its ability to perform its obligations under the related Contract or the Transaction Documents, in the case of either (i) or (ii) above, without the prior written consent of each Agent and each Group Agent.  No Transferor that is also an Originator shall make any change in any Credit and Collection Policy without giving prior written notice thereof to each Agent and each Group Agent.
 
(d)            [Reserved].
 
(e)            Mergers, Acquisitions, Sales, etc.  Be a party to any merger or consolidation or directly or indirectly sell, transfer, assign, convey or lease, whether in one or a series of transactions, all or substantially all of its assets, unless with respect to such merger, consolidation, sale, transfer, assignment, conveyance or lease, as the case may be, the Company, each Agent and each Group Agent have each (A) received ten (10) days’ prior notice thereof, (B) received executed copies of all documents, certificates and opinions (including, without limitation, opinions relating to bankruptcy and UCC matters) as the Company, any Agent or any Group Agent shall reasonably request and (C) been satisfied that all other action reasonably necessary to perfect and protect the interests of the Company and each Agent, in and to the Receivables to be sold by it hereunder and other Related Rights, as requested by the Company, any Agent or any Group Agent shall have been taken by, and at the expense of such Transferor (including the filing of any UCC financing statements, the receipt of certificates and other requested documents from public officials and all such other actions required pursuant to Section 7.3).
 
(f)            Lock-Box Banks.  Make any changes in its instructions to Obligors regarding Collections on Receivables sold, contributed or otherwise conveyed by it hereunder or add or terminate any bank as a Lock-Box Bank unless the requirements of each of the Receivables Financing Agreement and Receivables Purchase Agreement have been met.
 
(g)            Accounting for Purchases.  Account for or treat (whether in such Transferor’s financial statements or otherwise) the transactions contemplated hereby in any manner other than as sales or contributions, as applicable, of the Receivables and Related Rights by such Transferor to the Company.
 
(h)            Anti-Money Laundering/International Trade Law Compliance.  No Originator will become a Sanctioned Person.  No Covered Entity, either in its own right or through any third party, will (i) have any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) do business in or with, or derive any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; (iii) engage in any dealings or transactions prohibited by any Anti-Terrorism Law or (iv) use the proceeds of any Loan to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law.  Such Originator shall comply with all Anti-Terrorism Laws.  Such Originator
 
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shall promptly notify each Agent and each Group Agent in writing upon the occurrence of a Reportable Compliance Event.
 
SECTION 6.4  Substantive Consolidation.  Each Transferor hereby acknowledges that this Agreement and the other Transaction Documents are being entered into in reliance upon the Company’s identity as a legal entity separate from such Transferor and its Affiliates.  Therefore, from and after the date hereof, each Transferor shall take all reasonable steps necessary to make it apparent to third Persons that the Company is an entity with assets and liabilities distinct from those of such Transferor and any other Person, and is not a division of such Transferor, its Affiliates or any other Person.  Without limiting the generality of the foregoing and in addition to and consistent with the other covenants set forth herein, such Transferor shall take such actions as shall be required in order that:
 
(a)            such Transferor (other than CB) shall not be involved in the day to day management of the Company;
 
(b)            such Transferor shall maintain separate corporate records and books of account from the Company and otherwise will observe corporate formalities and have a separate area from the Company for its business (which may be located at the same address as the Company, and, to the extent that it and the Company have offices in the same location, there shall be a fair and appropriate allocation of overhead costs between them, and each shall bear its fair share of such expenses);
 
(c)            the financial statements and books and records of such Transferor shall be prepared after the date of creation of the Company to reflect and shall reflect the separate existence of the Company; provided, that the Company’s assets and liabilities may be included in a consolidated financial statement issued by an Affiliate of the Company; provided, however, that any such consolidated financial statement or the notes thereto shall make clear that the Company’s assets are not available to satisfy the obligations of such Affiliate;
 
(d)            except as permitted by each of the Receivables Financing Agreement and Receivables Purchase Agreement, (i) such Transferor shall maintain its assets (including, without limitation, deposit accounts) separately from the assets (including, without limitation, deposit accounts) of the Company and (ii) the Company’s assets, and records relating thereto, have not been, are not, and shall not be, commingled with those of such Transferor;
 
(e)            all of the Company’s business correspondence and other communications shall be conducted in the Company’s own name and on its own stationery;
 
(f)            such Transferor shall not act as an agent for the Company, other than CB in its capacity as the Servicer or any Originator in its capacity as Sub-Servicer, and in connection therewith, each such Transferor shall present itself to the public as an agent for the Company and a legal entity separate from the Company;
 
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(g)            such Transferor shall not conduct any of the business of the Company in its own name;
 
(h)            such Transferor shall not pay any liabilities of the Company out of its own funds or assets;
 
(i)            such Transferor shall maintain an arm’s-length relationship with the Company;
 
(j)            such Transferor shall not assume or guarantee or become obligated for the debts of the Company or hold out its credit as being available to satisfy the obligations of the Company;
 
(k)            such Transferor shall not acquire obligations of the Company other than, in the case of the Originators, the Company Notes;
 
(l)            such Transferor shall allocate fairly and reasonably overhead or other expenses that are properly shared with the Company, including, without limitation, shared office space;
 
(m)            such Transferor shall identify and hold itself out as a separate and distinct entity from the Company;
 
(n)            such Transferor shall correct any known misunderstanding respecting its separate identity from the Company;
 
(o)            such Transferor shall not enter into, or be a party to, any transaction with the Company, except as contemplated by the Transaction Documents or in the ordinary course of its business and on terms which are intrinsically fair and not less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party;
 
(p)            such Transferor shall not pay the salaries of the Company’s employees, if any; and
 
(q)            to the extent not already covered in paragraphs (a) through (p) above, such Transferor shall comply and/or act in accordance with all of the other separateness covenants set forth in each of Section 3 of Exhibit IV to the Receivables Financing Agreement and in the Receivables Purchase Agreement.
 
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS
IN RESPECT OF RECEIVABLES
 
SECTION 7.1  Rights of the Company.  Each Transferor hereby authorizes the Company or the Servicer or their respective designees or assignees under the Receivables Financing Agreement or Receivables Purchase Agreement (including, without limitation, any Agent) to take, subject to the terms of the Receivables Financing Agreement, the Receivables Financing
 
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Agreement and any applicable regulatory restrictions, any and all steps in such Transferor’s name necessary or desirable, in their respective determination, to collect all amounts due under any and all Receivables sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder, including, without limitation, endorsing the name of such Transferor on checks and other instruments representing Collections and enforcing such Receivables and the provisions of the related Contracts that concern payment and/or enforcement of rights to payment.
 
SECTION 7.2  Responsibilities of the Transferors.  Anything herein to the contrary notwithstanding:
 
(a)            Collection Procedures.  Each Transferor will instruct all Persons who are its respective Obligors to make payments of Receivables (other than Specified Receivables) sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder directly to a Lock-Box Account, except in the case of any Payment-on-Delivery Transactions and provided, that, such Transferor may permit such Obligor to make On-Site Payments notwithstanding such instructions.  Each Transferor further agrees to transfer any Collections of Receivables (other than Specified Receivables) sold, contributed or conveyed by it hereunder, including without limitation, Collections received in connection with any Payment-on-Delivery Transactions and On-Site Payments, that it receives directly to a Lock-Box Account within three (3) Business Days of receipt thereof, and agrees that all such Collections shall be deemed to be received in trust for the Company and the applicable Agent.
 
(b)            Each Transferor shall perform its obligations hereunder, and the exercise by the Company or its designee of its rights hereunder shall not relieve such Transferor from such obligations.
 
(c)            None of the Company, the Servicer, the Lenders, the Group Agents or any Agent shall have any obligation or liability to any Obligor or any other third Person with respect to any Receivables, Contracts related thereto or any other related agreements, nor shall the Company, the Servicer, the Lenders, the Group Agents or any Agent be obligated to perform any of the obligations of such Transferor thereunder.
 
(d)            Each Transferor hereby agrees that at any time following the occurrence and during the continuation of any Event of Default set forth in clause (a)(ii), (f) or clause (i) of Exhibit V of the Receivables Financing Agreement or Section 4(h) of the Receivables Purchase Agreement, an Agent may direct the Obligors that payment of all amounts payable under any Receivable is to be made directly to the applicable Agent or its designee.  The exercise of this right will be subject to any applicable regulatory restrictions.  CB agrees that, if such Agent is unable to exercise the rights in this clause (d) due to any applicable regulatory restrictions, it will, subject to any applicable regulatory restrictions, follow the instructions of such Agent in connection therewith.
 
SECTION 7.3  Further Action Evidencing Purchases.  Each Transferor agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the Company, the Servicer, any Agent or any Group Agent may reasonably request in order to perfect, protect or more fully evidence the Receivables and Related Rights purchased by or contributed, as applicable, to the Company hereunder, or to
 
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enable the Company to exercise or enforce any of its rights hereunder or under any other Transaction Document.  Without limiting the generality of the foregoing, upon the request of the Company, any Agent or any Group Agent, such Transferor will:
 
(a)            execute (if applicable), authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary; and
 
(b)            on the Closing Date and from time to time, if requested thereafter, and solely with respect to each Transferor that is also an Originator, post at the financial reporting offices of such Transferor a legend pursuant to Section 4.1(i).
 
Each Transferor hereby authorizes the Company or its designees (including, without limitation, any Agent) to file one or more financing or continuation statements, and amendments thereto and assignments thereof, without the signature of such Transferor, relative to all or any of the Receivables and Related Rights sold, contributed or otherwise conveyed or purported to be conveyed by it hereunder now existing or hereafter generated, as the case may be, by such Transferor.  If any Transferor fails to perform any of its agreements or obligations under this Agreement, the Company or its designees (including, without limitation, any Agent) may (but shall not be required to) itself perform, or cause the performance of, such agreement or obligation, and the expenses of the Company or its designee (including, without limitation, the Administrator) incurred in connection therewith shall be payable by such Transferor.
 
SECTION 7.4  Application of Collections.  Subject to the Monetization Intercreditor Agreement, any payment by an Obligor in respect of any indebtedness owed by it to any Transferor shall, except as otherwise specified by such Obligor or required by contract or applicable law and unless otherwise instructed by the Servicer (with the prior written consent of the Administrator) or the Administrator, be applied as a Collection of any Receivable or Receivables of such Obligor to the extent of any amounts then due and payable thereunder before being applied to any other indebtedness of such Obligor.
 
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
 
SECTION 8.1  Purchase and Sale Termination Events.  Each of the following events or occurrences described in this Section 8.1 shall constitute a “Purchase and Sale Termination Event” with respect to a Transferor:
 
(a)            the Facility Termination Date (as defined in the Receivables Financing Agreement) shall have occurred; or
 
(b)            such Transferor shall fail to make when due any payment or deposit to be made by it under this Agreement or any other Transaction Document to which it is a party and such failure shall remain unremedied for two (2) Business Days after the earlier of such Transferor’s knowledge or notice thereof; or
 
(c)            any representation or warranty made or deemed made by such Transferor (or any of its respective officers) under or in connection with this Agreement or any other
 
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Transaction Document to which it is a party, or any information or report delivered by such Transferor pursuant to this Agreement or any other Transaction Document to which it is a party, shall fail to have been true or correct in any material respect when made or deemed made or delivered and such failure shall, solely to the extent capable of cure, continue for thirty (30) days after the earlier of any such Transferor’s knowledge or notice thereof; or
 
(d)            such Transferor shall fail to perform or observe any term, covenant or agreement under this Agreement or any other Transaction Document to which it is a party, and such failure shall, solely to the extent capable of cure, continue for thirty (30) days after the earlier of any such Transferor’s knowledge or notice thereof; or
 
(e)            such Transferor shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against such Transferor seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of ninety (90) days, or any of the actions sought in such proceeding (including 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 such Transferor shall take any corporate action to authorize any of the actions set forth above in this paragraph;
 
provided that, if any “Purchase and Sale Termination Event” set forth in clauses (a) through (e) listed above shall have occurred with respect to CBT, such Purchase and Sale Termination Event shall be deemed to have occurred with respect to all Transferors.
 
SECTION 8.2  Remedies.
 
(a)            Optional Termination.  Upon the occurrence of a Purchase and Sale Termination Event with respect to a Transferor (other than the Purchase and Sale Termination Event described in Section 8.1(e) above), the Company shall have the option, by notice to such Transferor (with a copy to each Agent), to declare the Purchase and Sale Termination Date to have occurred with respect to such Transferor and the Purchase Facility as terminated with respect to such Transferor if it is also an Originator; provided that, automatically upon the occurrence of any Purchase and Sale Termination Event described in Section 8.1(e) above, the Purchase and Sale Termination Date shall be deemed to have been declared by the Company with respect to all Transferors and the Purchase Facility shall be deemed to be terminated for all Transferors that are Originators.
 
(b)            Remedies Cumulative.  Upon any termination of the Purchase Facility with respect to a Transferor pursuant to Section 8.2(a), the Company shall have, in addition to all other rights and remedies under this Agreement, all other rights and remedies provided under the UCC of each applicable jurisdiction and other applicable laws, which rights shall be cumulative.
 
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ARTICLE IX
INDEMNIFICATION
 
SECTION 9.1  Indemnities by the Transferors.  Without limiting any other rights which the Company may have hereunder or under applicable law, each Transferor, severally and for itself alone, hereby agrees to indemnify the Company and each of its officers, directors, employees and agents (each of the foregoing Persons being individually called a “Purchase and Sale Indemnified Party”), forthwith on demand, from and against any and all damages, losses, claims, judgments, liabilities and related costs and expenses, including reasonable attorneys’ fees and disbursements (all of the foregoing being collectively called “Purchase and Sale Indemnified Amounts”) awarded against or incurred by any of them to the extent arising out of or as a result of (a) the breach of any representation or warranty made by such Transferor herein or in any other Transaction Document to which it is a party or (b) the failure of such Transferor to perform its obligations under this Agreement or any other Transaction Document to which it is a party; excluding, however, (x) Purchase and Sale Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds such Purchase and Sale Indemnified Amounts resulted from gross negligence or willful misconduct on the part of such Purchase and Sale Indemnified Party, (y) any indemnification which has the effect of recourse for non-payment or uncollectibility of the Receivables due to a discharge in bankruptcy or similar insolvency proceeding or other credit related reasons with respect to the relevant Obligor and (z) any net income or franchise tax imposed on such Purchase and Sale Indemnified Party or any other taxes imposed against such Purchase and Sale Indemnified Party to the extent such taxes are measured by or against the gross income or net income or receipts of such Person.
 
If for any reason the indemnification provided above in this Section 9.1 is unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold such Purchase and Sale Indemnified Party harmless, then each Transferor agrees that it shall contribute to the amount paid or payable by such Purchase and Sale Indemnified Party to the maximum extent permitted under applicable law.
 
ARTICLE X
MISCELLANEOUS
 
SECTION 10.1  Amendments, etc.
 
(a)            The provisions of this Agreement may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and executed by the Company and each Transferor, with the prior written consent of each Agent and the Majority Group Agents.
 
(b)            No failure or delay on the part of the Company, the Servicer, any Transferor or any third party beneficiary in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Company, the Servicer or any Transferor in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by the Company or the Servicer under this Agreement shall, except as may otherwise be stated in such waiver or
 
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approval, be applicable to subsequent transactions.  No waiver or approval under this Agreement shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.
 
(c)            The Transaction Documents contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter thereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter thereof, superseding all prior oral or written understandings.
 
SECTION 10.2  Notices, etc.  All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including email communication) and shall be delivered or sent by email, or by overnight mail, to the intended party at the mailing address set forth on Schedule II hereto or at such other mailing address or email address shall be designated by such party in a written notice to the other parties hereto or in the case of (x) the Administrator or any Group Agent, at their respective address for notices pursuant to the Receivables Financing Agreement or (y) the Receivables Buyer, at its respective address for notices pursuant to the Receivables Purchase Agreement.  All such notices and communications shall be effective (a) if delivered by overnight mail, when received and (b) if sent by email, when sent, receipt confirmed by telephone or electronic means.
 
SECTION 10.3  No Waiver; Cumulative Remedies.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.  Without limiting the foregoing, each Transferor hereby authorizes the Company, at any time and from time to time, to the fullest extent permitted by law, to set off, against any obligations of such Transferor to the Company arising in connection with the Transaction Documents (including, without limitation, amounts payable pursuant to Section 9.1) that are then due and payable or that are not then due and payable but have accrued, any and all indebtedness at any time owing by the Company to or for the credit or the account of such Transferor.
 
SECTION 10.4  Binding Effect; Assignability.  This Agreement shall be binding upon and inure to the benefit of the Company and each Transferor and their respective successors and permitted assigns.  No Transferor may assign any of its rights hereunder or any interest herein without the prior written consent of the Company, each Agent and each Group Agent, except as otherwise herein specifically provided.  This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time as the parties hereto shall agree.  The rights and remedies with respect to any breach of any representation and warranty made by any Transferor pursuant to Article V and the indemnification and payment provisions of Article IX and Section 10.6 shall be continuing and shall survive any termination of this Agreement.
 
SECTION 10.5  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 10.6  Costs, Expenses and Taxes.  In addition to the obligations of the Transferors under Article IX, each Transferor, severally and for itself alone, agrees to pay on demand:
 
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(a)            to the Company (and any successor and permitted assigns thereof) all reasonable costs and expenses incurred by such Person in connection with the enforcement of this Agreement and the other Transaction Documents; and
 
(b)            all stamp and other taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement or the other Transaction Documents to be delivered hereunder, and agrees to indemnify each Purchase and Sale Indemnified Party against any liabilities with respect to or resulting from any delay in paying or omitting to pay such taxes and fees.
 
SECTION 10.7  SUBMISSION TO JURISDICTION.  EACH PARTY HERETO HEREBY IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK OR THE FEDERAL COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES 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.  NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY’S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ANY ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
 
SECTION 10.8  WAIVER OF JURY TRIAL.  EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
 
28


SECTION 10.9  Captions and Cross References; Incorporation by Reference.  The various captions (including, without limitation, the table of contents) in this Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  References in this Agreement to any underscored Section or Exhibit are to such Section or Exhibit of this Agreement, as the case may be.  The Exhibits hereto are hereby incorporated by reference into and made a part of this Agreement.
 
SECTION 10.10  Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement.
 
SECTION 10.11  Acknowledgment and Agreement.  By execution below, each Transferor expressly acknowledges and agrees that all of the Company’s rights, title, and interests in, to, and under this Agreement (but not its obligations), shall be pledged by the Company to the Administrator (for the benefit of the Secured Parties) pursuant to the Receivables Financing Agreement and the Receivables Buyer pursuant to the Receivables Purchase Agreement, and each Transferor consents to such assignment.  Each of the parties hereto acknowledges and agrees that the Secured Parties, the Group Agents and the Agents are third party beneficiaries of the rights of the Company arising hereunder and under the other Transaction Documents to which any Transferor is a party.  Notwithstanding the foregoing or anything else to the contrary in this Agreement, none of the Secured Parties, the Group Agents or the Agents shall (a) have any rights, title, or interest in, to, or under this Agreement or (b) have any rights as third party beneficiaries with respect to this Agreement after the first date following the occurrence of the Purchase and Sale Termination Date with respect to all Originators when all obligations of each Originator to the Company and its assigns under this Agreement have been satisfied in full (other than those which expressly survive termination of this Agreement).  Notwithstanding any provision to the contrary in this Agreement or any document related hereto, if and to the extent that for any reason any payment by or on behalf of a Transferor is rescinded or must be otherwise restored by the Company or its assigns, whether as a result of any proceedings in bankruptcy or reorganization or other similar proceedings or otherwise, such payment shall be treated for all purposes, as though such amounts had not been paid and the determination as to whether any such payment must be rescinded or restored shall be made by Company (or the Agents, as its assigns) in its sole discretion.
 
SECTION 10.12  No Proceeding.  Each Transferor hereby agrees that it will not institute, or join any other Person in instituting, against the Company any Insolvency Proceeding for at least one year and one day following until the latest of the Final Payout Date under the Receivables Financing Agreement or the Final Collection Date under the Receivables Purchase Agreement.  Each Originator further agrees that notwithstanding any provisions contained in this Agreement to the contrary, the Company shall not, and shall not be obligated to, pay any amount in respect of any Company Note or otherwise to such Originator pursuant to this Agreement unless in accordance with the Company Note.  Any amount which the Company does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in §101 of the Bankruptcy Code) against the Company by, or limited liability company obligation of the Company to, such Originator for any such insufficiency unless and until the provisions of
 
29


the foregoing sentence are satisfied.  The agreements in this Section 10.12 shall survive any termination of this Agreement.
 
SECTION 10.13  Limited Recourse.  Except as explicitly set forth herein, the obligations of the Company under this Agreement or any other Transaction Documents to which it is a party are solely the obligations of the Company.  No recourse under any Transaction Document shall be had against, and no liability shall attach to, any officer, employee, director, or beneficiary, whether directly or indirectly, of the Company.  The agreements in this Section 10.13 shall survive any termination of this Agreement.
 
[Signature Pages Follow]
 

30

 
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.
 
  CINCINNATI BELL FUNDING LLC  
       
 
By:
/s/ Joshua T. Duckworth  
  Name:  Joshua T. Duckworth  
  Title: Vice President of Treasury, Corporate Finance and Investor Relations  
       
 
 
 
 
  CINCINNATI BELL INC., as Servicer and as sole member of Cincinnati Bell Funding LLC  
       
 
By:
/s/ Joshua T. Duckworth  
  Name:  Joshua T. Duckworth  
  Title: Vice President of Treasury, Corporate Finance and Investor Relations  
       
 
 
 

2nd A&R Purchase and Sale Agreement
(Cincinnati Bell)
S-1

 
 
 
  ORIGINATORS:  
     
  CBTS TECHNOLOGY SOLUTIONS LLC, as an Originator   
       
       
 
By:
/s/ Joshua T. Duckworth  
  Name:  Joshua T. Duckworth  
  Title: Vice President of Treasury, Corporate Finance and Investor Relations  
       
 

 
 
  CINCINNATI BELL TELEPHONE COMPANY LLC, as an Originator  
       
       
 
By:
/s/ Joshua T. Duckworth  
  Name:  Joshua T. Duckworth  
  Title: Vice President of Treasury, Corporate Finance and Investor Relations  
       
 

 

2nd A&R Purchase and Sale Agreement
(Cincinnati Bell)
S-2


 
 
  CINCINNATI BELL EXTENDED TERRITORIES LLC, as an Originator  
       
       
 
By:
/s/ Joshua T. Duckworth  
  Name:  Joshua T. Duckworth  
  Title: Vice President of Treasury, Corporate Finance and Investor Relations  
       
 

 
 
  CBTS VIRGINIA LLC, as an Originator  
       
       
 
By:
/s/ Joshua T. Duckworth  
  Name:  Joshua T. Duckworth  
  Title: Vice President of Treasury, Corporate Finance and Investor Relations  
       
 

 

2nd A&R Purchase and Sale Agreement
(Cincinnati Bell)
S-3


 
 
  ONX USA LLC, as an Originator  
       
       
 
By:
/s/ Joshua T. Duckworth  
  Name:  Joshua T. Duckworth  
  Title: Vice President of Treasury, Corporate Finance and Investor Relations  
       
 

 

2nd A&R Purchase and Sale Agreement
(Cincinnati Bell)
S-4


Schedule I
 
LIST OF ORIGINATORS
 

1.            CBTS Technology Solutions LLC
 
2.            Cincinnati Bell Telephone Company LLC
 
3.            Cincinnati Bell Extended Territories LLC
 
4.            CBTS Virginia LLC
 
5.            OnX USA LLC
 

 
 
Schedule I-1

                                                                              
 
 
 
 
Exhibit 99.2
 
 
 
 
 
 
 
 
 
CANADIAN PURCHASE AND SALE AGREEMENT


Dated as of May 10, 2018


among


VARIOUS ENTITIES LISTED ON SCHEDULE I,

as the Originators


CINCINNATI BELL FUNDING CANADA LTD.,


and


ONX ENTERPRISE SOLUTIONS LTD.,

as Servicer
 
 
 
 
 
 
 
 

 

TABLE OF CONTENTS

Clause
Subject Matter
Page
 
ARTICLE I AGREEMENT TO PURCHASE AND SELL
3

 
SECTION 1.1 Agreement To Purchase and Sell
3
     
 
SECTION 1.2 Timing of Purchases
4
     
 
SECTION 1.3 Consideration for Purchases
4
     
 
SECTION 1.4 Purchase and Sale Termination Date
4
     
 
SECTION 1.5 Intention of the Parties
4

ARTICLE II Purchase Report; CALCULATION OF PURCHASE PRICE
5

 
SECTION 2.1 Purchase Report
5
     
 
SECTION 2.2 Calculation of Purchase Price
6

ARTICLE III PAYMENT OF PURCHASE PRICE
6

 
SECTION 3.1 Initial Purchase Price Payment
6
     
 
SECTION 3.2 Subsequent Purchase Price Payments
7
     
 
SECTION 3.3 Settlement as to Specific Receivables and Dilution
8
     
 
SECTION 3.4 [Reserved]
9
     
 
SECTION 3.5 Reconveyance of Receivables
9
     
 
SECTION 3.6 Letters of Credit
9

ARTICLE IV CONDITIONS PRECEDENT
11

 
SECTION 4.1 Conditions Precedent to Effectiveness of this Agreement
11
     
 
SECTION 4.2 Certification as to Representations and Warranties
11
     
 
SECTION 4.3 Additional Originators
12

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE TRANSFERORS
12

 
SECTION 5.1 Existence and Power
12
     
 
SECTION 5.2 Purchaser and Governmental Authorization, Contravention
13
     
 
SECTION 5.3 Binding Effect of Agreement
13
     
 
SECTION 5.4 Accuracy of Information
13
     
 
SECTION 5.5 Actions, Suits
13
     
 
SECTION 5.6 Taxes
13
     
 
SECTION 5.7 Compliance with Applicable Laws
14
     
 
SECTION 5.8 Reliance on Separate Legal Identity
14
     
 
SECTION 5.9 [Reserved]
14
 
 
-i-

CONTENTS

Clause
Subject Matter
Page
 
 
SECTION 5.10 Perfection
14
     
 
SECTION 5.11 Creation of Receivables
14
     
 
SECTION 5.12 Credit and Collection Policy
14
     
 
SECTION 5.13 Enforceability of Contracts
15
     
 
SECTION 5.14 Location and Offices
15
     
 
SECTION 5.15 Good Title
15
     
 
SECTION 5.16 Names
15
     
 
SECTION 5.17 Nature of Receivables
15
     
 
SECTION 5.18 Bulk Sales, Margin Regulations, No Fraudulent Conveyance
15
     
 
SECTION 5.19 Financial Condition
16
     
 
SECTION 5.20 Licenses, Contingent Liabilities, and Labor Controversies
16
     
 
SECTION 5.21 Anti-Money Laundering/International Trade Law Compliance
16
     
 
SECTION 5.22 Residency
16

ARTICLE VI COVENANTS OF THE ORIGINATORS
16

 
SECTION 6.1 Affirmative Covenants
16
     
 
SECTION 6.2 Reporting Requirements
18
     
 
SECTION 6.3 Negative Covenants
19
     
 
SECTION 6.4 Substantive Consolidation
21

ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF RECEIVABLES
23

 
SECTION 7.1 Rights of the Purchaser
23
     
 
SECTION 7.2 Responsibilities of the Originators
23
     
 
SECTION 7.3 Further Action Evidencing Purchases
24
     
 
SECTION 7.4 Application of Collections
25

ARTICLE VIII PURCHASE AND SALE TERMINATION EVENTS
25

 
SECTION 8.1 Purchase and Sale Termination Events
25
     
 
SECTION 8.2 Remedies
26

ARTICLE IX INDEMNIFICATION
26

 
SECTION 9.1 Indemnities by the Originators
26

ARTICLE X MISCELLANEOUS
27

 
SECTION 10.1 Amendments, etc
27
 
 
-ii-

CONTENTS

Clause
Subject Matter
Page
 
 
SECTION 10.2 Notices, etc
27
     
 
SECTION 10.3 No Waiver; Cumulative Remedies
28
     
 
SECTION 10.4 Binding Effect; Assignability
28
     
 
SECTION 10.5 Governing Law
28
     
 
SECTION 10.6 Costs, Expenses and Taxes
28
     
 
SECTION 10.7 SUBMISSION TO JURISDICTION
29
     
 
SECTION 10.8 WAIVER OF JURY TRIAL
29
     
 
SECTION 10.9 Captions and Cross References; Incorporation by Reference
29
     
 
SECTION 10.10 Execution in Counterparts
30
     
 
SECTION 10.11 Acknowledgment and Agreement
30
     
 
SECTION 10.12 No Proceeding
30
     
 
SECTION 10.13 Limited Recourse
31


-iii-

 
SCHEDULES

Schedule I
List of Originators
Schedule II
Location of Each Originator
Schedule III
Location of Books and Records of Originators
Schedule IV
Names

EXHIBITS

Exhibit A
Form of Purchase Report
Exhibit B
Form of Purchaser Note
Exhibit C
Form of Joinder Agreement
Exhibit D
Form of Quebec Assignment Agreement


 
 
 
 
 
 
 

 

THIS CANADIAN PURCHASE AND SALE AGREEMENT dated as of May 10, 2018 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is entered into among the VARIOUS ENTITIES LISTED ON SCHEDULE I HERETO (each, an “Originator”; and collectively, “Originators”), Cincinnati Bell Funding Canada Ltd., an Ontario corporation (the “Purchaser”) and ONX ENTERPRISE SOLUTIONS LTD., an Ontario corporation (“ONX”), as Servicer (in such capacity, the “Servicer”).

