Exhibit 10.1


 


LOAN AGREEMENT


 


DATED AS OF APRIL 7, 2010


 


Between


 


SQUARETWO FINANCIAL CORPORATION,

as US Borrower,


 


 


PREFERRED CREDIT RESOURCES LIMITED,

as Canadian Borrower,


 


 


THE OTHER PERSONS PARTY HERETO THAT

ARE DESIGNATED AS LOAN PARTIES,


 


 


GMAC COMMERCIAL FINANCE LLC, 

as Agent and a Lender


 


and


 


THE OTHER FINANCIAL INSTITUTION(S) LISTED

ON THE SIGNATURE PAGES HEREOF,


 


as Lenders


 

















 


TABLE OF CONTENTS


 


	
  SECTION 1.

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
  2

  
	
  1.1.

  	
  Certain Defined Terms

  	
  2

  
	
  1.2.

  	
  UCC Defined Terms

  	
  37

  
	
  1.3.

  	
  Accounting Terms

  	
  38

  
	
  1.4.

  	
  Other Definitional Provisions

  	
  38

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  LOANS AND COLLATERAL

  	
  39

  
	
  2.1.

  	
  Loans

  	
  39

  
	
  2.2.

  	
  Interest

  	
  48

  
	
  2.3.

  	
  Fees

  	
  53

  
	
  2.4.

  	
  Payments and Prepayments

  	
  54

  
	
  2.5.

  	
  Term of this Agreement

  	
  58

  
	
  2.6.

  	
  Statements

  	
  58

  
	
  2.7.

  	
  Intentionally Omitted

  	
  58

  
	
  2.8.

  	
  Yield Protection

  	
  59

  
	
  2.9.

  	
  Taxes

  	
  59

  
	
  2.10.

  	
  Required Termination and Prepayment

  	
  61

  
	
  2.11.

  	
  Optional Prepayment/Replacement of
  Lenders

  	
  62

  
	
  2.12.

  	
  Compensation

  	
  63

  
	
  2.13.

  	
  Booking of LIBOR Loans; Canadian
  Revolving Loans

  	
  63

  
	
  2.14.

  	
  Assumptions Concerning Funding of
  LIBOR Loans and Canadian BA Rate Loans

  	
  63

  
	
  2.15.

  	
  Endorsement; Insurance Claims

  	
  63

  
	
  2.16.

  	
  Increase of the US Maximum
  Revolving Advance Amount by US Borrower

  	
  64

  
	
  2.17.

  	
  Mitigation Obligation

  	
  66

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  CONDITIONS TO LOANS

  	
  66

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  69

  
	
  4.1.

  	
  Organization, Powers,
  Capitalization

  	
  69

  
	
  4.2.

  	
  Authorization of Borrowing, No
  Conflict

  	
  69

  
	
  4.3.

  	
  Financial Condition

  	
  69

  
	
  4.4.

  	
  Indebtedness and Liabilities

  	
  70

  
	
  4.5.

  	
  Holdings; Astrum; CA Marketing and
  Collect Air

  	
  70

  
	
  4.6.

  	
  Intentionally Omitted

  	
  70

  
	
  4.7.

  	
  Title to Properties; Liens

  	
  71

  
	
  4.8.

  	
  Litigation; Adverse Facts

  	
  71

  
	
  4.9.

  	
  Payment of Taxes

  	
  71

  
	
  4.10.

  	
  Performance of Agreements

  	
  72

  
	
  4.11.

  	
  Employee Benefit Plans

  	
  72

  
	
  4.12.

  	
  Broker’s Fees

  	
  73

  
	
  4.13.

  	
  Environmental Compliance

  	
  73

  
	
  4.14.

  	
  Solvency

  	
  74

  



 


i

















 


	
  4.15.

  	
  Disclosure

  	
  74

  
	
  4.16.

  	
  Insurance

  	
  74

  
	
  4.17.

  	
  Compliance with Laws; Government
  Authorizations; Consents

  	
  74

  
	
  4.18.

