EXHIBIT 10.22
SERVICING AGREEMENT
dated as of
September 26, 2006
by and among
AMERICAN COLOR GRAPHICS, INC.,
as Servicer
AMERICAN COLOR GRAPHICS FINANCE, LLC,
as Purchaser,
and
BANK OF AMERICA, N.A.,
as Administrative Agent and Collateral Agent
ALL RIGHT, TITLE AND INTEREST OF AMERICAN COLOR GRAPHICS FINANCE, LLC IN AND TO
THIS SERVICING AGREEMENT HAS BEEN ASSIGNED TO BANK OF AMERICA, N.A., AS
COLLATERAL AGENT UNDER THE CREDIT AGREEMENT, DATED AS OF SEPTEMBER 26, 2006, BY
AND AMONG AMERICAN COLOR GRAPHICS FINANCE, LLC, AS BORROWER, BANK OF AMERICA,
N.A., AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT, AND THE LENDERS IDENTIFIED
THEREIN.

 

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

 

TABLE OF CONTENTS

         
SERVICING AGREEMENT
    i  
 
       
ARTICLE I DEFINITIONS
    2  
Section 1.1 Defined Terms
    2  
Section 1.2 Other Terms
    7  
Section 1.3 Computation of Time Periods
    7  
Section 1.4 Interpretation
    7  
 
       
ARTICLE II ADMINISTRATION AND SERVICING OF PURCHASED RECEIVABLES
    8  
Section 2.1 Servicer to Act
    8  
Section 2.2 Concentration Account and Servicer Remittances
    11  
Section 2.3 Servicing Compensation
    12  
Section 2.4 No Offset
    12  
Section 2.5 Servicer’s Employees and Fidelity Bond
    12  
Section 2.6 Servicer Not to Resign
    12  
 
       
ARTICLE III REPORTS AND OTHER INFORMATION TO BE PROVIDED BY THE SERVICER
    13  
Section 3.1 Servicing Reports; Borrowing Base Certificates
    13  
Section 3.2 Financial Statements
    14  
Section 3.3 Certificates; Other Information
    15  
Section 3.4 Notices and Information
    16  
Section 3.5 Notice to Obligors
    17  
Section 3.6 Access to Certain Information
    17  
 
       
ARTICLE IV REPRESENTATIONS AND WARRANTIES
    18  
Section 4.1 Representations and Warranties of Servicer
    18  
Section 4.2 Representations and Warranties of the Purchaser
    24  
 
       
ARTICLE V COVENANTS OF SERVICER
    26  
Section 5.1 Affirmative Covenants of the Servicer
    26  
Section 5.2 Negative Covenants of the Servicer
    30  
Section 5.3 Financial Covenant of Servicer
    32  
 
       
ARTICLE VI INDEMNIFICATION
    32  
Section 6.1 Servicer Indemnification
    32  
 
       
ARTICLE VII SERVICER DEFAULTS
    34  
Section 7.1 Servicer Defaults
    34  
Section 7.2 Termination of the Servicer
    36  
Section 7.3 Effects of Termination of Servicer
    37  
Section 7.4 Servicer to Cooperate
    38  
Section 7.5 Waiver of Servicer Default
    38  
Section 7.6 Remedies Not Exclusive
    38  
Section 7.7 No Effect on Other Parties
    38  

i

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

 

         
ARTICLE VIII MISCELLANEOUS PROVISIONS
    39  
Section 8.1 Termination
    39  
Section 8.2 Amendments
    39  
Section 8.3 Notices
    39  
Section 8.4 Limitation of Liability
    40  
Section 8.5 Binding Effect; Benefit of Servicing Agreement
    40  
Section 8.6 Choice of Law and Venue; Jury Trial Waiver
    40  
Section 8.7 Execution in Counterparts; Severability; Integration
    41  
Section 8.8 Waiver of Setoff
    41  
Section 8.9 Headings and Exhibits
    41  
Section 8.10 Assignment
    42  
Section 8.11 Severability of Provisions; No Waiver
    42  
Section 8.12 Confidentiality
    42  
Section 8.13 Non-Petition
    44  

ii

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

 

     
SCHEDULES
   
 
   
Schedule 4.1(m)
  ERISA Compliance Information
Schedule 4.1(p)
  Intellectual Property Information
Schedule 4.1(r)
  Labor Matters Information
 
   
EXHIBITS
   
 
   
Exhibit A
  Form of Monthly Servicing Report
Exhibit B
  Form of Eligible Obligor Notice

iii

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

 

     SERVICING AGREEMENT, dated as of September 26, 2006 (the “Servicing
Agreement”), by and among AMERICAN COLOR GRAPHICS, INC., a New York corporation,
as the Servicer (in such capacity, the “Servicer”), AMERICAN COLOR GRAPHICS
FINANCE, LLC, a Delaware limited liability company, as the Purchaser (in such
capacity, the “Purchaser”), and BANK OF AMERICA, N.A., as the Administrative
Agent (in such capacity, the “Administrative Agent”) and the Collateral Agent
(in such capacity, the “Collateral Agent”).
PRELIMINARY STATEMENT
     WHEREAS, ACG, the Purchaser and the Administrative Agent have entered into
this Servicing Agreement to provide for, among other things, the continued
servicing of certain Transferred Receivables acquired from time to time by the
Purchaser from ACG pursuant to the Contribution Agreement.
     WHEREAS, the Purchaser has entered into the Credit Agreement with the
Collateral Agent, the Administrative Agent and the Lenders, and ACG and the
Purchaser have entered into the Contribution Agreement, providing for, among
other things, the absolute assignment, from time to time, by ACG to the
Purchaser of all of ACG’s right, title and interest in and to certain
Transferred Receivables.
     WHEREAS, under the Security Agreement, the Purchaser has granted a security
interest in all of its right, title and interest (whether now owned or hereafter
acquired or arising), in, to and under such Transferred Receivables to the
Collateral Agent as security for, among other things, any Loans made by the
Lenders to the Purchaser under the Credit Agreement.
     WHEREAS, the effectiveness of the Contribution Agreement, the Credit
Agreement and the Security Agreement are conditioned upon, among other things,
the Servicer, the Purchaser and the Administrative Agent entering into this
Servicing Agreement to provide for the servicing of the Transferred Receivables.
     WHEREAS, to further secure the repayment of any Loans made to the Purchaser
by the Lenders under the Credit Agreement, the Purchaser has granted to the
Collateral Agent a security interest in, among other things, the Purchaser’s
rights under this Servicing Agreement, and the Servicer agrees that all
covenants and agreements made by the Servicer herein with respect to the
Transferred Receivables shall also be for the benefit and security of the
Collateral Agent, the Administrative Agent and the Lenders.
     WHEREAS, for its services under this Servicing Agreement, the Servicer
shall receive the compensation described herein.
     NOW, THEREFORE, in consideration of the mutual covenants herein contained
and benefits to be derived herefrom, the parties hereto agree as follows:

 

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

 

ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms.
     Certain capitalized terms used throughout this Servicing Agreement are
defined in this Section 1.1. In addition, capitalized terms used but not defined
in this Servicing Agreement shall have the meanings set forth in the Credit
Agreement or the Contribution Agreement, as the case may be.
     “ACG” means American Color Graphics, Inc., a New York corporation.
     “Administrative Agent” has the meaning set forth in the Preamble hereto.
     “Businesses” means, at any time, a collective reference to the businesses
operated by the Servicer or its Affiliates at such time.
     “Capital Lease” means, as applied to any Person, any lease of any Property
(whether real, personal or mixed) by that Person as lessee which, in accordance
with GAAP, is required to be accounted for as a capital lease on the balance
sheet of that Person.
     “Change of Control” means the occurrence of any of the following events:
(a) the sale, lease, transfer or other disposition (other than by way of merger
or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Servicer and its Subsidiaries taken as a
whole to any “person” or “group” (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) other than the Sponsor,
(b) Holdings or the Servicer is liquidated or dissolved or adopts a plan of
liquidation or dissolution; (c) Holdings shall fail to own directly 100% of the
outstanding Capital Stock of the Servicer, (d) the Sponsor shall fail to own
beneficially, directly or indirectly, at least 40% of the outstanding Voting
Stock of Holdings, (e) a “person” or “group” (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) other than the
Sponsor shall have acquired beneficial ownership, directly or indirectly, of, or
shall have acquired by contract or otherwise, 30% or more of the outstanding
Voting Stock of Holdings, (f) during any period of 12 consecutive months, a
majority of the members of the board of directors or other equivalent governing
body of Holdings cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period,
(ii) whose election or nomination to that board or equivalent governing body was
approved by either the Sponsor or individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body or (iii) whose election or nomination to
that board or other equivalent governing body was approved by either the Sponsor
or individuals referred to in clauses (i) and (ii) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both clause (ii) and clause
(iii), any individual whose initial nomination for, or assumption of office as,
a member of that board or equivalent governing body occurs as a result of an
actual or threatened solicitation of proxies or consents for the election or
removal of one or more directors by any

2

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

 

person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors) or (g) the occurrence of a
“Change of Control” under, and as defined in, the Second Lien Indenture. As used
herein, “beneficial ownership” shall have the meaning provided in Rule 13d-3 of
the SEC under the Securities Exchange Act of 1934.
     “Collateral Agent” has the meaning set forth in the Preamble hereto.
     “Consolidated EBITDA” means, for any period, for ACG on a consolidated
basis, an amount equal to Consolidated Net Income plus, without duplication
(a) the following to the extent deducted in calculating such Consolidated Net
Income: (i) Consolidated Interest Charges, (ii) the provision for current and
deferred federal, state, local and foreign income taxes payable by ACG,
(iii) depreciation and amortization expense, (iv) restructuring charges,
severance expenses and other non-recurring expenses of ACG which do not
represent a cash item in such period and (v) non-cash losses or other non-cash
charges from (A) Dispositions of or write-downs of fixed assets and equipment
and (B) impairment of goodwill minus (b) the following to the extent included in
calculating such Consolidated Net Income: (i) current and deferred federal,
state, local and foreign income tax credits and (ii) all non-cash items
increasing Consolidated Net Income minus (c) restructuring charges, severance
expenses and other non-recurring expenses of ACG paid during such period for
restructuring initiatives adopted after May 5, 2005, which represent a cash item
in such current period (whether or not such charges and expenses were accrued
during such period).
     “Consolidated Interest Charges” means for any period for ACG on a
consolidated basis, the sum of all interest, premium payments, amortization or
write-off of deferred financing costs, debt discount, fees, charges and related
expenses of ACG in connection with borrowed money (including capitalized
interest, the interest component under Capital Leases and the implied interest
component of Synthetic Lease Obligations) or in connection with the deferred
purchase price of assets, in each case to the extent treated as interest in
accordance with GAAP.
     “Consolidated Net Income” means, for any period, for ACG on a consolidated
basis, net income (excluding extraordinary items), as determined in accordance
with GAAP.
     “Contribution Agreement” means that certain Contribution and Sale
Agreement, dated as of September 26, 2006, by and between American Color
Graphics Finance, LLC, as purchaser, and ACG, as seller.
     “Credit Agreement” means that certain Credit Agreement, dated as of
September 26, 2006, by and among American Color Graphics Finance, LLC, as
borrower, the lenders identified therein and Bank of America, N.A., as
administrative agent and collateral agent.
     “Disposition” or “dispose” means any disposition (including pursuant to a
Sale and Leaseback Transaction) of any or all of the Property (including,
without limitation, the Capital Stock of a Subsidiary) of ACG or any of its
consolidated Subsidiaries, whether by sale, lease, licensing, transfer or
otherwise; provided, however, that the term “Disposition” shall be deemed to
exclude any Equity Issuance.