DEFINITIONS AND INTERPRETATION

Unless otherwise indicated herein, capitalized terms used and not otherwise defined in this Agreement are defined in Exhibit I to the Receivables Financing Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Receivables Financing Agreement”), among the Purchaser and Cincinnati Bell Funding LLC, as Borrowers, Cincinnati Bell Inc. and ONX, as initial Servicers, the various Lenders and Group Agents from time to time party thereto, and PNC Bank, National Association, as Administrator and LC Bank.  For purposes of this Agreement, the following capitalized terms shall have the following meanings assigned thereto.

Agent” means the Administrator.

Agreement” has the meaning assigned to such term in the preamble hereto.

Canadian Insolvency Laws” means the Bankruptcy and Insolvency Act (Canada), the Companies Creditors' Arrangement Act (Canada), the Winding Up and Restructuring Act (Canada), the Assignments and Preferences Act (Ontario) and the Fraudulent Conveyances Act (Ontario).

Originator” has the meaning assigned to such term in the preamble hereto.

Québec Receivable” means a Receivable which is owed by an Obligor domiciled (within the meaning of the Civil Code of Québec) in the Province of Québec (Canada), or in respect of which the Obligor thereof is making payments to a location or account located in the Province of Québec, or in respect of which the related Contract contains a stipulation to the effect that such Contract is governed by the laws of the Province of Québec.

Servicer” has the meaning assigned to such term in the preamble hereto.

Solvent” means, with respect to any Originator at any time, that, at such time: (i) such Originator is not, and will not, by entering into, or immediately after completion of the transactions contemplated by, this Agreement, be, a bankrupt, an insolvent person, in insolvent circumstances or on the eve of insolvency or unable to meet its engagements, as applicable, within the meaning of any of the Canadian Insolvency Laws; (ii) such Originator will not become an insolvent person or be in insolvent circumstances within the meaning of any of the Canadian Insolvency Laws by entering into, or immediately after completion of any of the transactions contemplated by, this Agreement; and (iii) such Originator has entered into this Agreement and the documents contemplated hereby and each sale contemplated hereunder in good faith for the purpose of selling and transferring all of its right, title and interest in, to and under the Receivables and Related Rights to the Purchaser and receiving from the Purchaser the
 
 

 
 
consideration therefor specified herein, and not for the purpose of defeating, hindering, delaying, defrauding, oppressing, obstructing, injuring or impeding the rights and claims of creditors or others against it or for any other purpose relating in any way to the claims of creditors or others against it and not in contemplation of insolvency; and (iv) the consideration received by such Originator hereunder for the sale, assignment and conveyance of the Receivables and Related Rights is fair market value (as determined by the parties) and no proceedings under any Canadian Insolvency Laws or under any other applicable bankruptcy, insolvency, or similar law with respect to such Originator are pending or, to the best of such Originator’s knowledge, threatened. All references herein to months are to calendar months unless otherwise expressly indicated.

For purposes of any assets, liabilities or entities located in the Province of Quebec and for all other purposes pursuant to which the interpretation or construction of this Agreement may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) “personal property” shall include “movable property”, (b) “security interest”, “mortgage” and “lien” shall include a “hypothec”, “right of retention”, “prior claim”, “reservation of ownership” and a resolutory clause, (c) all references to filing, perfection, priority, remedies, registering or recording under the Personal Property Security Act shall include publication under the Civil Code of Quebec, (d) all references to “perfection” of or “perfected” lien or security interest shall include a reference to an “opposable” or “set up” hypothec or assignment, as applicable, as against third parties, (e) any “right of offset”, “right of setoff” or similar expression shall include a “right of compensation”, (f) “goods” shall include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (g) an “agent” shall include a “mandatary”, (h) “gross negligence or wilful misconduct” shall be deemed to be “intentional or gross fault”, (i) “priority” shall include “rank” or “prior claim”, as applicable (j)  “accounts” shall include “claims”, and (k) “guarantee” and “guarantor” shall include “suretyship” and “surety”, respectively.  The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language only and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only.  Les parties aux présentes confirment que c’est leur volonté que cette convention et les autres documents de crédit soient rédigés en langue anglaise seulement et que tous les documents, y compris tous avis, envisagés par cette convention et les autres documents peuvent être rédigés en langue anglaise seulement.

BACKGROUND:

1.            The Purchaser is a bankruptcy-remote special purpose corporation, all of the issued and outstanding shares of which are owned by ONX or an entity directly or indirectly owned by ONX;

2.            The Originators generate Receivables in the ordinary course of their businesses;
 
3.            The Originators wish to sell Receivables to the Purchaser, and the Purchaser is willing to purchase Receivables from the Originators, on the terms and subject to the conditions set forth herein; and
 
 
2

 
4.            Each of the Originators and the Purchaser intend this transaction to be a true sale of Receivables by each Originator to the Purchaser, providing the Purchaser with the full benefits of ownership of the Receivables, and the Originators and the Purchaser do not intend the transactions hereunder to be a loan from the Purchaser to any Originator.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows:

ARTICLE I
AGREEMENT TO PURCHASE AND SELL

SECTION 1.1  Agreement To Purchase and Sell.  On the terms and subject to the conditions set forth in this Agreement, each Originator, severally and for itself, agrees to sell to the Purchaser, and the Purchaser agrees to purchase from such Originator, from time to time on or after the Closing Date, but before the Purchase and Sale Termination Date (as defined in Section 1.4) with respect to such Originator, all of such Originator’s right, title and interest in and to:

                (a)            each Receivable of such Originator that existed and was owing to such Originator at the closing of such Originator’s business on the Closing Date;
 
                (b)           each Receivable generated by such Originator after the Closing Date to but excluding the Purchase and Sale Termination Date with respect to such Originator;

                (c)            all rights to, but not the obligations of, such Originator under all Related Security with respect to any of the foregoing Receivables;

               (d)            all monies due or to become due to such Originator with respect to any of the foregoing;

                (e)            all books and records of such Originator to the extent related to any of the foregoing;

                (f)            all Collections and other proceeds (as such term is defined in the applicable PPSA) of any of the foregoing that are or were received by such Originator on or after the Closing Date, including, without limitation, all funds which either are received by such Originator, the Purchaser or the Servicer from or on behalf of the Obligors in payment of any amounts owed (including, without limitation, invoice price, finance charges, interest and all other charges) in respect of any of the above Receivables or are applied to such amounts owed by the Obligors (including, without limitation, any insurance payments that such Originator, the Purchaser or the Servicer applies in the ordinary course of its business to amounts owed in respect of any of the above Receivables, and net proceeds of sale or other disposition of repossessed goods or other collateral or property of the Obligors in respect of any of the above Receivables or any other parties directly or indirectly liable for payment of such Receivables); and
 
 
3

 
                (g)            all right, title and interest (but not obligations) in and to the Lock-Box Accounts, into which any Collections or other proceeds with respect to such Receivables may be deposited, and any related investment property acquired with any such collections or other proceeds (as such term is defined in the applicable PPSA).

All purchases hereunder shall be made without recourse, but shall be made pursuant to, and in reliance upon, the representations, warranties and covenants of the Originators set forth in this Agreement and each other Transaction Document.  No obligation or liability to any Obligor on any Receivable is intended to be assumed by the Purchaser hereunder, and any such assumption is expressly disclaimed.  The Purchaser’s foregoing commitment to purchase Receivables and the proceeds and rights described in clauses (c) through (g) with respect to such Receivables (collectively, the “Related Rights”) is herein called the “Purchase Facility.”

SECTION 1.2  Timing of Purchases.

(a)            Closing Date Purchases.  Each Originator’s entire right, title and interest in (i) each Receivable that existed and was owing to such Originator at the Closing Date, and (ii) all Related Rights with respect thereto automatically shall be sold and deemed to have been sold by such Originator to the Purchaser on the Closing Date.

(b)            Subsequent Purchases.  After the Closing Date, until the Purchase and Sale Termination Date with respect to an Originator, each Receivable and the Related Rights generated by such Originator shall be sold and deemed to have been sold by such Originator to the Purchaser immediately (and without further action) upon the creation of such Receivable.

SECTION 1.3  Consideration for Purchases.  On the terms and subject to the conditions set forth in this Agreement, the Purchaser agrees to make Purchase Price payments to the Originators in accordance with Article III or, if the Purchase Price will be satisfied by the issuance and sale by the Purchaser, and corresponding purchase by the Originator, of common shares in the capital of the Purchaser, to issue such common shares to the applicable Originators and to record a corresponding increase in the capital account of such Originator in the Purchaser in accordance with Section 3.1(b).

SECTION 1.4  Purchase and Sale Termination Date.  The “Purchase and Sale Termination Date” shall mean with respect to an Originator, the earlier to occur of (a) the date the Purchase Facility is terminated (or deemed terminated) with respect to such Originator pursuant to Section 8.2 and (b) the Payment Date immediately following the day on which such Originator shall have given written notice to the Purchaser, each Agent and each Group Agent at or prior to 10:00 a.m. (Toronto time) that such Originator desires to terminate the Purchase Facility with respect to such Originator and terminate its rights, obligations and liabilities under this Agreement (other than those which expressly survive termination of this Agreement).

SECTION 1.5  Intention of the Parties.  It is the express intent of each Originator and the Purchaser (a) that each conveyance by such Originator to the
 
 
4

 
Purchaser pursuant to this Agreement of the Receivables and Related Rights, including without limitation, all Receivables, if any, constituting accounts as defined in the PPSA, and all Related Rights be construed as a valid and perfected sale and absolute assignment of such Receivables and Related Rights by such Originator to the Purchaser (rather than the grant of a security interest to secure a debt or other obligation of such Originator) without recourse to such Originator; provided, that (i) each Originator shall be liable to the Purchaser for all representations, warranties and covenants made by such Originator pursuant hereto and (ii) such sale does not constitute and is not intended to result in an assumption by the Purchaser or any assignee thereof of any obligation of any Originator or any other Person arising in connection with the Receivables and Related Rights or any other obligations of any Originator, and (b) that the right, title and interest in and to such Receivables and Related Rights conveyed to the Purchaser be prior to the rights of and enforceable against all other Persons at any time, including, without limitation, lien creditors, secured lenders, purchasers and any Person claiming through such Originator.  Each Originator hereby authorizes the Purchaser (and each Agent, as assignees of the Purchaser) to file financing statements, financing change statements and applications for registration in connection with the sales contemplated by this Agreement.

SECTION 1.6  Purchase and Sale of Quebec Receivables.  Each Originator shall deliver to the Purchaser an executed a Quebec assignment agreement in respect of Quebec Receivables in the form attached hereto as Exhibit D (a “Quebec Assignment Agreement”) contemporaneously with the first sale of Quebec Receivables by such Originator to the Purchaser hereunder, and such Seller shall promptly execute and deliver to the Purchaser, upon the Purchaser’s request and at the Originator’s expense, such notices of assignment to debtors, information, applications for registration with the Register of Personal and Movable Real Rights (Quebec) and such other writings as the Purchaser may reasonably request to give effect to the sale, assignment and transfer of such Quebec Receivables to the Purchaser. Without limiting the forgoing, each Originator shall promptly, and in any such event within ten (10) Business Days after the first sale of Quebec Receivables by such Originator to the Purchaser hereunder, cause an application for registration to be prepared and registered with the Register of Personal and Movable Real Rights (Quebec) in respect of the Quebec Assignment Agreement delivered by such Originator.

ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE

SECTION 2.1  Purchase Report.  On the 20th day of each calendar month (or if such day is not a Business Day, the next occurring Business Day) (each such date, a “Monthly Purchase Report Date”), the Servicer shall deliver to the Purchaser and each Originator a report in substantially the form of Exhibit A (each such report being herein called a “Purchase Report”) setting forth, among other things:
 
 
5

 
(a)            Receivables purchased by the Purchaser from each Originator during the calendar month immediately preceding the calendar month in which such Monthly Purchase Report Date occurs; and

(b)            the calculations of reductions of the Purchase Price for any Receivables as provided in Sections 3.3 (a) and (b).

SECTION 2.2  Calculation of Purchase Price.  The “Purchase Price” to be paid to each Originator for the Receivables that are purchased hereunder from such Originator shall be determined in accordance with the following formula:

 
PP
=
OB x FMVD
 
         
 
where:
     
         
 
PP
=
Purchase Price for each Receivable as calculated on the relevant Payment Date.
 
         
 
OB
=
The Outstanding Balance of such Receivable on the relevant Payment Date.
 
         
 
FMVD
=
A Fair Market Value Discount percentage, initially equal to ninety-nine percent (99.0%) of the Outstanding Balance of such Receivable on the relevant Payment Date; provided, however, that the Fair Market Value Discount percentage may be revised prospectively with the consent of the parties hereto (and, for the avoidance of doubt, without affecting the Purchase Price of Receivables previously sold hereunder) to the extent any such revision is necessary to have the Fair Market Value Discount percentage reflect the fair market value of Receivables to be sold hereunder after giving effect to such revision.
 

Payment Date” means (i) the Original Closing Date and (ii) each Business Day thereafter that the Originators are open for business.

ARTICLE III
PAYMENT OF PURCHASE PRICE

SECTION 3.1  Initial Purchase Price Payment.

(a)            On the terms and subject to the conditions set forth in this Agreement, the Purchaser agrees to pay to each Originator the Purchase Price for the purchases made from such Originator on the Original Closing Date partially in cash (in an amount agreed between the Purchaser and such Originator and set forth in the initial Purchase Report) and partially by issuing a promissory note (it being understood that the Purchaser may pay such Purchase Price on the Original Closing Date solely by issuing such a promissory note) in the form of Exhibit B to such Originator with an initial principal balance equal to the remaining Purchase Price (each
 
 
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such promissory note, as it may be amended, supplemented, endorsed or otherwise modified from time to time, together with all promissory notes issued from time to time in substitution therefor or renewal thereof in accordance with the Transaction Documents, each being herein called a “Purchaser Note”).

(b)            Notwithstanding Section 3.1(a), the Purchaser may elect to satisfy all or any portion of the Purchase Price payable to an Originator on the Closing Date by an issuance and sale by the Purchaser and corresponding purchase by such Originator of one common share in the capital of the Purchaser to such Originator for each dollar of the Purchase Price for such Receivables transferred hereunder and the Purchaser shall reflect a corresponding increase in the capital account of such Originator in the Purchaser. From time to time at the request of the Originator, the Purchaser will issue share certificates evidencing the issuance of such common shares. In each case, each of the applicable Originator and the Purchaser hereby acknowledge the sufficiency of such consideration.

SECTION 3.2  Subsequent Purchase Price Payments.  On each Payment Date subsequent to the Closing Date, on the terms and subject to the conditions set forth in this Agreement, the Purchaser shall pay to each Originator the Purchase Price for the Receivables generated by such Originator on such Payment Date:

(i)            First, in cash to the extent the Purchaser has cash available therefor (and such payment is not prohibited under the Receivables Financing Agreement) and/or, if requested by such Originator, by causing the LC Bank to issue one or more Letters of Credit in accordance with Section 3.6 and on the terms and subject to the conditions of this Article III and the Receivables Financing Agreement;  and
 
(ii)          Second, to the extent any portion of the Purchase Price remains unpaid, the principal amount outstanding under the applicable Purchaser Note shall be automatically increased by an amount equal to such remaining Purchase Price in accordance with the applicable Purchaser Note.

Notwithstanding the foregoing, the Purchaser may elect to satisfy all or any portion of the Purchase Price payable to an Originator by an issuance and sale by the Purchaser and corresponding purchase by such Originator of one common share in the capital of the Purchaser to such Originator for each dollar of the Purchase Price for such Receivables transferred hereunder and the Purchaser shall reflect a corresponding increase in the capital account of such Originator in the Purchaser. From time to time at the request of an Originator, the Purchaser will issue share certificates evidencing the issuance of such common shares. In each case, each of the applicable Originator and the Purchaser hereby acknowledge the sufficiency of such consideration.

Notwithstanding the foregoing, all amounts paid by the Purchaser to any Originator shall be allocated first to the payment of accrued and unpaid interest on the Purchaser Note of such Originator and second to the repayment of the principal outstanding on the Purchaser Note of such Originator to the extent of such outstanding principal thereof as of the date of such payment before such amounts may be allocated for any other purpose.  The Servicer shall make all appropriate record keeping entries with respect to each of the Purchaser Notes to reflect the
 
 
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foregoing payments and reductions made pursuant to Section 3.3, reductions on account of repayments of the principal amount of the Purchaser Notes and accrued interest on the Purchaser Notes and the Servicer’s books and records shall constitute rebuttable presumptive evidence of the principal amount of, and accrued interest on, each of the Purchaser Notes at any time.  Each Originator hereby irrevocably authorizes the Servicer to mark the Purchaser Notes “CANCELED” and to return such Purchaser Notes to the Purchaser upon the final payment thereof after the occurrence of the Purchase and Sale Termination Date with respect to such Originator.

Notwithstanding the foregoing, if, as of any date (the “Determination Date”), after giving effect to payments of such Purchase Price in accordance with Section 3.2, (x) the sum of the aggregate stated amount of Letters of Credit issued on behalf of any Originator or its designee during the period from the Original Closing Date to the Determination Date plus any related fees and expenses payable by the Purchaser in connection with the issuance of such Letters of Credit plus the aggregate of the amounts of indebtedness under the Purchaser Note payable to such Originator that remain unpaid for more than ninety (90) days during such period (the “Aged Amounts”) would exceed (y) an amount equal to 25% of the aggregate Purchase Price payable by the Purchaser to such Originator for all Receivables generated by such Originator during such period, the Purchaser shall pay the Purchase Price for such Receivable in cash and/or make a prepayment of such Aged Amounts to the extent necessary such that the sum of the amounts described in clause (x) above would not exceed the amount in clause (y) above.

In the event an Originator requests that any purchases be paid for by issuance of a Letter of Credit, such Originator shall on a timely basis provide the Purchaser with such information as is necessary for the Purchaser to obtain such Letter of Credit from the LC Bank.  None of ONX, any Originator nor any Affiliate thereof (other than the Purchaser) shall have any reimbursement or recourse obligations in respect of any Letter of Credit.

SECTION 3.3  Settlement as to Specific Receivables and Dilution.

(a)            If, on the day of purchase of any Receivable from an Originator hereunder, any of the representations or warranties set forth in Sections 5.10, 5.15 and 5.17 was untrue with respect to such Receivable, then the Purchase Price with respect to such Receivable shall be reduced by an amount equal to the Outstanding Balance of such Receivable and shall be accounted to such Originator as provided in paragraph (c) or (d), as applicable, below; provided, that if the Purchaser thereafter receives payment on account of Collections due with respect to such Receivable, the Purchaser promptly shall deliver such funds to such Originator.

(b)            If, on any day, the Outstanding Balance of any Receivable purchased hereunder is reduced or adjusted as a result of any defective, rejected or returned goods or services, or any revision, cancellation, allowance, discount or other adjustment made by an Originator or any Affiliate of such Originator (other than the Purchaser), or the Servicer or any Affiliate of the Servicer (other than the Purchaser), or any setoff or dispute between an Originator or any Affiliate of such Originator (other than the Purchaser), or the Servicer or any Affiliate of the Servicer (other than the Purchaser) and an Obligor (except any such revision, cancellation, allowance, discount or other adjustment made in settlement of such Receivable resulting from the financial inability of the applicable Obligor to pay such Receivable and, in the
 
 
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case of all Receivables (other than Specified Receivables), made in accordance with the Credit and Collection Policies), then the Purchase Price with respect to such Receivable shall be reduced by the amount of such net reduction and shall be accounted to such Originator as provided in paragraph (c) or (d), as applicable, below.

(c)            In the case of any Receivable sold by an Originator to the Purchaser hereunder, any reduction in the Purchase Price of such Receivable pursuant to paragraph (a) or (b) above shall be applied as a credit for the account of the Purchaser against the Purchase Price of Receivables subsequently purchased by the Purchaser from such Originator hereunder; provided, however if there have been no purchases of Receivables from such Originator (or insufficiently large purchases of Receivables) to create a Purchase Price sufficient to so apply such credit against, the amount of such credit:

(i)           to the extent of any outstanding principal balance under the Purchaser Note payable to such Originator, shall be deemed to be a payment under, and shall be deducted from the principal amount outstanding under, the Purchaser Note payable to such Originator; and

(ii)          after making any deduction pursuant to clause (i) above, shall be paid in cash to the Purchaser by such Originator in the manner and for application as described in the following proviso;

provided, further, that at any time (y) when an Event of Default exists under the Receivables Financing Agreement or (z) on or after the Purchase and Sale Termination Date with respect to such Originator, the amount of any such credit shall be paid by such Originator to the Purchaser by deposit in immediately available funds into a Lock-Box Account for application by the Servicer to the same extent as if Collections of the applicable Receivable in such amount had actually been received on such date.

(d)            In the case of any Receivable sold by an Originator to the Purchaser hereunder in consideration for common shares in the capital of the Purchaser, the amount of any reduction in the Purchase Price for such Receivable pursuant to paragraph (a) or (b) above, shall be paid by such Originator in cash, in immediately available funds, into a Lock-Box Account for application by the Servicer in accordance with the terms of the Receivables Financing Agreement and the Purchaser shall record a corresponding decrease in the capital account of such Originator in the Purchaser.

SECTION 3.4  [Reserved]

SECTION 3.5  Reconveyance of Receivables.  In the event that an Originator has paid to the Purchaser the full Outstanding Balance of any Receivable pursuant to Section 3.3, the Purchaser shall reconvey such Receivable to such Originator, without representation or warranty, but free and clear of all liens, security interests, charges, and encumbrances created by the Purchaser.

SECTION 3.6  Letters of Credit.
 
 
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(a)            Upon the request of ONX (acting as agent for the Originators as described in subsection (b) below), and on the terms and conditions for issuing Letters of Credit under the Receivables Financing Agreement (including any limitations therein on the amount of any such issuance), the Purchaser agrees to cause the LC Bank to issue, on the Purchase Dates specified by ONX (on behalf of the Originators), Letters of Credit on behalf of any Originator or any Originator’s designee (which designee shall be an Affiliate of the Purchaser and the Originators) in favour of the beneficiaries specified by ONX (on behalf of the Originators).  The aggregate stated amount of the Letters of Credit being issued on any Purchase Date on behalf of any Originator or its designee plus any related fees and expenses payable by the Purchaser in connection with the issuance of the Letters of Credit shall constitute a credit against the aggregate Purchase Price payable by the Purchaser to such Originator on such Purchase Date pursuant to Section 3.1.  To the extent that the aggregate stated amount of the Letters of Credit being issued on any Payment Date plus any related fees and expenses payable by the Purchaser in connection with the issuance of the Letters of Credit exceeds the aggregate Purchase Price payable by the Purchaser to any Originator on such Payment Date, such excess shall be deemed to be a reduction in the outstanding principal balance of (and, to the extent necessary, the accrued but unpaid interest on) the applicable Purchaser Note payable to such Originator.  The aggregate stated amount of Letters of Credit to be issued on any Payment Date plus any related fees and expenses payable by the Purchaser in connection with the issuance of the Letters of Credit shall not exceed the sum of the aggregate Purchase Price payable on such Payment Date to the Originators plus the aggregate outstanding principal balance of, and accrued but unpaid interest on, the Purchaser Notes payable to the Originators on such Payment Date.  In the event that any such Letter of Credit issued pursuant to this Section 3.6 (i) expires or is cancelled or otherwise terminated with all or any portion of its stated amount undrawn, (ii) has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the Purchaser’s Reimbursement Obligation in respect thereof is reduced for any reason other than by virtue of a payment made in respect of a drawing thereunder, then an amount equal to such undrawn amount, such decrease or such reduction, as the case may be, shall either be paid in cash to such Originator on the next Payment Date or, if the Purchaser does not then have cash available therefor, shall be added to the outstanding principal balance of the Purchaser Note issued to such Originator.  Under no circumstances shall any Originator (or any Affiliate thereof (other than the Purchaser)) have any reimbursement or recourse obligations in respect of any Letter of Credit.

(b)            Each Originator appoints ONX as its agent (on which appointment the Purchaser, each Agent, the Group Agents and the Secured Parties may rely until such Originator provides contrary written notice to all of such Persons) to act on such Originator’s behalf to take all actions and to make all decisions in respect of the issuance, amendment and administration of the Letters of Credit, including requests for the issuance and extension of Letters of Credit and the allocation of the stated amounts of Letters of Credit against the Purchase Price owed to particular Originators and against the Purchaser Notes issued to particular Originators.  In the event that ONX requests a Letter of Credit hereunder, ONX shall on a timely basis provide the Purchaser with such information as is necessary for the Purchaser to obtain such Letter of Credit from the LC Bank, and shall notify the relevant Originators, the Purchaser and the Administrator of the allocations described in the preceding sentence.  Such allocations shall be binding on the Purchaser and each Originator, absent manifest error.
 
 
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(c)            Each Originator agrees to be bound by the LC Bank’s interpretations of any Letter of Credit issued for the Purchaser and by the LC Bank’s written regulations and customary practices relating to letters of credit, in each case subject to the terms and conditions set forth in the Receivables Financing Agreement.

ARTICLE IV
CONDITIONS PRECEDENT

SECTION 4.1  Conditions Precedent to Effectiveness of this Agreement.  The effectiveness of this Agreement is subject to the condition precedent that the Purchaser and the each Agent (as the Purchaser’s assignees) and each Group Agent shall have received, on or before the Closing Date, the following, each (unless otherwise indicated) dated on or before the Closing Date, and each in form and substance reasonably satisfactory to the Purchaser and the each Agent (as the Purchaser’s assignees) and each Group Agent:

(a)            A copy of the resolutions of the board of directors or managers of each Originator approving this Agreement and the other Transaction Documents to be executed and delivered by it and the transactions contemplated hereby and thereby, certified by the Secretary or Assistant Secretary of such Originator;

(b)            Certificates of status, certificates of compliance, good standing certificates or analogous certificates for each Originator issued as of a recent date acceptable to the Purchaser and each Agent (as the Purchaser’s assignees);

(c)            A certificate of the Secretary or Assistant Secretary of each Originator certifying the names and true signatures of the officers authorized on such Person’s behalf to sign this Agreement and the other Transaction Documents to be executed and delivered by it (on which certificate the Servicer, the Purchaser and each Agent (as the Purchaser’s assignees) may conclusively rely until such time as the Servicer, the Purchaser and each Agent (as the Purchaser’s assignees) shall receive from such Person a revised certificate meeting the requirements of this paragraph (c));
 
(d)            The certificate or articles of incorporation or other organizational document of each Originator, together with a copy of the by-laws of such Originator, each duly certified by the Secretary or an Assistant Secretary of such Originator; and

(e)            Evidence (i) of the execution and delivery by each of the parties thereto of each of the other Transaction Documents to be executed and delivered by it in connection herewith and (ii) that each of the conditions precedent to the execution, delivery and effectiveness of such other Transaction Documents has been satisfied to the Purchaser’s and each Agent’s (as the Purchaser’s assignees) satisfaction.

SECTION 4.2  Certification as to Representations and Warranties.  Each Originator, by accepting the Purchase Price related to each purchase of Receivables generated by such Originator, shall be deemed to have certified that the representations and warranties contained in Article V, as from time to time amended in accordance with the terms hereof, are true and correct in all material
 
 
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respects on and as of such day as though made on and as of such day, except for representations and warranties which apply as to an earlier date (in which case such representations and warranties shall be true and correct as of such date).

SECTION 4.3  Additional Originators.  Additional Persons may be added as Originators hereunder, with the prior written consent of the Purchaser, each Agent and each Group Agent; provided that the following conditions are satisfied on or before the date of such addition:

(a)            The Servicer shall have given the Purchaser, each Agent and each Group Agent at least thirty (30) days prior written notice of such proposed addition and the identity of the proposed additional Originator and shall have provided such other information with respect to such proposed additional Originator as any Agent or any Group Agent may reasonably request;

(b)            such proposed additional Originator has executed and delivered to the Purchaser, each Agent and each Group Agent an agreement substantially in the form attached hereto as Exhibit C (a “Joinder Agreement”);

(c)            such proposed additional Originator has delivered to the Purchaser and each Agent (as the Purchaser’s assignees) and each Group Agent each of the documents with respect to such Originator described in Section 4.1 and, to the extent requested by the any Agent or any Group Agent, such opinions covering matters similar to the matters covered by the opinions delivered on the Closing Date, in form and substance reasonably satisfactory to the Purchaser, each Agent (as the Purchaser’s assignees) and each Group Agent, from external counsel reasonably satisfactory to each Agent and each Group Agent (it being understood that external counsel that delivered opinions on the Closing Date shall be satisfactory to each Agent and each Group Agent for purposes of delivering similar opinions under this clause (c));

(d)            [Reserved]; and

(e)            the Purchase and Sale Termination Date shall not have occurred and be continuing with respect to all Originators then party to this Agreement.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE TRANSFERORS

In order to induce the Purchaser to enter into this Agreement and to make purchases hereunder, each Originator hereby makes the representations, warranties and covenants set forth in this Article V.