  	
  Employee Matters

  	
  75

  
	
  4.19.

  	
  Governmental Regulation

  	
  75

  
	
  4.20.

  	
  Intentionally Omitted

  	
  75

  
	
  4.21.

  	
  Intentionally Omitted

  	
  75

  
	
  4.22.

  	
  Intentionally Omitted

  	
  75

  
	
  4.23.

  	
  Amendment of Schedule

  	
  75

  
	
  4.24.

  	
  Senior Credit Agreement and
  Designated Senior Lien Obligations

  	
  75

  
	
  4.25.

  	
  Patriot Act

  	
  75

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  REPORTING AND OTHER AFFIRMATIVE
  COVENANTS

  	
  76

  
	
  5.1.

  	
  Financial Statements and Other
  Reports

  	
  76

  
	
  5.2.

  	
  Maintenance of Properties

  	
  76

  
	
  5.3.

  	
  Further Assurances

  	
  76

  
	
  5.4.

  	
  Use of Proceeds and Margin Security

  	
  77

  
	
  5.5.

  	
  Landlords’ Agreements, Mortgagee
  Agreements, Bailee Letters and Real Estate Purchases

  	
  77

  
	
  5.6.

  	
  Organizational Existence

  	
  78

  
	
  5.7.

  	
  Patriot Act Documentation

  	
  78

  
	
  5.8.

  	
  Insurance

  	
  78

  
	
  5.9.

  	
  Compliance with Laws; Consents

  	
  79

  
	
  5.10.

  	
  Intentionally Omitted

  	
  79

  
	
  5.11.

  	
  Inspection; Lender Meeting

  	
  79

  
	
  5.12.

  	
  Collection of Assets and Payments

  	
  80

  
	
  5.13.

  	
  Legal Opinion

  	
  80

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  FINANCIAL COVENANTS

  	
  80

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  NEGATIVE COVENANTS

  	
  81

  
	
  7.1.

  	
  Indebtedness and Liabilities

  	
  81

  
	
  7.2.

  	
  Intentionally Omitted

  	
  82

  
	
  7.3.

  	
  Disposal of Assets or Subsidiary
  Stock, Liens and Related Matters

  	
  82

  
	
  7.4.

  	
  Investments

  	
  83

  
	
  7.5.

  	
  Contingent Obligations

  	
  85

  
	
  7.6.

  	
  Restricted Payments

  	
  86

  
	
  7.7.

  	
  Restriction on Fundamental Changes

  	
  87

  
	
  7.8.

  	
  Changes Relating to Second Lien
  Debt

  	
  87

  
	
  7.9.

  	
  Transactions with Affiliates

  	
  87

  
	
  7.10.

  	
  Conduct of Business

  	
  88

  
	
  7.11.

  	
  Tax Consolidations

  	
  88

  
	
  7.12.

  	
  Subsidiaries

  	
  88

  
	
  7.13.

  	
  Fiscal Year; Tax Designation

  	
  88

  
	
  7.14.

  	
  Press Release; Public Offering
  Materials

  	
  89

  
	
  7.15.

  	
  Bank Accounts

  	
  89

  
	
  7.16.

  	
  Intentionally Omitted

  	
  89

  



 


ii

















 


	
  7.17.

  	
  ERISA; Canadian Pension Plans and
  Canadian Benefit Plans

  	
  89

  
	
  7.18.

  	
  Sale-Leasebacks

  	
  90

  
	
  7.19.

  	
  Prepayments of Indebtedness

  	
  90

  
	
  7.20.

  	
  Changes to Material Contracts

  	
  90

  
	
  7.21.

  	
  Acquisition of Assets

  	
  90

  
	
  7.22.

  	
  Anti-Terrorism Laws

  	
  91

  
	
  7.23.

  	
  Trading with the Enemy Act

  	
  91

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  DEFAULT, RIGHTS AND REMEDIES

  	
  92

  
	
  8.1.