3

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

 

     “Eligible Obligor Notice” has the meaning specified in Section 3.5.
     “Equity Issuance” means any issuance by ACG or any of its consolidated
Subsidiaries to any Person for cash of (a) shares of its Capital Stock, (b) any
shares of its Capital Stock pursuant to the exercise of options or warrants,
(c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity or the conversion of any class equity securities to any
other class of equity securities or (d) any options or warrants relating to its
Capital Stock. The term “Equity Issuance” shall not be deemed to include any
Disposition.
     “Excepted Persons” has the meaning specified in Section 8.12(a).
     “First Lien Leverage Ratio” means, as of the last day of any fiscal quarter
of ACG, the ratio of (a) the sum of the Aggregate Revolving Commitments (as such
term is defined in the ACG Senior Facility) plus the outstanding principal
balance of the Term Loan (as such term is defined in the ACG Senior Facility) as
of such date to (b) Consolidated EBITDA for the four fiscal quarter period
ending on such date.
     “FRB” means the Board of Governors of the Federal Reserve System of the
United States.
     “Intellectual Property” has the meaning specified in Section 4.1(p).
     “IRS” means the United States Internal Revenue Service.
     “Monthly Reporting Date” shall mean the 20th day of each calendar month.
     “Monthly Servicing Report” means the monthly report required to be
delivered in accordance with Section 3.1(b), in the form attached hereto as
Exhibit A.
     “Operating Lease” means, as applied to any Person, any lease (including,
without limitation, leases which may be terminated by the lessee at any time) of
any Property (whether real, personal or mixed) which is not a Capital Lease
other than any such lease in which that Person is the lessor.
     “PBA” means the Pensions Benefit Act of Ontario and all regulations
thereunder and any successor legislation.
     “Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Servicer or
any ERISA Affiliate or to which the Servicer or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
     “Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Servicer or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

4

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

 

     “Real Properties” means, at any time, a collective reference to each of the
facilities and real Properties owned, leased or operated by the Servicer or any
of its Affiliates at such time.
     “Reporting Date” means each Tuesday of each calendar week commencing in the
week after the first purchase of Transferred Receivables by the Purchaser
pursuant to the Contribution Agreement.
     “Sale and Leaseback Transaction” means any arrangement pursuant to which
the Servicer, directly or indirectly, becomes liable as lessee, guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any Property (a) which the Servicer has sold or transferred (or is to
sell or transfer) to another Person or (b) which the Servicer intends to use for
substantially the same purpose as any other Property which has been sold or
transferred (or is to be sold or transferred) by the Servicer to another Person
in connection with such lease.
     “Servicer” has the meaning set forth in the Preamble hereto.
     “Servicer Default” has the meaning set forth in Section 7.1.
     “Servicer Indemnified Party” has the meaning set forth in Section 6.1(a).
     “Servicer Termination Date” means the date that the Servicer’s (or a
successor Servicer’s) rights and obligations under this Servicing Agreement have
been terminated, except as, and to the extent, otherwise provided under the
terms of this Servicing Agreement.
     “Servicer Termination Notice” has the meaning set forth in Section 7.2(a).
     “Servicing Agreement” has the meaning set forth in the Preamble hereto.
     “Servicing Fee” means the monthly fee payable (in arrears) to the Servicer
hereunder on the Payment Date for each month, in an amount equal (each month) to
the product of (x) 1.0% per annum and (y) the average aggregate Transferred
Receivable balance outstanding during the prior month; provided, however, that
the Servicing Fee shall not be less than $17,917.00 per month.
     “Servicing Standard” means the standard of care described in
Section 2.1(b).
     “Sponsor” means (a) for purposes of clause (d) of the definition of “Change
of Control”, collectively, Metalmark Capital LLC (and its Affiliates that are
not portfolio Investments), The Morgan Stanley Leveraged Equity Fund II, L.P., a
Delaware limited partnership, Morgan Stanley Capital Partners III, L.P., a
Delaware limited partnership, Morgan Stanley Capital Investors, L.P., a Delaware
limited partnership, and MSCP III 892 Investors, L.P., a Delaware limited
partnership, and (b) for all other purposes, the Persons identified in the
preceding clause (a) and the other investors, including the officers and
directors of the Servicer or Holdings, who beneficially own voting stock of
Holdings on May 5, 2005 or, upon the death of any such

5

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

 

individual investor, such individual investor’s executors, administrators,
testamentary trustees, heirs, legatees or beneficiaries.
     “Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
     “Swap Termination Value” means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
     “Synthetic Lease Obligation” means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of Property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
     “Tax Sharing Agreement” means that certain Amended and Restated Tax
Allocation Agreement dated as of August 15, 1995, by and between Holdings and
the Servicer.
     “Threshold Amount” means $5,000,000.
     Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
     “United States” and “U.S.” mean the United States of America.

6

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

 

     Section 1.2 Other Terms.
     All accounting terms used but not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC, and
used but not specifically defined herein, are used herein as defined in such
Article 9.
     Section 1.3 Computation of Time Periods.
     Unless otherwise stated in this Servicing Agreement, in the computation of
a period of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each mean “to
but excluding.”
     Section 1.4 Interpretation.
     In this Servicing Agreement, unless a contrary intention appears:
     (a) the singular number includes the plural number and vice versa;
     (b) reference to any Person includes such Person’s successors and assigns
but, if applicable, only if such successors and assigns are permitted under the
terms of this Servicing Agreement or under the terms of any of the other Loan
Documents;
     (c) reference to any gender includes the other gender;
     (d) the word “or” has the inclusive meaning represented by the phrase
“and/or”;
     (e) the words “hereof,” “herein,” “hereby,” and “hereunder,” and any other
similar words, refer to this Servicing Agreement as a whole and not to any
particular provision hereof;
     (f) reference to day or days without further qualification means calendar
days;
     (g) in the case where the date on which any action required to be taken,
document required to be delivered or payment required to be made is not a
Business Day, such action, delivery or payment need not be made on such date,
but may be made on the next succeeding Business Day;
     (h) reference to any article, section, subsection, clause, exhibit and
schedule references are to this Servicing Agreement
     (i) reference to any agreement (including any Loan Document), document or
instrument means such agreement, document or instrument as amended, supplemented
or modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms of the other Loan Documents, and reference to any
promissory note includes any promissory note that is an extension or renewal
thereof or a substitute or replacement therefor; and

7

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

 

     (j) reference to any Applicable Law means such Applicable Law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder and
reference to any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision.
ARTICLE II
ADMINISTRATION AND SERVICING OF PURCHASED RECEIVABLES
     Section 2.1 Servicer to Act.
     (a) The Administrative Agent and the Purchaser each hereby appoint ACG as
the initial Servicer of the Transferred Receivables, and ACG, in executing this
Servicing Agreement, hereby accepts such appointment on the terms and conditions
set forth in this Servicing Agreement. Accordingly, ACG shall, as an independent
contractor on behalf of the Administrative Agent and the Purchaser and for the
benefit of the Administrative Agent, the Purchaser, the Lenders and (with
respect to each) their respective beneficiaries, successors and assigns,
(i) manage, service and administer the Transferred Receivables in accordance
with the terms of the related Contract and of this Servicing Agreement and
(ii) be responsible for enforcing the Purchaser’s and the Administrative Agent’s
rights in the Transferred Receivables.
     (b) In performing its duties and obligations pursuant to this Servicing
Agreement and managing, administering, servicing, enforcing and making
Collections on the Transferred Receivables pursuant to this Servicing Agreement,
the Servicer shall perform its duties on a fair and equitable basis, administer
the Transferred Receivables on a non-discriminatory basis, exercise that degree
of diligence, prudence, skill and care consistent with industry standards and
the customary practices of other servicers for servicing comparable trade
receivables portfolios without preference to ownership thereof and in any event,
in a prudent and commercially reasonable manner that is consistent with
Applicable Law and its Credit Policies (the foregoing, the “Servicing
Standard”). Subject to the provisions of this Section 2.1, the Servicer (at its
expense and consistent with its Credit Policies) shall have full power and
authority, acting at its sole discretion, to do any and all things in connection
with the management, servicing, administration, enforcement, collection and sale
or other disposition of Transferred Receivables that it may deem necessary or
desirable.
     (c) Without limiting the generality of the foregoing, the Servicer shall be
responsible, among other duties, to (i) monitor and post all Collections related
to the Transferred Receivables, (ii) respond to inquiries of Obligors,
(iii) investigate delinquencies, (iv) account for collections and furnish
weekly, monthly and annual statements to the Purchaser and the Administrative
Agent with respect to the Collections related to the Transferred Receivables,
together with any other information required to be provided to them under the
terms of this Servicing Agreement or under the terms of any of the other Loan
Documents, (v) maintain with respect to each Contract, and with respect to each
payment by each Obligor and compliance by each Obligor

8

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

 

with the provisions of each Contract, complete and accurate records in such
manner and to the same extent as Servicer does with respect to similar contracts
held for its own account, (vi) apply for and maintain (or cause to be applied
for and maintained) all licenses, permits, registrations, authorizations and
other governmental items necessary for the Purchaser to acquire, hold and manage
the Transferred Receivables in each jurisdiction where the ownership of its
assets or the nature of its operations would require the Purchaser to maintain
such licenses, permits, registrations, authorizations or governmental items and
cause to be paid all fees associated with obtaining and maintaining such
licenses, (vii) cause to be paid all applicable taxes properly due and owing in
connection with the Purchaser’s activities, (viii) negotiate and maintain the
insurances required by this Servicing Agreement, (ix) in connection with its
performance of the responsibilities and obligations, and exercise of rights,
under a Contract, minimize any abatement, reduction, recoupment, setoff, defense
or counterclaim by the related Obligor, and (x) maintain the perfected first
priority security interest of the Collateral Agent (for the benefit of the
Lenders) in the Transferred Receivables. To the extent that the Purchaser fails
to pay any amounts referred to in clauses (vi) or (vii) of the preceding
sentence, the Servicer shall pay such amount but shall be entitled to be
reimbursed promptly therefore.
     (d) Notwithstanding the foregoing general delegation of servicing
responsibility to the Servicer, the Servicer shall conduct its management,
servicing, administration, collection and enforcement activities with respect to
the Transferred Receivables in accordance with the following more specific
guidelines:
     (i) The Servicer, as agent for and on behalf of the Purchaser and the
Administrative Agent (for the benefit of the Lenders), shall (except as
otherwise directed by the Administrative Agent), with respect to any Transferred
Receivable that is a Defaulted Receivable, follow such practices and procedures
as are normal and consistent with the Servicer’s Credit Policies related to its
own Receivables that are similar to the Transferred Receivables, and, in any
event, consistent with the Servicing Standard, including the taking of
appropriate actions to enforce the Purchaser’s rights under the Contribution
Agreement. The Servicer shall deposit (or shall cause to be deposited) all
recoveries in respect of any such Defaulted Receivable in the Concentration
Account pursuant to Section 2.2;
     (ii) The Servicer shall take such reasonable and lawful actions as the
Administrative Agent may in good faith request to enforce the Purchaser’s rights
under the Transferred Receivables and, following the occurrence of an Event of
Default, shall take such actions as the Administrative Agent may request to
exercise rights for the benefit of the Administrative Agent. The Servicer may
sue to enforce or collect upon Transferred Receivables as agent for the
Purchaser and the Administrative Agent for the benefit of the Lenders. If the
Servicer elects to commence a legal proceeding to enforce a Transferred
Receivable, the act of commencement shall be deemed to be an automatic
assignment of the Transferred Receivable to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Transferred Receivable on the ground
that it is not a real party in interest or a holder entitled to enforce the
Transferred Receivable, then the Purchaser, the Collateral Agent or the
Administrative Agent, as applicable, shall, at the Servicer’s request, take

9

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

 

such steps as the Servicer deems necessary and instructs it in writing to take
to enforce the Transferred Receivable, including bringing suit in the name of
the Purchaser, the Collateral Agent, the Administrative Agent or the Servicer,
as applicable, and the Purchaser, the Collateral Agent or the Administrative
Agent, as applicable, shall be reimbursed and indemnified by the Servicer for
any such action taken;
     (iii) The Servicer shall maintain the Purchaser’s books and records related
to the Transferred Receivables separate and apart from the books and records
related to any assets owned by the Servicer in its individual capacity. The
Servicer shall clearly indicate that the Transferred Receivables are assets of
the Purchaser, and the Servicer shall not commingle the Transferred Receivables
with its (or any of its Affiliate’s) assets or files (except as expressly
permitted under the terms of the Intercreditor Agreement); and
     (iv) The Servicer shall make and maintain the effectiveness of all UCC
filings and recordings as may be required pursuant to the terms of the
Contribution Agreement and the Credit Agreement, including, without limitation,
filing all “precautionary” UCC financing statements (to the extent required to
be filed pursuant to the terms of the Contribution Agreement or the Credit
Agreement), or assignments thereof, necessary to perfect the Purchaser’s
ownership interest and the Collateral Agent’s security interest in the
Transferred Receivables. The Servicer shall, in accordance with its customary
servicing procedures and at its own expense, be responsible for taking such
steps as are necessary to maintain the perfection and first priority of such
security interests. The Collateral Agent hereby authorizes the Servicer to
continue and/or re-perfect or to cause the continuation and/or reperfection of
its security interest on its behalf as the Collateral Agent for the benefit of
the Lenders, as necessary.
     (e) Without the prior written consent of the Administrative Agent and the
Required Lenders, the Servicer shall not be permitted to delegate any of its
duties or responsibilities as Servicer to any Person other than, with respect to
certain Defaulted Receivables, to outside collection agencies or attorneys in
accordance with its customary practices. Notwithstanding the foregoing, the
Servicer shall be and remain primarily liable to the Purchaser, the
Administrative Agent and the Lenders for the full and prompt performance of all
duties and responsibilities of the Servicer hereunder and the Administrative
Agent and the Lenders shall be entitled to deal exclusively with the Servicer in
matters relating to the discharge by the Servicer of its duties and
responsibilities hereunder.
     (f) In performing its servicing duties hereunder, the Servicer shall engage
in reasonable efforts, consistent with the Servicing Standard, to collect all
payments required to be made by the Obligors under the Contracts and enforce all
material rights of the Purchaser in and to Transferred Receivables. The Servicer
shall notify the Purchaser and the Administrative Agent of any claim of offset
by any Obligor as to a Transferred Receivable to the extent that any such claim
would have a material adverse effect on the interest of the Purchaser, the
Administrative Agent or the Lenders or on the Transferred Receivables. The
Servicer shall not assign, sell, pledge or exchange or in any way encumber or
otherwise dispose of the Transferred Receivables, except as permitted hereunder
or in any other Loan Documents.