SECTION 5.1  Existence and Power.  Such Originator is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has all power and authority and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted, unless the failure to have such power, authority, licenses, authorizations, consents or approvals would not reasonably be expected to have a Material Adverse Effect.
 
 
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SECTION 5.2  Purchaser and Governmental Authorization, Contravention.  The execution, delivery and performance by such Originator of this Agreement are within such Originator’s company powers, have been duly authorized by all necessary company action, require no action by or in respect of, or filing with (other than the filing of the PPSA financing statements, financing change statements and applications for registration contemplated hereunder), any governmental body, agency or official, and, do not contravene, or constitute a default under, any provision of applicable law or regulation or of the organizational documents of such Originator or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Originator (unless such contravention or default would not reasonably be expected to have a Material Adverse Effect) or result in the creation or imposition of any lien (other than liens in favour of the Purchaser or any Agent under the Transaction Documents or other Permitted Adverse Claims) on assets of such Originator or any of its Subsidiaries.
 
SECTION 5.3  Binding Effect of Agreement.  This Agreement and each of the other Transaction Documents to which it is a party constitutes the legal, valid and binding obligation of such Originator enforceable against such Originator in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law.
 
SECTION 5.4  Accuracy of Information.  All information heretofore furnished in writing by such Originator to the Purchaser, any Agent or any Group Agent pursuant to or in connection with this Agreement or any other Transaction Document or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Originator to the Purchaser, any Agent or any Group Agent in writing pursuant to this Agreement or any Transaction Document will be, true and accurate in all material respects on the date such information is stated or certified.
 
SECTION 5.5  Actions, Suits.  There are no actions, suits or proceedings pending or, to the best of such Originator’s knowledge, threatened against or affecting such Originator or any of its Affiliates or their respective properties, in or before any court, arbitrator or other body, which would reasonably be expected to have a Material Adverse Effect upon the ability of such Originator (or such Affiliate) to perform its obligations under this Agreement or any other Transaction Document to which it is a party.
 
SECTION 5.6  Taxes.  Such Originator has filed or caused to be filed all Canadian federal and provincial income tax returns and all other returns, statements, forms and reports for taxes, domestic or foreign, required to be filed by it and has paid all taxes payable by it which have become due or any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except (a) any
 
 
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taxes, fees, assessments and other charges that are being contested in good faith by appropriate proceedings and for which such Originator has set aside on its books adequate reserves or (b) to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.
 
SECTION 5.7  Compliance with Applicable Laws.  Such Originator is in compliance with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject if the failure to comply would reasonably be expected to have a Material Adverse Effect.  In addition, No Receivable sold hereunder contravenes in any material respect any laws, rules or regulations applicable thereto or to such Originator.
 
SECTION 5.8  Reliance on Separate Legal Identity.  Such Originator acknowledges that each of the Credit Parties, the Group Agents and each Agent are entering into the Transaction Documents to which they are parties in reliance upon the Purchaser’s identity as a legal entity separate from such Originator.
 
SECTION 5.9  [Reserved].
 
SECTION 5.10  Perfection.  Immediately preceding its sale of each Receivable hereunder, such Originator was the owner of such Receivable sold purported to be sold, as the case may be, free and clear of any Adverse Claims other than Permitted Adverse Claims, and each such sale hereunder constitutes a valid sale, transfer and assignment of all of such Originator’s right, title and interest in, to and under the Receivables sold by it, free and clear of any Adverse Claims other than Permitted Adverse Claims. On or before the date hereof and before the generation by such Originator of any new Receivable to be sold or otherwise conveyed hereunder, all financing statements, applications for registration and other documents (other than, for a period of up to ten (10) Business Days after the first sale of Quebec Receivables hereunder by any Originator, applications for registration with the Register of Personal and Movable Real Rights (Quebec) to be filed in accordance with Section 1.6 in respect of the sale of Quebec Receivables hereunder by such Originator), if any, required to be recorded or filed in order to perfect and protect the Purchaser’s ownership interest in such Receivable against all creditors of and purchasers from such Originator will have been duly filed in each filing office necessary for such purpose, and all filing fees and taxes, if any, payable in connection with such filings shall have been paid in full.
 
SECTION 5.11  Creation of Receivables.  The Originator has exercised at least the same degree of care and diligence in the creation of the Receivables sold or otherwise transferred hereunder as it has exercised in connection with the creation of receivables originated by it and not so transferred hereunder.
 
SECTION 5.12  Credit and Collection Policy.  The Originator has complied in all material respects with its Credit and Collection Policy in regard to
 
 
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each Receivable (other than Specified Receivables) sold by it hereunder and each related Contract, if any.
 
SECTION 5.13  Enforceability of Contracts.  Each Contract related to any Receivable sold by such Originator hereunder is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the outstanding balance of such Receivable, enforceable against the Obligor in accordance with its terms, without being subject to any defense, deduction, offset or counterclaim, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law, and such Originator has fully performed its obligations, if any, under such Contract.
 
SECTION 5.14  Location and Offices.  As of the date hereof, such Originator’s location (within the meaning of section 7(3) of the Personal Property Security Act (Ontario)), registered office, domicile and chief executive office is at the address set forth on Schedule II hereto, and such location has not been changed for at least four months before the date hereof.  The offices where such Originator keeps all records concerning the Receivables (other than Specified Receivables) are located at the addresses set forth on Schedule III hereto or such other locations of which the Purchaser and each Agent (as the Purchaser’s assignees) has been given written notice in accordance with the terms hereof.
 
SECTION 5.15  Good Title.  Upon the sale or other conveyance hereunder by such Originator and on the Closing Date for then existing Receivables, the Purchaser shall have a valid and perfected first priority ownership interest in each Receivable sold to it hereunder, free and clear of any Adverse Claim other than Permitted Adverse Claims. On or before the Closing Date, the Purchaser shall have received copies of all releases, estoppels and no-interest letters from any Person who has made a registration or filing against the applicable Originator that could be relied upon to perfect or protect an interest in the Receivables, confirming that such registration or filing does not perfect or protect an interest in the Receivables and that such Person will not rely on such registration or filing for such purpose.
 
SECTION 5.16  Names.  Except as described in Schedule IV, such Originator has not used any corporate or company names, tradenames or assumed names other than its name set forth on the signature pages of this Agreement.
 
SECTION 5.17  Nature of Receivables.  Each Receivable sold, transferred, or assigned hereunder is an Eligible Receivable on the date of sale, transfer or assignment, unless otherwise specified in the first Information Package or Purchase Request that includes such Receivable.
 
SECTION 5.18  Bulk Sales, Margin Regulations, No Fraudulent Conveyance.  No transaction contemplated hereby requires compliance with any bulk sales act or similar law.  No purchase hereunder constitutes a fraudulent
 
 
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transfer or conveyance, preference or transfer at undervalue under any Canadian Insolvency Laws or other similar laws of any jurisdiction applicable to the relevant Originator, or is otherwise void or voidable under such or similar laws or principles or for any other reason.
 
SECTION 5.19  Financial Condition.

(a)            The consolidated balance sheet of CB and subsidiaries as of December 31, 2017, and the related consolidated statements of operations, shareowners’ equity (deficit) and comprehensive income (loss), and cash flows for the year ended December 31, 2017, copies of which have been furnished to the Purchaser and each Agent (as the Purchaser’s assignees), present fairly, in all material respects, the financial position of CB and subsidiaries as of such date, and the results of their operations and their cash flows for the period then ended, prepared in accordance with accounting principles generally accepted in Canada.

(b)            On the date hereof, and on the date of each purchase hereunder (both before and after giving effect to such purchase), such Originator shall be Solvent.

SECTION 5.20  Licenses, Contingent Liabilities, and Labor Controversies.

(a)            Such Originator has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, unless such failure would not reasonably be expected to have a Material Adverse Effect.

(b)            There are no labor controversies pending against such Originator that have had (or would not reasonably be expected to have) a Material Adverse Effect.

SECTION 5.21  Anti-Money Laundering/International Trade Law Compliance.  No Covered Entity is a Sanctioned Person.  No Covered Entity, either in its own right or through any third party, (i) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (iii) engages in any dealings or transactions prohibited by any Anti-Terrorism Law.

SECTION 5.22  Residency. Such Originator is not a non-resident of Canada within the meaning of the Income Tax Act (Canada).

ARTICLE VI
COVENANTS OF THE ORIGINATORS

SECTION 6.1  Affirmative Covenants.  From the date hereof until (i) in the case of an Originator, the first date following the Purchase and Sale Termination Date with respect to such Originator when all obligations of such Originator to the Purchaser and its assigns have been satisfied in full or (ii) in the case of ONX, the first date following the Purchase and Sale Termination Date with respect to all
 
 
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Originators when all obligations of ONX and each Originator to the Purchaser and its assigns have been satisfied in full, each Originator agrees that it will, unless each Agent and the Purchaser shall otherwise consent in writing, perform the following:

(a)            General Information.  Such Originator shall furnish to the Purchaser, any Agent and each Group Agent such information as such Person may from time to time reasonably request.

(b)            Furnishing of Information and Inspection of RecordsSuch Originator will furnish each Agent and each Group Agent from time to time such information with respect to the Receivables as any Agent or such Group Agent may reasonably request, except to the extent prohibited by applicable law or licenses.  Such Originator will, at any time and from time to time during regular business hours with reasonable prior written notice, (i) at such Originator’s expense, permit any Agent or any Group Agent, or their respective agents or representatives, (A) to examine and make copies of and abstracts from all books and records relating to the Receivables or Related Rights and (B) to visit the offices and properties of such Originator for the purpose of examining such books and records, and to discuss matters relating to the Receivables, other Related Rights or such Originator’s performance hereunder or under the other Transaction Documents to which it is a party with any of the officers, directors, employees or independent chartered accountants of such Originator (provided that representatives of such Originator are present during such discussions) having knowledge of such matters and (ii) without limiting the provisions of clause (i) above, from time to time during regular business hours, upon reasonable prior written notice from any Agent or the Group Agents, permit certified chartered accountants or other auditors acceptable to such Agent to conduct a review of its books and records with respect to the Receivables; provided, however, that such Originator shall not be obligated to permit such examinations, visits or reviews under clauses (i) and (ii) above, together with any examinations, visits or reviews pursuant to Section 1(e) of Exhibit IV of the Receivables Financing Agreement, more than three times per year (commencing upon and including the Closing Date) during such time that no Event of Default pursuant to the Receivables Financing Agreement has occurred and is continuing and no Originator shall be obligated to pay or reimburse any Person for the expenses of more than one such examination or visit pursuant to clause (i) above (together with any examination or visit pursuant to Section 1(e)(i) of Exhibit IV of the Receivables Financing Agreement) per year (commencing upon and including the Closing Date) during such time that no Event of Default pursuant to the Receivables Financing Agreement has occurred and is continuing.

(c)            Keeping of Records and Books.  The Originator will have and maintain (i) administrative and operating procedures (including an ability to recreate records if originals are destroyed), (ii) adequate facilities, personnel and equipment and (iii) all records and other information reasonably necessary for collection of the Receivables originated by such Originator (including records adequate to permit the daily identification of each new such Receivable and all Collections of, and adjustments to, each existing such Receivable).  Such Originator will give the Purchaser, each Agent and each Group Agent prior notice of any change in such administrative and operating procedures that causes them to be materially different from the procedures described to the Purchaser, each Agent and each Group Agent on or before the date
 
 
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hereof as such Originator’s then existing or planned administrative and operating procedures for collecting Receivables.

(d)            Performance and Compliance with Receivables and ContractsSuch Originator will at its expense timely and fully perform and comply with all provisions, covenants and other promises required to be observed by it under all Contracts or other documents or agreements related to the Receivables if the failure to perform or comply would reasonably be expected to have a Material Adverse Effect.

(e)            Credit and Collection PolicyThe Originator will comply in all material respects with its Credit and Collection Policy with regard to each Receivable (other than Specified Receivables) originated by such Originator.

(f)            Receivable Purchase AgreementThe Originator will perform and comply with each covenant and other undertaking in the Receivables Financing Agreement that the Purchaser undertakes to cause such Originator to perform, subject to any grace periods for such performance provided for in the Receivables Financing Agreement.

(g)            Preservation of Existence.  Such Originator shall preserve and maintain its existence as a corporation, partnership or unlimited liability company, as applicable, and all rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as an extra-provincial corporation, partnership or unlimited liability company, as applicable, in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification would be reasonably expected to have a Material Adverse Effect.

(h)            Location of Records.  Such Originator will keep its location (within the meaning of section 7(3) of the Personal Property Security Act (Ontario)), registered office, domicile and chief executive office, and the offices where it keeps its records concerning or related to Receivables (other than Specified Receivables), at the address(es) referred to in Schedule II or Schedule III, respectively, or, upon thirty (30) days’ prior written notice to the Purchaser, each Agent (as the Purchaser’s assignees) and each Group Agent, at such other locations in jurisdictions where all action required by Section 7.3 shall have been taken and completed.

SECTION 6.2  Reporting Requirements.  From the date hereof until (i) in the case of an Originator, the first date following the Purchase and Sale Termination Date with respect to such Originator when all obligations of such Originator to the Purchaser and its assigns have been satisfied in full or (ii) in the case of ONX, the first date following the Purchase and Sale Termination Date with respect to all Originators when all obligations of ONX and each Originator to the Purchaser and its assigns have been satisfied in full, each Originator agrees that it will, unless the Purchaser, each Agent and the Majority Group Agents shall otherwise consent in writing, furnish to the Purchaser, each Agent and the Majority Group Agents:
 
 
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(a)            Purchase and Sale Termination Events.  As soon as possible, and in any event within three (3) Business Days after such Originator becomes aware of the occurrence of each Purchase and Sale Termination Event with respect to such Originator or each event which with notice or the passage of time or both would become a Purchase and Sale Termination Event (an “Unmatured Purchase and Sale Termination Event”) with respect to such Originator, a written statement of the chief financial officer, treasurer or chief accounting officer of such Originator describing such Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination Event and any action that such Originator proposes to take with respect thereto, in each case in reasonable detail;

(b)            Proceedings.  As soon as possible and in any event within three (3) Business Days after such Originator becomes aware thereof, written notice of (i) any litigation, investigation or proceeding of the type described in Section 5.5 not previously disclosed to the Purchaser, each Agent or each Group Agent which would reasonably be expected to have a Material Adverse Effect, and (ii) all material adverse developments that have occurred with respect to any previously disclosed litigation, proceedings and investigations; and

(c)            Other.  Promptly, from time to time, such other information, documents, records or reports respecting the Receivables or the conditions or operations, financial or otherwise, of such Originator as the Purchaser, any Agent or any Group Agent may from time to time reasonably request in order to protect the interests of the Purchaser, any Agent, the Credit Parties, the Group Agents under or as contemplated by the Transaction Documents.

(d)            Other Documents.  Promptly after the execution and delivery thereof, written notice of the effectiveness of any written agreement, instrument, document or other arrangement to which such Originator becomes a party after the effectiveness of this Agreement that restricts the right of such Originator to amend, supplement, amend and restate or otherwise modify, or to extend or renew, or to waive any right under, this Agreement or any other Transaction Document.

SECTION 6.3  Negative Covenants.  From the date hereof until the latest of the Final Payout Date under the Receivables Financing Agreement, each Originator agrees that, unless the Purchaser, each Agent and the Majority Group Agents shall otherwise consent in writing, it shall not:

(a)            Sales, Liens, Etc.  Except as otherwise provided herein or in any other Transaction Document, sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim other than Permitted Adverse Claims upon or with respect to, any Receivable sold or otherwise conveyed or purported to be sold or otherwise conveyed hereunder or related Contract or Related Security, or any interest therein, or any Collections thereon, or assign any right to receive income in respect thereof.

(b)            Extension or Amendment of Receivables.  Except as the Servicer is otherwise permitted in the Receivables Financing Agreement and the applicable Credit and Collection Policy, extend, amend or otherwise modify in any material respect the terms of any Receivable (other than Specified Receivables) generated by it that is sold or otherwise conveyed
 
 
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hereunder, or amend, modify or waive, in any material respect, the provisions of any Contract related thereto.

(c)            Change in Business or Credit and Collection Policy.  (i) Make any change in the character of its business, which change could impair the collectibility of any Receivable sold by such Originator hereunder or (ii) make any change in its Credit and Collection Policy that would reasonably be expected to adversely affect the collectibility of the Receivables, the enforceability of any related Contract or its ability to perform its obligations under the related Contract or the Transaction Documents, in the case of either (i) or (ii) above, without the prior written consent of each Agent and each Group Agent.  No Originator that is also an Originator shall make any change in any Credit and Collection Policy without giving prior written notice thereof to each Agent and each Group Agent.

(d)            [Reserved].

(e)            Mergers, Acquisitions, Sales, etc.  Be a party to any merger, amalgamation or consolidation or directly or indirectly sell, transfer, assign, convey or lease, whether in one or a series of transactions, all or substantially all of its assets, unless with respect to such merger, amalgamation, consolidation, sale, transfer, assignment, conveyance or lease, as the case may be, the Purchaser, each Agent and each Group Agent have each (A) received ten (10) days’ prior notice thereof, (B) received executed copies of all documents, certificates and opinions (including, without limitation, opinions relating to bankruptcy and PPSA matters) as the Purchaser, any Agent or any Group Agent shall reasonably request and (C) been satisfied that all other action reasonably necessary to perfect and protect the interests of the Purchaser and each Agent, in and to the Receivables to be sold by it hereunder and other Related Rights, as requested by the Purchaser, any Agent or any Group Agent shall have been taken by, and at the expense of such Originator (including the filing of any PPSA financing statements, applications for registration, the receipt of certificates and other requested documents from public officials and all such other actions required pursuant to Section 7.3).

(f)            Lock-Box Banks.  Make any changes in its instructions to Obligors regarding Collections on Receivables sold or otherwise conveyed by it hereunder or add or terminate any bank as a Lock-Box Bank unless the requirements of the Receivables Financing Agreement have been met.

(g)            Accounting for Purchases.  Account for or treat (whether in such Originator’s financial statements or otherwise) the transactions contemplated hereby in any manner other than as sales of the Receivables and Related Rights by such Originator to the Purchaser.

(h)            Anti-Money Laundering/International Trade Law Compliance.  No Originator will become a Sanctioned Person.  No Covered Entity, either in its own right or through any third party, will (i) have any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) do business in or with, or derive any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; (iii) engage in any dealings or transactions prohibited by any Anti-Terrorism Law or (iv) use the
 
 
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proceeds of any Loan to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law.  Such Originator shall comply with all Anti-Terrorism Laws.  Such Originator shall promptly notify each Agent and each Group Agent in writing upon the occurrence of a Reportable Compliance Event.

SECTION 6.4  Substantive Consolidation.  Each Originator hereby acknowledges that this Agreement and the other Transaction Documents are being entered into in reliance upon the Purchaser’s identity as a legal entity separate from such Originator and its Affiliates.  Therefore, from and after the date hereof, each Originator shall take all reasonable steps necessary to make it apparent to third Persons that the Purchaser is an entity with assets and liabilities distinct from those of such Originator and any other Person, and is not a division of such Originator, its Affiliates or any other Person.  Without limiting the generality of the foregoing and in addition to and consistent with the other covenants set forth herein, such Originator shall take such actions as shall be required in order that:

                (a)          such Originator (other than ONX) shall not be involved in the day to day management of the Purchaser;
 
                (b)          such Originator shall maintain separate corporate records and books of account from the Purchaser and otherwise will observe corporate formalities and have a separate area from the Purchaser for its business (which may be located at the same address as the Purchaser, and, to the extent that it and the Purchaser have offices in the same location, there shall be a fair and appropriate allocation of overhead costs between them, and each shall bear its fair share of such expenses);
 
                (c)           the financial statements and books and records of such Originator shall be prepared after the date of creation of the Purchaser to reflect and shall reflect the separate existence of the Purchaser; provided, that the Purchaser’s assets and liabilities may be included in a consolidated financial statement issued by an Affiliate of the Purchaser; provided, however, that any such consolidated financial statement or the notes thereto shall make clear that the Purchaser’s assets are not available to satisfy the obligations of such Affiliate;
 
                (d)          except as permitted by the Receivables Financing Agreement, (i) such Originator shall maintain its assets (including, without limitation, deposit accounts) separately from the assets (including, without limitation, deposit accounts) of the Purchaser and (ii) the Purchaser’s assets, and records relating thereto, have not been, are not, and shall not be, commingled with those of such Originator;
 
                (e)           not identify the telephone number of the Purchaser as its telephone number and all of the Purchaser’s business correspondence and other communications shall be conducted in the Purchaser’s own name and on its own stationery;
 
 
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                (f)           such Originator shall not act as an agent for the Purchaser, other than ONX in its capacity as the Servicer or any Originator in its capacity as Sub-Servicer, and in connection therewith, each such Originator shall present itself to the public as an agent for the Purchaser and a legal entity separate from the Purchaser;
 
                (g)          such Originator shall not conduct any of the business of the Purchaser in its own name;
 
                (h)          such Originator shall not pay any liabilities of the Purchaser out of its own funds or assets;
 
                (i)            such Originator shall maintain an arm’s-length relationship with the Purchaser;
 
                (j)            such Originator shall not assume or guarantee or become obligated for the debts of the Purchaser or hold out its credit as being available to satisfy the obligations of the Purchaser;
 
                (k)           such Originator shall not acquire obligations of the Purchaser other than, in the case of the Originators, the Purchaser Notes;
 
                (l)            such Originator shall allocate fairly and reasonably overhead or other expenses that are properly shared with the Purchaser, including, without limitation, shared office space;
 
                (m)         such Originator shall identify and hold itself out as a separate and distinct entity from the Purchaser;
 
                (n)          such Originator shall correct any known misunderstanding respecting its separate identity from the Purchaser;
 
                (o)          such Originator shall not enter into, or be a party to, any transaction with the Purchaser, except as contemplated by the Transaction Documents or in the ordinary course of its business and on terms which are intrinsically fair and not less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party;
 
                (p)          such Originator shall not pay the salaries of the Purchaser’s employees, if any;
 
                (q)          services provided to the Purchaser by consultants and agents shall be paid directly from the Purchaser's bank accounts (or, to the extent paid by such Originator, reimbursed by the Purchaser) and, to the extent any consultant or agent of the Purchaser is also an employee, consultant or agent of such Originator, compensation of such employee, consultant or agent shall be allocated between the Purchaser and such Originator on a basis that reflects the services rendered to the Purchaser and such Originator;
 
 
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                (r)            all overhead expenses for items shared between the such Originator and the Purchaser shall be allocated on the basis of actual use to the extent practicable and, to the extent such allocation is not practicable, on a basis reasonably related to actual use; and
 
                (s)           to the extent not already covered in paragraphs (a) through (r) above, such Originator shall comply and/or act in accordance with all of the other separateness covenants set forth in each of Section 3 of Exhibit IV to the Receivables Financing Agreement.

ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS
IN RESPECT OF RECEIVABLES

SECTION 7.1  Rights of the Purchaser.  Each Originator hereby authorizes the Purchaser or the Servicer or their respective designees or assignees under the Receivables Financing Agreement (including, without limitation, any Agent) to take, subject to the terms of the Receivables Financing Agreement and any applicable regulatory restrictions, any and all steps in such Originator’s name necessary or desirable, in their respective determination, to collect all amounts due under any and all Receivables sold or otherwise conveyed or purported to be conveyed by it hereunder, including, without limitation, endorsing the name of such Originator on cheques and other instruments representing Collections and enforcing such Receivables and the provisions of the related Contracts that concern payment and/or enforcement of rights to payment.
 
SECTION 7.2  Responsibilities of the Originators.  Anything herein to the contrary notwithstanding:

(a)            Collection Procedures.  Each Originator will instruct all Persons who are its respective Obligors to make payments of Receivables (other than Specified Receivables) sold or otherwise conveyed or purported to be conveyed by it hereunder directly to a Lock-Box Account, except in the case of any Payment-on-Delivery Transactions and provided, that, such Originator may permit such Obligor to make On-Site Payments notwithstanding such instructions.  Each Originator further agrees to transfer any Collections of Receivables (other than Specified Receivables) sold or conveyed by it hereunder, including without limitation, Collections received in connection with any Payment-on-Delivery Transactions and On-Site Payments, that it receives directly to a Lock-Box Account within three (3) Business Days of receipt thereof, and agrees that all such Collections shall be deemed to be received in trust for the Purchaser and the applicable Agent.

(b)            Each Originator shall perform its obligations hereunder, and the exercise by the Purchaser or its designee of its rights hereunder shall not relieve such Originator from such obligations.

(c)            None of the Purchaser, the Servicer, the Lenders, the Group Agents or any Agent shall have any obligation or liability to any Obligor or any other third Person with respect
 
 
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to any Receivables, Contracts related thereto or any other related agreements, nor shall the Purchaser, the Servicer, the Lenders, the Group Agents or any Agent be obligated to perform any of the obligations of such Originator thereunder.

(d)            Each Originator hereby agrees that at any time following the occurrence and during the continuation of any Event of Default set forth in clause (a)(ii), (f) or clause (i) of Exhibit V of the Receivables Financing Agreement, an Agent may direct the Obligors that payment of all amounts payable under any Receivable is to be made directly to the applicable Agent or its designee.  The exercise of this right will be subject to any applicable regulatory restrictions.  ONX agrees that, if such Agent is unable to exercise the rights in this clause (d) due to any applicable regulatory restrictions, it will, subject to any applicable regulatory restrictions, follow the instructions of such Agent in connection therewith.

SECTION 7.3  Further Action Evidencing Purchases.  Each Originator agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the Purchaser, the Servicer, any Agent or any Group Agent may reasonably request in order to perfect, protect or more fully evidence the Receivables and Related Rights purchased by or contributed, as applicable, to the Purchaser hereunder, or to enable the Purchaser to exercise or enforce any of its rights hereunder or under any other Transaction Document.  Without limiting the generality of the foregoing, upon the request of the Purchaser, any Agent or any Group Agent, such Originator will:

                (a)          execute (if applicable), authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary;
 
                (b)         on the Closing Date and from time to time, if requested thereafter, and solely with respect to each Originator, post at the financial reporting offices of such Originator a legend pursuant to Section 4.1(i); and
                (c)          all releases, estoppels and no-interest letters from any Person who has made a registration or filing against the applicable Originator after the Closing Date that could be relied upon to perfect or protect an interest in the Receivables, confirming that such registration or filing does not perfect or protect an interest in the Receivables and that such Person will not rely on such registration or filing for such purpose.

Each Originator hereby authorizes the Purchaser or its designees (including, without limitation, any Agent) to file one or more financing statements or financing change statements, applications for registration and assignments thereof, without the consent of such Originator, relative to all or any of the Receivables and Related Rights sold or otherwise conveyed or purported to be conveyed by it hereunder now existing or hereafter generated, as the case may be, by such Originator.  If any Originator fails to perform any of its agreements or obligations under this Agreement, the Purchaser or its designees (including, without limitation, any Agent) may (but shall not be required to) itself perform, or cause the performance of, such agreement or obligation, and the expenses of the Purchaser or its designee (including, without limitation, the Administrator) incurred in connection therewith shall be payable by such Originator.
 
 
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SECTION 7.4  Application of Collections.  Any payment by an Obligor in respect of any indebtedness owed by it to any Originator shall, except as otherwise specified by such Obligor or required by contract or applicable law and unless otherwise instructed by the Servicer (with the prior written consent of the Administrator) or the Administrator, be applied as a Collection of any Receivable or Receivables of such Obligor to the extent of any amounts then due and payable thereunder before being applied to any other indebtedness of such Obligor.
 
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS

SECTION 8.1  Purchase and Sale Termination Events.  Each of the following events or occurrences described in this Section 8.1 shall constitute a “Purchase and Sale Termination Event” with respect to an Originator:

                (a)            the Facility Termination Date (as defined in the Receivables Financing Agreement) shall have occurred; or
 
                (b)           such Originator shall fail to make when due any payment or deposit to be made by it under this Agreement or any other Transaction Document to which it is a party and such failure shall remain unremedied for two (2) Business Days after the earlier of such Originator’s knowledge or notice thereof; or

                (c)            any representation or warranty made or deemed made by such Originator (or any of its respective officers) under or in connection with this Agreement or any other Transaction Document to which it is a party, or any information or report delivered by such Originator pursuant to this Agreement or any other Transaction Document to which it is a party, shall fail to have been true or correct in any material respect when made or deemed made or delivered and such failure shall, solely to the extent capable of cure, continue for thirty (30) days after the earlier of any such Originator’s knowledge or notice thereof; or

                (d)           such Originator shall fail to perform or observe any term, covenant or agreement under this Agreement or any other Transaction Document to which it is a party, and such failure shall, solely to the extent capable of cure, continue for thirty (30) days after the earlier of any such Originator’s knowledge or notice thereof; or

                (e)            such Originator shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against such Originator seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a Receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of ninety (90) days, or any of the actions sought in such proceeding (including the entry of an order for relief against, or the appointment of a Receiver, trustee,
 
 
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custodian or other similar official for, it or for any substantial part of its property) shall occur; or such Originator shall take any corporate action to authorize any of the actions set forth above in this paragraph;

provided that, if any “Purchase and Sale Termination Event” set forth in clauses (a) through (e) of the U.S. Sale Agreement shall have occurred with respect to CBT, such Purchase and Sale Termination Event shall be deemed to have occurred with respect to all Originators.
 
SECTION 8.2  Remedies.