  	
  Event of Default

  	
  92

  
	
  8.2.

  	
  Suspension or Termination of
  Revolving Loan Commitments

  	
  95

  
	
  8.3.

  	
  Acceleration and Other Remedies

  	
  95

  
	
  8.4.

  	
  Remedies

  	
  96

  
	
  8.5.

  	
  Appointment of Attorney-in-Fact

  	
  97

  
	
  8.6.

  	
  Limitation on Duty of Agent and
  Lenders with Respect to Collateral

  	
  97

  
	
  8.7.

  	
  Application of Proceeds

  	
  98

  
	
  8.8.

  	
  License of Intellectual Property

  	
  100

  
	
  8.9.

  	
  Waivers; Non-Exclusive Remedies

  	
  100

  
	
  8.10.

  	
  Performance by Agent

  	
  100

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AGENT

  	
  100

  
	
  9.1.

  	
  Agent

  	
  100

  
	
  9.2.

  	
  Notice of Default

  	
  107

  
	
  9.3.

  	
  Lender Actions Against Collateral

  	
  107

  
	
  9.4.

  	
  Agent Reports

  	
  107

  
	
  9.5.

  	
  [Intentionally Omitted.]

  	
  108

  
	
  9.6.

  	
  Quebec Security

  	
  108

  
	
  9.7.

  	
  Action by Agent

  	
  109

  
	
  9.8.

  	
  Amendments, Waivers and Consents

  	
  109

  
	
  9.9.

  	
  Assignments and Participations in
  Loans

  	
  112

  
	
  9.10.

  	
  Set Off and Sharing of Payments

  	
  115

  
	
  9.11.

  	
  Disbursement of Funds

  	
  115

  
	
  9.12.

  	
  Settlements, Payments and
  Information

  	
  116

  
	
  9.13.

  	
  Discretionary Advances

  	
  118

  
	
  9.14.

  	
  Swingline Lender

  	
  119

  
	
  9.15.

  	
  Removal of Issuing Lender

  	
  119

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  GUARANTY

  	
  120

  
	
  10.1.

  	
  Unconditional Guaranty

  	
  120

  
	
  10.2.

  	
  Taxes

  	
  120

  
	
  10.3.

  	
  Waivers of Notice, Demand, etc

  	
  121

  
	
  10.4.

  	
  No Invalidity, Irregularity,
  etc

  	
  121

  
	
  10.5.

  	
  Independent Liability

  	
  121

  
	
  10.6.

  	
  Indemnity

  	
  121

  
	
  10.7.

  	
  Liability Absolute

  	
  122

  
	
  10.8.

  	
  Action by Agent Without Notice

  	
  123

  
	
  10.9.

  	
  Application of Proceeds

  	
  123

  



 


iii

















 


	
  10.10.

  	
  Continuing Effectiveness

  	
  123

  
	
  10.11.

  	
  Enforcement

  	
  125

  
	
  10.12.

  	
  Statute of Limitations

  	
  126

  
	
  10.13.

  	
  Interest

  	
  126

  
	
  10.14.

  	
  Currency Conversion

  	
  126

  
	
  10.15.

  	
  Acknowledgement

  	
  126

  
	
  10.16.

  	
  Continuing Effectiveness

  	
  127

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  MISCELLANEOUS

  	
  127

  
	
  11.1.

  	
  Expenses and Attorneys’ Fees

  	
  127

  
	
  11.2.

  	
  Indemnity

  	
  127

  
	
  11.3.

  	
  Notices

  	
  128

  
	
  11.4.

  	
  Survival of Representations and
  Warranties and Certain Agreements

  	
  129

  
	
  11.5.

  	
  Indulgence Not Waiver

  	
  130

  
	
  11.6.

  	
  Marshaling; Payments Set Aside

  	
  130

  
	
  11.7.

  	
  Entire Agreement

  	
  130

  
	
  11.8.

  	
  Severability

  	
  130

  
	
  11.9.