10

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

 

     (g) The Servicer shall maintain in full force and effect insurance
(including worker’s compensation insurance, liability insurance, employee theft
insurance, directors and officers insurance, property insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice. Each of the Administrative Agent and the Purchaser
shall be named as an additional insured (in the case of liability insurance) or
loss payee or mortgagee, as the respective interests of each may appear (in the
case of hazard insurance), with respect to any such insurance providing coverage
in respect of any Transferred Receivable, and each provider of any such
insurance shall agree, by endorsement upon the policy or policies issued by it
or by independent instruments furnished to the Administrative Agent, that it
will give the Administrative Agent thirty (30) days prior written notice before
any such policy or policies shall lapse, be canceled or be terminated.
     Section 2.2 Concentration Account and Servicer Remittances.
     (a) From and after the initial Purchase Date, the Borrower shall at all
times maintain in existence the Lockboxes and the Concentration Account, which
shall be subject to a Control Agreement containing control provisions in favor
of the Collateral Agent.
     (b) Upon request of the Servicer (and with the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld) or upon
notice of resignation received from the Depository Bank and/or the Collateral
Agent, the Depository Bank and the Collateral Agent may be changed, in each
case, in accordance with the terms of the Control Agreement and/or the
Intercreditor Agreement, as applicable.
     (c) The Servicer shall promptly instruct all Obligors to send all payments
related to the Transferred Receivables directly to the Depository Bank for
deposit into the Concentration Account.
     (d) In accordance with the terms of the Control Agreement, the Depository
Bank shall apply all amounts in the Concentration Account on a daily basis in
accordance with Section 2.23 of the Credit Agreement.
     (e) Within 2 Business Days of receipt, the Servicer shall identify all
amounts delivered to a Lockbox or deposited in the Concentration Account that
relate to the Transferred Receivables and all amounts delivered to a Lockbox or
deposited in the Concentration Account that do not relate to the Transferred
Receivable. Upon such identification, the Servicer shall notify the Collateral
Agent, the Purchaser and the Administrative Agent (together with any other
parties required to be notified pursuant to Section 5 of the Intercreditor
Agreement) of any amounts, since the previous such notification, that were
delivered to a Lockbox or deposited in the Concentration Account that did not
relate to the Transferred Receivables.
     (f) If, notwithstanding subparagraph (c) above, any Collections relating to
the Transferred Receivables are deposited into an account other than the
Concentration Account, the Servicer (or such Affiliate) shall deposit such
amounts into the Concentration Account within

11

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

 

two (2) Business Days of receipt thereof. If, notwithstanding subparagraph
(c) above, any Collections relating to the Transferred Receivables are remitted
directly to the Servicer or any Affiliate of the Servicer (other than by
delivery to the Concentration Account or an account other than the Concentration
Account), the Servicer (or such Affiliate) shall deposit such amounts into the
Concentration Account within three (3) Business Days of receipt thereof.
     (g) The Servicer shall hold in trust for the benefit of the Purchaser and
the Collateral Agent any payment it receives related to the Transferred
Receivables pending remittance to the Concentration Account in accordance with
the above provisions.
     Section 2.3 Servicing Compensation.
     As compensation for the performance of its obligations under this Servicing
Agreement, the Servicer shall be entitled to receive the Servicing Fee at the
times and in the priority set forth in Section 2.23 of the Credit Agreement. The
Servicing Fee shall be paid monthly, commencing on the first Payment Date
following a Purchase Date in accordance with the terms of Section 2.23 of the
Credit Agreement and terminating on the first to occur of (i) the termination of
the Credit Agreement or (ii) the date that the Servicer is terminated in
accordance with the terms of this Servicing Agreement. The Servicer shall pay
all expenses incurred by it in connection with its servicing activities
hereunder, including, without limitation, payment of the fees and disbursements
of its independent accountants and payment of expenses incurred in connection
with distributions and reports to the Administrative Agent and the Lenders and
payment of the fee of the Depository Bank and the Collateral Agent under the
Intercreditor Agreement and shall not be entitled to reimbursement for such
expenses.
     Section 2.4 No Offset.
     The obligations of the Servicer under this Servicing Agreement shall not be
subject to any defense, counterclaim or right of offset that the Servicer has or
may have against the Purchaser, the Administrative Agent, any Lender or any
other Person, whether in respect of this Servicing Agreement, any Transferred
Receivable or otherwise.
     Section 2.5 Servicer’s Employees and Fidelity Bond.
     The Servicer agrees to indemnify, defend and protect the Administrative
Agent, the Collateral Agent and the Lenders from and against, and assumes all
liabilities and obligations relating to, all costs, expenses, losses, damages,
claims or other liabilities arising out of or relating to theft or embezzlement
of any funds, or other employee dishonesty, relating to the Transferred
Receivables by the Servicer’s employees.
     Section 2.6 Servicer Not to Resign.
     (a) The Servicer shall not resign from the duties and obligations hereby
imposed on it except upon a determination by its president or other Person
authorized to execute and deliver an Officer’s Certificate that by reason of
change in applicable legal requirements, with which the Servicer cannot
reasonably comply, the continued performance by the Servicer of its duties

12

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

 

under this Servicing Agreement would cause it to be in violation of such legal
requirements, such determination to be evidenced by an Officer’s Certificate to
such effect and accompanied by an Opinion of Counsel to such effect.
     (b) No such resignation shall become effective until a successor Servicer
acceptable to the Administrative Agent that is experienced in the business of
acting as servicer with respect to financial agreements of the type comprising
the Transferred Receivables shall have assumed the responsibilities and
obligations of the Servicer hereunder.
     (c) Except as provided in this Section 2.6 and in Section 7.2, the duties
and obligations of the Servicer under this Servicing Agreement shall continue
until this Servicing Agreement shall have been terminated as provided in
Section 8.1, and shall survive the exercise by the Purchaser, the Collateral
Agent, the Administrative Agent or the Lenders of any right or remedy under this
Servicing Agreement, or the enforcement by the Purchaser, the Collateral Agent,
the Administrative Agent or the Lenders of any provision of this Servicing
Agreement or any other Loan Document.
     (d) Nothing contained in this Section 2.6 shall impair or restrict the
ability of the Servicer or any successor Servicer to appoint a subservicer (that
is not an Affiliate of the Purchaser) with the prior written consent of the
Administrative Agent; provided, however, that (i) the Servicer or any successor
Servicer making such an appointment shall remain primarily liable for all of its
obligations and duties hereunder and under the other Loan Documents; and
(ii) the terms and provisions of such subservicing arrangements must be
terminable at will by the Servicer or otherwise expire automatically without
additional cost and expense if such the Servicer ceases to be the Servicer
hereunder.
ARTICLE III
REPORTS AND OTHER INFORMATION TO BE PROVIDED BY THE SERVICER
     Section 3.1 Monthly Servicing Reports; Borrowing Base Certificates.
     (a) (i) No later than 2:00 p.m. (New York time) (or, if the Purchaser is
submitting a Borrowing Request on such Reporting Date, no later than 1:00 p.m.
(New York time)) on each Reporting Date and (ii) upon the direction by the
Purchaser in connection with any Loan under the Credit Agreement, the Servicer,
in conjunction with the Purchaser, shall deliver to the Administrative Agent a
Borrowing Base Certificate.
     (b) No later than 2:00 p.m. (New York time) on each Monthly Reporting Date,
the Servicer shall deliver to the Administrative Agent and the Purchaser a
Monthly Servicing Report with respect to the activity of the Transferred
Receivables and any Collections with respect thereto.

13

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

 

     (c) The Servicer shall also promptly deliver to the Administrative Agent
any additional information regarding the Transferred Receivables, the
Collections or the financial condition of the Purchaser or the Servicer, as the
Administrative Agent may request.
     (d) Concurrently with the delivery of any report or certificate referred to
in Section 3.1(a) and (b), the Servicer shall also deliver to the Administrative
Agent and the Purchaser an Officer’s Certificate certifying that (i) all
information contained in such report or certificate is true and correct,
(ii) all representations and warranties of the Servicer are true and correct as
of the date of the delivery of such Officer’s Certificate, and (iii) no Default,
Servicer Default or Event of Default has occurred or is continuing, or, if any
such Default, Servicer Default or Event of Default shall exist, stating the
nature and status of such event.
     Section 3.2 Financial Statements.
     The Servicer shall furnish to the Purchaser, the Agents and each Lender, in
form and detail satisfactory to the Administrative Agent and the Required
Lenders:
     (a) as soon as available, but in any event within ninety (90) days after
the end of each fiscal year of Holdings, (i) a consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and an opinion of
independent certified public accountants of recognized national standing, which
report and opinion shall be prepared in accordance with generally accepted
auditing standards and applicable Securities Laws and shall not be subject to
any “going concern” or like qualification or exception or contain any
qualification arising out of the scope of the audit or contain explanatory
language that questions the ability of Holdings and its Subsidiaries to continue
as a going concern and (ii) a consolidating income statement of Holdings and its
Subsidiaries as at the end of such fiscal year, setting forth in comparative
form the figures for the previous fiscal year, all in reasonable detail and
certified by the chief executive officer or the chief financial officer of ACG
as fairly presenting the financial condition of Holdings and its Subsidiaries in
accordance with GAAP;
     (b) as soon as available, but in any event within forty-five (45) days
after the end of each fiscal quarter of each fiscal year of Holdings, a
consolidated and consolidating balance sheet of Holdings and its Subsidiaries as
at the end of such fiscal quarter, and the related consolidated and
consolidating statements of income or operations and a consolidated statement of
cash flows for such fiscal quarter and for the portion of the fiscal year of
Holdings and its Subsidiaries then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year
(other than balance sheet information), all in reasonable detail, such
statements to be certified by the chief executive officer or the chief financial
officer of ACG as fairly presenting the financial condition, results of
operations and cash flows of Holdings and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes and such consolidating statements to be certified by the chief
executive officer or the chief financial officer of ACG to the effect that such
statements are fairly stated in

14

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

 

all material respects when considered in relation to the consolidated financial
statements of Holdings and its Subsidiaries;
     (c) as soon as available, but in any event within thirty (30) days after
the end of each calendar month (or forty-five (45) days in the case of any month
that is also the last month of a fiscal quarter or fiscal year), a consolidated
and consolidating balance sheet of Holdings and its Subsidiaries as at the end
of such fiscal month, and the related consolidated and consolidating statements
of income or operations and a consolidated statement of cash flows for such
fiscal month and for the portion of the fiscal year Holdings and its
Subsidiaries then ended, setting forth in each case in comparative form the
figures for the corresponding calendar month of the previous fiscal year and the
corresponding portion of the previous fiscal year (other than balance sheet
information), all in reasonable detail, such statements to be certified by the
chief executive officer or the chief financial officer of ACG as fairly
presenting the financial condition, results of operations and cash flows of
Holdings and its Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes and such consolidating
statements to be certified by the chief executive officer or the chief financial
officer of ACG to the effect that such statements are fairly stated in all
material respects when considered in relation to the consolidated financial
statements of Holdings and its Subsidiaries;
     (d) concurrently with the delivery of the financial statements referred to
in Section 3.2(a), (b) and (c), an Officer’s Certificate signed by the chief
executive officer or chief financial officer of the Servicer certifying that no
Default, Servicer Default or Event of Default has occurred or is continuing, or,
if any such Default, Servicer Default or Event of Default shall exist, stating
the nature and status of such event; and
     (e) as soon as available and in no event later than 45 days after the end
of the Fiscal Year of the Servicer, beginning with the fiscal year ending
March 31, 2007, an annual budget of the Servicer containing projected
consolidated financial statements and a consolidating income statement of the
Servicer by business segment, in each case for the next fiscal year.
     Any consolidating balance sheet or consolidating statement of income or
operations furnished under this Section 3.2 shall show unconsolidated
information for Holdings on the one hand and ACG and its consolidated
subsidiaries on the other hand and need not show separately consolidating
information for ACG and any of its consolidated subsidiaries. Such
unconsolidated financial information for ACG and its consolidated subsidiaries
shall also include the information on Schedule 5.01 to the Credit Agreement.
     Section 3.3 Certificates; Other Information.
     The Servicer shall furnish to the Purchaser, the Agents and each Lender, in
form and detail satisfactory to the Administrative Agent and the Required
Lenders:
     (a) concurrently with the delivery of the financial statements referred to
in Section 3.2(a), a certificate of its independent certified public accountants
stating that in making the examination necessary therefor no knowledge was
obtained of any Servicer Default with