(a)            Optional Termination.  Upon the occurrence of a Purchase and Sale Termination Event with respect to an Originator (other than the Purchase and Sale Termination Event described in Section 8.1(e) above), the Purchaser shall have the option, by notice to such Originator (with a copy to each Agent), to declare the Purchase and Sale Termination Date to have occurred with respect to such Originator and the Purchase Facility as terminated with respect to such Originator if it is also an Originator; provided that, automatically upon the occurrence of any Purchase and Sale Termination Event described in Section 8.1(e) above, the Purchase and Sale Termination Date shall be deemed to have been declared by the Purchaser with respect to all Originators and the Purchase Facility shall be deemed to be terminated for all Originators that are Originators.

(b)            Remedies Cumulative.  Upon any termination of the Purchase Facility with respect to an Originator pursuant to Section 8.2(a), the Purchaser shall have, in addition to all other rights and remedies under this Agreement, all other rights and remedies provided under the PPSA of each applicable jurisdiction and other applicable laws, which rights shall be cumulative.

ARTICLE IX
INDEMNIFICATION

SECTION 9.1  Indemnities by the Originators.  Without limiting any other rights which the Purchaser may have hereunder or under applicable law, each Originator, severally and for itself alone, hereby agrees to indemnify the Purchaser and each of its officers, directors, employees and agents (each of the foregoing Persons being individually called a “Purchase and Sale Indemnified Party”), forthwith on demand, from and against any and all damages, losses, claims, judgments, liabilities and related costs and expenses, including reasonable fees of legal counsel and disbursements (all of the foregoing being collectively called “Purchase and Sale Indemnified Amounts”) awarded against or incurred by any of them to the extent arising out of or as a result of (a) the breach of any representation or warranty made by such Originator herein or in any other Transaction Document to which it is a party or (b) the failure of such Originator to perform its obligations under this Agreement or any other Transaction Document to which it is a party; excluding, however, (x) Purchase and Sale Indemnified
 
 
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Amounts to the extent a final judgment of a court of competent jurisdiction holds such Purchase and Sale Indemnified Amounts resulted from gross negligence or willful misconduct on the part of such Purchase and Sale Indemnified Party, (y) any indemnification which has the effect of recourse for non-payment or uncollectibility of the Receivables due to a discharge in bankruptcy or similar insolvency proceeding or other credit related reasons with respect to the relevant Obligor and (z) any net income or franchise tax imposed on such Purchase and Sale Indemnified Party or any other taxes imposed against such Purchase and Sale Indemnified Party to the extent such taxes are measured by or against the gross income or net income or receipts of such Person.

If for any reason the indemnification provided above in this Section 9.1 is unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold such Purchase and Sale Indemnified Party harmless, then each Originator agrees that it shall contribute to the amount paid or payable by such Purchase and Sale Indemnified Party to the maximum extent permitted under applicable law.
 
ARTICLE X
MISCELLANEOUS

SECTION 10.1  Amendments, etc.

(a)            The provisions of this Agreement may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and executed by the Purchaser and each Originator, with the prior written consent of each Agent and the Majority Group Agents.

(b)            No failure or delay on the part of the Purchaser, the Servicer, any Originator or any third party beneficiary in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Purchaser, the Servicer or any Originator in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by the Purchaser or the Servicer under this Agreement shall, except as may otherwise be stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval under this Agreement shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.

(c)            The Transaction Documents contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter thereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter thereof, superseding all prior oral or written understandings.

SECTION 10.2  Notices, etc.  All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile communication) and shall be delivered or sent by email, or by overnight mail, to the intended party at the mailing address or email address set forth under its name on the signature pages hereof or at such other mailing address
 
 
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or email address as shall be designated by such party in a written notice to the other parties hereto or in the case of the Administrator or any Group Agent, at their respective address for notices pursuant to the Receivables Financing Agreement.  All such notices and communications shall be effective (a) if delivered by overnight mail, when received, and (b) if sent by email, when sent, receipt confirmed by telephone or electronic means.
 
SECTION 10.3  No Waiver; Cumulative Remedies.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.  Without limiting the foregoing, each Originator hereby authorizes the Purchaser, at any time and from time to time, to the fullest extent permitted by law, to set off, against any obligations of such Originator to the Purchaser arising in connection with the Transaction Documents (including, without limitation, amounts payable pursuant to Section 9.1) that are then due and payable or that are not then due and payable but have accrued, any and all indebtedness at any time owing by the Purchaser to or for the credit or the account of such Originator.
 
SECTION 10.4  Binding Effect; Assignability.  This Agreement shall be binding upon and inure to the benefit of the Purchaser and each Originator and their respective successors and permitted assigns.  No Originator may assign any of its rights hereunder or any interest herein without the prior written consent of the Purchaser, each Agent and each Group Agent, except as otherwise herein specifically provided.  This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time as the parties hereto shall agree.  The rights and remedies with respect to any breach of any representation and warranty made by any Originator pursuant to Article V and the indemnification and payment provisions of Article IX and Section 10.6 shall be continuing and shall survive any termination of this Agreement.
 
SECTION 10.5  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.
 
SECTION 10.6  Costs, Expenses and Taxes.  In addition to the obligations of the Originators under Article IX, each Originator, severally and for itself alone, agrees to pay on demand:

               (a)           to the Purchaser (and any successor and permitted assigns thereof) all reasonable costs and expenses incurred by such Person in connection with the enforcement of this Agreement and the other Transaction Documents; and
 
                (b)           all stamp and other taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement or the other Transaction Documents to be delivered hereunder, and agrees to indemnify each Purchase and Sale
 
 
28

 
Indemnified Party against any liabilities with respect to or resulting from any delay in paying or omitting to pay such taxes and fees.

SECTION 10.7  SUBMISSION TO JURISDICTION.  EACH PARTY HERETO HEREBY IRREVOCABLY (a) SUBMITS AND ATTORNS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE PROVINCE OF ONTARIO OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURT; (c) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES 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.  NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE PURCHASER’S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ANY ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
 
SECTION 10.8  WAIVER OF JURY TRIAL.  EACH PARTY HERETO WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
 
SECTION 10.9  Captions and Cross References; Incorporation by Reference.  The various captions (including, without limitation, the table of contents) in this Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  References in
 
 
29

 
this Agreement to any underscored Section or Exhibit are to such Section or Exhibit of this Agreement, as the case may be.  The Exhibits hereto are hereby incorporated by reference into and made a part of this Agreement.
 
SECTION 10.10  Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement.
 
SECTION 10.11  Acknowledgment and Agreement.  By execution below, each Originator expressly acknowledges and agrees that all of the Purchaser’s rights, title, and interests in, to, and under this Agreement (but not its obligations), shall be pledged and assigned (by way of security) by the Purchaser to the Administrator (for the benefit of the Secured Parties) pursuant to the Receivables Financing Agreement, and each Originator consents to such assignment.  Each of the parties hereto acknowledges and agrees that the Secured Parties, the Group Agents and the Agents shall be beneficiaries of the rights of the Purchaser arising hereunder and under the other Transaction Documents to which any Originator is a party by virtue of such pledge and assignment.  Notwithstanding the foregoing or anything else to the contrary in this Agreement, none of the Secured Parties, the Group Agents or the Agents shall have any rights, title, or interest in, to, or under this Agreement after the first date following the occurrence of the Purchase and Sale Termination Date with respect to all Originators when all obligations of each Originator to the Purchaser and its assigns under this Agreement have been satisfied in full (other than those which expressly survive termination of this Agreement).  Notwithstanding any provision to the contrary in this Agreement or any document related hereto, if and to the extent that for any reason any payment by or on behalf of an Originator is rescinded or must be otherwise restored by the Purchaser or its assigns, whether as a result of any proceedings in bankruptcy or reorganization or other similar proceedings or otherwise, such payment shall be treated for all purposes, as though such amounts had not been paid and the determination as to whether any such payment must be rescinded or restored shall be made by Purchaser (or the Agents, as its assigns) in its sole discretion.
 
SECTION 10.12  No Proceeding.  Each Originator hereby agrees that it will not institute, or join any other Person in instituting, against the Purchaser any Insolvency Proceeding for at least one year and one day following until the latest of the Final Payout Date under the Receivables Financing Agreement.  Each Originator further agrees that notwithstanding any provisions contained in this Agreement to the contrary, the Purchaser shall not, and shall not be obligated to, pay any amount in respect of any Purchaser Note or otherwise to such Originator pursuant to this Agreement unless in accordance with the Purchaser Note.  Any amount which the Purchaser does not pay pursuant to the operation of the preceding sentence shall not constitute a claim against the Purchaser in any Bankruptcy Proceedings by, or obligation of the Purchaser to, such Originator for any such insufficiency unless and until the provisions of the foregoing sentence are
 
 
30

 
satisfied.  The agreements in this Section 10.12 shall survive any termination of this Agreement.
 
SECTION 10.13  Limited Recourse.  Except as explicitly set forth herein, the obligations of the Purchaser under this Agreement or any other Transaction Documents to which it is a party are solely the obligations of the Purchaser.  No recourse under any Transaction Document shall be had against, and no liability shall attach to, any officer, employee, director, or beneficiary, whether directly or indirectly, of the Purchaser.  The agreements in this Section 10.13 shall survive any termination of this Agreement.


[Signature Pages Follow]



 
 
 
 
 
31

 
 

 
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.

 
 
CINCINNATI BELL FUNDING CANADA LTD.
 
       
       
 
By:
/s/ Joshua T. Duckworth  
    Name:  Joshua T. Duckworth  
    Title:    Vice President, Treasury and  
                 Investor Relations  
 
 
 
 
 
 
 
 
 
S-1
Purchase and Sale Agreement
(Cincinnati Bell)

 
 
 
 
ONX ENTERPRISE SOLUTIONS LTD.,
 
  as Servicer  
       
       
 
By:
/s/ Joshua T. Duckworth  
    Name:  Joshua T. Duckworth  
    Title:    Vice President, Treasury and  
                 Investor Relations  
       
 
 
 
ORIGINATORS:
 
     
 
ONX ENTERPRISE SOLUTIONS LTD., as an
 
 
Originator
 
       
       
 
By:
/s/ Joshua T. Duckworth  
    Name:  Joshua T. Duckworth  
    Title:    Vice President, Treasury and  
                 Investor Relations  
       
 
 
S-2
Purchase and Sale Agreement
(Cincinnati Bell)

 
Schedule I
 
 
LIST OF ORIGINATORS

1.            ONX Enterprise Solutions Ltd.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule I-1
 
Exhibit 99.3
 
 


 
 
 
 
RECEIVABLES FINANCING AGREEMENT


dated as of May 10, 2018


among


CINCINNATI BELL FUNDING LLC and CINCINNATI BELL FUNDING CANADA LTD., as Borrowers


CINCINNATI BELL INC. and ONX ENTERPRISE SOLUTIONS LTD.
as Servicers


THE LENDERS AND GROUP AGENTS FROM TIME TO TIME PARTY HERETO,


PNC BANK, NATIONAL ASSOCIATION,
as Administrator and LC Bank


and


PNC CAPITAL MARKETS LLC,
as Structuring Agent
 
 
 
 
 


 



 
TABLE OF CONTENTS

Page


ARTICLE I
AMOUNTS AND TERMS OF THE LOANS
2

 
Section 1.1
Loan Facility
2
       
 
Section 1.2
Making Loans
4
       
 
Section 1.3
Coverage Percentage Computation
7
       
 
Section 1.4
Settlement Procedures
7
       
 
Section 1.5
Fees
13
       
 
Section 1.6
Payments and Computations, Etc.
13
       
 
Section 1.7
Increased Costs
14
       
 
Section 1.8
Requirements of Law
15
       
 
Section 1.9
Funding Losses
15
       
 
Section 1.10
Taxes
16
       
 
Section 1.11
Letters of Credit
20
       
 
Section 1.12
Issuance of Letters of Credit
21
       
 
Section 1.13
Requirements For Issuance of Letters of Credit
22
       
 
Section 1.14
Disbursements, Reimbursement
22
       
 
Section 1.15
Repayment of Participation Advances
23
       
 
Section 1.16
Documentation
24
       
 
Section 1.17
Determination to Honor Drawing Request
24
       
 
Section 1.18
Nature of Participation and Reimbursement Obligations
25
       
 
Section 1.19
[Reserved]
26
       
 
Section 1.20
Liability for Acts and Omissions
26
       
 
Section 1.21
LC Collateral Accounts
28
       
 
Section 1.22
Inability to Determine CDOR, Euro-Rate or LMIR
28
       
 
Section 1.23
Extension of Termination Date
29
       
 
Section 1.24
Mitigation Obligations; Replacement of Lenders
30
       
 
Section 1.25
Borrowers Jointly and Severally Liable for Obligations
30
       
 
Section 1.26
Successor CDOR, Euro-Rate or LMIR Index
34

ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS; EVENTS OF DEFAULT
35

 
Section 2.1
Representations and Warranties; Covenants
35
 
 
i

 

TABLE OF CONTENTS
(continued)

Page

 
Section 2.2
Events of Default
35

ARTICLE III
INDEMNIFICATION
36

 
Section 3.1
Indemnities by the Borrowers
36
       
 
Section 3.2
Indemnities by the Servicers
37

ARTICLE IV
ADMINISTRATION AND COLLECTIONS
38

 
Section 4.1
Appointment of the Servicers
38
       
 
Section 4.2
Duties of the Servicers
40
       
 
Section 4.3
Lock-Box Account Arrangements
41
       
 
Section 4.4
Enforcement Rights
42
       
 
Section 4.5
Responsibilities of the Borrowers
42
       
 
Section 4.6
Servicing Fee
43

ARTICLE V
THE AGENTS
43

 
Section 5.1
Appointment and Authorization
43
       
 
Section 5.2
Delegation of Duties
44
       
 
Section 5.3
Exculpatory Provisions
44
       
 
Section 5.4
Reliance by Agents
45
       
 
Section 5.5
Notice of Events of Default
45
       
 
Section 5.6
Non-Reliance on Administrator, Group Agents and Other Lenders
46
       
 
Section 5.7
Administrators and Affiliates
46
       
 
Section 5.8
Indemnification
46
       
 
Section 5.9
Successor Administrator
47
       

ARTICLE VI
MISCELLANEOUS
47

 
Section 6.1
Amendments, Etc.
47
       
 
Section 6.2
Notices, Etc
48
       
 
Section 6.3
Successors and Assigns; Participations; Assignments
48
       
 
Section 6.4
Costs, Expenses and Taxes
50
       
 
Section 6.5
No Proceedings; Limitation on Payments
51
       
 
Section 6.6
GOVERNING LAW AND JURISDICTION
52
       
 
Section 6.7
Confidentiality
52


ii


 
TABLE OF CONTENTS
(continued)

Page

 
Section 6.8
Execution in Counterparts
53
       
 
Section 6.9
Survival of Termination
53
       
 
Section 6.10
WAIVER OF JURY TRIAL
53
       
 
Section 6.11
Sharing of Recoveries
54
       
 
Section 6.12
Right of Setoff
54
       
 
Section 6.13
Entire Agreement
54
       
 
Section 6.14
Headings
54
       
 
Section 6.15
Groups’ Liabilities
54
       
 
Section 6.16
USA Patriot Act
54
       
 
Section 6.17
Structuring Agent
55
       
 
Section 6.18
Currency
55
       
 
Section 6.19
Currency Equivalence
55
       
 
Section 6.20
Criminal Interest
56
       
 
Section 6.21
Québec Matters
56
       
 
Section 6.22
Québec Security
56
       
 
Section 6.23
Intent of the Parties
57
       
 
Section 6.24
Post Closing Covenants
57


iii

 

EXHIBIT I
Definitions
   
EXHIBIT II
Conditions of Loans
   
EXHIBIT III
Representations and Warranties
   
EXHIBIT IV
Covenants
   
EXHIBIT V
Events of Default
   
SCHEDULE I
Credit and Collection Policy
   
SCHEDULE II
Lock-Box Banks and Lock-Box Accounts
   
SCHEDULE III
Group Commitments
   
SCHEDULE IV
Permitted Accounts
   
ANNEX A
Form of Information Package
   
ANNEX B
Form of Borrowing Notice
   
ANNEX C
Form of Assumption Agreement
   
ANNEX D
Form of Transfer Supplement
   
ANNEX E
Form of Paydown Notice
   
ANNEX F
Form of Compliance Certificate
   
ANNEX G
Form of Letter of Credit Application
   
ANNEX H
Special Obligors
   
ANNEX I
Designated Obligors and Designated Terms
   
ANNEX J
DSO Trigger
   
ANNEX K
Monetization Report
   
ANNEX L
Tax Forms
   
ANNEX M
Subject PPSA Filings



iv



This RECEIVABLES FINANCING AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) is entered into as of May 10, 2018, among CINCINNATI BELL FUNDING LLC, a Delaware limited liability company (the “U.S. Borrower”) and CINCINNATI BELL FUNDING CANADA LTD., an Ontario corporation (the “Canadian Borrower”, and together with the U.S. Borrower, the “Borrowers”), CINCINNATI BELL INC., an Ohio corporation (“CB” or “U.S. Servicer”) and OnX Enterprise Solutions Ltd., an Ontario corporation (the “Canadian Servicer”, together with the U.S. Servicer, the “Servicers”), THE VARIOUS LENDERS, LC PARTICIPANTS AND GROUP AGENTS FROM TIME TO TIME PARTY HERETO, PNC BANK, NATIONAL ASSOCIATION, as Administrator for each Group (in such capacity, the “Administrator”), and as issuer of Letters of Credit (in such capacity, together with its successors and assigns in such capacity, the “LC Bank”), and PNC CAPITAL MARKETS, a Pennsylvania limited liability company, as Structuring Agent (in such capacity, the “Structuring Agent”).

PRELIMINARY STATEMENTS.  Certain terms that are capitalized and used throughout this Agreement are defined in Exhibit I.  References in the Exhibits hereto to the “Agreement” refer to this Agreement, as amended, restated, supplemented or otherwise modified from time to time.

Each Borrower has requested (a) that the Lenders make Loans from time to time to the Borrowers and (b) that the LC Bank issue or cause the issuance of one or more Letters of Credit from time to time, in each case, on the terms and subject to the conditions set forth herein.

This Agreement amends and restates in its entirety, as of the Closing Date, the Amended and Restated Receivables Purchase Agreement, dated as of June 6, 2011 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Original Agreement”), among the U.S. Borrower, as “Seller”, the U.S. Servicer, as “Servicer”, the “Purchaser Agents” and “Purchasers” from time to time party thereto and the Administrator.  Upon the effectiveness of this Agreement, the terms and provisions of the Original Agreement shall, subject to this paragraph, be superseded hereby in their entirety.  Notwithstanding the amendment and restatement of the Original Agreement by this Agreement, (i) the U.S. Borrower and the U.S. Servicer shall continue to be liable to each of the parties to the Original Agreement or any other Indemnified Party or Affected Person (as such terms are defined in the Original Agreement) for fees and expenses which are accrued and unpaid under the Original Agreement on the date hereof (collectively, the “Original Agreement Outstanding Amounts”) and all agreements to indemnify such parties in connection with events or conditions arising or existing prior to the effective date of this Agreement and (ii) the security interest created under the Original Agreement shall remain in full force and effect as security for such Original Agreement Outstanding Amounts until such Original Agreement Outstanding Amounts shall have been paid in full; provided that any Pool Assets sold to the “Purchasers” pursuant to the Original Agreement shall be deemed to be assets of the Borrowers subject to the security interest granted hereunder in favor of the Administrator.  Upon the effectiveness of this Agreement, each reference to the Original Agreement in any other document, instrument or agreement shall mean and be a reference to this Agreement.  Nothing contained herein, unless expressly herein stated to the contrary, is intended to amend, modify or otherwise affect any other instrument, document or agreement executed and/or delivered in connection with the Original Agreement.






In consideration of the mutual agreements, provisions and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

AMOUNTS AND TERMS OF THE LOANS

Section 1.1        Loan Facility.

(a)            On the terms and subject to the conditions hereof, each Borrower may, from time to time before the Facility Termination Date, (i) request that the Lenders make U.S. Dollar Loans or Canadian Dollar Loans.  Each loan requested by such Borrower pursuant to Section 1.2(a) shall be made ratably (based on Ratable Share) by the respective Groups, and each Group’s Ratable Share of each Loan shall be made and funded (x) if such Group contains a Conduit Lender and such Conduit Lender elects (in its sole discretion) to make and fund such portion of such Loan, by such Conduit Lender, or (y) if such Group does not contain a Conduit Lender or if the Conduit Lender in such Group declines (in its sole discretion) to make or fund such portion of such Loan, by the Related Committed Lender in such Group and (ii) request that the LC Bank issue or cause the issuance of Letters of Credit, in each case subject to the terms hereof (each such loan or issuance is referred to herein as a “Loan”).  At no time will a Conduit Lender have any obligation to make a Loan.  Each Related Committed Lender severally hereby agrees, on the terms and subject to the conditions hereof, to make Loans to each Borrower from time to time from the date hereof to the Facility Termination Date or, if earlier, the Scheduled Termination Date with respect to such Related Committed Lender, based on the applicable Group’s Ratable Share of each Loan requested pursuant to Section 1.2(a) (and, in the case of each Related Committed Lender, its Commitment Percentage of its Group’s Ratable Share of such Loan) and, on the terms of and subject to the conditions of this Agreement, the LC Bank hereby agrees to issue Letters of Credit in return for (and each LC Participant hereby severally agrees to make Participation Advances in connection with any draws under such Letters of Credit equal to such LC Participant’s Ratable Share of such draws).  Notwithstanding anything set forth in this paragraph (a) or otherwise herein to the contrary under no circumstances shall any Lender make any Loan or issue any Letters of Credit hereunder, as applicable, if, after giving effect to such Loan, the (i) aggregate outstanding U.S. Dollar Equivalent of the amount of the Capital of such Lender, when added to all other Capital of all other Lenders in such Lender’s Group would exceed (A) its Group’s Group Commitment (as the same may be reduced from time to time pursuant to Section 1.1(c)), minus (B) the Related LC Participant’s Ratable Share of the Aggregate LC Participation Amount, (ii) Aggregate Capital plus the Aggregate LC Participation Amount would exceed the Facility Limit, (iii) the Coverage Percentage would exceed 100%, (iv) the Aggregate LC Participation Amount would exceed the aggregate of the Commitments of the LC Participants, (v) the aggregate amount of Canadian Dollar Capital would exceed the Canadian Dollar Capital Sublimit or (vi) the Canadian Dollar LC Participation Amount would exceed the Canadian Dollar LC Sublimit.

Each Borrower may, subject to this paragraph (a) and the other requirements and conditions herein, use the proceeds of any loan by the Lenders hereunder to satisfy its Reimbursement Obligation to the LC Bank and the LC Participants (ratably, based on the


2


 
outstanding amounts funded by the LC Bank and each such LC Participant) pursuant to Section 1.14 below.

(b)            The Borrowers shall repay in full the outstanding Capital of each Lender on the Final Maturity Date.  Prior thereto, the Borrowers shall, on each Settlement Date, make a prepayment of the outstanding Capital of the Lenders to the extent required under Section 1.4 and otherwise in accordance therewith.  Notwithstanding the foregoing, the Borrowers, in their discretion, shall have the right to make a prepayment, in whole or in part, of the outstanding Capital of the Lenders on any Business Day upon one (1) Business Day’s prior written notice thereof to the Administrator and each Lender in the form of Annex E (each, a “Paydown Notice”); provided that each Borrower may (i) make a prepayment of U.S. Dollar Capital so long as (x) the amount of such U.S. Dollar Capital being prepaid does not exceed $15,000,000 and (y) the related Paydown Notice is received by the Administrator and each Group Agent before 1:00 p.m.  (New York City time) on the date of such prepayment and (ii) make a prepayment of Canadian Dollar Capital so long as (x) the amount of such Canadian Dollar Capital being prepaid does not exceed CAD10,000,000 and (y) the related Paydown Notice is received by the Administrator and each Group Agent before 12:00 p.m.  noon (Toronto, Ontario time).  Each such prepayment shall be in a minimum aggregate amount of $200,000; provided, however, that notwithstanding the foregoing, (i) a prepayment may be made in an amount necessary to reduce the Coverage Percentage to 100% and (ii) any accrued Interest and Fees in respect of such prepaid Capital shall be paid on the immediately following Settlement Date.

(c)            The Borrowers may, upon at least thirty (30) Business Days’ written notice to the Administrator and each Group Agent, terminate the credit facility evidenced by this Agreement in whole or, upon at least fifteen (15) Business Days’ prior written notice to the Administrator, from time to time, irrevocably reduce in part the unused portion of the Facility Limit (but not below the amount that would cause the Aggregate Capital plus the Aggregate LC Participation Amount to exceed the Facility Limit or would cause the U.S. Dollar Equivalent amount of the Group Capital of any Group to exceed its Group Commitment, in each case after giving effect to such reduction); provided that each partial reduction shall be in the amount of at least $5,000,000, or an integral multiple of $1,000,000 in excess thereof, and that, unless terminated in whole, the Facility Limit shall in no event be reduced below $20,000,000.  Each reduction in the Commitments hereunder shall be made ratably among the Lenders in accordance with their respective Commitment Percentages and their respective Commitments.  The Administrator shall promptly advise the Group Agents of any notice received by it pursuant to this Section 1.1(c); it being understood that (in addition to and without limiting any other requirements for termination, prepayment and/or the funding of the LC Collateral Account hereunder) no such termination or reduction shall be effective unless and until (i) in the case of a termination, the amount on deposit in the LC Collateral Account is at least equal to the then outstanding Aggregate LC Participation Amount plus the LC Fee Expectation and (ii) in the case of a partial reduction, the amount on deposit in the LC Collateral Account is at least equal to the amount, if any, by which the Facility Limit as so reduced by such partial reduction exceeds the sum of the Aggregate Capital plus the Aggregate LC Participation Amount.

(d)            From time to time, the U.S. Borrower may sell certain Receivables to the Receivables Buyer pursuant to the Monetization Documents; provided that, unless otherwise consented to in writing by the Administrator, (i) the Purchase Date with respect to any such sale


3


 
shall be a date permitted from time to time under the Monetization Documents, (ii) each Receivable subject to the related Purchase Request shall be a Permitted Monetization Receivable and (iii) not less than one (1) Business Day prior to any proposed Purchase Date, the U.S. Servicer shall deliver to the Administrator and each Group Agent a report in substantially the form set forth on Annex K (such report, a “Monetization Report”).  Any Receivable identified on any Purchase Request and sold to the Receivables Buyer in accordance with the Monetization Documents shall constitute a “Monetized Receivable”.  On the related Purchase Date therefor, a Monetized Receivable shall cease to constitute a Pool Receivable and the Administrator’s security interest under this Agreement in such Monetized Receivable and Related Monetized Assets (but not in any other Receivable or any other Pool Assets) shall automatically and without any further action be released and of no further force or effect; provided that if such Monetized Receivable and Related Monetized Assets is transferred, reconveyed or returned to the U.S. Borrower by the Receivables Buyer (including in connection with an “Event of Repurchase” pursuant to the Monetization Documents with respect to such Receivable), then (x) such Receivable shall cease to constitute a Monetized Receivable and shall thereafter constitute a Pool Receivable and (y) the security interest granted herein shall immediately be reinstated with respect to such Receivable.

Section 1.2        Making Loans.

(a)            Each Borrower may request a Loan to be made in cash on any day upon such Borrower’s irrevocable written notice in the form of Annex B (each, a “Borrowing Notice”) delivered to the Administrator and each Group Agent in accordance with Section 6.2 (which notice must be received by the Administrator and each Group Agent before 12:00 p.m.  (New York City time)) at least one (1) Business Day before the date of the requested Loan; provided that (i) each Borrower may request a U.S. Dollar Loan on the date of the requested Loan so long as (x) the amount of such Loan does not exceed $15,000,000 and (y) the related Borrowing Notice is received by the Administrator and each Group Agent before 1:00 p.m.  (New York City time) and (ii) each Borrower may request a Canadian Dollar Loan on the date of the requested Loan so long as (x) the amount of such Loan does not exceed CAD10,000,000 and (y) the related Borrowing Notice is received by the Administrator and each Group Agent before 12:00 p.m.  noon (Toronto, Ontario time).  Each Borrowing Notice shall specify: (A) the amount requested to be paid to such Borrower (such amount, which shall not be less than (x) with respect to U.S. Dollar Loans, $500,000 or (y) with respect to Canadian Dollar Loans, CAD500,000 or, in either case, such lesser amount as agreed to by the Administrator and each Group Agent), being the Capital then being funded with respect to each Group, (B) the date of such Loan (which shall be a Business Day) and (C) the pro forma calculation of the Coverage Percentage after giving effect to the increase in the Aggregate Capital resulting from such Loan.  Upon delivering any Borrowing Notice, the Borrowers shall indicate the percentage share of each of the U.S. Borrower and the Canadian Borrower of the Aggregate Capital (such percentage share, the “U.S. Borrower’s Share” and the “Canadian Borrower’s Share”, as applicable) after giving effect to such Loan.  The Borrowers may from time to time adjust the U.S. Borrower’s Share and the Canadian Borrower’s Share in connection with the delivery of any Paydown Notice pursuant to Section 1.1(b) or by written notice to each Purchaser Agent and the Administrator.  The Servicers shall indicate the then-applicable U.S. Borrower’s Share and the Canadian Borrower’s Share on each Information Package delivered pursuant to this Agreement.