15

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

 

respect to the financial covenants set forth in Section 5.3 or, if any such
Servicer Default shall exist, stating the nature and status of such event;
     (b) promptly upon receipt by Holdings or any Subsidiary of any detailed
written audit report, written report, “management letter” or other written
recommendation submitted by independent accountants to Holdings or any
Subsidiary in connection with any annual or special audit of the books of such
Person, in each case citing a material weakness in internal controls, notice of
receipt thereof, and a copy of each such written report or “management letter”
unless (i) ACG has been informed by such independent accountants that delivery
thereof to the Administrative Agent or the Lenders is not permitted by generally
applicable policies of such independent accountants and (ii) such information is
not being delivered to any other lenders or creditors of Holdings or any
Subsidiary;
     (c) promptly, and in any event within five (5) Business Days after receipt
thereof by Holdings or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or other inquiry by such
agency regarding financial or other operational results of Holdings or any
Subsidiary;
     (d) promptly after the same are available, (i) copies of each annual
report, proxy or financial statement or other material report generally sent to
the stockholders of Holdings or any Subsidiary, and copies of all annual,
regular, periodic and special reports and registration statements which Holdings
or any Subsidiary may file or be required to file with the SEC under Section 13
or 15(d) of the Securities Exchange Act of 1934, and (iii) upon the request of
the Administrative Agent, all reports and written information to and from the
United States Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational Safety and
Health Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters; and
     (e) promptly, such additional information regarding the business, financial
or corporate affairs of Holdings or the Servicer, or compliance with the terms
of the Loan Documents, as the Administrative Agent (or any Lender through the
Administrative Agent) may from time to time reasonably request.
     Section 3.4 Notices and Information.
     The Servicer shall furnish to the Purchaser and the Administrative Agent
(who shall notify the other Lenders), in form and detail satisfactory to the
Administrative Agent, with:
     (a) promptly after notice or knowledge thereof, notice of the occurrence of
any Default, Event of Default or Servicer Default and the nature thereof;
     (b) promptly after notice or knowledge thereof, notice of the occurrence of
any matter that has resulted or would reasonably be expected to result in a
Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the

16

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

 

Servicer; (ii) any dispute, litigation, investigation, proceeding or suspension
between the Servicer and any Governmental Authority; or (iii) the commencement
of, or any material development in, any material litigation or proceeding
affecting the Servicer, including pursuant to any applicable Environmental Laws;
     (c) promptly after notice or knowledge thereof, notice of the occurrence of
any ERISA Event; and
     (d) promptly after notice or knowledge thereof, notice of any material
change in accounting policies or financial reporting practices by Holdings or
the Servicer.
     Each notice pursuant to this Section 3.4(a) through (d) shall be
accompanied by a statement of a Financial Officer of the Servicer setting forth
details of the occurrence referred to therein and stating what action the
Servicer has taken and proposes to take with respect thereto. Each notice
pursuant to Section 3.4(a) shall describe with particularity any and all
provisions of this Servicer Agreement or any other Loan Document that have been
breached.
     Section 3.5 Notice to Obligors.
     In the event that an Event of Default or a Servicer Default shall occur,
the Servicer shall provide a notice in the form of Exhibit C hereto (each, an
“Eligible Obligor Notice”) to the related Obligors of the Purchaser’s interest
in the Transferred Receivables.
     Section 3.6 Access to Certain Information.
     (a) The Administrative Agent and its duly authorized representatives,
attorneys and accountants shall have access, at any reasonable time during
business hours and at reasonable intervals of time, and upon reasonable prior
notice, to any and all documentation regarding the Transferred Receivables that
the Servicer may possess, and the Servicer shall make its officers, employees
and agents available to such parties for purposes of discussing the Transferred
Receivables and the Servicer’s performance of its obligations under and
compliance with, the terms of the Loan Documents, such access being afforded
without charge but only upon reasonable request and during normal business hours
so as not to interfere unreasonably with the Servicer’s normal operations or
customer or employee relations, at offices of the Servicer designated by the
Servicer. The Purchaser shall pay for the reasonable out-of-pocket cost and
expense (including, inter alia, travel) of the Administrative Agent in
conducting (i) up to four (4) such inspections per each calendar year, so long
as no Default, Event of Default or Servicer Default has occurred and (ii) all
such inspections, if a Default, Event of Default or Servicer Default has
occurred.
     (b) At all times during the term hereof, the Servicer shall keep available
at its principal executive office for inspection by the Administrative Agent a
list of all of the Transferred Receivables that have been purchased by the
Purchaser under the Contribution Agreement, together with a reconciliation of
such list to that set forth in each of the Borrowing Base Certificates and
Monthly Servicing Reports, indicating the additions and removals (or repayments)
of Retransferred Receivables from the Transferred Receivables.

17

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

 

     (c) The Servicer shall maintain files, accounts and records as to each
Transferred Receivable serviced by the Servicer that are accurate and
sufficiently detailed so as to permit (i) the reader thereof to know, on a daily
basis, the status of such Transferred Receivables, including any payments,
insurance proceeds, residual proceeds and recoveries received or owing with
respect thereto (and the nature of each) and (ii) the reconciliation between
payments or other recoveries on (or with respect to) each Transferred Receivable
and the amounts from time to time deposited in the Concentration Account in
respect of such Transferred Receivables.
     (d) The Servicer shall maintain a database so that, from and after each
Purchase Date and the grant of the security interest in the relevant Transferred
Receivables to the Collateral Agent, the Servicer’s accounts and records
(including any backup computer archives) that refer to such Transferred
Receivables indicate clearly that such Transferred Receivables were sold to the
Purchaser and pledged to the Collateral Agent for the benefit of the Lenders.
Indication of the Collateral Agent’s interest in such Transferred Receivables
shall be deleted from or modified in such database (or other electronic database
being used by a successor Servicer) or elsewhere on the Servicer’s accounts and
records when, and only when, any Transferred Receivables included in such
Transferred Receivables become Retransferred Receivables pursuant to Section 6.2
of the Contribution Agreement or otherwise released from the Administrative
Agent’s Lien on such Transferred Receivables under the Credit Agreement.
     (e) Nothing in this Section 3.6 shall affect the obligation of the Servicer
to observe any Applicable Law prohibiting disclosure of information regarding
any Obligor, and the failure to provide information otherwise required by this
Section 3.6 as a result of such observance by the Servicer shall not constitute
a breach of this Section 3.6 or any similar provision of any other Loan
Document.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
     Section 4.1 Representations and Warranties of Servicer.
     The Servicer makes the following representations and warranties to the
Purchaser, the Collateral Agent and the Administrative Agent as of the Closing
Date and as of each Purchase Date, except as otherwise specified below, which
shall survive such date:
     (a) Existence, Qualification and Power; Compliance with Laws. The Servicer
(i) is duly organized and in good standing under the laws of the state of New
York, (ii) has all requisite power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (A) own or lease its assets
and carry on its business and (B) execute, deliver and perform its obligations
under the Loan Documents to which it is a party and (iii) is duly qualified and
is licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or

18

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

 

license; except in each case referred to in clause (ii)(A) or (iii), to the
extent that failure to do so would not reasonably be expected to have a Material
Adverse Effect.
     (b) Authorization; No Contravention. The execution, delivery and
performance by the Servicer of each Loan Document to which it is party have been
duly authorized by all necessary corporate or other organizational action and do
not and shall not (i) contravene the terms of any of the Servicer’s
Organizational Documents; (ii) conflict with or result in any breach or
contravention of, or result in or require the creation of any Lien under, or
require any payment to be made under (A) any Contractual Obligation to which the
Servicer is a party or affecting the Servicer or the Property of the Servicer or
any of its Subsidiaries or (B) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which the Servicer or its
property is subject; or (iii) violate any Applicable Law (including, without
limitation, Regulation U or Regulation X issued by the FRB). The Servicer and
each Subsidiary thereof is in compliance with all Contractual Obligations
referred to in clause (ii)(A), except to the extent that failure to do so would
not reasonably be expected to have a Material Adverse Effect.
     (c) Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Servicer of any Loan Document, except for (i) consents,
authorizations, notices and filings which have already been obtained or made and
(ii) filings to perfect the Liens created by the Loan Documents.
     (d) Binding Effect. Each Loan Document to which the Servicer is a party has
been duly executed and delivered by the Servicer. Each Loan Document to which
the Servicer is a party constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms except
as enforceability may be limited by the Bankruptcy Code and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
     (e) Financial Statements. All financial statements delivered pursuant to
Sections 3.2(a), (b) and (c) have been prepared in accordance with GAAP (except
as may otherwise be permitted under Sections 3.2(a), (b) and (c)) and present
fairly in all material respects (on the basis disclosed in the footnotes, where
applicable, to such financial statements) the consolidated and consolidating
statements of financial condition and income or operations and a consolidated
statement of cash flows of Holdings as of such date and for such periods.
     (f) Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Servicer after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Servicer or against any of
its properties or revenues that (a) purport to affect or pertain to any of the
Loan Documents or any of the transactions contemplated thereby or, (b) either
individually or in the aggregate, if determined adversely, would reasonably be
expected to have a Material Adverse Effect.

19

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

 

     (g) Compliance with Laws. The Servicer is in compliance in all material
respects with the requirements of all Applicable Laws and all orders, writs,
injunctions and decrees applicable to it or to its Properties, except in such
instances in which (a) such requirement of Applicable Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
     (h) No Default. No Servicer Default has occurred and no condition exists
which, with notice or lapse of time, or both, would constitute a Servicer
Default.
     (i) Ownership of Property; Liens. The Servicer has good record and
marketable title in fee simple to, or valid leasehold interests in, all real
Property necessary or used in the ordinary conduct of its business, except for
such defects in title as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
     (j) Environmental Compliance. Except in each case where the existence
and/or occurrence of any of the following would not reasonably be expected to
have a Material Adverse Effect:
     (i) Each of the Real Properties and all operations at the Real Properties
are in compliance with all applicable Environmental Laws, and there is no
violation of any Environmental Law with respect to the Real Properties or the
Businesses.
     (ii) None of the Real Properties contains, or to the knowledge of the
Financial Officers of the Servicer has previously contained, any Hazardous
Materials at, on or under the Real Properties in amounts or concentrations that
constitute or constituted a violation of, or could give rise to liability under,
Environmental Laws.
     (iii) The Servicer has not received any written notice of, or inquiry from
any Governmental Authority regarding, any violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Real Properties
or the Businesses, except for such notice or inquiry that has been fully and
finally adjudicated, withdrawn, settled or otherwise resolved; nor does any
Financial Officer of the Servicer have knowledge or reason to believe that any
such notice shall be received or is being threatened.
     (iv) Hazardous Materials have not been transported or disposed of from the
Real Properties, or generated, treated, stored or disposed of at, on or under
any of the Real Properties or any other location, in each case by or on behalf
of the Servicer in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law.
     (v) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Financial Officers of the Servicer,
threatened, under any Environmental Law to which the Servicer is or shall be
named as a party, nor are

20

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

 

there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Servicer, the Real
Properties or the Businesses.
     (vi) During the Servicer’s period of ownership or lease (with respect to
real Property previously owned or operated by the Servicer) or, to the knowledge
of the Financial Officers of the Servicer, at any time (with respect to real
Property currently owned or operated by the Servicer), there has been no
release, or threat of release, of Hazardous Materials at or from the Real
Properties, or arising from or related to the operations (including, without
limitation, disposal) of the Servicer in connection with the Real Properties or
otherwise in connection with the Businesses, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws.
     (k) Insurance. All of the tangible Property of the Servicer and its
Subsidiaries is insured with financially sound and reputable insurance companies
that are not Affiliates of the Servicer, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar Property in localities where the Servicer
operates.
     (l) Taxes. The Servicer and Holdings have filed all federal income tax
returns and all other material federal, state and other tax returns and reports
required to be filed by them, and have paid all federal income taxes and all
other material federal, state and other taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Servicer, Holdings or any Subsidiary that would, if made,
have a Material Adverse Effect. The Servicer is not a party to any tax sharing
agreement other than the Tax Sharing Agreement.
     (m) ERISA Compliance. Except as specifically disclosed in Schedule 4.1(m):
     (i) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code, the PBA and other Applicable Law. Each Plan which
is intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and, to the best knowledge of the Servicer,
nothing has occurred which would cause the loss of such qualification. The
Servicer and each ERISA Affiliate have made all required contributions to any
Plan when due, and no application for a funding waiver or an extension of any
amortization period has been made with respect to any Plan.
     (ii) There are no pending or, to the best knowledge of the Servicer,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or would reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or would reasonably be expected to result in a Material Adverse
Effect.

21

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

 

     (iii) (A) No ERISA Event has occurred or is reasonably expected to occur;
(B) the Unfunded Pension Liability of all Pension Plans does not exceed
$40,000,000 in the aggregate; (C) neither the Servicer nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA) that would not reasonably be expected to
have a Material Adverse Effect; (D) neither the Servicer nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any material liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with respect
to a Multiemployer Plan; (E) neither the Servicer nor any ERISA Affiliate has
engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA that would reasonably be expected to have a Material Adverse Effect; and
(F) no Lien has arisen, choate or inchoate, in respect of the Servicer or any of
its Property in connection with any Plan (save for contribution amounts not yet
due).
     (n) Margin Regulations; Investment Company Act.
     (i) The Servicer is not engaged and shall not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock.
     (ii) The Servicer (A) is not or is not required to be registered as an
“investment company” under the Investment Company Act of 1940 or (B) is not
subject to regulation under any other Applicable Law which limits its ability to
incur Indebtedness.
     (o) Disclosure. The Servicer has disclosed to the Administrative Agent all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect.
No report, financial statement, certificate or other written information
(a) prepared by or at the request of the Servicer or (b) to the Servicer’s
knowledge, otherwise furnished by or on behalf of the Servicer in each case to
the Administrative Agent in connection with the transactions contemplated hereby
and the negotiation of this Servicing Agreement or delivered hereunder or under
any other Loan Document pursuant to a provision of any Loan Document or pursuant
to a specific request from the Administrative Agent in accordance with the Loan
Documents (in each case, as modified or supplemented by other information so
furnished), when taken as a whole, contains any misstatement of material fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that (i) with respect to projected financial information, the Servicer
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time and (ii) with respect to
reports, financial statements, certificates and other information that was not
prepared at the request of the Servicer, the Servicer represents only that they
are not aware that such materials contain any material misstatements of fact or
material omissions.

22

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

 

     (p) Intellectual Property. The Servicer owns, or has the legal right to
use, all material trademarks, service marks, trade names, trade dress, patents,
copyrights, technology, know-how and processes (the “Intellectual Property”)
reasonably necessary for it to conduct its business as currently conducted. Set
forth on Schedule 4.1(p) is a list of all Intellectual Property registered or
pending registration with the United States Copyright Office or the United
States Patent and Trademark Office and owned by the Servicer or that the
Servicer has the exclusive right to use. Except as set forth on Schedule 4.1(p),
no written claim has been received by the Servicer and currently is pending by
any Person challenging the use of, or the validity or effectiveness of, the
Intellectual Property owned by the Servicer under Applicable Law, nor does the
Servicer know of any such claim, and, to the knowledge of the Responsible
Officers of the Servicer, the use of the Intellectual Property by the Servicer
or the granting of a right or a license in respect of the Intellectual Property
from the Servicer does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, none of the
Intellectual Property used by the Servicer is subject to any exclusive licensing
agreement or similar arrangement except as forth on Schedule 4.1(p).
     (q) Location of Offices. The principal place of business and chief
executive office of the Servicer and the office where the Servicer keeps all
books and records with respect to the Transferred Receivables are located at the
address of Servicer set forth on the signature page hereof (or at such other
locations as to which the notice and other requirements specified in
Section 5.2(g) shall have been satisfied).
     (r) Labor Matters. There are no collective bargaining agreements or
Multiemployer Plans covering the employees of the Servicer as of the Closing
Date except as forth on Schedule 4.1(r), and the Servicer has not suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years.
     (s) Existing Standard of Care. Prior to the date hereof, the Servicer has
serviced, and shall continue to service, the Transferred Receivables in a manner
consistent with Applicable Law and the Credit Policies, and in any event in a
manner consistent with the Servicing Standard.
     (t) Servicing Fee. The Servicing Fee is sufficient and reasonable to
compensate the Servicer for the anticipated expenses associated with its
servicing obligations hereunder.
     (u) Concentration Account. The Servicer has instructed each Obligor with
respect to a Transferred Receivable to remit payment on such Transferred
Receivable directly to a Lockbox or the Concentration Account. The account
numbers of the Concentration Account and the post office box numbers of the
Lockboxes, together with the address of the Depository Bank, are at all times
specified in the Control Agreement.
     (v) Perfection of Security Interests. The Servicer, at its expense, has
taken and shall take all action necessary or desirable to establish and
maintain, in favor of the Collateral Agent, a valid and enforceable first
priority perfected security interest in the Transferred Receivables, free and
clear of any Lien (other than any Lien created pursuant to the terms of the Loan
Documents),

23

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

 

including, without limitation, filing UCC financing statements and taking such
other action to perfect, protect or more fully evidence the ownership interest
created by the Contribution Agreement and the lien created by the Security
Agreement, as requested from time to time by the Collateral Agent, or a
beneficiary of the Collateral Agent’s security interest.
     (w) Special Purpose Entity. The Purchaser is an entity with assets and
liabilities separate and distinct from those of the Servicer and any other
Affiliates of the Servicer, and the Servicer hereby acknowledges that
Administrative Agent and the Lenders under the Credit Agreement are entering
into the transactions contemplated by the Credit Agreement and the other Loan
Documents in reliance upon Purchaser’s identity as a legal entity separate and
apart from the Servicer and from each other Affiliate of the Servicer.
     (x) Nonconsolidation. The Servicer represents and warrants that (i) the
annual consolidated financial statements of Holdings shall contain a note
indicating that the Servicer’s separate assets and liabilities are neither
available to pay the debts of the consolidated entity or any other constituent
thereof nor constitute obligations of any other member of the consolidated
entity, it being understood that the foregoing does not apply to liabilities for
which joint and several liability is provided under the Code or ERISA,
(ii) except as permitted or required by the Loan Documents, none of the Servicer
or its Affiliates pays any of the Purchaser’s expenses, guarantees any of the
Purchaser’s obligations or advances funds to the Purchaser for payment of
expenses, and (iii) none of the Servicer or its Affiliates acts as an agent of
the Purchaser, except ACG in its capacity as Servicer.
Section 4.2 Representations and Warranties of the Purchaser.
     The Purchaser makes the following representations and warranties to the
Servicer, the Collateral Agent and the Administrative Agent as of the Closing
Date and as of each Purchase Date, except as otherwise specified below, which
shall survive such date, that:
     (a) Existence, Qualification and Power; Compliance with Laws. The Purchaser
(i) is duly organized and is validly existing as a limited liability company
under the laws of the State of Delaware, (ii) has all requisite power and
authority and all requisite governmental licenses, authorizations, consents and
approvals to (A) own or lease its assets and carry on its business and
(B) execute, deliver and perform its obligations under the Loan Documents to
which it is a party and (iii) is duly qualified and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license.
     (b) Authorization; No Contravention. The execution, delivery and
performance by the Purchaser of each Loan Document to which it is party have
been duly authorized by all necessary limited liability company action and do
not and shall not (i) contravene the terms of any of such Person’s
Organizational Documents; (ii) conflict with or result in any breach or
contravention of (A) any Contractual Obligation to which such Person is a party
or affecting such Person or the Property of such Person or any of its
Subsidiaries or (B) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its

24

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

 

property is subject; or (iii) violate any Applicable Law (including, without
limitation, Regulation U or Regulation X issued by the FRB).
     (c) Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Purchaser of any Loan Document, except for (i) consents,
authorizations, notices and filings which have been obtained or made and
(ii) filings to perfect the Liens created by the Loan Documents.
     (d) Binding Effect. Each Loan Document to which the Purchaser is a party
has been duly executed and delivered by the Purchaser. Each Loan Document to
which the Purchaser is a party constitutes a legal, valid and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with its terms
except as enforceability may be limited by the Bankruptcy Code and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
     (e) Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Purchaser after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Purchaser or against any of
its properties or revenues that (a) purport to affect or pertain to any of the
Loan Documents or any of the transactions contemplated thereby or, (b) either
individually or in the aggregate, if determined adversely, would reasonably be
expected to have a Material Adverse Effect.
     (f) Investment Company Act. The Purchaser is not required to be registered
as an “investment company” under the Investment Company Act of 1940.
     (g) Compliance with Laws. The Purchaser is in compliance in all material
respects with the requirements of all Applicable Laws and all orders, writs,
injunctions and decrees applicable to it or to its Properties, except in such
instances in which (a) such requirement of Applicable Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
     (h) Solvency. The Purchaser shall not take any actions which would result
in the Purchaser failing to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations.

25

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

 

ARTICLE V
COVENANTS OF SERVICER
     Section 5.1 Affirmative Covenants of the Servicer.
     From the date hereof:
     (a) Compliance with Law. The Servicer shall comply in all material respects
with all Applicable Laws, including those applicable to the Receivables.
     (b) Preservation of Company Existence. The Servicer shall preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its formation and qualify and remain qualified in good standing
as a foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification has
had, or would reasonably be expected to have, a Material Adverse Effect.
     (c) Obligations and Compliance with Transferred Receivables. The Servicer
shall, at its expense, timely and fully perform and comply with all of the
provisions, covenants, promises and obligations on the part of the Servicer to
be fulfilled, performed or complied with under or in connection with each
Transferred Receivable and shall do nothing to impair the rights of the
Purchaser in, to and under such Transferred Receivables.
     (d) Keeping of Records and Books of Account. The Servicer shall maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Transferred
Receivables in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all or any portion of the
Transferred Receivables and the identification of the Transferred Receivables
(or any proceeds derived therefrom). The Servicer shall give the Purchaser and
the Administrative Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence. The Servicer shall
permit the Purchaser or the Administrative Agent, or their respective agents or
representatives, to visit the offices of the Servicer during normal office hours
upon advance notice and to examine and make copies of all documents, books,
records and other information concerning the Transferred Receivables and to
discuss any matters related thereto with any of the officers or employees of the
Servicer having knowledge of such matters in accordance with the provisions of
Section 3.6.
     (e) Payment Performance and Discharge of Obligations. The Servicer shall
pay, perform and discharge all of its obligations and liabilities, including,
without limitation, all taxes, assessments and governmental charges upon its
income and properties when due the non-payment, performance or discharge of
which would reasonably be expected to have a Material Adverse Effect, unless and
to the extent only that such obligations, liabilities, taxes, assessments and
governmental charges shall be contested in good faith and by appropriate
proceedings and that, to the extent required by GAAP, proper and adequate book
reserves relating thereto are established by the Servicer and then only to the
extent that a bond is filed in