4


 
(b)            On the date of each Loan requested by any Borrower pursuant to Section 1.2(a), each applicable Conduit Lender or Related Committed Lender, as the case may be, shall, upon satisfaction of the applicable conditions set forth in Exhibit II, make available to such Borrower in same day funds, at such account so designated in writing by such Borrower to the Administrator and each Group Agent, an amount equal to such Lender’s Ratable Share of the amount of such Loan requested.

(c)            To secure the payment in full and performance of all obligations under this Agreement and the other Transaction Documents to which it is a party, each Borrower hereby grants to the Administrator, for the benefit of the Secured Parties a security interest in and collaterally assigns, all of such Borrower’s right, title and interest in, to and under all of the following, whether now or hereafter owned, existing or arising:
 
 (i)               all Pool Receivables,

 (ii)              all Related Security with respect to such Pool Receivables,

 (iii)            all Collections with respect to such Pool Receivables,

 (iv)            (A) the Lock-Box Accounts and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing such Lock-Box Accounts and amounts on deposit therein and (B) each LC Collateral Account and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing such LC Collateral Account and amounts on deposit therein,

 (v)             all rights (but none of the obligations) of such Borrower under the applicable Sale Agreement (other than any rights with respect to Monetized Receivables or Related Monetized Assets), and

 (vi)           all proceeds of, and all amounts received or receivable under any or all of, the foregoing (collectively, the “Pool Assets”); provided, however, that “Pool Assets” shall not include any Monetized Receivables, Related  Monetized Assets or “consumer goods” (within the meaning of the PPSA).

If the grant of the security interests under this Section 1.2(c) with respect to any Contract would result in the termination or breach of such Contract, or is otherwise prohibited or ineffective (whether by the terms thereof or under Applicable Law), then such Contract, shall not be subject to the security interests granted hereunder but shall be held in trust by the applicable Borrower for the benefit of the Administrator (for its own benefit and for the benefit of the other Secured Parties) and, on the exercise by the Administrator of any of its rights or remedies under this Agreement following an Event of Default shall be assigned by such Borrower as directed by the Administrator; provided that: (a) the security interests of such Borrower shall attach to such Contract, or applicable portion thereof, immediately at such time as the condition causing such termination or breach is remedied, and (b) if a term in a Contract that prohibits or restricts the grant of the security interests in the whole of an account or chattel paper forming part of the Pool Assets is unenforceable against the Administrator under Applicable Law, then the exclusion from the security interests set out above shall not apply to such account or chattel paper.  Each


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Borrower hereby authorizes the Administrator to file one or more financing statements, and amendments thereto, describing the collateral covered thereby as “ALL ASSETS” or words to that effect, notwithstanding that such wording may be broader in scope than the Collateral described in this Security Agreement.  The Administrator, on behalf of the Secured Parties, shall have, with respect to the Pool Assets, and in addition to all the other rights and remedies available to the Administrator and the other Secured Parties, all the rights and remedies of a secured party under any applicable UCC or PPSA.  Without limiting the foregoing, the Administrator may, at any time from and after an Event of Default, (i) obtain from any court of competent jurisdiction an order for the appointment of a Receiver of any or all Borrowers or of any or all of the Pool Assets of any or all Borrowers or (ii) appoint by instrument in writing one or more Receivers of any or all Borrowers or any or all of the Pool Assets of any or all Borrower with such rights, powers and authority (including any or all of the rights, powers and authority of the Administrator under this Agreement) as may be provided for in the instrument of appointment or any supplemental instrument, and remove and replace any such Receiver from time to time.  To the extent permitted by Applicable Law, any Receiver appointed by the Administrator shall (for purposes relating to responsibility for the Receiver’s acts or omissions) be considered to be the agent of any such Borrower and not of the Administrator or any of the other Secured Parties.

(d)            Each Borrower confirms that value has been given by the Secured Parties to such Borrower, that such Borrower has rights in its Pool Assets existing at the date of this Agreement, and that such Borrower and the Administrator have not agreed to postpone the time for attachment of any security interest created by this Agreement to any of the Pool Assets of such Borrower.

(e)            Each Borrower may, with the written consent of the Administrator and each Group Agent (and, in the case of a new Related LC Participant, the LC Bank), add additional Persons as Lenders (either to an existing Group or by creating new Groups) or cause an existing Related Committed Lender or Related LC Participant to increase its Commitment in connection with a corresponding increase in the Facility Limit; provided that the Commitment of any Related Committed Lender or Related LC Participant may only be increased with the prior written consent of such Lender (which consent may be granted or withheld in their sole discretion).  Each new Conduit Lender, Related Committed Lender or Related LC Participant (or Group) shall become a party hereto, by executing and delivering to the Administrator, each Group Agent and each Borrower, an Assumption Agreement in the form of Annex C hereto (which Assumption Agreement shall, in the case of any new Conduit Lender, Related Committed Lender or Related LC Participant, be executed by each Person in such new Lender’s Group).

(f)            Each Related Committed Lender’s and Related LC Participant’s obligations hereunder shall be several, such that the failure of any Related Committed Lender or Related LC Participant to make a payment in connection with any loan hereunder, or drawing under a Letter of Credit hereunder, as the case may be, shall not relieve any other Related Committed Lender or Related LC Participant of its obligation hereunder to make payment for any Funded Loan or such drawing.  Further, in the event any Related Committed Lender or Related LC Participant fails to satisfy its obligation to make a payment with respect to such drawing as required hereunder, upon receipt of notice of such failure from any Borrower or the Administrator (or any relevant Group Agent or, solely to the extent no such notice has been given, notice by each Servicer),


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subject to the limitations set forth herein, the non-defaulting Related Committed Lenders or Related LC Participants in such defaulting Related Committed Lender’s or Related LC Participant’s Group shall fund the defaulting Related Committed Lender’s or Related LC Participant’s Commitment Percentage of the related Loan or drawing pro rata in proportion to their relative Commitment Percentages (determined without regard to the Commitment Percentage of the defaulting Related Committed Lender or Related LC Participant; it being understood that a defaulting Related Committed Lender’s or Related LC Participant’s Commitment Percentage of any Loan or drawing shall be first funded by the Related Committed Lenders or Related LC Participants in such defaulting Related Committed Lender’s or Related LC Participant’s Group and thereafter if there are no other Related Committed Lenders or Related LC Participants in such Group or if such other Related Committed Lenders or Related LC Participants are also defaulting Related Committed Lenders or Related LC Participants, then such defaulting Related Committed Lender’s or Related LC Participant’s Commitment Percentage of such Loan or drawing shall be funded by each other Group ratably (based on Ratable Share) and applied in accordance with this paragraph (f)).  Notwithstanding anything in this paragraph (f) to the contrary, no Related Committed Lender or Related LC Participant shall be required to make a Loan or payment with respect to such drawing pursuant to this paragraph for an amount which would cause the aggregate U.S. Dollar Equivalent amount of the Capital of such Related Committed Lender or the Ratable Share of the Aggregate LC Participation Amount of such Related LC Participant (after giving effect to such Loan or payment with respect to such drawing) to exceed its Commitment.

Section 1.3        Coverage Percentage Computation.  The Coverage Percentage shall be initially computed on the Closing Date.  Thereafter, until the Facility Termination Date, such Coverage Percentage shall be automatically recomputed (or deemed to be recomputed) on each Business Day other than a Termination Day.  On any Termination Day, the Coverage Percentage shall be deemed to be 100%.  The Coverage Percentage shall become zero when the Final Payout Date has occurred and the Servicers shall have received the accrued Servicing Fee thereon.

Section 1.4        Settlement Procedures.

(a)            The U.S. Servicer shall set aside and hold in trust for the benefit of the Secured Parties (or, if so requested by the Administrator, segregate in a separate account designated by the Administrator, which shall be an account maintained and controlled by the Administrator unless the Administrator otherwise instructs in its sole discretion), for application in accordance with the priority of payments set forth below, all Collections on Pool Receivables that are received by the U.S. Servicer or the U.S. Borrower or received in any Lock-Box Account the customer of record of which at the applicable Lock-Box Bank is the U.S. Borrower (each such Lock-Box Account, a “U.S. Lock-Box Account”); provided, however, that so long as each of the conditions precedent set forth in Section 3 of Exhibit II are satisfied on such date, the U.S. Servicer may release to the U.S. Borrower from such Collections the amount (if any) necessary to pay (i) the purchase price for Receivables purchased by the U.S. Borrower on such date in accordance with the terms of the U.S. Sale Agreement or (ii) amounts owing by the U.S. Borrower to the U.S. Originators under the Company Notes issued to the U.S. Originators (each such release, a “U.S. Collections Release”).  On each Settlement Date, the U.S. Servicer (or, following its assumption of control of the U.S. Lock-Box Accounts, the Administrator) shall, distribute such Collections in the following order of priority:


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 (i)               first, to the U.S. Servicer for the payment of the accrued Servicing Fees payable to it for the immediately preceding Interest Period (plus, if applicable, the amount of Servicing Fees payable to it for any prior Interest Period to the extent such amount has not been distributed to the U.S. Servicer);

 (ii)              second, to each Lender and other Credit Party (ratably, based on the amount then due and owing), the U.S. Borrower’s Share of all accrued and unpaid Interest and Fees due to such Lender and other Credit Party accrued during the immediately preceding Interest Period (including any additional amounts or indemnified amounts payable under Sections 1.10 and 3.1 in respect of such payments), plus, if applicable, the U.S. Borrower’s Share of the amount of any such Interest and Fees (including any additional amounts or indemnified amounts payable under Sections 1.10 and 3.1 in respect of such payments) payable for any prior Interest Period to the extent such amount has not been distributed to such Lender or Credit Party;

 (iii)            third, as set forth in clause (x), (y) or (z) below, as applicable:

(x)
if such day is not a Termination Day, to the extent that the Coverage Percentage exceeds 100% on such date: (I) first, to the Lenders (ratably, based on the U.S. Dollar Equivalent of the amount of aggregate outstanding Capital of each Lender at such time) for the payment of a portion of the U.S. Borrower’s Share of the outstanding Aggregate Capital at such time, in an aggregate amount equal to the U.S. Borrower’s Share of the amount necessary to reduce the Coverage Percentage to 100% and (II) second, to each LC Collateral Account, in reduction of the U.S. Borrower’s Share of the Aggregate Adjusted LC Participation Amount, in an amount equal to the amount necessary (after giving effect to clause (I) above) to reduce the U.S. Borrower’s Share of the Coverage Percentage to 100%;

(y)
if such day is a Termination Day: (I) first, to each Lender (ratably, based on the U.S. Dollar Equivalent of the amount of aggregate outstanding Capital of each Lender at such time) for the payment in full of the U.S. Borrower’s Share of the aggregate outstanding Capital of such Lender at such time and (II) second, to each LC Collateral Account (A) the amount necessary to reduce the U.S. Borrower’s Share of the Aggregate Adjusted LC Participation Amount to zero ($0) and (B) an amount equal to the U.S. Borrower’s Share of the LC Fee Expectation at such time; or

(z)
if such day is not a Termination Day, at the election of the U.S. Borrower and in accordance with Section 1.2(b), to the payment of all or any portion of the U.S. Borrower’s Share of the outstanding Capital of the Lenders at such time (ratably, based on the U.S. Dollar Equivalent of the amount of aggregate outstanding Capital of each Lender at such time);


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provided, that the U.S. Servicer (or, following its assumption of control of the U.S. Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to this clause (iii), if any amounts remain due and unpaid pursuant to Section 1.4(b)(ii) below after giving effect to the distribution of Collections available therefor under Section 1.4(b);

 (iv)             fourth, to the Credit Parties that are then Exiting Lenders (ratably, based on the amount due and owing at such time), for the payment the U.S. Borrower’s Share of all other obligations then due and owing by the Borrowers to such Credit Parties; provided, that the U.S. Servicer (or, following its assumption of control of the U.S. Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to clause (iv), if any amounts remain due and unpaid pursuant to Section 1.4(b)(iii) below after giving effect to the distribution of Collections available therefor under Section 1.4(b);

 (v)               fifth, to the Credit Parties, the Affected Persons and the Indemnified Parties (ratably, based on the amount due and owing at such time), for the payment of the U.S. Borrower’s Share of all other obligations then due and owing by the Borrowers to the Credit Parties, the Affected Persons and the Indemnified Parties; provided, that the U.S. Servicer (or, following its assumption of control of the U.S. Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to this clause (v), if any amounts remain due and unpaid pursuant to Section 1.4(b)(iv) below after giving effect to the distribution of Collections available therefor under Section 1.4(b);

 (vi)             sixth, to the extent that the U.S. Borrower has failed to make any payment or deposit required to be made under the Monetization Documents and such failure has remained unremedied for one (1) or more Business Days, the balance, if any, to a separate account designated by the Administrator or, if so instructed by the Administrator, transferred to the Receivables Buyer in an amount equal to the amounts then due and owing to the Receivables Buyer under the Monetization Documents; provided, that the U.S. Servicer (or, following its assumption of control of the U.S. Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to this clause (vi), if any amounts remain due and unpaid pursuant to Section 1.4(b)(v) below after giving effect to the distribution of Collections available therefor under Section 1.4(b); and

 (vii)           seventh, the balance, if any, to be paid to the U.S. Borrower for its own account; provided, that the U.S. Servicer (or, following its assumption of control of the U.S. Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to this clause (vii), if any amounts remain due and unpaid pursuant to Section 1.4(b)(v) below after giving effect to the distribution of Collections available therefor under Section 1.4(b).

(b)            The Canadian Servicer shall set aside and hold in trust for the benefit of the Secured Parties (or, if so requested by the Administrator, segregate in a separate account designated by the Administrator, which shall be an account maintained and controlled by the Administrator unless the Administrator otherwise instructs in its sole discretion), for application in accordance with the priority of payments set forth below, all Collections on Pool Receivables


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that are received by the Canadian Servicer or the Canadian Borrower or received in any Lock-Box Account the customer of record of which at the applicable Lock-Box Bank is the Canadian Borrower (each such Lock-Box Account, a “Canadian Lock-Box Account”); provided, however, that so long as each of the conditions precedent set forth in Section 3 of Exhibit II are satisfied on such date, the Canadian Servicer may release to the Canadian Borrower from such Collections the amount (if any) necessary to pay (i) the purchase price for Receivables purchased by the Canadian Borrower on such date in accordance with the terms of the Canadian Sale Agreement or (ii) amounts owing by the Canadian Borrower to the Canadian Originators under the Company Notes issued to the Canadian Originators (each such release, a “Canadian Collections Release”).  On each Settlement Date, the Canadian Servicer (or, following its assumption of control of the Canadian Lock-Box Accounts, the Administrator) shall, distribute such Collections in the following order of priority:

(i)            first, to the Canadian Servicer for the payment of the accrued Servicing Fees payable to it for the immediately preceding Interest Period (plus, if applicable, the amount of Servicing Fees payable to it for any prior Interest Period to the extent such amount has not been distributed to the Canadian Servicer), plus applicable GST/HST;

(ii)          second, to each Lender and other Credit Party (ratably, based on the amount then due and owing), the Canadian Borrower’s Share of all accrued and unpaid Interest and Fees due to such Lender and other Credit Party accrued during the immediately preceding Interest Period (including any additional amounts or indemnified amounts payable under Sections 1.10 and 3.1 in respect of such payments), plus, if applicable, the Canadian Borrower’s Share of the amount of any such Interest and Fees (including any additional amounts or indemnified amounts payable under Sections 1.10 and 3.1 in respect of such payments) payable for any prior Interest Period to the extent such amount has not been distributed to such Lender or Credit Party;

(iii)         third, as set forth in clause (x), (y) or (z) below, as applicable:

(x)
if such day is not a Termination Day, to the extent that the Coverage Percentage exceeds 100% on such date: (I) first, to the Lenders (ratably, based on the U.S. Dollar Equivalent of the amount of aggregate outstanding Capital of each Lender at such time) for the payment of a portion of the Canadian Borrower’s Share of the outstanding Aggregate Capital at such time, in an aggregate amount equal to the Canadian Borrower’s Share of the amount necessary to reduce the Coverage Percentage to 100% and (II) second, to each LC Collateral Account, in reduction of the Canadian Borrower’s Share of the Aggregate Adjusted LC Participation Amount, in an amount equal to the amount necessary (after giving effect to clause (I) above) to reduce the Canadian Borrower’s Share of the Coverage Percentage to 100%;

(y)
if such day is a Termination Day: (I) first, to each Lender (ratably, based on the U.S. Dollar Equivalent of the amount of aggregate outstanding Capital of each Lender at such time) for the payment


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in full of the Canadian Borrower’s Share of the aggregate outstanding Capital of such Lender at such time and (II) second, to each LC Collateral Account (A) the amount necessary to reduce the Canadian Borrower’s Share of the Aggregate Adjusted LC Participation Amount to zero ($0) and (B) an amount equal to the Canadian Borrower’s Share of the LC Fee Expectation at such time; or

(z)
if such day is not a Termination Day, at the election of the Canadian Borrower and in accordance with Section 1.2(b), to the payment of all or any portion of the Canadian Borrower’s Share of the outstanding Capital of the Lenders at such time (ratably, based on the U.S. Dollar Equivalent of the amount of aggregate outstanding Capital of each Lender at such time); provided, that the Canadian Servicer (or, following its assumption of control of the Canadian Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to this clause (iii), if any amounts remain due and unpaid pursuant to Section 1.4(a)(ii) above after giving effect to the distribution of Collections available therefor under Section 1.4(a);

(iv)        fourth, to the Credit Parties that are then Exiting Lenders (ratably, based on the amount due and owing at such time), for the payment the Canadian Borrower’s Share of all other obligations then due and owing by the Borrowers to such Credit Parties; provided that the Canadian Servicer (or, following its assumption of control of the Canadian Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to this clause (iv), if any amounts remain due and unpaid pursuant to Section 1.4(a)(iii) above after giving effect to the distribution of Collections available therefor under Section 1.4(a);

(v)          fifth, to the Credit Parties, the Affected Persons and the Indemnified Parties (ratably, based on the amount due and owing at such time), for the payment of the Canadian Borrower’s Share of all other obligations then due and owing by the Borrowers to the Credit Parties, the Affected Persons and the Indemnified Parties; provided that the Canadian Servicer (or, following its assumption of control of the Canadian Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to this clause (v), if any amounts remain due and unpaid pursuant to Section 1.4(a)(iv) above after giving effect to the distribution of Collections available therefor under Section 1.4(a);

(vi)        sixth, the balance, if any, to be paid to the Canadian Borrower for its own account; provided that the Canadian Servicer (or, following its assumption of control of the Canadian Lock-Box Accounts, the Administrator) shall not distribute Collections pursuant to this clause (vi), if any amounts remain due and unpaid pursuant to Section 1.4(a)(v) or Section 1.4(a)(vi) above after giving effect to the distribution of Collections available therefor under Section 1.4(a).


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(c)            All payments or distributions to be made by any Servicer, any Borrower and any other Person to the Lenders (or their respective related Affected Persons and Indemnified Parties) and the LC Bank hereunder shall be paid or distributed to the related Group Agent.  The applicable Group Agent shall distribute such amounts to the applicable Lenders, the LC Bank, Affected Persons and the Indemnified Parties ratably.

(d)            U.S. Dollar Capital and Interest and Fees relating thereto shall be payable in U.S. Dollars and all Canadian Dollar Capital and Interest and Fees relating thereto shall be payable in Canadian Dollars.

(e)            For the purposes of this Section 1.4:

 (i)               if on any day the Outstanding Balance of any Pool Receivable is reduced or adjusted as a result of any defective, rejected or returned goods or services, or any revision, cancellation, allowance, discount or other adjustment made by any Borrower or any Affiliate of such Borrower, or the applicable Servicer or any Affiliate of the applicable Servicer, or any setoff or dispute between any Borrower or any Affiliate of such Borrower, or the applicable Servicer or any Affiliate of the applicable Servicer and an Obligor (except any such revision, cancellation, allowance, discount or other adjustment made in settlement of such Pool Receivable resulting from the financial inability of the applicable Obligor to pay such Pool Receivable and, in the case of all Pool Receivables (other than Specified Receivables), made in accordance with the Credit and Collection Policies), the Borrower that purchased such Receivable under the applicable Sale Agreement shall be deemed to have received on such day a Collection of such Pool Receivable in the amount of such reduction or adjustment and shall immediately pay any and all such amounts in respect thereof to a Lock-Box Account for the benefit of the Lenders and their assigns and for application pursuant to Section 1.4;

 (ii)              if on any day it is determined that any of the representations or warranties in Sections 1(j) or 3(a) of Exhibit III was (and at the time of such determination remains) untrue with respect to any Pool Receivable at the time a Loan was made with respect to such Pool Receivable, the Borrower that purchased such Receivable under the applicable Sale Agreement shall be deemed to have received on such day a Collection of such Pool Receivable in full and shall immediately pay any and all such amounts to a Lock-Box Account (or as otherwise directed by the Administrator at such time) for the benefit of the Lenders and their assigns and for application pursuant to this Section 1.4 (Collections deemed to have been received pursuant to clause (i) or (ii) of this paragraph (e) are hereinafter sometimes referred to as “Deemed Collections”);

 (iii)            except as otherwise required by the Monetization Intercreditor Agreement, applicable law or the relevant Contract, all Collections received from an Obligor of any Receivable shall be applied to the Receivables of such Obligor in a manner consistent with the application and allocation procedures employed by each Servicer at such time; and

 (iv)            if and to the extent the Administrator, any Group Agent or any Lender shall be required for any reason to pay over to an Obligor (or any trustee, Receiver,


12


 
custodian or similar official in any Insolvency Proceeding) any amount received by it hereunder, such amount shall be deemed not to have been so received by such Person but rather to have been retained by the Borrowers and, accordingly, such Person shall have a claim against the Borrowers for such amount, payable when and to the extent that any distribution from or on behalf of such Obligor is made in respect thereof.

Section 1.5        Fees.  Each Borrower shall pay to each Group Agent for the benefit of the Lenders and Liquidity Providers in the related Group in accordance with the provisions set forth in Section 1.4(a) and Section 1.4(b) and the Structuring Agent certain fees in the amounts and on the dates set forth in one or more fee letter agreements, dated the Closing Date (or dated the date any such Lender and member of its related Group become a party hereto pursuant to an Assumption Agreement, a Transfer Supplement or otherwise), between such Borrower and the applicable Group Agent, respectively, (as any such fee letter agreement may be amended, restated, supplemented or otherwise modified from time to time, each, a “Group Fee Letter” and each of the Group Fee Letters may be referred to collectively as, the “Fee Letters”).

Section 1.6        Payments and Computations, Etc.

(a)            All amounts to be paid or deposited by any Borrower or any Servicer hereunder shall be made without reduction for offset or counterclaim and shall be paid or deposited no later than 2:00 p.m. (New York City time) on the day when due in same day funds to the account for each Lender maintained by the applicable Group Agent (or such other account as may be designated from time to time by such Group Agent to such Borrower and such Servicer).  All amounts received after 2:00 p.m.  (New York City time) will be deemed to have been received on the next Business Day.

(b)            Each Borrower or each Servicer, as the case may be, shall, to the extent permitted by law, pay interest on any amount not paid or deposited by such Borrower or such Servicer, as the case may be, when due hereunder, at an interest rate equal to 3% per annum above the applicable Base Rate, payable on demand.

(c)            All computations of interest under paragraph (b) and all computations of Interest, Fees and other amounts hereunder shall be made on the basis of a year of 360 (or 365 or 366, as applicable, with respect to Interest or other amounts calculated by reference to the applicable Base Rate) days for the actual number of days elapsed.  For the purposes of the Interest Act (Canada), the annual rate to which any interest rate, discount rate or present value expressed on the basis of a year of 360 days is equivalent, is such rate or value multiplied by the actual number of days in the year, divided by 360, and each Borrower hereby represents and warrants that it understands the foregoing conversion formula and how to calculate annual rates of interest using such formula.  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 Business Day and such extension of time shall be included in the computation of such payment or deposit.

(d)            On any day when any computation or calculation hereunder requires the aggregation of amounts denominated in more than one currency, all amounts that are denominated in Canadian Dollars shall be deemed to be the U.S. Dollar Equivalent thereof on such day for purposes of such computation or calculation.


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Section 1.7        Increased Costs.

(a)            If, after the date hereof, the Administrator, any Lender, Liquidity Provider or Program Support Provider or any of their respective Affiliates (each an “Affected Person”) determines that any Change in Law affects or would affect the amount of capital required or expected to be maintained by such Affected Person based upon the existence of any commitment to make Loans (or otherwise to maintain the Loans) or any related liquidity facility, credit enhancement facility and other commitments of the same type, then, upon demand by such Affected Person (with a copy to the Administrator), each Borrower shall promptly pay such Affected Person, 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 determines such increase in capital is allocable to the existence of any of such commitments.

(b)            If due to any Change in Law, including a Change in Law that subjects any Affected Person to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, there shall be any increase after the Closing Date in the cost to any Affected Person of making or maintaining the Loans (or its portion thereof) in respect of which Interest is computed by reference to the Euro-Rate, CDOR or LMIR, then, upon demand by such Affected Person, each Borrower shall promptly pay to such Affected Person, from time to time as specified by such Affected Person, additional amounts sufficient to compensate such Affected Person for such increased costs.

(c)            If an Affected Person requests compensation under this Section 1.7, a certificate describing in reasonable detail such amounts and the basis for such Affected Person’s demand for such amounts shall be submitted to the Borrowers and the applicable Group Agent by such Affected Person and shall be conclusive and binding for all purposes, absent manifest error.

(d)            Within a reasonable time period after any Affected Person has actual knowledge that it is subject to increased capital requirements or incurs other increased costs pursuant to this Section 1.7, such Affected Person shall notify the Borrowers and the Servicers of such fact.

(e)            Notwithstanding anything in this Section 1.7 to the contrary, (i) if any Affected Person fails to give demand for amounts or losses incurred in connection with this Section 1.7 within one hundred and eighty (180) days after it obtains knowledge that it is subject to increased capital requirements or has incurred other increased costs, such Affected Person shall, with respect to amounts payable pursuant to this Section 1.7, only be entitled to payment under this Section 1.7 for amounts or losses incurred from and after the date one hundred and eighty (180) days prior to the date that such Affected Person does give such demand and (ii) the Borrowers shall not be required to pay to any Affected Person (I) any amount that has been fully and finally paid in cash to such Affected Person pursuant to any other provision of this Agreement or any other Transaction Document, or (II) any amount, if the payment of such amount is expressly excluded by any provision of this Agreement or any other Transaction Document.


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Section 1.8        Requirements of Law.

(a)            If, after the date hereof, any Affected Person determines that any Change in Law:

 (i)            does or shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, Loans, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Affected Person that are not otherwise included in the determination of the Euro-Rate, CDOR or LMIR,

 (ii)            does or shall impose on such Affected Person any other condition,

and the result of any of the foregoing is: (1) to increase the cost to such Affected Person of agreeing to make or maintain the Loans (or interests therein) or any Portion of Capital, or (2) to reduce any amount receivable hereunder (whether directly or indirectly), then, in any such case, upon demand by such Affected Person, the Borrowers shall promptly pay to such Affected Person additional amounts necessary to compensate such Affected Person for such additional cost or reduced amount receivable.  All such amounts shall be payable as incurred.

(b)            If an Affected Person requests compensation under this Section 1.8, a certificate describing in reasonable detail such amounts and the basis for such Affected Person’s demand for such amounts shall be submitted to the Borrowers and the applicable Group Agent by such Affected Person and shall be conclusive and binding for all purposes, absent manifest error.

(c)            Within a reasonable time period after any Affected Person has actual knowledge that it has incurred additional costs or reduced amounts receivable pursuant to this Section 1.8, such Affected Person shall notify the Borrowers and the Servicers of such fact.

(d)            Notwithstanding anything in this Section 1.8 to the contrary, (i) if any Affected Person fails to give demand for additional costs or reduced amounts receivable incurred in connection with this Section 1.8 within one hundred and eighty (180) days after it obtains knowledge that it has suffered additional costs or reduced amounts receivable, such Affected Person shall, with respect to amounts payable pursuant to this Section 1.8, only be entitled to payment under this Section 1.8 for amounts or losses incurred from and after the date one hundred and eighty (180) days prior to the date that such Affected Person does give such demand and (ii) the Borrowers shall not be required to pay to any Affected Person (I) any amount that has been fully and finally paid in cash to such Affected Person pursuant to any other provision of this Agreement or any other Transaction Document, (II) any amount, if the payment of such amount is expressly excluded by any provision of this Agreement or (III) any amount, if such amount constitutes Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes).

Section 1.9        Funding Losses.

(a)            Each Borrower shall compensate each Affected Person, upon written request by such Person for all losses, expenses and liabilities (including any interest paid by such Affected Person to lenders of funds borrowed by it to fund or maintain any Portion of Capital hereunder at an interest rate determined by reference to the Euro-Rate, CDOR or LMIR and any loss sustained

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by such Person in connection with the re-employment of such funds), which such Affected Person may sustain with respect to funding or maintaining such Portion of Capital at the Euro-Rate, CDOR or LMIR if, for any reason, after the applicable request by any Borrower to fund or maintain such Portion of Capital at an interest rate determined by reference to the Euro-Rate, CDOR or LMIR, such funding or maintenance does not occur on a date specified therefor.

(b)            If an Affected Person requests compensation under this Section 1.9, a certificate describing in reasonable detail such amounts and the basis for such Affected Person’s demand for such amounts shall be submitted to the Borrowers and the applicable Group Agent by such Affected Person and shall be conclusive and binding for all purposes, absent manifest error.

(c)            Within a reasonable time period after any Affected Person has actual knowledge that such Affected Person has incurred losses pursuant to this Section 1.9, such Affected Person shall notify the Borrowers and the Servicers of such fact.

(d)            Notwithstanding anything in this Section 1.9 to the contrary, no Borrower shall be required to pay to any Affected Person any amount pursuant to this Section 1.9 to the extent (i) such amount has been fully and finally paid in cash to such Affected Person pursuant to any other provision of this Agreement (including, without limitation, as a component of Interest) or any other Transaction Document or (ii) the payment of such amount is expressly excluded by any provision of this Agreement or any other Transaction Document.

Section 1.10      Taxes.

(a)            Each Borrower agrees that:

 (i)            Any and all payments by or on account of any obligation of any Borrower under this Agreement and any other Transaction Document shall be made free and clear of and without deduction or withholding for any Taxes, except as required by law.  If any applicable withholding agent shall be required by law to deduct or withhold any Tax from or in respect of any such payment, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable shall be increased by the amount necessary to yield to such Person (after payment of all Taxes, including Taxes applicable to additional sums payable under this Section 1.10(a)(i)) an amount equal to the sum it would have received had no such deductions or withholdings been made.

 (ii)            Whenever any Indemnified Taxes are payable by any Borrower, as promptly as possible thereafter, such Borrower shall send to the Administrator for its own account or for the account of any Lender or any Liquidity Provider or other Program Support Provider, as the case may be, a certified copy of an original official receipt showing payment thereof or such other evidence of such payment as may be available to such Borrower and acceptable to the taxing authorities having jurisdiction over such Person.  If any Borrower fails to pay any Indemnified Taxes when due to the appropriate taxing authority or fails to remit to the Administrator the required receipts or other required documentary evidence, such Borrower shall indemnify the Administrator and/or


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any other Affected Person, as applicable, for any incremental Taxes, interest or penalties that may become payable by such party as a result of any such failure.

(b)            Each Borrower shall indemnify each Affected Person within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes payable or paid by such Affected Person or required to be withhold or deducted from a payment to such Affected Party on or with respect to any payment by or on account of any obligation of such Borrower hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 1.10) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.

(c)            (i)  Each Foreign Lender shall, prior to becoming a Foreign Lender and upon changing its funding office, to the extent entitled to an exemption or reduction of withholding tax, provide to the Borrowers and Administrator the applicable documentation set forth in Section 1.10(c)(ii) and all other applicable properly completed and executed documentation certifying that payments hereunder to such Foreign Lender are exempt from or not subject to withholding tax or are subject to a reduced rate of withholding (such documentation, a “Withholding Certificate”).  Each Foreign Lender shall also deliver a Withholding Certificate, if legally entitled to do so, promptly upon the obsolescence, expiration or invalidity of any Withholding Certificate previously delivered by such Foreign Lender and from time to time upon the reasonable request of any Borrower.  Each Foreign Lender shall promptly notify each Borrower at any time it determines that it is no longer in a position to provide any previously delivered Withholding Certificate to each Borrower.  No Foreign Lender may become a Lender hereunder if such Person fails to deliver a Withholding Certificate that is able to be provided pursuant to the foregoing provisions in advance of becoming a party to this Agreement.  Each Foreign Lender shall within a reasonable time period notify each Borrower that it is a Foreign Lender and shall also within a reasonable time period notify such Borrower of any change in its funding office.

(ii)            Without limiting the generality of the foregoing, with respect to the U.S. Borrower:

 (A)            any Lender that is a U.S. Person shall deliver to the U.S. Borrower and the Administrator on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the U.S. Borrower or the Administrator), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding Tax;

 (B)            any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the U.S. Borrower and the Administrator (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the U.S. Borrower or the Administrator), whichever of the following is applicable:


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(1)            in the case of a Foreign Lender claiming the benefits of an income Tax treaty to which the United States is a party (x) with respect to payments of interest under this Agreement or any other Transaction Document, executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such Tax treaty and (y) with respect to any other applicable payments under this Agreement or any other Transaction Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)            executed originals of IRS Form W-8ECI;

(3)            in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Annex L-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the U.S. Borrower within the meaning of Section 871(h)(3)(B) of the Code or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

(4)            to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of Annex L-2 or Annex L-3, IRS Form W-9 and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Annex L-4 on behalf of each such direct or indirect partner;

(C)            any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the U.S. Borrower and the Administrator (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the U.S. Borrower or the Administrator), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from, or a reduction in, U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the U.S. Borrower or the Administrator to determine withholding or deduction required to be made; and


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(D)            if a payment made to a Lender under this Agreement or any other Transaction Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the U.S. Borrower and the Administrator at the time or times prescribed by law and at such time or times reasonably requested by the U.S. Borrower or the Administrator such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the U.S. Borrower or the Administrator as may be necessary for the U.S. Borrower and the Administrator to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(d)                If an Affected Person determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by any Borrower, it shall pay over such refund to such Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section 1.10 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses of such Affected Person (including Taxes) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund net of any applicable Taxes payable in respect of such interest); provided that such Borrower, upon the request of such Affected Person, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Affected Person in the event such Affected Person is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (d), in no event will any Affected Person be required to pay any amount to Borrowers pursuant to this paragraph (d) the payment of which would place such Affected Person in a less favorable net after-Tax position than such Affected Person would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This Section 1.10 shall not be construed to require any Affected Person to make available its tax returns (or any other information relating to its Taxes which it deems confidential) to any Borrower or any other Person.

(e)               If an Affected Person requests indemnification or repayment under this Section 1.10, a certificate describing in reasonable detail such amounts and the basis for such Affected Person’s demand for such amounts shall be submitted to each Borrower and the applicable Group Agent by such Affected Person and shall be conclusive and binding for all purposes, absent manifest error.

(f)               Within a reasonable time period after an obligation of any Borrower to indemnify or repay an Affected Person pursuant to this Section 1.10 arises, such Affected Person shall notify the Borrowers and Servicers of such fact.


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(g)            Notwithstanding anything in this Section 1.10 to the contrary, no Borrower shall be required to pay to an Affected Person any amount pursuant to this Section 1.10 to the extent (i) such amount has been fully and finally paid in cash to such Affected Person pursuant to any other provision of this Agreement or any other Transaction Document, (ii) the payment of such amount is expressly excluded by any provision of this Agreement or any other Transaction Document.

(h)            Notwithstanding Section 1.10(a)(i) or Section 1.10(b), (i) where an amount payable hereunder by the Canadian Borrower is receivable by a party not dealing at arm’s length with the Canadian Borrower for purposes of the Canadian Tax Act, (A) in the case of Section 1.10(a)(i), the amount shall be increased only if the recipient of the interest payable hereunder is a resident of the United States for purposes of the Convention between Canada and the United States of America with respect to Taxes on Income and on Capital, and, (B) in the case of Section 1.10(b), the Canadian Borrower shall be required to indemnify only if the recipient of the interest payable hereunder is a resident of the United States for purposes of the Convention between Canada and the United States of America with respect to Taxes on Income and on Capital and (ii) where the transfer or assignment of any Loan made to the Canadian Borrower or of any interest therein pursuant to Section 6.3 by any Lender results in interest payable under such Loan becoming “participating debt interest” within the meaning of the Canadian Tax Act, the Canadian Borrower shall not be required to increase the amount payable under the Loan by any Canadian withholding tax imposed on such interest pursuant to Section 1.10(a)(i) or indemnify for any such Canadian withholding tax pursuant to Section 1.10(b).

(i)            Without limiting any other rights that any Indemnified Party may have hereunder or under applicable law and notwithstanding any other provision of this Agreement, CB hereby agrees to indemnify and hold harmless each Indemnified Party from and against any and all Indemnified Amounts to the extent arising out of or resulting from (whether directly or indirectly) any obligation of the Canadian Borrower to pay, withhold and/or remit Canadian federal, provincial or local taxes (including income, withholding, franchise or value added taxes) other than any Canadian withholding tax imposed on (1) an amount payable by the Canadian Borrower under this Agreement to a party not dealing at arm’s length with the Canadian Borrower for purposes of the Canadian Tax Act that is not a resident of the United States for purposes of the Convention between Canada and the United States of America with respect to Taxes on Income and on Capital or (2) interest payable on any Loan made to the Canadian Borrower where the transfer of such Loan or of any interest therein pursuant to Section 6.3 by any Lender results in such interest becoming “participating debt interest” within the meaning of the Canadian Tax Act.

Section 1.11        Letters of Credit.

(a)            Subject to the terms and conditions hereof, the LC Bank shall from time to time on any Business Day from the Closing Date until the Facility Termination Date issue or cause the issuance of Letters of Credit denominated in either U.S. Dollars or Canadian Dollars (“Letters of Credit”) on behalf of each Borrower (and, if applicable, on behalf of, or for the account of, any Originator or Servicer or any other Affiliate of such Borrower and the applicable Servicer); provided, however, the LC Bank’s obligation to issue a Letter of Credit shall be


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subject in all respects to the limitations set forth in the last sentence of the first paragraph of Section 1.1(a).

(b)            Notwithstanding anything to the contrary set forth herein or in any other Transaction Document, the LC Bank shall be under no obligation to issue Letters of Credit requested by any Borrower which are denominated in Canadian Dollars if the LC Bank notifies any Borrower on or prior to the date of such issuance that the issuance of such Letter of Credit, or the funding of any draw thereunder has been made or, in the case of a draw, would be made, impracticable or unlawful by compliance by the LC Bank in good faith with any Applicable Law or any request or directive of any Governmental Authority (whether or not having the force of law).

(c)            Interest shall accrue on all amounts drawn under Letters of Credit for each day on and after the applicable Drawing Date so long as such drawn amounts shall have not been reimbursed to the LC Bank pursuant to the terms hereof.

Section 1.12        Issuance of Letters of Credit.

(a)            Any Borrower may request the LC Bank, upon two (2) Business Days’ prior written notice submitted on or before 11:00 a.m.  (New York City time) to issue a Letter of Credit by delivering to the Administrator, the LC Bank’s form of Letter of Credit Application (the “Letter of Credit Application”), substantially in the form of Annex G attached hereto and a Borrowing Notice, substantially in the form of Annex B hereto, in each case completed to the reasonable satisfaction of the Administrator and the LC Bank.  Each Borrower also has the right to give instructions and make agreements with respect to any Letter of Credit Application and the disposition of documents, and to agree with the Administrator upon any amendment, extension or renewal of any Letter of Credit.

(b)            Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts or other written demands for payment when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twelve (12) months after such Letter of Credit’s date of issuance, extension or renewal, as the case may be, and in no event later than twelve (12) months after the Facility Termination Date.  The terms of each Letter of Credit may include customary “evergreen” provisions providing that such Letter of Credit’s expiry date shall automatically be extended for additional periods not to exceed twelve (12) months unless, not less than thirty (30) days (or such longer period as may be specified in such Letter of Credit) (the “Notice Date”) prior to the applicable expiry date, the LC Bank delivers written notice to the beneficiary thereof declining such extension; provided, however, that if (x) any such extension would cause the expiry date of such Letter of Credit to occur after the date that is twelve (12) months after the Facility Termination Date determined pursuant to clause (a) of the definition thereof or (y) the LC Bank determines that any condition precedent to issuing such Letter of Credit hereunder are not satisfied (other than any such condition requiring the Borrowers to submit a Borrowing Notice or Letter of Credit Application in respect thereof), then the LC Bank, in the case of clause (x) above, may (or at the written direction of any LC Participant, shall) or, in the case of clause (y) above, shall, use reasonable efforts in accordance with (and to the extent permitted by) the terms of such Letter of Credit to prevent the extension of such expiry date (including notifying


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the Borrowers and the beneficiary of such Letter of Credit in writing prior to the Notice Date that such expiry date will not be so extended).  Each Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No.  600, and any amendments or revisions thereof adhered to by the LC Bank or the International Standby Practices (ISP98-International Chamber of Commerce Publication Number 590), and any amendments or revisions thereof adhered to by the LC Bank, as determined by the LC Bank.

(c)            Immediately upon the issuance by the LC Bank of any Letter of Credit (or any amendment to a Letter of Credit increasing the amount thereof), the LC Bank shall be deemed to have sold and transferred to each LC Participant, and each LC Participant shall be deemed irrevocably and unconditionally to have purchased and received from the LC Bank, without recourse or warranty, an undivided interest and participation, to the extent of such LC Participant’s Ratable Share, in such Letter of Credit, each drawing made thereunder and the obligations of the Borrowers hereunder with respect thereto, and any security therefor or guaranty pertaining thereto.  Upon any change in the Commitments or Ratable Shares of the LC Participants pursuant to this Agreement, it is hereby agreed that, with respect to all outstanding Letters of Credit and unreimbursed drawings thereunder, there shall be an automatic adjustment to the participations pursuant to this Section 1.12(c) to reflect the new Ratable Shares of the assignor and assignee LC Participant or of all LC Participants with Commitments, as the case may be.  In the event that the LC Bank makes any payment under any Letter of Credit and the Borrowers shall not have reimbursed such amount in full to the LC Bank pursuant to Section 1.14(a), each LC Participant shall be obligated to make Participation Advances with respect to such Letter of Credit in accordance with Section 1.14(b).

Section 1.13        Requirements For Issuance of Letters of Credit.  Each Borrower shall authorize and direct the LC Bank to name such Borrower, the applicable Servicer or any other Affiliate of such Borrower and the applicable Servicer as the “Applicant” or “Account Party” of each Letter of Credit.

Section 1.14        Disbursements, Reimbursement.

(a)            In the event of any drawing under a Letter of Credit by the beneficiary or transferee thereof, the LC Bank will promptly notify the Administrator and each Borrower of such drawing.  Each Borrower shall reimburse (such obligation to reimburse the LC Bank shall sometimes be referred to as a “Reimbursement Obligation”) the LC Bank not later than (i) if such Borrower shall have received such notice by 1:00 p.m.  (New York City time) on the date of such drawing (each such date, a “Drawing Date”), 4:00 p.m.  (New York City time) on the Drawing Date and (ii) otherwise 12:00 noon (New York City time) on the Business Day immediately following the Drawing Date (the date on which such Borrower is obligated to perform a Reimbursement Obligation is referred to as a “Reimbursement Date”) in an amount equal to the amount so paid by the LC Bank.  Such Reimbursement Obligation shall be satisfied by the Borrowers (i) first, by the remittance by the Administrator to the LC Bank of any available amounts denominated in the same currency as the Letter of Credit relating to such Reimbursement Obligation then on deposit in any LC Collateral Account, (ii) second, by the remittance by or on behalf of the Borrowers to the LC Bank of any other funds of the Borrowers then available for disbursement and (iii) third, by the remittance by the Administrator to the LC


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Bank of any available amounts then on deposit in the LC Collateral Account denominated in a currency other than the currency of the Letter of Credit relating to such Reimbursement Obligation; provided that at the time of such remittance, such amounts shall be converted to the currency of the Letter of Credit relating to such Reimbursement Obligation.  In the event any Borrower fails to reimburse the LC Bank for the full amount of any drawing under any Letter of Credit by noon (New York City time) on a Reimbursement Date (including because the conditions precedent to a Borrowing requested by any Borrower pursuant to Section 1.2 shall not have been satisfied), the LC Bank will promptly notify each LC Participant thereof.  Any notice given by the LC Bank pursuant to this Section 1.14 may be oral if immediately confirmed in writing; provided that the lack of such an immediate written confirmation shall not affect the conclusiveness or binding effect of such oral notice.

(b)            Each LC Participant shall upon any notice pursuant to paragraph (a) above make available to the LC Bank an amount in immediately available funds equal to its Ratable Share of the amount of the drawing (a “Participation Advance”), whereupon the LC Participants shall each be deemed to have made a Loan in that amount denominated in the same currency as the Letter of Credit relating to such Participation Amount.  If any LC Participant so notified fails to make available to the LC Bank the amount of such LC Participant’s Ratable Share of such amount by no later than 2:00 p.m.  (New York City time) on the Reimbursement Date in the applicable currency (or, if such Reimbursement Date is the Drawing Date, 12:00 noon (New York City time) on the Business Day immediately following such Reimbursement Date) (the date on which an LC Participant is obligated to make available to the LC Bank the amount of such LC Participant’s Ratable Share is referred to as the “LC Participant Reimbursement Date”), then interest shall accrue on such LC Participant’s obligation to make such payment, from the LC Participant Reimbursement Date to the date on which such LC Participant makes such payment (i) during the first three (3) days following the LC Participant Reimbursement Date, at a rate per annum equal to (x) with respect to a Participation Advance denominated in U.S. Dollars, the Federal Funds Rate and (y) with respect to a Participation Advance denominated in Canadian Dollars, CDOR and (ii) at a rate per annum equal to the applicable Base Rate on and after the fourth day following the LC Participant Reimbursement Date.  The LC Bank will promptly give notice of the occurrence of the LC Participant Reimbursement Date, but failure of the LC Bank to give any such notice on the LC Participant Reimbursement Date or in sufficient time to enable any LC Participant to effect such payment on the LC Participant Reimbursement Date shall not relieve such LC Participant from its obligation under this paragraph (b), provided that such LC Participant shall not be obligated to pay interest as provided in clauses (i) and (ii) above until and commencing from the date of receipt of notice from the LC Bank or the Administrator of the occurrence of the LC Participant Reimbursement Date.  Each LC Participant’s Commitment shall continue until the last to occur of any of the following events: (A) the LC Bank ceases to be obligated to issue or cause to be issued Letters of Credit hereunder, (B) no Letter of Credit issued hereunder remains outstanding and uncancelled or (C) all Persons (other than the Borrowers) have been fully reimbursed for all payments made under or relating to Letters of Credit.

Section 1.15        Repayment of Participation Advances.

(a)            Upon (and only upon) receipt by the LC Bank for its account of immediately available funds from or for the account of any Borrower (i) in reimbursement of any payment made by the LC Bank under a Letter of Credit with respect to which any LC Participant has


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made a Participation Advance to the LC Bank or (ii) in payment of Interest on the Loans made or deemed to have been made in connection with any such draw, the LC Bank will pay to each LC Participant, ratably (based on the outstanding drawn amounts funded by each such LC Participant in respect of such Letter of Credit), in the same funds as those received by the LC Bank; it being understood, that the LC Bank shall retain a ratable amount of such funds that were not the subject of any payment in respect of such Letter of Credit by any LC Participant.

(b)            If the LC Bank is required at any time to return to any Borrower, or to a trustee, Receiver, liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments made by such Borrower to the LC Bank pursuant to this Agreement in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each LC Participant shall, on demand of the LC Bank, forthwith return to the LC Bank the amount of its Ratable Share of any amounts so returned by the LC Bank plus interest at (x) with respect to amounts denominated in U.S. Dollars, the Federal Funds Rate, and (y) with respect to amounts denominated in Canadian Dollars, CDOR, from the date the payment was first made to such LC Participant through, but not including, the date the payment is returned by such LC Participant.

(c)            If any Letters of Credit are outstanding and undrawn on the close of business on the Facility Termination Date, the LC Collateral Accounts shall be funded from Collections (or, in the Borrowers’ sole discretion, by other funds available to the Borrowers) in an amount (which amount may be held in U.S. Dollars or Canadian Dollars and is subject to conversion by the Administrator in accordance with Section 1.21) equal to the U.S. Dollar Equivalent of the aggregate undrawn face amount of such Letters of Credit plus the U.S. Dollar Equivalent of all related fees to accrue through the stated expiration dates thereof, including any customary presentation, amendment and other processing fees, and other standard costs and charges, of the LC Bank relating to letters of credit (such fees to accrue, as reasonably estimated by the LC Bank, the “LC Fee Expectation”).

Section 1.16        Documentation.  Each Borrower agrees to be bound by, and to cause any other Person on whose behalf a Letter of Credit is issued hereunder (including any “Account Party” or “Applicant” thereof) to comply with, and be bound by LC Bank’s written regulations and customary practices relating to letters of credit.  In the event of a conflict between the Letter of Credit Application and this Agreement, this Agreement shall govern.  It is understood and agreed that, except in the case of gross negligence or willful misconduct by the LC Bank, the LC Bank shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following each Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.  In addition to any other fees or expenses owing under the Fee Letter or any other Transaction Document or otherwise pursuant to any Letter of Credit Application, the Borrowers shall pay to the LC Bank for its own account any customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the LC Bank relating to letters of credit as from time to time in effect.  Such customary fees shall be due and payable upon demand and shall be nonrefundable.

Section 1.17        Determination to Honor Drawing Request.  In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, the LC Bank shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with


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the requirements of such Letter of Credit and that any other drawing condition appearing on the face of such Letter of Credit has been satisfied in the manner so set forth.

Section 1.18        Nature of Participation and Reimbursement Obligations.

Each LC Participant’s obligation in accordance with this Agreement to make Participation Advances as a result of a drawing under a Letter of Credit, and the obligations of each Borrower to reimburse the LC Bank upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Article I irrespective of the following circumstances:

(i)            any set-off, counterclaim, recoupment, defense or other right which such LC Participant may have against the LC Bank, the Administrator, the Group Agents, the Lenders, any Borrower or any other Person for any reason whatsoever;

(ii)            the failure of any Borrower or any other Person to comply with the conditions set forth in this Agreement for the making of a Loan, Releases, requests for Letters of Credit or otherwise, it being acknowledged that such conditions are not required for the making of Participation Advances hereunder;

(iii)            any lack of validity or enforceability of any Letter of Credit or any set-off, counterclaim, recoupment, defense or other right which any Borrower or any Originator on behalf of which a Letter of Credit has been issued may have against the LC Bank, the Administrator, any Lender, any Group Agent or any other Person for any reason whatsoever;

(iv)            any claim of breach of warranty that might be made by any Borrower, the LC Bank or any LC Participant against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, defense or other right which any Borrower, the LC Bank or any LC Participant may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such beneficiary or transferee may be acting), the LC Bank, any LC Participant, the Administrator, any Lender or any Group Agent or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between any Borrower, CB, any Servicer, any Originator or any Affiliate thereof and the beneficiary for which any Letter of Credit was procured);

(v)            the lack of power or authority of any signer of, or lack of validity, sufficiency, accuracy, enforceability or genuineness of, any draft, demand, instrument, certificate or other document presented under any Letter of Credit, or any such draft, demand, instrument, certificate or other document proving to be forged, fraudulent, invalid, defective or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, even if the Administrator or the LC Bank has been notified thereof, provided in each case such draft, demand, instrument, certificate or other document appeared on its face to comply with the terms of such Letter of Credit;

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(vi)            payment by the LC Bank under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit other than as a result of the gross negligence or willful misconduct of the LC Bank;

(vii)          the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;

(viii)         any failure by the LC Bank or any of the LC Bank’s Affiliates to issue any Letter of Credit in the form requested by any Borrower, unless the LC Bank has received written notice from such Borrower of such failure within three (3) Business Days after the LC Bank shall have furnished such Borrower a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;

(ix)            any Material Adverse Effect on any Borrower, any Originator or any Affiliates thereof;

(x)              any breach of this Agreement or any Transaction Document by any party thereto;

(xi)            the occurrence or continuance of an Insolvency Proceeding with respect to any Borrower, any Originator or any Affiliate thereof;

(xii)           the fact that an Event of Default or an Unmatured Event of Default shall have occurred and be continuing;

(xiii)         the fact that (A) this Agreement or the obligations of any Borrower or any Servicer hereunder has terminated, (B) the Scheduled Termination Date has occurred or (C) such LC Participant has become an Exiting Lender; and

(xiv)         any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a legal or equitable discharge of, an LC Participant or any Borrower.

Section 1.19        [Reserved].

Section 1.20        Liability for Acts and Omissions.  As between any Borrower, on the one hand, and the Administrator, the LC Bank, the LC Participants, the Group Agents and the Lenders, on the other, such Borrower assumes all risks of the acts and omissions of, or misuse of any Letter of Credit by, any beneficiary, “Applicant” or “Account Party” of such Letter of Credit.  In furtherance and not in limitation of the respective foregoing, none of the Administrator, the LC Bank, the LC Participants, the Group Agents or the Lenders shall be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient,
 
 
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inaccurate, fraudulent or forged (even if the LC Bank or any LC Participant shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any Borrower against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Borrower and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, facsimile or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit or (viii) any consequences arising from causes beyond the control of the Administrator, the LC Bank, the LC Participants, the Group Agents and the Lenders, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of the LC Bank’s rights or powers hereunder.  Nothing in the preceding sentence or in Section 1.18 shall relieve the LC Bank from liability for its gross negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction, in connection with actions or omissions described in such clauses (i) through (viii) of the preceding sentence, in Section 1.18 or otherwise.  In no event shall the Administrator, the LC Bank, the LC Participants, the Group Agents or the Lenders or their respective Affiliates, be liable to any Borrower or any other Person for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

Without limiting the generality of the foregoing, the Administrator, the LC Bank, the LC Participants, the Group Agents and the Lenders and each of its Affiliates (i) may rely on any written communication believed in good faith by such Person to have been authorized or given by or on behalf of the applicant for a Letter of Credit; (ii) may honor any presentation if the documents presented appear on their face to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by the LC Bank or its Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on the Administrator, the LC Bank, the LC Participants, the Group Agents or the Lenders or their respective Affiliates, in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”) and may honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents


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presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by the LC Bank under or in connection with any Letter of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith and without gross negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction, shall not put the LC Bank under any resulting liability to any Borrower, any LC Participant or any other Person.

Section 1.21        LC Collateral Accounts.

(a)            Provided that no Event of Default or Unmatured Event of Default has occurred and is continuing and the Facility Termination Date has not occurred, any Borrower may from time to time advise the Administrator and each Group Agent in writing of its desire to convert certain amounts that are on deposit in an LC Collateral Account and that are denominated in one currency to another currency that is either denominated in U.S. Dollars or Canadian Dollars.  Following receipt of such request, the Administrator shall notify such Borrower in writing whether or not the Administrator is agreeable to such conversion; provided, however, that if the Administrator fails to so notify such Borrower within one (1) Business Day, the Administrator shall be deemed to have declined such conversion request.  In the event that the Administrator has so notified such Borrower in writing that it is agreeable to such conversion, such Borrower and the Administrator shall enter into such documents as the Administrator may deem necessary or appropriate to effect such conversion, and such conversion shall occur at such exchange rate as agreed to in writing between the Administrator and such Borrower.

(b)            From and after any time that an Event of Default has occurred and is continuing, the Administrator may, in its sole discretion, convert any amounts that are on deposit in an LC Collateral Account and that are denominated in one currency to U.S. Dollars or Canadian Dollars.  Any such conversion shall occur at the exchange rate reasonably determined by the Administrator to exist at such time of conversion and which is available to the Administrator at such time of conversion.

(c)            In connection with any such conversion occurring pursuant to this Section 1.21, the Borrowers shall promptly pay the Administrator all customary and reasonable fees and expenses as well as standard reasonable costs and charges of the Administrator in connection with such conversion as well as all reasonable out-of-pocket documented costs and expenses incurred by the Administrator in connection therewith.  The proceeds of any such conversion shall be deposited by the Administrator into the applicable LC Collateral Account.

Section 1.22        Inability to Determine CDOR, Euro-Rate or LMIR.

(a)            If the Administrator (or any Group Agent) determines before the first day of any Interest Period (or solely with respect to LMIR, on any day) (which determination shall be final and conclusive in the absence of manifest error) that, by reason of circumstances affecting the interbank eurodollar market generally (i) deposits in U.S. Dollars (in the relevant amounts for such Interest Period) are not being offered to banks in the interbank eurodollar market for such


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Interest Period, (ii) adequate means do not exist for ascertaining CDOR, the Euro-Rate or LMIR for such Interest Period (or portion thereof), or (iii) CDOR, the Euro-Rate or LMIR does not accurately reflect the cost to any Lender (as determined by such Lender or such Lender’s Group Agent) of maintaining any Portion of Capital during such Interest Period (or portion thereof), then the Administrator shall give notice thereof to each Borrower.  Thereafter, until the Administrator or such Group Agent notifies such Borrower that the circumstances giving rise to such suspension no longer exist, (a) no Portion of Capital shall be funded at the Alternate Rate determined by reference to CDOR, the Euro-Rate or LMIR, as applicable, and (b) the Interest for any outstanding Portions of Capital then funded at the Alternate Rate determined by reference to CDOR, the Euro-Rate or LMIR shall, on the last day of the then current Interest Period (or solely with respect to LMIR, immediately), be converted to the Alternate Rate determined by reference to the applicable Base Rate.

(b)            If, on or before the first day of any Interest Period (or solely with respect to LMIR, on any day), the Administrator shall have been notified by any Lender, Group Agent or Liquidity Provider that, such Person has determined (which determination shall be final and conclusive) that, any enactment, promulgation or adoption of or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by a governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Person with any guideline, request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for such Person to fund or maintain any Portion of Capital at the Alternate Rate determined by reference to CDOR, the Euro-Rate or LMIR, the Administrator shall notify each Borrower thereof.  Upon receipt of such notice, until the Administrator notifies such Borrower that the circumstances giving rise to such determination no longer apply, (a) no Portion of Capital shall be funded at the Alternate Rate determined by reference to CDOR, the Euro-Rate or LMIR, as applicable, and (b) the Interest for any outstanding Portions of Capital then funded at the Alternate Rate determined by reference to CDOR, the Euro-Rate or LMIR shall be converted to the Alternate Rate determined by reference to the applicable Base Rate either (i) on the last day of the then current Interest Period (or solely with respect to LMIR, on any day) if such Person may lawfully continue to maintain such Portion of Capital at the Alternate Rate determined by reference to CDOR, the Euro-Rate or LMIR to such day, or (ii) immediately, if such Person may not lawfully continue to maintain such Portion of Capital at the Alternate Rate determined by reference to CDOR, the Euro-Rate or LMIR to such day.