26

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

 

cases where the filing of a bond is necessary to avoid the creation of a Lien
against any of its properties.
     (f) Adverse Claims. The Servicer shall not create, or participate in the
creation of, or permit to exist, any Liens in relation to the Concentration
Account, other than as permitted under the terms of the Intercreditor Agreement.
     (g) Separate Company Existence. From and after the date of execution and
delivery of this Servicing Agreement, the Servicer shall take all reasonable
steps, including, without limitation, all steps that the Administrative Agent
may from time to time reasonably request, to maintain the Purchaser’s identity
as a legal entity separate and apart from the Servicer and any Affiliate of the
Servicer, and to make it manifest to third parties that the Purchaser is an
entity with assets and liabilities distinct from those of the Servicer and any
Affiliate of the Servicer, and is not a division of the Servicer or of any
Affiliate of the Servicer. Without limiting the generality of the foregoing and
in addition to the other covenants set forth herein, the Servicer shall take all
reasonable steps to ensure that the Purchaser:
     (i) not have any assets other than cash, cash equivalents and the
Transferred Receivables and other incidental assets or property as may be
necessary for the operation of the Purchaser;
     (ii) not have any obligations or indebtedness other than indebtedness under
the Credit Agreement and any obligations incurred in favor of the Lenders under
the Credit Agreement or the other Loan Documents, and not hold out its credit as
being available to satisfy the obligations of any member, Affiliate, or other
person;
     (iii) not incur or permit to exist any Liens on any of its assets except
under the Credit Agreement or the other Loan Documents;
     (iv) maintain books and records separate from any other person or entity,
except to the extent that it is required or permitted by law to file or be
included in a tax return filed by another Person, including in a consolidated
return or as an entity whose existence is disregarded for purposes of preparing
the Parent’s return;
     (v) maintain its accounts separate from those of any other person or
entity;
     (vi) not commingle assets with those of any other entity (except as
expressly permitted under the terms of the Intercreditor Agreement);
     (vii) conduct its own business in its own name;
     (viii) maintain separate financial statements and not permit the
Purchaser’s assets, liabilities or income to be included in the financial
statement of any other Person except to the extent that Holdings or any other
parent of Purchaser is required by GAAP to include them in its respective
periodic consolidated financial statements and any related consolidating
financial statements prepared in accordance with GAAP or that the

27

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

 

Seller includes them in any financial information required to be furnished under
Section 5.01 of the Credit Agreement or Section 7.01 of the ACG Senior Facility,
provided, however, that any annual consolidated financial statements of Holdings
shall contain a note indicating that the Purchaser’s separate assets and
liabilities are neither available to pay the debts of the consolidated entity or
any other constituent thereof nor constitute obligations of any other member of
the consolidated entity, it being understood that the foregoing does not apply
to liabilities for which joint and several liability is provided under the Code
or ERISA;
     (ix) pay its own liabilities out of its own funds;
     (x) observe all limited liability company formalities and other formalities
required by the Purchaser’s Organizational Documents;
     (xi) maintain an arm’s-length relationship with its Affiliates;
     (xii) pay the salaries of its own employees, if any, and maintain a
sufficient number of employees in light of its contemplated business operations;
     (xiii) not guarantee or become obligated for the debts of any other entity
or hold out its credit as being available to satisfy the obligations of others;
     (xiv) not acquire obligations or securities of its partners, members, or
shareholders;
     (xv) allocate fairly and reasonably any overhead for shared office space;
     (xvi) use separate stationery, invoices, and checks;
     (xvii) not pledge its assets for the benefit of any other entity or make
any loans or advances to any entity (except as provided in the Credit Agreement
or the other Loan Documents);
     (xviii) hold itself out as a separate entity;
     (xix) correct any known misunderstanding regarding its separate identity;
     (xx) maintain adequate capital in light of its contemplated business
operations;
     (xxi) not merge into or consolidate with any Person or dissolve, terminate
or liquidate, in whole or in part, transfer or otherwise dispose of all or
substantially all of its assets or change its legal structure, without, in each
case, first obtaining the written consent of the Administrative Agent;
     (xxii) not fail to preserve its existence as an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization or

28

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

 

formation, or without the prior written consent of the Administrative Agent,
amend, modify, terminate or fail to comply with the provisions of its
certificate of formation or limited liability company operating agreement, or
fail to observe limited liability company formalities;
     (xxiii) not own any Subsidiary or make any investment in any Person;
     (xxiv) not share any common logo with or hold itself out as or be
considered as a department or division of the Servicer or any of its other
Affiliates or any other Person, except as permitted by clause (iv) of this
Section 5.1(g);
     (xxv) not fail at any time to have an Independent Manager (as such term is
defined in the Purchaser’s Organizational Documents); and
     (xxvi) take or refrain from taking, as applicable, any of the actions
specified in the non-consolidation opinion of counsel to the Servicer delivered
on the Closing Date, upon which the conclusions expressed therein are based.
     (h) [Reserved].
     (i) Other Information. The Servicer shall furnish to the Purchaser and the
Administrative Agent promptly, from time to time, such other information,
documents, records or reports related to the Transferred Receivables or the
condition or operations, financial or otherwise, of the Servicer as the
Administrative Agent may from time to time reasonably request in order to
protect the interests of the Purchaser, the Administrative Agent or the Lenders
under or as contemplated by this Servicing Agreement or any of the other Loan
Documents.
     (j) Defense of Collateral. The Servicer shall defend the Transferred
Receivables against, and shall take such other action as is necessary to remove,
any Lien, security interest or claim on or to the Transferred Receivables (other
than any Lien created pursuant to the terms of the Loan Documents), and the
Servicer shall defend the right, title and interest of the Collateral Agent, for
the benefit of the Lenders, in and to any of the Transferred Receivables against
the claims and demands of all Persons whomsoever. The Servicer shall promptly
notify the Purchaser and the Administrative Agent of the existence of any Lien
(other than any Lien created pursuant to the terms of the Loan Documents) on any
Transferred Receivables and the Servicer shall defend the right, title and
interest of the Purchaser in, to and under the Transferred Receivables against
all claims of third parties. The Servicer shall do nothing to disturb or impair
the enforceability of the Transferred Receivables or the security interest of
the Collateral Agent therein, nor create any Lien (except for the Lien of the
Collateral Agent) upon or with respect to, any Transferred Receivables, or any
proceeds related thereto, or upon or with respect to any account to which any
proceeds of any Transferred Receivables are sent, or assign any right to receive
income in respect thereof.
     (k) Disaster Recovery Plan. The Servicer shall maintain a disaster recovery
plan intended to permit recovery of electronic data maintained by the Servicer
in the event of fire,

29

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

 

flood, or certain other natural or man-made disasters. The Servicer shall review
its disaster recovery plan no less frequently than annually.
     (l) Maintenance of Systems. The Servicer shall maintain (i) a system of
accounting that enables the Servicer to process financial statements in
accordance with GAAP, (ii) a database to store and process data and other
records pertaining to the Transferred Receivables, and (iii) administrative and
operating procedures and all documents, books and records and other information
that, in the reasonable determination of the Administrative Agent, are necessary
or advisable in accordance with prudent industry practice and custom of
transactions of the type contemplated by the Loan Documents.
     (m) Further Assurances. The Servicer shall perform such further acts and
execute and deliver, or cause to be executed and delivered, such further
amendments, restatements, supplements, modifications, instruments and documents
as may be reasonably requested and necessary to implement the intent of, and
consummate the transactions contemplated by this Servicing Agreement and each of
the other Loan Documents.
     (n) Insurance. The Servicer shall at all times have in effect, maintain and
keep in force for the benefit of the Purchaser, or cause the Purchaser to have
in effect, maintain and keep in force, the insurance required by Section 2.1(g).
     (o) Performance and Compliance with Contracts and Credit Policies. The
Servicer shall, at its expense, timely and fully perform and comply with all
material provisions, covenants and other promises required to be observed by it
under the Contracts related to the Transferred Receivables and timely and fully
comply with the Credit Policies in regard to each Transferred Receivable and the
related Contract.
     (p) Independent Accountants. The Servicer shall, at all times, retain
independent nationally recognized certified public accountants and request such
accountants to cooperate with, and be available to, the Collateral Agent and the
Administrative Agent or their representatives to discuss the Servicer’s
financial performance, financial condition, operating results, controls, and
such other matters, within the scope of the retention of such accountants, as
may be raised by the Collateral Agent or Administrative Agent.
     (q) Solvency. The Servicer shall not take any actions which would result in
the Servicer failing to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations.
     Section 5.2 Negative Covenants of the Servicer.
     From the date hereof:
     (a) Transferred Receivables Not to be Evidenced by Instruments. The
Servicer shall take no action to cause any Transferred Receivable that is not,
as of the relevant Purchase Date, as the case may be, evidenced by an
Instrument, to be so evidenced except in connection with the enforcement or
collection of such Transferred Receivable.

30

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

 

     (b) Security Interests. Except as otherwise permitted herein or in any
other Loan Document, the Servicer shall not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on
any Transferred Receivables, whether now existing or hereafter transferred
hereunder, or any interest therein, and the Servicer shall not sell, pledge,
assign or suffer to exist any Lien on its interest, if any, hereunder.
     (c) Deposits to Concentration Account. Except as otherwise provided in the
Loan Documents, the Servicer shall not deposit or otherwise credit, or cause or
permit to be so deposited or credited, to the Concentration Account cash or cash
proceeds other than Collections received in respect of any Transferred
Receivable.
     (d) Change in Payment Instructions to Obligors. The Servicer shall not
instruct Obligors to make payments with respect to the Transferred Receivables
to any account other than the Concentration Account.
     (e) Change in Business. The Servicer shall not engage in any material line
of business substantially different from those lines of business conducted by
the Servicer on the date hereof or any business substantially related or
incidental thereto.
     (f) Merger. The Servicer shall not merge, dissolve, liquidate, consolidate
with or into another Person, or dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person; provided that,
notwithstanding the foregoing provisions of this Section 5.2(f), the Servicer
may merge or consolidate with any of its Subsidiaries (other than the Purchaser)
provided that the Servicer shall be the continuing or surviving corporation.
     (g) Change of Name or Location of Records. The Servicer shall not
(i) change its name, change its jurisdiction of formation, move the location of
its principal place of business and chief executive office, and the offices
where it keeps records concerning the Transferred Receivables from the location
referred to in Section 4.1(o) or (ii) move the records concerning the
Transferred Receivables from the location thereof, unless the Servicer has given
at least thirty (30) days’ written notice to the Purchaser and the
Administrative Agent.
     (h) ERISA Matters. ACG shall not (i) permit to exist any accumulated
funding deficiency, as defined in Section 302(a) of ERISA and Section 412(a) of
the Code, or funding deficiency with respect to any Pension Plan other than a
Multiemployer Plan, (ii) fail to make any material payments to a Multiemployer
Plan that ACG or any ERISA Affiliate may be required to make under the agreement
relating to such Multiemployer Plan or any law pertaining thereto, (iii)
terminate any Pension Plan so as to result in any material liability, or
(iv) permit to exist any occurrence of any reportable event described in Title
IV of ERISA that would reasonably be expected to result in a material liability.
     (i) Credit and Collection Policy. The Servicer shall not make any changes
to the Credit Policies in a manner which would reasonably be expected to have a
material adverse effect on the interests of the Purchaser or the Administrative
Agent without first obtaining the

31

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

 

Administrative Agent’s prior written consent to any such proposed change or
amendment to the Credit Policies, which consent shall not be unreasonably
withheld or delayed.
     (j) No Bankruptcy Petition. The Servicer covenants and agrees it shall not,
prior to the date that is one year and one day after the payment in full of all
amounts owing pursuant to the Credit Agreement and the other Loan Documents,
institute against, or join any other Person in instituting against, the
Purchaser, any bankruptcy, reorganization, receivership, arrangement, insolvency
or liquidation proceedings or other similar proceedings under any applicable
bankruptcy, insolvency or similar law. The provisions of this Section 5.2(j)
shall survive the termination of this Servicing Agreement.
     (k) No Impairment. The Servicer shall not take any action that would impair
the rights of the Purchaser, the Administrative Agent or the Lenders in and to
any Transferred Receivables, which at the time the Servicer reasonably believes
would be contrary to the goal of maximizing the ultimate proceeds derived (or to
be derived) from such Transferred Receivables.
Section 5.3 Financial Covenant of Servicer.
     The Servicer shall not permit the First Lien Leverage Ratio as of the last
day of any fiscal quarter of Holdings to be greater than the ratio set forth
below opposite such fiscal quarter:

                                      March 31   June 30   September 30  
December 31
2006
    N/A       N/A       2.45 to 1.00       2.40 to 1.00  
2007
    2.35 to 1.00       2.25 to 1.00       2.25 to 1.00       2.15 to 1.00  
2008
    2.15 to 1.00       2.10 to 1.00       2.10 to 1.00       2.05 to 1.00  
Thereafter
    2.00 to 1.00       2.00 to 1.00       2.00 to 1.00       2.00 to 1.00  