Section 1.23        Extension of Termination Date.  From time to time, any Borrower may advise the Administrator and each Group Agent in writing of its desire to extend the then current Scheduled Termination Date to a date that is (x) not more than three hundred and sixty-four (364) days after such then current Scheduled Termination Date and (y) not later than the Facility Termination Date scheduled to occur pursuant to clause (a) of the definition thereof; provided such request is made not more than one hundred and twenty (120) days prior to, and not less than ninety (90) days prior to, the then current Scheduled Termination Date.  In the event that all the Lenders in any Group are agreeable to such extension, the Administrator shall so notify such Borrower in writing (it being understood that the Lenders may accept or decline such a request in their sole discretion and on such terms as they may elect) not less than sixty (60) days prior to the then current Scheduled Termination Date and such Borrower, the applicable Servicer, the


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Administrator, the Group Agents and the Lenders shall enter into such documents as the Lenders may deem reasonably necessary or appropriate to reflect such extension, and all reasonable costs and expenses incurred by the Lenders, the Administrator and the Group Agents in connection therewith (including reasonable Attorneys’ Costs) shall be paid by such Borrower.  If all the Lenders in at least one Group accept such request for extension but any Lender in any other Group declines the request for such extension (all such Lenders in Groups containing Lenders that decline such a request, “Exiting Lenders”), then effective as of the Scheduled Termination Date (without giving effect to such requested extension):

(a)            the Scheduled Termination Date shall be extended as agreed to by such accepting Lender(s);

(b)            the Commitments of the Exiting Lenders shall terminate; and

(c)            the Facility Limit shall be reduced by the amount of the Group Commitments of such Exiting Lender’s Group terminated pursuant to clause (b) above.

Section 1.24        Mitigation Obligations; Replacement of Lenders.

(a)            If any Affected Person requests compensation under Section 1.7, Section 1.8 or Section 1.9, or if any Borrower is required to pay any additional amount to any Affected Person or any Governmental Authority for the account of any Affected Person pursuant to Section 1.10, then such Affected Person will use all reasonable efforts to take such action as it deems appropriate to avoid the need for, or reduce the amount of, such compensation that would not be otherwise disadvantageous to such Affected Person.

(b)            At any time there is more than one Group, any Borrower shall be permitted to replace any Lender (and the related Group) who has requested compensation under Section 1.7, Section 1.8 or Section 1.9, or if such Borrower is required to pay any additional amount to such Lender or any Governmental Authority for the account of such Lender pursuant to Section 1.10, provided, however, that such Borrower shall be permitted to replace (i) the Group of which the Administrator is a member or (ii) any Lender which is administered by the Administrator or an Affiliate thereof only if, in either case, the Administrator is also replaced contemporaneously, pursuant to documents reasonably satisfactory to the Administrator; provided that (i) the replacement financial institution shall purchase, at par, all Capital and other amounts owing to such replaced Lender on or prior to the date of replacement, (ii) the replacement financial institution, if not already a member of an existing Group, shall be reasonably satisfactory to the Administrator, (iii) until such time as such replacement shall be consummated, each Borrower shall pay all additional amounts requested, subject to the terms of this Agreement, and (iv) any such replacement shall not be deemed to be a waiver of any rights that such Borrower, the Administrator or any other Lender shall have against the replaced Lender or any member of its Group.

Section 1.25        Borrowers Jointly and Severally Liable for Obligations.

(a)            Joint and Several Liability.  Notwithstanding anything to the contrary herein or in any other Transaction Document, each Borrower shall be jointly and severally liable for all the


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other Borrowers’ obligations.  Each Borrower acknowledges, agrees, represents and warrants the following:

(i)            [Reserved].

(ii)            Combined Liability.  Each of the Borrowers shall be jointly and severally liable to the Administrator, the Lenders and any other Secured Party for all of the Borrowers’ payment obligations hereunder, and the Administrator (on behalf of each Secured Party) may enforce any unpaid obligation of a Borrower against any one or all of the Borrowers.

(iii)            Separate Exercise of Remedies.  The Administrator (on behalf of the Secured Parties) may exercise remedies against each Borrower and its property (including the Pool Assets) separately, whether or not the Administrator exercises remedies against the other Borrowers or their property.  The Administrator may enforce one or all Borrowers’ obligations without enforcing the other Borrowers’ obligations.  Any failure or inability of the Administrator to enforce a Borrower’s obligations shall not in any way limit the Administrator’s right to enforce the obligations of the other Borrowers.

(b)            Guaranty.  Without limiting clause (a) above, jointly with the other Borrowers, each Borrower hereby unconditionally guarantees to the Administrator, each Lender, each Group Agent and each other Secured Party the prompt payment of the obligations of the other Borrowers under this Agreement and the other Transaction Documents in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) and the timely performance by the other Borrowers of all their other obligations under this Agreement and the other Transaction Documents.  This guaranty is a guaranty of payment and not of collection and is a continuing guaranty and shall apply to each of the Borrowers’ obligations, whenever arising.  Notwithstanding any provision to the contrary contained herein or in any other Transaction Document, to the extent the liability of a Borrower for the obligations of the other Borrowers under this Section 1.25 shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the liability of such Borrower for the obligations of the other Borrower under this Section 1.25 shall be limited to the maximum amount that is permissible under applicable law (whether federal or state or otherwise).  If any or all of the obligations of any Borrower under this Agreement or any other Transaction Document are not duly paid or performed by such Borrower and are not paid or performed by the other Borrower in its capacity as guarantor under this Section 1.25 for any reason whatsoever, such other Borrower shall, as a separate and distinct obligation, indemnify and save each of the Administrator, each Lender, each Group Agent and each other Secured Party harmless from and against all losses, costs, damages, expenses, claims and liabilities that each of them may suffer or incur in connection with or in respect of any failure by the defaulting Borrower for any reason to pay or perform any of its obligations under this Agreement or any other Transaction Document, and shall pay all such amounts to the Administrator after demand as herein provided.

(c)            Obligations Unconditional.  The obligations of each Borrower under this Section 1.25 are absolute and unconditional, irrespective of the value, genuineness, validity,


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regularity or enforceability of any of the Transaction Documents or any other agreement or instrument referred to therein, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.  Each Borrower agrees that this Section 1.25 may be enforced by the Administrator, the Group Agents and the other Secured Party without the necessity at any time of resorting to or exhausting any other security or collateral and without the necessity at any time of having recourse to any other Transaction Documents or any collateral hereafter securing the Obligations of a Borrower or otherwise, and each Borrower hereby waives the right to require any Secured Party to make demand on or proceed against any Borrower, any Servicer, any Originator or any other Person (including a co-guarantor) or to require any Secured Party to pursue any other remedy or enforce any other right.  Each Borrower further agrees that it shall have no right of subrogation, indemnity, reimbursement or contribution against the other Borrowers or any other guarantor of any Borrower’s obligations for amounts paid under this Section 1.25 until the Final Payout Date.  Each Borrower further agrees that nothing contained herein shall prevent any Secured Party from suing on any of the other Transaction Documents or foreclosing its or their, as applicable, security interest in or lien on any collateral securing the Obligations or from exercising any other rights available to it or them, as applicable, under this Agreement, any other Transaction Document, or any other instrument of security, if any, and the exercise of any of the aforesaid rights and the completion of any foreclosure proceedings shall not constitute a discharge of such Borrower’s obligations hereunder; it being the purpose and intent of each Borrower that its obligations under this Section 1.25 shall be absolute, independent and unconditional under any and all circumstances.  Neither any Borrower’s obligations under this Section 1.25 nor any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by an impairment, modification, change, release, increase or limitation of the liability of the other Borrowers, of any Servicer or of any Originator or by reason of the bankruptcy or insolvency of the other Borrowers, of any Servicer or of any Originator.  Each Borrower waives any and all notice of the creation, renewal, extension or accrual of any of the obligations of the other Borrowers and notice of or proof of reliance by any Secured Party on the guarantees set forth in this Section 1.25 or acceptance thereof.  The obligations, and any part of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantees set forth in this Section 1.25.  All dealings between any Borrower (or any of its Affiliates, including the initial Servicers and the Originators), on the one hand, and the Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantees set forth in this Section 1.25.  Each Borrower hereby subordinates to the obligations of the other Borrowers all debts, liabilities and other obligations, whether direct, indirect, primary, secondary, several, joint and several or otherwise, and irrespective of whether such debts, liabilities and obligations be evidenced by note, contract, open account, book entry or otherwise, owing to such Borrower by the other Borrowers, any Servicer, any Originator or any of their respective Affiliates.

(d)            Modifications.  Each Borrower agrees that (i) all or any part of the other Borrowers’ Pool Assets now or hereafter held for the obligations, if any, may be exchanged, compromised or surrendered from time to time; (ii) none of the Secured Parties shall have any obligation to protect, perfect, secure or insure any such security interests, liens or encumbrances now or hereafter held, if any, for the Obligations; (iii) the time or place of payment of the other Borrowers’ Obligations may be changed or extended, in whole or in part, to a time certain or


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otherwise, and may be renewed or accelerated, in whole or in part; (iv) the other Borrowers and any other party liable for payment of the other Borrowers’ obligations may be granted indulgences generally; (v) any of the other Borrowers’ rights, duties, obligations or liabilities under any of the Transaction Documents may be modified, amended or waived; (vi) any party (including any co-guarantor) liable for the payment of all or any part of the obligations may be granted indulgences or be released; and (vii) any deposit balance for the credit of the other Borrowers or any other party liable for the payment of the obligations or liable upon any security therefor may be released, in whole or in part, at, before or after the stated, extended or accelerated maturity of the Obligations, all without notice to or further assent by such Borrower.

(e)            Waiver of Rights.  Each Borrower hereby expressly waives diligence, presentment, demand, protest or notice of any kind whatsoever, as well as any requirement that the Secured Parties (or any of them) exhaust any right to take any action against any Borrower, any Originator, any Servicer or any other Person (including the filing of claims in the event of receivership or bankruptcy of any Borrower, Servicer, any Originator or any other entity) or with respect to any collateral or collateral security at any time securing any of the obligations, and hereby consents to any and all extensions of time of the due performance of any or all of the obligations.  Each Borrower agrees that it shall not exercise or assert any right which it may acquire by way of contribution, reimbursement or subrogation under this Agreement unless and until the occurrence of the Final Payout Date.  Each Borrower also hereby expressly waives all other defenses it may have as a guarantor or a surety generally or otherwise based upon suretyship, impairment of collateral or otherwise in connection with the obligations whether in equity or at law other than the occurrence of the Final Payout Date.  Each Borrower agrees that its obligations hereunder shall be irrevocable and unconditional.

(f)            Reinstatement.  Notwithstanding anything contained in this Agreement or the other Transaction Documents, the obligations of each Borrower under this Section 1.25 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the other Borrowers’ obligations is rescinded or must be otherwise restored by any holder of any of the other Borrowers’ obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Borrower agrees that it will indemnify each Secured Party on demand for all reasonable costs and expenses (including, without limitation, reasonable fees of counsel) incurred by such Person in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

(g)            Remedies.  Each Borrower acknowledges and agrees that its obligations under this Section 1.25 are secured in accordance with the terms of this Agreement (including, without limitation, the terms of Sections 1.2(c)).

(h)            Subrogation.  Each Borrower agrees that, until the Final Payout Date, it will not exercise, and hereby waives, any right of reimbursement, subrogation, contribution, offset or other claims against the other Borrowers arising by contract or operation of law in connection with any payment made or required to be made by such Borrower under this Section 1.25.  After the Final Payout Date, each Borrower shall be entitled to exercise against the other Borrowers all


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such rights of reimbursement, subrogation, contribution, and offset, and all such other claims, to the fullest extent permitted by law.

(i)            Maximum Guaranty Amount.  Notwithstanding any other provision of this Agreement to the contrary, in the event that any action is brought seeking to invalidate any Borrower’s obligations under this Agreement under any fraudulent conveyance or fraudulent transfer theory, such Borrower shall be liable under this Agreement only for an amount equal to the maximum amount of liability that could have been incurred under applicable law by such Borrower under any guaranty of the other Borrowers’ obligations (or any portion thereof) at the time of the execution and delivery of this Agreement (or, if such date is determined not to be the appropriate date for determining the enforceability of such Borrower’s obligations hereunder for fraudulent conveyance or transfer purposes, on the date determined to be so appropriate) without rendering such a hypothetical guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer (the “Maximum Guaranty Amount”), and not for any greater amount, as if such Borrower’s obligations under this Agreement had instead been the Maximum Guaranty Amount].

Section 1.26        Successor CDOR, Euro-Rate or LMIR Index

(a)            If the Administrator determines (which determination shall be final and conclusive, absent manifest error) that either (i) (A) the circumstances set forth in Section 1.22 have arisen and are unlikely to be temporary, or (B) the circumstances set forth in Section 1.22 have not arisen but the applicable supervisor or administrator (if any) of CDOR, the Euro-Rate or LMIR or a Governmental Authority having jurisdiction over the Administrator has made a public statement identifying the specific date after which CDOR, the Euro-Rate or LMIR shall no longer be used for determining interest rates for loans (either such date, a “LIBOR Termination Date”), or (ii) a rate other than CDOR, the Euro-Rate or LMIR, as applicable, has become a widely recognized benchmark rate for newly originated loans in U.S. Dollars in the U.S. market (or Canadian Dollars in the Canadian market), then the Administrator may (in consultation with the Borrowers) choose a replacement index for CDOR, the Euro-Rate or LMIR, as applicable, and make adjustments to applicable margins and related amendments to this Agreement as referred to below such that, to the extent practicable, the all-in Interest based on the replacement index will be substantially equivalent to the all-in Interest based on CDOR, the Euro-Rate or LMIR, as applicable, in effect prior to its replacement.

(b)            The Administrator and the Borrowers shall enter into an amendment to this Agreement to reflect the replacement index, the adjusted margins and such other related amendments as may be appropriate, in the discretion of the Administrator, for the implementation and administration of the replacement index-based rate.  Notwithstanding anything to the contrary in this Agreement or the other Transaction Documents (including, without limitation, Section 6.1), such amendment shall become effective without any further action or consent of any other party to this Agreement at 5:00 p.m.  New York City time on the tenth (10th) Business Day after the date a draft of the amendment is provided to the Group Agents, unless the Administrator receives, on or before such tenth (10th) Business Day, a written notice from the Majority Group Agents stating that such Majority Group Agents object to such amendment.


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(c)            Selection of the replacement index, adjustments to the applicable margins, and amendments to this Agreement (i) will be determined with due consideration to the then-current market practices for determining and implementing a rate of interest for newly originated loans in the United States and Canada, as applicable, and loans converted from a LIBOR Rate-based rate to a replacement index-based rate, and (ii) may also reflect adjustments to account for (A) the effects of the transition from CDOR, the Euro-Rate or LMIR, as applicable, to the replacement index and (B) yield- or risk-based differences between CDOR, the Euro-Rate or LMIR, as applicable, and the replacement index.

(d)            Until an amendment reflecting a new replacement index in accordance with this Section 1.26 is effective, each Portion of Capital accruing Interest with reference to CDOR, the Euro-Rate or LMIR will continue to bear interest with reference to CDOR, the Euro-Rate or LMIR, as applicable; provided however, that if the Administrator determines (which determination shall be final and conclusive, absent manifest error) that a LIBOR Termination Date has occurred, then following the LIBOR Termination Date, each Portion of Capital that would otherwise accrue Interest with reference to CDOR, the Euro-Rate or LMIR shall automatically begin accruing Interest with reference to the Base Rate until such time as an amendment reflecting a replacement index and related matters as described above is implemented.

(e)            Notwithstanding anything to the contrary contained herein, if at any time the replacement index is less than zero, at such times, such index shall be deemed to be zero for purposes of this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES; COVENANTS; EVENTS OF DEFAULT

Section 2.1        Representations and Warranties; Covenants.  Each Borrower and each Servicer hereby makes the representations and warranties, and hereby agrees to perform and observe the covenants, applicable to it set forth in Exhibits III and IV, respectively.

Section 2.2        Events of Default.  If any of the Events of Default set forth in Exhibit V shall occur, the Administrator may (with the consent of the Majority Group Agents) or shall (at the direction of the Majority Group Agents), by notice to each Borrower, declare the Facility Termination Date to have occurred, declare all the Loans and other obligations to be due and payable and to accelerate the Final Maturity Date (in which case the Facility Termination Date and the Final Maturity Date shall be deemed to have occurred and all Loans and other obligations shall become immediately due and payable); 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 (f) of Exhibit V, the Facility Termination Date and the Final Maturity Date shall occur and all Loans and other obligations shall become immediately due and payable.  Upon any such declaration, occurrence or deemed occurrence of the Facility Termination Date, the Administrator and each Secured Party shall have, in addition to the rights and remedies that they may have under this Agreement, all other rights and remedies provided after default under the UCC, PPSA and under other applicable law, which rights and remedies shall be cumulative.


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ARTICLE III

INDEMNIFICATION

Section 3.1        Indemnities by the Borrowers.  Without limiting any other rights any such Person may have hereunder or under applicable law, each Borrower hereby agrees to indemnify and hold harmless the Administrator, each Group Agent, each Liquidity Provider, each Program Support Provider, each Lender, each LC Participant, the LC Bank (and any of the LC Bank’s Affiliates) and their respective officers, directors, agents and employees (each an “Indemnified Party”) from and against any and all damages, losses, claims, liabilities, penalties, costs and expenses (including reasonable and documented attorneys’ fees and court costs) (all of the foregoing collectively, the “Indemnified Amounts”) at any time imposed on or incurred by any Indemnified Party to the extent arising out of or otherwise relating to any Transaction Document or the issuance of any Letter of Credit, the transactions contemplated thereby or the funding or maintenance of the Loan, or any action taken or omitted by any of the Indemnified Parties (including any action taken by the Administrator as attorney in fact for such Borrower or any Originator hereunder or under any other Transaction Document), whether arising by reason of the acts to be performed by such Borrower hereunder or otherwise, excluding only Indemnified Amounts to the extent (a) a final judgment of a court of competent jurisdiction holds such Indemnified Amounts resulted from gross negligence or willful misconduct of the Indemnified Party seeking indemnification, (b) due to the credit risk or financial inability to pay of the Obligor and for which reimbursement would constitute recourse to any Originator, CB, any Borrower or any Servicer for uncollectible Receivables, (c) such Indemnified Amounts constitute Taxes other than any Taxes that represent losses, claims, damages, etc.  arising from any non-Tax claim, (d) the same have been fully and finally paid in cash to such Indemnified Party pursuant to any other provision of this Agreement or any other Transaction Document, or (e) the same are expressly excluded by any provision of this Agreement or any other Transaction Document; provided, however, that nothing contained in this sentence shall limit the liability of any Borrower or any Servicer or limit the recourse of any Indemnified Party to such Borrower or such Servicer for any amounts otherwise specifically provided to be paid by such Borrower or such Servicer hereunder.  Without limiting the foregoing indemnification, but subject to the limitations set forth in clauses (a), (b), (c), (d) and (e) of the previous sentence, each Borrower shall indemnify each Indemnified Party for Indemnified Amounts (including losses in respect of uncollectible Receivables, regardless, for purposes of these specific matters, of whether reimbursement therefor would constitute recourse to such Borrower or its Servicer) to the extent relating to or resulting from:

(i)             any representation or warranty made by any Borrower (or any employee or agent of such Borrower) under or in connection with this Agreement, any Information Package or any other information or report delivered by or on behalf of such Borrower pursuant hereto, which shall have been false or incorrect in any respect when made or deemed made;

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


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(iii)           the failure of any Borrower to vest and maintain vested in the Administrator, for the benefit of the Lenders, a perfected security interest in the Pool Assets free and clear of any Adverse Claim;

(iv)           any commingling of funds to which the Administrator, any Group Agent or any Lender is entitled hereunder with any other funds of any Borrower or their Affiliates, including any commingling with any Monetized Receivable Collections;

(v)            any failure of a Lock Box Bank to comply with the terms of the applicable Lock Box Agreement;

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

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

(viii)        any action taken by the Administrator as attorney in fact for any Borrower or any Originator pursuant to this Agreement or any other Transaction Document;

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

(x)            any issuance of any Letter of Credit.

Section 3.2         Indemnities by the Servicers.

(a)            Without limiting any other rights that any Indemnified Party may have hereunder or under applicable law, each Servicer hereby agrees to indemnify and hold harmless each Indemnified Party from and against any and all Indemnified Amounts to the extent arising out of or resulting from (whether directly or indirectly): (a) the failure of any information contained in any single Information Package when taken as a whole, as of the date such Information Package is delivered pursuant to Sections 1(a)(ii) and 2(a)(iv) of Exhibit IV to be true and correct, or the failure of any other information provided to such Indemnified Party by, or on behalf of, such Servicer to be true and correct, (b) the failure of any representation, warranty or statement made or deemed made by each Servicer (or any of its officers) under or in connection with this Agreement or any other Transaction Document to which it is a party, to have been true and correct as of the date made or deemed made, (c) the failure by each Servicer to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract, (d) any dispute, claim, offset or defense of the Obligor to the payment of any Receivable in, or purporting to be in, the Receivables Pool resulting from or related to the collection activities with

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respect to such Receivable and not arising from the financial inability of the Obligor to pay, (e) the commingling of Collections with Monetized Receivable Collections or (f) any failure of any Servicer to perform its duties or obligations in accordance with the provisions hereof or any other Transaction Document to which it is a party; excluding only such amounts to the extent (a) a final judgment of a court of competent jurisdiction holds that such amounts resulted from gross negligence or willful misconduct of the Indemnified Party seeking indemnification, (b) due to the credit risk of the Obligor and for which reimbursement would constitute recourse to any Originator, CB, any Borrower or any Servicer for uncollectible Receivables, (c) such amounts constitute Taxes other than any Taxes that represent losses, claims, damages, etc.  arising from any non-Tax claim, (d) the same have been fully and finally paid in cash to such Indemnified Party pursuant to any other provision of this Agreement or any other Transaction Document or (e) the same are expressly excluded by any provision of this Agreement or any other Transaction Document; provided, however, that nothing contained in this sentence shall limit the liability of any Borrower or any Servicer or limit the recourse of any Indemnified Party to such Borrower or such Servicer for any amounts otherwise specifically provided to be paid by such Borrower or such Servicer hereunder.

(b)            CB, as Performance Guarantor, hereby acknowledges that each of the Transaction Documents has been made available to and has been reviewed by Performance Guarantor.  Performance Guarantor hereby unconditionally reaffirms its obligations under the Performance Guaranty and acknowledges and agrees that such obligations continue in full force and effect (including, without limitation, with respect to the Guaranteed Obligations) and the Performance Guaranty is hereby ratified and confirmed.  Performance Guarantor hereby represents and warrants that each of the representations and warranties made by it in the Performance Guaranty are true and correct as of the day hereof and after the effect of this Agreement (unless stated to relate solely to an earlier date, in which case such representations or warranties were true and correct as of such earlier date).

ARTICLE IV

ADMINISTRATION AND COLLECTIONS

Section 4.1        Appointment of the Servicers.

(a)            The servicing, administering and collection of the Pool Receivables shall be conducted by each Person so designated from time to time as the Servicer in accordance with this Section 4.1.  Until the Administrator gives notice to any Servicer (in accordance with this Section 4.1) of the designation of a new servicer: (i) CB is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer with respect to all Pool Receivables that were originated by a U.S. Originator and (ii) OnX Enterprise Solutions Ltd. is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer with respect to all Pool Receivables that were originated (x) by it and sold to the Canadian Borrower on a fully-serviced basis and (y) by any other Canadian Originator, in each case in accordance with the terms hereof.  Upon the occurrence of a Servicer Default, the Administrator may (with the consent of the Majority Group Agents) or shall (at the direction of the Majority Group Agents) designate as Servicer any Person (including itself) to succeed any Servicer or any successor Servicer, on the condition in each case that any such Person so designated shall agree


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to perform the duties and obligations of a Servicer pursuant to the terms hereof; provided that any successor Servicer with respect to Canadian Originator Receivables shall not be a non-resident of Canada for purposes of the Canadian Tax Act.

(b)            Upon the designation of any successor Servicer as set forth in paragraph (a), each Servicer agrees that it will terminate its activities as Servicer hereunder in a manner that the Administrator reasonably determines will facilitate the transition of the performance of such activities to the new Servicer, and each Servicer shall cooperate with and assist such new Servicer.  In connection with such cooperation, such Servicer shall, upon request by the Administrator: (i) assemble all of the records (including all Contracts) reasonably necessary or desirable to collect the Pool Receivables and the Related Security and transfer such records to the successor Servicer, except to the extent such transfer is prohibited by applicable law, (ii) except to the extent prohibited by applicable law, licenses or other agreement, transfer or license to the successor Servicer the use of all licenses, hardware or software necessary or desirable to collect the Pool Receivables and the Related Security, and make the same available to the Administrator or its designee (for the benefit of the Lenders), at a place selected by the Administrator, and (iii) segregate all cash, checks and other instruments received by it from time to time constituting Collections in a manner reasonably acceptable to the Administrator and, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Administrator or its designee.

(c)            Each Servicer acknowledges that, in making their decision to execute and deliver this Agreement, the Administrator and each member in each Group have relied on such Servicer’s agreement to act as Servicer hereunder.  Accordingly, each Servicer agrees that it will not voluntarily resign as Servicer unless required to do so by applicable law; provided that any Servicer may, with the prior written consent of the Administrator and the Majority Group Agents (such consent not to be unreasonably withheld), resign as Servicer if (i) a successor Servicer which is an Affiliate of such Servicer has agreed to act as Servicer on the terms and conditions hereof and (ii) such successor Servicer has agreed to execute documentation, in form and substance reasonably satisfactory to the Administrator, to effect its appointment as, and the assumption of the rights and duties of, such Servicer hereunder and under the Transaction Documents; provided, further, no such resignation will be effective until such successor Servicer has been appointed pursuant to such documentation and such successor Servicer with respect to Canadian Originator Receivables shall not be a non-resident of Canada for purposes of the Canadian Tax Act.  For the avoidance of doubt, any such appointment of a successor Servicer pursuant to this paragraph shall not terminate the appointment of any Sub-Servicer.

(d)            Any Servicer may delegate its duties and obligations hereunder to any sub-servicer (each a “Sub-Servicer”); provided that in each such delegation: (i) such Sub-Servicer shall agree in writing to perform the duties and obligations of a Servicer pursuant to the terms hereof, (ii) the applicable Servicer shall remain liable for the performance of the duties and obligations so delegated, (iii) each Borrower, the Administrator and each Group shall have the right to look solely to each Servicer for performance, and (iv) the terms of any agreement with any Sub-Servicer that is an Affiliate of each Servicer shall provide that the Administrator may terminate such agreement upon the termination of such Servicer hereunder by giving notice of its desire to terminate such agreement to such Servicer (and such Servicer shall provide appropriate notice to each such Sub-Servicer); provided, however, that if any such delegation is to any


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Person other than any Originator or an Affiliate thereof, the Administrator and the Majority Group Agents shall have consented in writing in advance to such delegation (which consent shall not be unreasonably withheld or delayed); and provided, further, that each Servicer may delegate the following duties and obligations to a Sub-Servicer without further consent by any party: (w) data processing, including customer care and billing, (x) customer acquisition and retention and market research, (y) inbound and outbound teleservices and (z) computer system maintenance, enhancement, machine processing and production support.

(e)            At any time following the occurrence and during the continuation of an Event of Default, the Administrator may request any Servicer to, and upon such request such Servicer shall: (i) solely to the extent that such event is also a Servicer Default, assemble all of the records reasonably necessary or desirable to collect the Pool Receivables and the Related Security, and transfer or license to a successor Servicer, except to the extent prohibited by applicable law, licenses or other agreement, the use of all software necessary or desirable to collect the Pool Receivables and the Related Security, and make the same available to the Administrator or its designee (for the benefit of the Lenders), except to the extent prohibited by applicable law, licenses or other agreement, at a place selected by the Administrator, and (ii) segregate all cash, checks and other instruments received by it from time to time constituting Collections in a manner reasonably acceptable to the Administrator and, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Administrator or its designee.

(f)            For the avoidance of doubt, nothing in this Agreement shall have the effect of making any Servicer liable for any obligations of any Borrower under this Agreement or the other Transaction Documents and nothing in this Agreement shall constitute the giving of a guarantee or the assumption of a similar obligation by such Servicer in respect of the performance by such Borrower of its obligations under this Agreement or the other Transaction Documents.

(g)            No Servicer or any of its sub-servicers, employees, agents or other delegates shall (nor shall it have the authority to), (i) while acting in Canada, negotiate or enter into contracts or other agreements in the name of the U.S. Borrower, the Administrator or any other Secured Party, (ii) delegate to any Person acting in Canada the authority to, or permit any such Person to, negotiate or enter into contracts or other agreements in the name of the U.S. Borrower, the Administrator or any other Secured Party or (iii) establish an office or other place of business of the U.S. Borrower, the Administrator or any other Secured Party in Canada.