ARTICLE VI
INDEMNIFICATION
Section 6.1 Servicer Indemnification.
     (a) Without limiting any other rights which any Servicer Indemnified Party
may have under any Loan Document or Applicable Law, the Servicer, shall save,
defend, indemnify and hold harmless (on an after tax basis) the Purchaser, the
Collateral Agent, the Administrative Agent and the Lenders, and their respective
successors, transferees, participants and assigns and their respective members,
officers, directors, employees, representatives and agents (each, a “Servicer
Indemnified Party”), forthwith on demand, from and against any loss, liability,
claim, judgment, tax, cost, expense (including reasonable attorneys’ fees and
costs and expenses of litigation reasonably incurred), damage or injury imposed
on, asserted against, awarded against or suffered or sustained by any Servicer
Indemnified Party and arising out of, imposed by reason of, incurred in
connection with or attributable to (i)(x) the failure by the Servicer to perform
its duties as Servicer under this Servicing Agreement, (y) the inaccuracy of any
representation or warranty made by it as Servicer hereunder (including any
Officer’s Certificate delivered by the

32

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

 

Servicer, the Monthly Servicing Report or other information, report or
certificate) or (z) a Servicer Default, (ii) errors or omissions of the Servicer
related to its duties as Servicer, including computational errors made by it in
connection with any Monthly Servicing Report, (iii) its activities as Servicer
under or in connection with the Loan Documents or the transactions contemplated
thereby, (iv) the failure to vest and maintain vested in the Administrative
Agent, as against ACG and the Purchaser and their respective creditors, a first
priority perfected security interest in, to and under any and all of the
Transferred Receivables, free and clear of any Lien, (v) except as expressly
permitted under the terms of the Loan Documents, the commingling of the
Transferred Receivables (including the income, payments and/or proceeds thereof)
at any time with any other assets of ACG or any other Person, or (vi) the
failure to pay or to remit any Tax or other governmental fee or charge required
to be paid or remitted by it as Servicer under any Loan Document, all interest
and penalties thereon or with respect thereto, and all costs and expenses,
including the reasonable fees and expenses of counsel in defending against the
same, which relate to the Transferred Receivables and which have not been timely
paid by the Servicer; provided, however, that the Servicer shall not have any
obligation to indemnify a Servicer Indemnified Party to the extent that acts of
fraud, willful misconduct or gross negligence by such Servicer Indemnified Party
caused such loss, liability, claim, judgment, tax, cost, expense, damage or
injury imposed on, asserted against, awarded against or suffered or sustained by
such Servicer Indemnified Party.
     (b) Upon the occurrence of a Servicer Default and delivery of a Servicer
Termination Notice, the outgoing Servicer agrees to pay on demand (or to
reimburse the Purchaser for), to the Collateral Agent, the Administrative Agent
and the Lenders, as applicable, any out of pocket costs and expenses (including
reasonable fees and expenses of counsel and expenses of litigation reasonably
incurred) incurred by any such Person in connection with enforcement of
termination of the outgoing Servicer as Servicer and installation of the
successor Servicer, provided, however, that the outgoing Servicer agrees also to
pay on demand (or to reimburse the Administrative Agent and the Lenders for) the
reasonable out of pocket costs and expenses (including reasonable fees and
expenses of counsel and expenses of litigation reasonably incurred) of the
Collateral Agent, the Administrative Agent and the Lenders, as applicable,
incurred by any such Person in connection with a foreclosure on the Transferred
Receivables caused by or related to such Servicer Default (it being understood
that the cost of foreclosure does not include any costs of servicing and
enforcing the Transferred Receivables after such foreclosure).
     (c) The Purchaser shall have the right to, and at the direction of the
Administrative Agent shall, set-off any indemnification amounts due from the
Servicer under this Section 6.1 against amounts owed to the Servicer by the
Purchaser. Upon any such set-off, the Purchaser shall give notice to the
Servicer and the Administrative Agent of the amount thereof and the reasons
therefor.
     (d) The provisions of this Section 6.1 shall survive the payment in full of
all amounts due and owing to the Collateral Agent, the Administrative Agent or
the Lenders under the Credit Agreement, the termination of the Credit Agreement
and any expiration or termination of this Servicing Agreement or the appointment
of any successor Servicer.

33

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

 

ARTICLE VII
SERVICER DEFAULTS
     Section 7.1 Servicer Defaults.
     The occurrence of any one or more of the following events shall constitute
a “Servicer Default” unless the particular occurrence of such event is waived as
a Servicer Default in writing by the Administrative Agent; provided, however,
that, unless and until any such waiver is given, a Servicer Default shall be
deemed to exist for all purposes under this Servicing Agreement and the other
Loan Documents:
     (a) any failure by the Servicer to deposit (or cause to be deposited) into
the Concentration Account any funds required to be so deposited within the times
specified in Section 2.2; or
     (b) any failure by the Servicer to deliver Monthly Servicing Report or a
Borrowing Base Certificate pursuant to Section 3.1 that remains unremedied as of
5:00 p.m. (New York time) on the first Business Day following the date on which
such Monthly Servicing Report or Borrowing Base Certificate was required to be
delivered; or
     (c) any failure by the Servicer to deliver any report, other than Monthly
Servicing Report or Borrowing Base Certificate, required to be delivered to the
Administrative Agent that remains unremedied as of 5:00 p.m. (New York time) on
the fifth Business Day following the date on which such report was required to
be delivered; or
     (d) the Servicer fails to perform or observe any other covenant or
agreement contained in this Servicing Agreement or any other Loan Document to
which it is a party and such failure continues for thirty (30) days; or
     (e) any representation, warranty, certification or statement of fact made
or deemed made by or on behalf of the Servicer herein or in any other Loan
Document, or in any document or certificate delivered pursuant hereto or thereto
shall be incorrect or misleading in any material respect when made or deemed
made; or
     (f) the Servicer ceases to be engaged in the business of servicing
Receivables of a type comparable to the Transferred Receivables;
     (g) any event of default occurs under the ACG Senior Facility or the Second
Lien Indenture; or
     (h) any Refinancing of the ACG Senior Facility (as determined by the
Administrative Agent in its reasonable commercial judgment); or

34

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

 

     (i) the Servicer or any Affiliate of the Servicer institutes or consents to
the institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for sixty
(60) calendar days; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any material part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for
sixty (60) calendar days, or an order for relief is entered in any such
proceeding; or
     (j) (i) the Servicer becomes unable or admits in writing its inability or
fails generally to pay its debts (exclusive of Intercompany Debt (as such term
is defined in the ACG Senior Facility)) as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any such Person and is not
released, vacated or fully bonded within thirty (30) days after its issue or
levy; or
     (k) there is entered against the Servicer (i) any one or more final
judgments or orders for the payment of money in an aggregate amount exceeding
the Threshold Amount (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either
case, (A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of ten (10) consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or
     (l) (i) the Servicer (A) fails to perform or observe (beyond the applicable
grace period with respect thereto, if any) any Contractual Obligation if such
failure would reasonably be expected to have a Material Adverse Effect,
(B) fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness
or Guarantee (other than Indebtedness hereunder, Intercompany Debt (as such term
is defined in the ACG Senior Facility) and Indebtedness under Swap Contracts)
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount, or (C) fails
to observe or perform any other agreement or condition relating to any
Indebtedness or Guarantee described in the foregoing clause (B) or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event occurs, the effect of which default or other event is to cause, or
to permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any
Swap Contract an “early termination date” (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which the
Servicer or any Subsidiary is

35

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

 

the ”defaulting party” (as defined in such Swap Contract) or (B) any
“termination event” (as so defined) under such Swap Contract as to which the
Servicer or any Subsidiary is an “affected party” (as so defined) and, in either
event, the Swap Termination Value owed by the Servicer or such Subsidiary as a
result thereof is greater than the Threshold Amount; or
     (m) a Change of Control occurs; or
     (n) any Loan Document, at any time after its execution and delivery and for
any reason other than as expressly permitted hereunder or satisfaction in full
of all the obligations under the Credit Agreement, ceases to be in full force
and effect; or the Servicer contests in any manner the validity or
enforceability of any Loan Document; or the Servicer denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document; or
     (o) (i) an ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Servicer or any Affiliate of the Servicer under Title IV of
ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
in excess of the Threshold Amount, or (ii) the Servicer or any ERISA Affiliate
of the Servicer fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of the Threshold Amount.
     Section 7.2 Termination of the Servicer.
     (a) If a Servicer Default shall have occurred and be continuing, the
Administrative Agent may, and shall, upon the written direction of the Lenders,
give written notice to the Servicer (a “Servicer Termination Notice”), the
Purchaser and each Lender of the termination of all (but not less than all) of
the rights and obligations of the Servicer under this Servicing Agreement, and
the Administrative Agent shall, as promptly as possible, appoint a successor
Servicer and such successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Administrative Agent and the Required
Lenders.
     (b) Each of the Servicer and any successor Servicer shall take such actions
consistent with this Servicing Agreement as shall be necessary to effect such
succession. On the receipt by the Servicer of such Servicer Termination Notice,
all of the rights and obligations of the Servicer under this Servicing
Agreement, including, without limitation, the Servicer’s right hereunder to
receive unaccrued Servicing Fees, shall cease and the same shall pass to and be
vested in, and assumed by, the successor Servicer pursuant to and under this
Servicing Agreement. Such successor Servicer shall be subject to all the
responsibilities, duties and liabilities of the Servicer hereunder. Each of the
successor Servicer and the Administrative Agent is hereby authorized and
empowered to execute and deliver, on behalf of the terminated Servicer, as
attorney-in-fact or otherwise, any and all documents and perform any and all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and assignment of any
Transferred Receivables or such passing, vesting or assumption or to cause
Obligors to remit all future Contract Payments and other amounts due under any
Contract

36

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

 

or in respect of any Transferred Receivable to such account as shall be
specified by the Administrative Agent, acting at the written direction of the
Required Lenders.
     (c) Notwithstanding any Servicer Default and delivery of any Servicer
Termination Notice, the existing Servicer shall not be relieved of its
responsibilities hereunder, and shall continue to service the Transferred
Receivables and be entitled to payment of Servicing Fees and other
reimbursements, until such time as a successor Servicer has assumed the
responsibilities of Servicer hereunder.
     (d) If the Servicer’s duties, responsibilities and liabilities under this
Servicing Agreement should be terminated pursuant to this Section 7.2, the
Servicer shall discharge such duties and responsibilities during the period from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated to
exercise under this Servicing Agreement, and shall take no action whatsoever
that might impair or prejudice the rights or financial condition of its
successor or the value of any Serviced Assets.
     (e) Any termination of the Servicer pursuant to this Section 7.2 shall not
affect any claims that the Purchaser, the Administrative Agent, any Lender or
any other Person may have against such terminated Servicer arising prior to the
effective date of any such termination.
     (f) Upon receipt of request by the Administrative Agent, the terminated
Servicer shall immediately deliver to the successor Servicer the funds that are,
or are required to be, in the Concentration Account, the files related to the
Transferred Receivables and all related Contract documents held by it hereunder
and the terminated Servicer shall account for all funds and shall execute and
deliver such instruments and do such other things as may reasonably be required
to more fully and definitely vest and confirm in the successor Servicer all such
rights, powers, duties, responsibilities, obligations and liabilities of the
terminated Servicer.
     Section 7.3 Effects of Termination of Servicer.
     (a) Upon the appointment of the successor Servicer, the predecessor
Servicer shall thereafter hold in trust for the Purchaser (and the
Administrative Agent) and shall remit within one (1) Business Day of
identification, any payments or proceeds that it may receive with respect to the
Transferred Receivables to the Administrative Agent for deposit into the
Concentration Account after such date of appointment.
     (b) After Servicer Termination Date, and subject to the terms of this
Article VII, the outgoing Servicer shall have no further rights or authority
with respect to the management, administration, servicing, enforcement, custody
or collection of the Transferred Receivables, all of which rights and authority
shall be vested in the successor Servicer. The outgoing Servicer shall, however,
transmit or cause to be transmitted directly to the successor Servicer, promptly
on receipt and in the same form in which received, any amounts held by the
outgoing Servicer (properly endorsed where required for the successor Servicer
to collect them) received as payments upon or otherwise in connection with the
Transferred Receivables and shall be subject to the continuing obligations
described herein, subject to set-off against amounts owed by the

37

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

 

outgoing Servicer hereunder. The outgoing Servicer’s indemnification obligations
pursuant to Section 6.1 shall survive the termination of Servicer but shall not
extend to any acts or omissions of a successor Servicer.
Section 7.4 Servicer to Cooperate.
     The Servicer agrees to cooperate with any successor Servicer, in effecting
the termination and transfer of the responsibilities and rights of the Servicer,
as the case may be hereunder, and the transfer thereof, to the successor
Servicer, including, without limitation, the preparation, execution and delivery
of any and all documents and other instruments and the transfer to the successor
Servicer for administration by it of all cash amounts which shall at the time be
held by the Servicer or thereafter received with respect to the Transferred
Receivables. The Servicer hereby agrees to transfer to any successor Servicer
copies of its electronic records and all other records, correspondence and
documents relating to the Transferred Receivables in the manner and at such
times as the successor Servicer shall reasonably request and do any and all
other acts or things necessary or appropriate to effect the purposes of
termination.
     Section 7.5 Waiver of Servicer Default.
     The written consent of the Administrative Agent (acting at the direction of
the Required Lenders) must be obtained in order to waive any Servicer Default or
any or all of its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any default arising therefrom shall be deemed
to have been remedied for every purpose of this Servicing Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
     Section 7.6 Remedies Not Exclusive.
     Nothing in the preceding provisions of this Article VII shall be
interpreted as limiting or restricting any rights or remedies which the
Administrative Agent, the Lenders or any other Person would otherwise have at
law or in equity on account of the breach or violation of any provision of this
Servicing Agreement by the Servicer, including, without limitation, the right to
recover full and complete damages on account thereof and the right to injunctive
relief and specific performance.
     Section 7.7 No Effect on Other Parties.
     Upon any termination of the rights and powers of Servicer pursuant to this
Servicing Agreement, or upon any appointment of a successor Servicer, all the
rights, powers, duties and obligations of the other parties under this Servicing
Agreement, the Credit Agreement, the Contribution Agreement and the other Loan
Documents shall remain unaffected by such termination or appointment and shall
remain in full force and effect thereafter.

38

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

 

ARTICLE VIII
MISCELLANEOUS PROVISIONS
     Section 8.1 Termination.
     (a) The term of this Servicing Agreement shall be until all obligations
under the Loan Documents have been satisfied in full; provided, however, that
any provision that expressly survives termination of this Servicing Agreement
shall be continuing and shall survive any termination of this Servicing
Agreement. The Administrative Agent shall be permitted to execute and deliver
written evidence of the termination of this Servicing Agreement at such time as
the obligations under the Loan Documents have been satisfied in full.
     (b) This Servicing Agreement shall not be automatically terminated as a
result of a Event of Default under the Credit Agreement or any action taken by
the Administrative Agent thereafter with respect thereto.
     Section 8.2 Amendments.
     No amendment or waiver of any provision of this Servicing Agreement shall
be effective except pursuant to an agreement or agreements in writing entered
into by the Purchaser, the Servicer and the Administrative Agent (acting at the
direction of the Required Lenders). The Servicer shall provide not less than ten
(10) Business Days’ prior written notice of any proposed amendment to the
Administrative Agent.
     Section 8.3 Notices.
     All notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier as follows, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:
     (i) if to the Administrative Agent or any Lender, to the address,
telecopier number, electronic mail address or telephone number specified for
such Person in the Credit Agreement; and
     (ii) if to the Servicer or the Purchaser, to the address, telecopier
number, electronic mail address or telephone number set forth on the signature
pages of this Servicing Agreement.
     Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received; notices
sent by telecopier shall be deemed to have been given when sent (except that, if
not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next business day for the
recipient).

39

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

 

     Section 8.4 Limitation of Liability.
     Except with respect to any claim arising out of the willful misconduct or
gross negligence of the Administrative Agent or any Lender or their respective
Affiliates, directors, officers, employees, attorneys or agents, no claim may be
made by the Servicer or any other Person against the Administrative Agent or any
Lender or their respective Affiliates, directors, officers, employees, attorneys
or agents for any special, indirect, consequential or punitive damages in
respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Servicing
Agreement, or any act, omission or event occurring in connection therewith; and
the Servicer hereby waives, releases and agrees not to sue upon any claim for
any such damages, whether or not known or suspected to exist in its favor.
     Section 8.5 Binding Effect; Benefit of Servicing Agreement.
     All provisions of this Servicing Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of the parties hereto,
and all such provisions shall inure to the benefit of the Administrative Agent
and the Lenders. The Administrative Agent and each Lender is an express third
party beneficiary of this Servicing Agreement and is entitled to enforce the
provisions hereof as if it was a party hereto.
     Section 8.6 Choice of Law and Venue; Jury Trial Waiver.
     (a) THE VALIDITY OF THIS SERVICING AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW
PRINCIPLES).
     (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS SERVICING AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAWS,
FEDERAL COURTS LOCATED IN NEW YORK COUNTY, STATE OF NEW YORK, PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PURCHASED ASSET OR OTHER PROPERTY
MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH PURCHASED ASSET OR OTHER PROPERTY MAY
BE FOUND. THE PARTIES HERETO WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAWS, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO

40

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

 

VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
8.6.
     (c) THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. THE PARTIES HERETO REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
SERVICING AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
     Section 8.7 Execution in Counterparts; Severability; Integration.
     This Servicing Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts (including by facsimile),
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. In case
any provision in or obligation under this Servicing Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby. This Servicing Agreement and any agreements or letters
(including fee letters) executed in connection herewith contains the final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.
     Section 8.8 Waiver of Setoff.
     (a) The Servicer’s obligations under this Servicing Agreement shall not be
affected by any right of setoff, counterclaim, recoupment, defense or other
similar right the Servicer might have against the Purchaser, the Administrative
Agent or the Lenders or any assignee of such Persons, all of which rights are
hereby waived by the Servicer.
     (b) The Purchaser shall have the right to set-off against the Servicer any
amounts to which the Servicer may be entitled and to apply such amounts to any
claims the Purchaser may have against the Servicer from time to time under this
Servicing Agreement. Upon any such set-off, the Purchaser shall give notice of
the amount thereof and the reasons therefor to the Servicer.
     Section 8.9 Headings and Exhibits.
     The headings herein are for purposes of references only and shall not
otherwise affect the meaning or interpretation of any provision hereof. The
schedules and exhibits attached hereto

41

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

 

and referred to herein shall constitute a part of this Servicing Agreement and
are incorporated into this Servicing Agreement for all purposes.
     Section 8.10 Assignment.
     (a) Notwithstanding anything to the contrary contained herein, this
Servicing Agreement may not be assigned by the Purchaser or the Servicer except
as permitted by this Section 8.10 or by the Credit Agreement. Simultaneously
with the execution and delivery of this Servicing Agreement, the Purchaser shall
collaterally assign all of its right, title and interest herein to the
Administrative Agent under the Credit Agreement, to which assignment the
Servicer hereby expressly consents. Upon such assignment, the Servicer agrees to
perform its obligations hereunder for the benefit of the Administrative Agent
and the Lenders under the Credit Agreement, and the Administrative Agent and the
Lenders, in such capacity, shall be third party beneficiaries hereof. The
Administrative Agent and the Lenders, upon such assignment may enforce the
provisions of this Servicing Agreement, exercise the rights of the Purchaser and
enforce the obligations of the Servicer hereunder without joinder of the
Purchaser.
     (b) The Servicer hereby grants to the Administrative Agent the power as its
attorney-in-fact, limited to the exercise thereof in the event the Servicer
fails to take any action hereunder to effect the transactions contemplated
herein, or an Event of Default or a Servicer Default exists, to do any and all
other acts as may be necessary or appropriate to effect the transactions
contemplated herein. Nothing in this Section 8.10 shall be interpreted, however,
to relieve the Servicer of its responsibilities hereunder, including, without
limitation, the obligation to execute and file (or cause to be filed) any
financing statements or other document as shall be necessary or appropriate to
perfect or to preserve and protect the ownership interests created under the
Contribution Agreement or the security interests created under the Security
Agreement.
     Section 8.11 Severability of Provisions; No Waiver.
     If one or more of the provisions of this Servicing Agreement shall be for
any reason whatever held invalid, illegal or unenforceable, such provisions
shall be deemed severable from the remaining covenants and provisions of this
Servicing Agreement, and shall in no way affect the validity, legality and
enforceability of such remaining provisions, the rights of any parties hereto,
or the rights of the Administrative Agent or any Lender. To the extent permitted
by law, the parties hereto waive any provision of law which renders any
provision of this Servicing Agreement prohibited or unenforceable in any
respect. No failure on the part of the Administrative Agent or any Lender 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. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
     Section 8.12 Confidentiality.
     (a) The Purchaser and the Servicer shall maintain and shall cause each of
its employees and officers to maintain the confidentiality of this Servicing
Agreement and all information with respect to the Administrative Agent and the
Lenders, including all information

42

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

 

regarding the business of the Purchaser or the Servicer hereto and their
respective businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
each such party and its officers and employees may (i) disclose such information
to its external accountants, attorneys, investors, potential investors and
agents of such Persons (“Excepted Persons”); provided, however, that each
Excepted Person shall, as a condition to any such disclosure, agree for the
benefit of the Administrative Agent and the Lenders that such information shall
be used solely in connection with such Excepted Person’s evaluation of, or
relationship with, the Purchaser or the Servicer and its Affiliates,
(ii) disclose the existence of this Servicing Agreement, but not the financial
terms thereof, (iii) disclose such information as is required by Applicable Law
and (iv) disclose this Servicing Agreement and such information in any suit,
action, proceeding or investigation (whether in law or in equity or pursuant to
arbitration) involving any of the Loan Documents for the purpose of defending
itself, reducing its liability, or protecting or exercising any of its claims,
rights, remedies, or interests under or in connection with any of the Loan
Documents. It is understood that the financial terms that may not be disclosed
except in compliance with this Section 8.12(a) include, without limitation, all
fees and other pricing terms, and all Events of Default, Servicer Defaults and
priority of payment provisions.
     (b) Anything herein to the contrary notwithstanding, the Purchaser and the
Servicer each hereby consents to the disclosure of any nonpublic information
with respect to it (i) to the Administrative Agent and the Lenders, by each
other, (ii) by the Administrative Agent or the Lenders, to any rating agency,
commercial paper dealer and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided each such Person is
informed of and agrees to maintain the confidential nature of such information.
In addition, the Lenders and the Administrative Agent may disclose any such
nonpublic information as required pursuant to any law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings (whether or not having the force or effect of law).
     (c) Notwithstanding anything herein to the contrary, the foregoing shall
not be construed to prohibit (i) disclosure of any and all information that is
or becomes publicly known, (ii) disclosure of any and all information (a) if
required to do so by any Applicable Law, (b) to any government agency or
regulatory body having or claiming authority to regulate or oversee any aspect
of the Administrative Agent’s or any Lender’s business or that of any of their
Affiliates, or (c) pursuant to any subpoena, civil investigative demand or
similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Administrative Agent or any Lender or an Affiliate or
an officer, director, employer or shareholder thereof is a party, provided that
in the case of any request, subpoena or proposed release or disclosure of
information described in the foregoing clauses (a) through (c) the party
believing it is obligated to release or disclose shall, subject to compliance
with the applicable law, regulations, subpoena or other legal process, use
commercially reasonable efforts to notify the party that furnished such
information prior to such release or disclosure, or (iii) any other disclosure
authorized by the Purchaser or the Servicer with respect to confidential
information relating to the Purchaser or the Servicer.

43

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

 

     Section 8.13 Non-Petition.
     During the term of this Servicing Agreement and for one (1) year and one
(1) day after payment in full of any amounts owing to Agents or the Lenders
under the Credit Agreement or any of the other Loan Documents, none of the
parties hereto or any Affiliate thereof will institute against or join any other
Person in instituting against the Purchaser any Insolvency Proceeding. This
Section 8.13 shall survive any termination of this Servicing Agreement.

44

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

 

     IN WITNESS WHEREOF, the Purchaser, the Servicer and the Administrative
Agent have caused this Servicing Agreement to be duly executed by their
respective duly authorized officers as of the date and year first written above.

            AMERICAN COLOR GRAPHIS, INC., as Servicer
      By:   /s/ Patrick W. Kellick       Name:   Patrick W. Kellick     
Title:     Senior Vice President / Chief Financial Officer and Secretary     
Address: 100 Winners Circle
                         Brentwood, Tennessee 37027        Telephone No.:
615-377-7430       Fax No.: 615-337-0331      

            AMERICAN COLOR GRAPHICS FINANCE, LLC, as the Purchaser
      By:   /s/ Patrick W. Kellick       Name:   Patrick W. Kellick     
Title:   Senior Vice President / Chief Financial Officer and Secretary     
Address: 100 Winners Circle
                         Brentwood, Tennessee 37027        Telephone No.: (615)
377-7430       Fax No.: (615) 337-0331      

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

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

 

            BANK OF AMERICA, N.A.,
as Administrative Agent
      By:   /s/ Peter Sherman         Name:   Peter Sherman        Title:  
Managing Director        BANK OF AMERICA, N.A.,
as Collateral Agent
      By:   /s/ Peter Sherman         Name:   Peter Sherman        Title:  
Managing Director