Section 4.2        Duties of the Servicers.

(a)            Each Servicer shall take or cause to be taken all such action as may be reasonably necessary or advisable to administer and collect each Pool Receivable from time to time, all in accordance in all material respects with this Agreement and all applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policies (except in the case of Specified Receivables).  Each Servicer shall set aside for the accounts of the applicable Borrower and the Lenders the amount of Collections to which each is entitled in accordance with Article I hereof.  Each Servicer may, in accordance with the applicable Credit and Collection Policy, take such action, including extensions, amendments,


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modifications, waivers or restructurings of Pool Receivables and the related Contracts, as such Servicer may reasonably determine to be appropriate to maximize Collections thereof or reflect adjustments permitted under the Credit and Collection Policies; provided, however, that: (i) such action shall not change the number of days such Pool Receivable has remained unpaid from the date of the original due date related to such Pool Receivable, (ii) such action shall not alter the status of such Pool Receivable as a Delinquent Receivable or a Defaulted Receivable under this Agreement and (iii) no Servicer shall be required to comply with Credit and Collection Policies with respect to Specified Receivables.  Each Borrower shall deliver to the applicable Servicer and such Servicer shall hold for the benefit of the applicable Borrower and the Administrator (individually and for the benefit of the Lenders, in accordance with their respective interests), all records and documents (including computer tapes or disks) with respect to each Pool Receivable.

(b)            [Reserved].

(c)            Each Servicer’s obligations hereunder shall terminate on the Final Payout Date.

After such termination, if any Servicer or an Affiliate thereof was not the Servicer on the date of such termination, each Servicer shall promptly deliver to the applicable Borrower all books, records and related materials that such Borrower previously provided to such Servicer, or that have been obtained by such Servicer, in connection with this Agreement.

Section 4.3         Lock-Box Account Arrangements.  Prior to the Closing Date, each Borrower shall have entered into Lock-Box Agreements with all of the Lock-Box Banks and delivered counterparts of each to the Administrator.  Upon the occurrence and during the continuation of an Event of Default, the Administrator may (with the consent of the Majority Group Agents) or shall (upon the direction of the Majority Group Agents) at any time thereafter give notice to each Lock-Box Bank that the Administrator is exercising its rights under the Lock-Box Agreements to do any or all of the following: (a) to have the exclusive control of the Lock-Box Accounts transferred to the Administrator (for the benefit of the Lenders) and to exercise exclusive dominion and control over the funds deposited therein and (b) to take any or all other actions permitted under the applicable Lock-Box Agreement.  The Administrator hereby agrees that it shall not give such notice or exercise such rights with respect to any such Lock-Box Account unless an Event of Default has occurred and is continuing.  Each Borrower hereby agrees that if the Administrator gives notice (after the occurrence and during the continuation of an Event of Default) to a Lock-Box Bank that the Administrator is exercising its rights under the related Lock-Box Agreement pursuant to clause (a) above, the Administrator shall have exclusive control (for the benefit of the Lenders) of the proceeds (including Collections) of all Pool Receivables and each Borrower hereby further agrees to take any other action that the Administrator or any Group Agent may reasonably request to transfer such control.  Any proceeds of Pool Receivables received by such Borrower or the applicable Servicer thereafter shall be sent immediately to, or as otherwise instructed by, the Administrator.  The parties hereto hereby acknowledge that if at any time the Administrator takes control of any Lock-Box Account, the Administrator shall not have any rights to (a) the funds therein in excess of the unpaid amounts then due and payable to the Administrator, any member of any Group, any Secured Party or any other Person hereunder, and the Administrator shall distribute or cause to be distributed such funds in accordance with Article I (in each case as if such funds were held by any Servicer thereunder) or (b) any Non-Receivable Cash Deposits therein, and the


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Administrator shall transfer any such Non-Receivable Cash Deposits to an account designated by each Borrower (or the applicable Servicer on its behalf) within three (3) Business Days of the Administrator’s receipt of a written request by any Borrower (or the applicable Servicer on its behalf), together with a Non-Receivable Cash Deposit Report which identifies the amount of such Non-Receivable Cash Deposits.

Section 4.4        Enforcement Rights.

(a)            At any time following the occurrence and during the continuation of any Event of Default set forth in clause (a)(ii) or paragraphs (f) or (i) of Exhibit V of this Agreement, the Administrator may direct the Obligors that payment of all amounts payable under any Pool Receivable is to be made directly to the Administrator or its designee.  The exercise of this right will be subject to any applicable regulatory restrictions.  Each Servicer agrees that, if the Administrator is unable to exercise the rights in this paragraph (a) due to any applicable regulatory restrictions, it will, subject to any applicable regulatory restrictions, follow the instructions of the Administrator in connection therewith.

(b)            Each Borrower hereby authorizes the Administrator (on behalf of each Group), and irrevocably appoints the Administrator as its attorney-in-fact with full power of substitution and with full authority in the place and stead of such Borrower, which appointment is coupled with an interest, to take any and all steps in the name of such Borrower and on behalf of such Borrower reasonably necessary or desirable, in the determination of the Administrator, after the occurrence and during the continuation of an Event of Default, to collect any and all amounts or portions thereof due under any and all Pool Assets, including endorsing the name of such Borrower on checks and other instruments representing Collections and enforcing such Pool Assets.  Notwithstanding anything to the contrary contained in this subsection, none of the powers conferred upon such attorney-in-fact pursuant to the preceding sentence shall subject such attorney-in-fact to any liability if any action taken by it shall prove to be inadequate or invalid, nor shall they confer any obligations upon such attorney-in-fact in any manner whatsoever.

Section 4.5        Responsibilities of the Borrowers.

(a)            Anything herein to the contrary notwithstanding, each Borrower shall: (i) perform all of its obligations, if any, under the Contracts related to the Pool Receivables, and the exercise by the Administrator, any Group Agent or any Lender of their respective rights hereunder shall not relieve any Borrower from such obligations, and (ii) pay when due any taxes, including any sales taxes payable in connection with the Pool Receivables and their creation and satisfaction.  None of the Administrator, the Group Agents or the Lenders shall have any obligation or liability with respect to any Pool Asset, nor shall any of them be obligated to perform any of the obligations of any Borrower, any Servicer, CB or any Originators thereunder.

(b)            Each Servicer hereby irrevocably agrees that if at any time it shall cease to be a Servicer hereunder, it shall act (if such then-current Servicer so requests) as the data processing agent of such Servicer and, in such capacity, each Servicer shall conduct the data processing functions of the administration of the Pool Receivables and the Collections thereon in


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substantially the same way that such Servicer conducted such data processing functions while it acted as the Servicer.

Section 4.6        Servicing Fee.

(a)            Subject to paragraph (b), CB shall be paid a fee equal to 1.00% per annum of the daily average aggregate Outstanding Balance of the Pool Receivables that are serviced by it (the “Servicing Fee Rate”), and OnX Enterprise Solutions Ltd. shall be paid a fee of $20,000 per calendar month (each a “Servicing Fee”), and the Servicing Fee payable to OnX Enterprise Solutions Ltd. shall be exclusive of applicable GST/HST.  Such fee and, as applicable, GST/HST shall be paid through the distributions contemplated by Section 1.4(a) and Section 1.4(b).

(b)            If CB or OnX Enterprise Solutions Ltd. ceases to be a Servicer or an Affiliate thereof, the Servicing Fee shall be the greater of: (i) the amount calculated pursuant to paragraph (a), and (ii) an alternative amount specified by the successor Servicer not to exceed 110% of the aggregate reasonable costs and expenses incurred by such successor Servicer in connection with the performance of its obligations as Servicer and is exclusive of applicable GST/HST.

ARTICLE V

THE AGENTS

Section 5.1        Appointment and Authorization.

(a)            Each Lender and Group Agent hereby irrevocably designates and appoints PNC Bank, National Association, as the “Administrator” hereunder and authorizes the Administrator to take such actions and to exercise such powers as are delegated to the Administrator hereby and to exercise such other powers as are reasonably incidental thereto.  The Administrator shall not have any duties other than those expressly set forth herein or any fiduciary relationship with any Lender or Group Agent, and no implied obligations or liabilities shall be read into this Agreement, or otherwise exist, against the Administrator.  The Administrator does not assume, nor shall it be deemed to have assumed, any obligation to, or relationship of trust or agency with, any Borrower or any Servicer.  Notwithstanding any provision of this Agreement or any other Transaction Document to the contrary, in no event shall the Administrator ever be required to take any action which exposes the Administrator to personal liability or which is contrary to the provision of any Transaction Document or applicable law.

(b)            Each Lender hereby irrevocably designates and appoints the respective institution identified as the Group Agent for such Lender’s Group on the signature pages hereto or in the Assumption Agreement or Transfer Supplement pursuant to which such Lender becomes a party hereto, and each authorizes such Group Agent to take such action on its behalf under the provisions of this Agreement and to exercise such powers and perform such duties as are expressly delegated to such Group Agent by the terms of this Agreement, if any, together with such other powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary elsewhere in this Agreement, no Group Agent shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender or other Group Agent or the Administrator, and no implied covenants, functions, responsibilities, duties,


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obligations or liabilities on the part of such Group Agent shall be read into this Agreement or otherwise exist against such Group Agent.

(c)            Except as otherwise specifically provided in this Agreement, the provisions of this Article V are solely for the benefit of the Group Agents, the Administrator and the Lenders, and none of the Borrowers or the Servicers shall have any rights as a third‑party beneficiary or otherwise under any of the provisions of this Article V, except that this Article V (including, for the avoidance of doubt, Sections 5.2, 5.3 and 5.4) shall not affect any obligations or liability which any Group Agent, the Administrator or any Lender may have to any Borrower or the applicable Servicer under the other provisions of this Agreement.  Furthermore, no Lender shall have any rights as a third-party beneficiary or otherwise under any of the provisions hereof in respect of a Group Agent which is not the Group Agent for such Lender.

(d)            In performing its functions and duties hereunder, the Administrator shall act solely as the agent of the Lenders and the Group Agents and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Borrower or any Servicer or any of their successors and assigns.  In performing its functions and duties hereunder, each Group Agent shall act solely as the agent of its respective Lender and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Borrower, any Servicer, any other Lender, any other Group Agent or the Administrator, or any of their respective successors and assigns.

Section 5.2        Delegation of Duties.  The Administrator may execute any of its duties through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Administrator shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

Section 5.3        Exculpatory Provisions.  None of the Group Agents, the Administrator or any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted (i) with the consent or at the direction of the Majority Group Agents (or in the case of any Group Agent, the Lenders within its Group that have a majority of the aggregate Commitment of such Group) or (ii) in the absence of such Person’s gross negligence or willful misconduct.  The Administrator shall not be responsible to any Lender, Group Agent or other Person for (i) any recitals, representations, warranties or other statements made by any Borrower, any Servicer, any Originator or any of their Affiliates, (ii) the value, validity, effectiveness, genuineness, enforceability or sufficiency of any Transaction Document, (iii) any failure of any Borrower, any Servicer, any Originator or any of their Affiliates to perform any obligation hereunder or under the other Transaction Documents to which it is a party (or under any Contract), or (iv) the satisfaction of any condition specified in Exhibit II.  The Administrator shall not have any obligation to any Lender or Group Agent to ascertain or inquire about the observance or performance of any agreement contained in any Transaction Document or to inspect the properties, books or records of any Borrower, any Servicer, any Originator or any of their respective Affiliates.


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Section 5.4        Reliance by Agents.

(a)            Each Group Agent and the Administrator shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or other writing or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person and upon advice and statements of legal counsel (including counsel to each Borrower), independent accountants and other experts selected by the Administrator.  Each Group Agent and the Administrator shall in all cases be fully justified in failing or refusing to take any action under any Transaction Document unless it shall first receive such advice or concurrence of the Majority Group Agents (or in the case of any Group Agent, the Lenders within its Group that have a majority of the aggregate Commitment of such Group), and assurance of its indemnification, as it deems appropriate.

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

(c)            The Lenders within each Group with a majority of the Commitment of such Group shall be entitled to request or direct the related Group Agent to take action, or refrain from taking action, under this Agreement on behalf of such Lenders.  Such Group Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of such Majority Group Agents, and such request and any action taken or failure to act pursuant thereto shall be binding upon all of such Group Agent’s Lenders.

(d)            Unless otherwise advised in writing by a Group Agent or by any Lender on whose behalf such Group Agent is purportedly acting, each party to this Agreement may assume that (i) such Group Agent is acting for the benefit of each of the Lenders in respect of which such Group Agent is identified as being the “Group Agent” in the definition of “Group Agent” hereto, as well as for the benefit of each assignee or other transferee from any such Person, and (ii) each action taken by such Group Agent has been duly authorized and approved by all necessary action on the part of the Lenders on whose behalf it is purportedly acting.  Each Group Agent and its Lender(s) shall agree amongst themselves as to the circumstances and procedures for removal, resignation and replacement of such Group Agent.

Section 5.5          Notice of Events of Default.  Neither any Group Agent nor the Administrator shall be deemed to have knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default unless such Administrator has received notice from any Lender, Group Agent, any Servicer or any Borrower stating that an Event of Default or an Unmatured Event of Default has occurred hereunder and describing such Event of Default or Unmatured Event of Default.  In the event that the Administrator receives such a notice, it shall promptly give notice thereof to each Group Agent whereupon each such Group Agent shall promptly give notice thereof to its related Lenders.  In the event that a Group Agent receives such a notice (other than from the Administrator), it shall promptly give notice thereof to the Administrator.  The Administrator shall take such action concerning an Event of Default or an Unmatured Event of Default as may be directed by the Majority Group Agents (unless such action otherwise requires the consent of all Lenders), but until the Administrator receives such


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directions, the Administrator may (but shall not be obligated to) take such action, or refrain from taking such action, as the Administrator deems advisable and in the best interests of the Lenders and the Group Agents.

Section 5.6        Non-Reliance on Administrator, Group Agents and Other Lenders.  Each Lender and Group Agent expressly acknowledges that none of the Administrator, the Group Agents nor any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrator, or any Group Agent hereafter taken, including any review of the affairs of any Borrower, CB, any Servicer or any Originator, shall be deemed to constitute any representation or warranty by the Administrator or such Group Agent, as applicable.  Each Lender represents and warrants to the Administrator and the Group Agents that, independently and without reliance upon the Administrator, the LC Bank, Group Agents or any other Lender and based on such documents and information as it has deemed appropriate, it has made and will continue to make its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of any Borrower, CB, any Servicer or any Originator, and the Receivables and its own decision to enter into this Agreement and to take, or omit, action under any Transaction Document.  Except for items specifically required to be delivered hereunder, the Administrator shall not have any duty or responsibility to provide any Group Agent with any information concerning any Borrower, CB, any Servicer or any Originators or any of their Affiliates that comes into the possession of the Administrator or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

Section 5.7        Administrators and Affiliates.  Each of the Lenders, the Group Agents and the Administrator and any of their respective Affiliates may extend credit to, accept deposits from and generally engage in any kind of banking, trust, debt, entity or other business with any Borrower, CB, any Servicer or any Originator or any of their Affiliates.  With respect to any funding of the Eligible Receivables pursuant to this Agreement, each of the Group Agents and the Administrator shall have the same rights and powers under this Agreement as any Lender and may exercise the same as though it were not such an agent, and the terms “Lender” and “Lenders” shall include, to the extent applicable, each of the Group Agents and the Administrator in their individual capacities.

Section 5.8        Indemnification.  Each LC Participant and Related Committed Lender agrees to indemnify and hold harmless the Administrator (but solely in its capacity as Administrator) and its officers, directors, employees, representatives and agents and the LC Bank (to the extent not reimbursed by any Borrower, any Servicer or any Originator and without limiting the obligation of any Borrower, any Servicer, or any Originator to do so), ratably (based on respective Group Commitments) from and against any and all liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses and disbursements of any kind whatsoever (including in connection with any investigative or threatened proceeding, whether or not the Administrator, the LC Bank or such Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Administrator, the LC Bank or such Person as a result of, or related to, any of the transactions contemplated by the Transaction Documents or the execution, delivery or performance of the Transaction Documents or any other document furnished in connection therewith (but excluding any such liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses or disbursements resulting


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solely from the gross negligence or willful misconduct of the Administrator or the LC Bank or such Person as finally determined by a court of competent jurisdiction).  Without limiting the generality of the foregoing, each LC Participant agrees to reimburse the Administrator and the LC Bank, ratably according to their ratable shares (based on respective Group Commitments), promptly upon demand, for any out-of-pocket expenses (including reasonable counsel fees) incurred by the Administrator or the LC Bank in connection with the administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of its rights or responsibilities under, this Agreement.

Section 5.9        Successor Administrator.  The Administrator may, upon at least five (5) days’ notice to each Borrower, each Lender and Group Agent, resign as Administrator.  Such resignation shall not become effective until a successor Administrator is appointed by the Majority Group Agents and has accepted such appointment.  Upon such acceptance of its appointment as Administrator hereunder by a successor Administrator, such successor Administrator shall succeed to and become vested with all the rights and duties of the retiring Administrator, and the retiring Administrator shall be discharged from its duties and obligations under the Transaction Documents.  After any retiring Administrator’s resignation hereunder, the provisions of Sections 3.1 and 3.2 and this Article V shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrator.

ARTICLE VI

MISCELLANEOUS

Section 6.1        Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Transaction Document, or consent to any departure by any Borrower or any Servicer therefrom, shall be effective unless in a writing signed by the Administrator and the Majority Group Agents, and, in the case of any amendment, by the other parties thereto; 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 such amendment or waiver shall, without the consent of each affected Lender, (A) extend the date of any payment or deposit of Collections by any Borrower or any Servicer, (B) reduce the rate or extend the time of payment of Interest, (C) reduce any fees payable to the Administrator, any Group Agent or any Lender pursuant to the applicable Group Fee Letter, (D) change the amount of Capital of any Lender or any Related Committed Lender’s Commitment, (E) amend, modify or waive any provision of the definition of “Majority Group Agents” or this Section 6.1, (F) consent to or permit the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement, (G) change the definition of “Adjusted Net Receivables Pool Balance”, “Dilution Reserve”, “Dilution Reserve (Monetized Receivables)”, “Dilution Reserve Percentage”, “Eligible Receivable”, “Event of Default”, “Loss Reserve”, “Loss Reserve Percentage”, “Monetized Receivable”, “Monetized Receivable Collections”, “Net Receivables Pool Balance”, “Ratable Share” or “Related Monetized Assets”, (H) release all or any material part of the Pool Assets from the security interest granted by any Borrower to the Administrator hereunder or under any other Transaction Document, (I) amend the priority of payments set forth in Sections 1.4(a) and 1.4(b) or (J) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (I) above in a manner that would circumvent the intention of the restrictions set forth in such clauses.  No failure on the part of the


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Lenders, the Group Agents or the Administrator 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.  Notwithstanding the foregoing, the consent of the Structuring Agent shall not be required for any amendment or waiver unless such amendment or waiver materially and adversely affects the interests of the Structuring Agent or materially increases its obligations under this Agreement.

Section 6.2        Notices, Etc.  All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including email communication) and shall be personally delivered or sent by email or by overnight mail, to the intended party at the mailing address or email address of such party set forth under its name on the signature pages hereof (or in any other document or agreement pursuant to which it is or became a party hereto), or at such other mailing address or email address as shall be designated by such party in a written notice to the other parties hereto.  All such notices and communications shall be effective (i) if delivered by overnight mail, when received, and (ii) if transmitted by email, when sent, receipt confirmed by telephone or electronic means.

Section 6.3        Successors and Assigns; Participations; Assignments.

(a)            Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Except as otherwise provided herein, (i) no Borrower or Servicer may assign or transfer any of its rights or delegate any of its duties hereunder or under any Transaction Document without the prior consent of the Administrator, the LC Bank and the Group Agents and (ii) the Administrator shall not assign or transfer any of its rights or delegate any of its duties hereunder or under any Transaction Document without the prior consent of such Borrower (such consent not to be unreasonably withheld or delayed); provided that such Borrower’s consent shall not be required if an Event of Default or Servicer Default has occurred and is continuing.  The Administrator, acting solely for this purpose as a non-fiduciary agent of Borrowers, shall maintain a record of any assignment by any Lender of right or obligations hereunder or under any Transaction Document and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrator and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(b)            Participations.  Except as otherwise specifically provided herein, any Lender may sell to one or more Persons (each a “Participant”) participating interests in the interests of such Lender hereunder; provided, however, that no Lender shall grant any participation under which the Participant shall have rights to approve any amendment to or waiver of this Agreement or any other Transaction Document.  Such Lender shall remain solely responsible for performing its obligations hereunder, and each Borrower, each Group Agent and the Administrator shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations hereunder.  A Lender shall not agree with a Participant to restrict such Lender’s right to agree to any amendment hereto.  Each Lender that sells a participation shall, acting

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solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Transaction Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrator (in its capacity as Administrator) shall have no responsibility for maintaining a Participant Register.

(c)            Assignments by Certain Related Committed Lenders.  Any Related Committed Lender may assign to one or more Persons (each a “Purchasing Related Committed Lender”), reasonably acceptable to each of the Administrator, the LC Bank and the related Group Agent in its sole discretion, any portion of its Commitment pursuant to a supplement hereto, substantially in the form of Annex D with any changes as have been approved by the parties thereto (each, a “Transfer Supplement”), executed by each such Purchasing Related Committed Lender, such selling Related Committed Lender, such related Group Agent and the Administrator if any Borrower shall have given its prior written consent thereto; provided that such Borrower’s consent shall not be required if an Event of Default or Servicer Default has occurred and is continuing.  Any such assignment by Related Committed Lender cannot be for an amount less than $10,000,000.  Upon (i) the execution of the Transfer Supplement, (ii) delivery of an executed copy thereof to each Borrower, such related Group Agent and the Administrator and (iii) payment by the Purchasing Related Committed Lender to the selling Related Committed Lender of the agreed purchase price, if any, such selling Related Committed Lender shall be released from its obligations hereunder to the extent of such assignment and such Purchasing Related Committed Lender shall for all purposes be a Related Committed Lender party hereto and shall have all the rights and obligations of a Related Committed Lender hereunder to the same extent as if it were an original party hereto.  The amount of the Commitment of the selling Related Committed Lender allocable to such Purchasing Related Committed Lender shall be equal to the amount of the Commitment of the selling Related Committed Lender transferred regardless of the purchase price, if any, paid therefor.  The Transfer Supplement shall be an amendment hereof only to the extent necessary to reflect the addition of such Purchasing Related Committed Lender as a “Related Committed Lender” and a “Related LC Participant” and any resulting adjustment of the selling Related Committed Lender’s Commitment and, if applicable, selling Related LC Participant’s Ratable Share of the Aggregate LC Participation Amount.

(d)            Assignments to Liquidity Providers and other Program Support Providers.  Any Conduit Lender may at any time grant to one or more of its Liquidity Providers or other Program Support Providers, participating interests in its portion of the Loan.  In the event of any such grant by such Conduit Lender of a participating interest to a Liquidity Provider or other Program Support Provider, such Conduit Lender shall remain responsible for the performance of its obligations hereunder.


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(e)            Other Assignment by Conduit Lenders.  Each party hereto agrees and consents (i) to any Conduit Lender’s assignment, participation, grant of security interests in or other transfers of any portion of, or any of its beneficial interest in, the Loan (or portion thereof), including without limitation to any collateral agent in connection with its commercial paper program and (ii) to the complete assignment by any Conduit Lender of all of its rights and obligations hereunder to any other Person within such Conduit Lender’s Group, and upon such assignment such Conduit Lender shall be released from all obligations and duties, if any, hereunder; provided, however, that such Conduit Lender may not, without the prior consent of its Related Committed Lenders, make any such transfer of its rights hereunder unless the assignee (i) is principally engaged in the funding of loans similar to loan being funded hereunder, (ii) has as its Group Agent the Group Agent of the assigning Conduit Lender and (iii) issues commercial paper or other Notes with credit ratings substantially comparable to the ratings of the assigning Conduit Lender; provided, further, that such Conduit Lender may not make any assignment of its rights or obligations hereunder to any Person who is not a member of an existing Group without the prior consent of any Borrower (such consent not to be unreasonably withheld or delayed and not required if an Event of Default or Servicer Default has occurred and is continuing).  Any assigning Conduit Lender shall deliver to any assignee a Transfer Supplement with any changes as have been approved by the parties thereto, duly executed by such Conduit Lender, assigning any portion of its interest in the Loan to its assignee.  Such Conduit Lender shall promptly (i) notify each of the other parties hereto of such assignment and (ii) take all further action that the assignee reasonably requests in order to evidence the assignee’s right, title and interest in such interest in the Loan and to enable the assignee to exercise or enforce any rights of such Conduit Lender hereunder.  Upon the assignment of any portion of its interest in the Loan, the assignee shall have all of the rights hereunder with respect to such interest (except that the Interest therefor shall thereafter accrue at the rate, determined with respect to the assigning Conduit Lender unless any Borrower, the related Group Agent and the assignee shall have agreed upon a different Interest).

(f)            Certain Pledges.  Without limiting the right of any Lender to sell or grant interests, security interests or participations to any Person as otherwise described in this Section 6.3, any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure its obligations as a Lender hereunder, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledge or assignee for such Lender as a party hereto.

(g)            Opinions of Counsel.  If required by the Administrator or the applicable Group Agent or to maintain the ratings of the Notes of any Conduit Lender, each Transfer Supplement must be accompanied by an opinion of counsel of the assignee as to such matters as the Administrator or such Group Agent may reasonably request.

Section 6.4        Costs, Expenses and Taxes.

(a)            By way of clarification, and not of limitation, of Sections 1.7 or 3.1, each Borrower shall pay to the Administrator, each Group Agent and each Lender on demand all reasonable costs and out-of-pocket expenses (excluding Taxes other than Other Taxes) in connection with (i) the preparation, execution, delivery and administration (including


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amendments or waivers of any provision) of this Agreement or the other Transaction Documents, (ii) the perfection (and continuation) of the Administrator’s rights in the Pool Receivables, Collections and other Pool Assets, (iii) the enforcement by the Administrator, any Group Agent or any member of any Group of the obligations of each Borrower, the applicable Servicer or the Originators under the Transaction Documents or of any Obligor under a Receivable and (iv) the maintenance by the Administrator of the Lock-Box Accounts (and any related lock-box or post office box), including reasonable fees, costs and out-of-pocket expenses of external legal counsel for the Administrator and any member of any Group relating to any of the foregoing or to advising the Administrator, any member of any Group, any related Liquidity Provider or any other related Program Support Provider about its rights and remedies under any Transaction Document or any other document, agreement or instrument related thereto and all reasonable costs and out-of-pocket expenses (including reasonable external counsel fees and expenses) of the Administrator, each Group Agent and each Lender in connection with the enforcement or administration of the Transaction Documents or any other document, agreement or instrument related thereto.  Administrator and each member of each Group agree, however, that unless an Event of Default has occurred and is continuing all of such entities will be represented by a single law firm.  Each Borrower shall reimburse the Administrator and each Group Agent for the cost of such Person’s external auditors auditing the books, records and procedures of such Borrower or the applicable Servicer.  Each Borrower shall reimburse each Conduit Lender on demand for all reasonable costs and out of pocket expenses incurred by such Conduit Lender in connection with the Transaction Documents or the transactions contemplated thereby, including certain costs related to the Rating Agencies and reasonable fees and out of pocket expenses of external counsel of the Administrator and each member of any Group for advice relating to such Conduit Lender’s operation in connection with the transactions contemplated by the Transaction Documents.

(b)            In addition, each Borrower shall pay on demand any and all stamp and Other Taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement or the other documents or agreements to be delivered hereunder, and agrees to save each Indemnified Party and Affected Person harmless from and against any liabilities with respect to or resulting from any delay in paying or omission to pay such Taxes and fees.

Section 6.5        No Proceedings; Limitation on Payments.

(a)            Each Borrower, CB, each Servicer, the Administrator, the LC Bank, the Group Agents, the Lenders, each assignee of the Loan or any interest therein, and each Person that enters into a commitment to fund the Loans or interests therein, hereby covenants and agrees that it will not institute against, or join any other Person in instituting against, any Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, for one year and one (1) day after the latest maturing Note issued by such Conduit Lender is paid in full.  The provisions of this paragraph shall survive any termination of this Agreement.

(b)            Notwithstanding any provisions contained in this Agreement to the contrary, no Conduit Lender shall or shall be obligated to, pay any amount, if any, payable by it pursuant to this Agreement or any other Transaction Document unless (i) such Conduit Lender has received funds which may be used to make such payment and which funds are not required to repay the


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Notes when due and (ii) after giving effect to such payment, either (x) such Conduit Lender could issue Notes to refinance all outstanding Notes (assuming such outstanding Notes matured at such time) in accordance with the program documents governing such Conduit Lender’s securitization program or (y) all Notes are paid in full.  Any amount which such Conduit Lender does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in §101 of the Bankruptcy Code) against or company obligation of such Conduit Lender for any such insufficiency unless and until such Conduit Lender satisfies the provisions of clauses (i) and (ii) above.  The provisions of this paragraph shall survive any termination of this Agreement.

Section 6.6        GOVERNING LAW AND JURISDICTION.

(a)            THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

(b)            ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.  EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

Section 6.7         Confidentiality</