  	
  Lenders’ Obligations Several;
  Independent Nature of Lenders’ Rights

  	
  130

  
	
  11.10.

  	
  Headings

  	
  131

  
	
  11.11.

  	
  APPLICABLE LAW

  	
  131

  
	
  11.12.

  	
  Successors and Assigns

  	
  131

  
	
  11.13.

  	
  No Fiduciary Relationship; No Duty;
  Limitation of Liabilities

  	
  131

  
	
  11.14.

  	
  CONSENT TO JURISDICTION

  	
  132

  
	
  11.15.

  	
  WAIVER OF JURY TRIAL

  	
  132

  
	
  11.16.

  	
  Construction

  	
  133

  
	
  11.17.

  	
  Counterparts; Effectiveness

  	
  133

  
	
  11.18.

  	
  Confidentiality

  	
  133

  
	
  11.19.

  	
  Publication

  	
  133

  
	
  11.20.

  	
  Subordination of Intercompany Debt

  	
  134

  
	
  11.21.

  	
  Cargill Intercreditor Agreement

  	
  134

  
	
  11.22.

  	
  Intentionally Omitted

  	
  135

  
	
  11.23.

  	
  Judgment Currency

  	
  135

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  BORROWING AGENCY

  	
  135

  
	
  12.1.

  	
  Borrowing Agency Provisions

  	
  135

  
	
  12.2.

  	
  Waiver of Subrogation

  	
  136

  



 


iv

















 


EXHIBITS


 


	
  A.

  	
  Assignment and Acceptance Agreement

  
	
  B.

  	
  Borrowing Base Certificate

  
	
  C.

  	
  Compliance Certificate

  
	
  D.

  	
  Form of US Revolving Note

  
	
  E.

  	
  Form of Canadian Revolving Note

  
	
  F.

  	
  Form of Swingline Note

  
	
  G.

  	
  Form of Notice of Borrowing

  
	
  H.

  	
  Closing Checklist

  
	
  I.

  	
  Assets Available for Purchase Agreements

  



 


v

















 


SCHEDULES


 


	
  1.1

  	
  Franchisee Program Reserve

  
	
  4.1(B)

  	
  Capitalization of Loan Parties

  
	
  4.4

  	
  Pro Forma

  
	
  4.5

  	
  Collect Air

  
	
  4.8

  	
  Litigation

  
	
  4.9(a)

  	
  Federal Tax ID Number of each US Loan Party and its
  Subsidiaries and Audits

  
	
  4.11(A)

  	
  ERISA

  
	
  4.11(B)

  	
  Canadian Employee Benefit Plans

  
	
  4.12

  	
  Broker’s Fees

  
	
  4.13

  	
  Environmental Conditions

  
	
  4.18

  	
  Employee Matters

  
	
  7.1

  	
  Indebtedness

  
	
  7.3(B)

  	
  Other Liens

  
	
  7.4

  	
  Investments

  
	
  7.5

  	
  Contingent Obligations

  
	
  7.9

  	
  Transactions with Affiliates

  



 


vi

















 


RIDERS


 


	
  A.

  	
  Reporting Rider

  
	
  B.

  	
  Financial Covenants Rider

  



 


vii

















 


LOAN AGREEMENT


 


This LOAN AGREEMENT is dated as of April 7, 2010
and entered into among SQUARETWO FINANCIAL CORPORATION, a Delaware corporation
(“US Borrower”), PREFERRED CREDIT RESOURCES LIMITED, an Ontario
corporation (“Canadian Borrower”) (US Borrower and Canadian Borrower are
sometimes collectively referred to herein as “Borrowers” and
individually as a “Borrower”), the other persons designated as “Loan
Parties”, the financial institutions who are or hereafter become parties to
this Agreement (collectively, the “Lenders” and individually, a “Lender”),
GMAC COMMERCIAL FINANCE LLC, a Delaware limited liability company (in its
individual capacity, “GMAC CF”), as administrative and collateral agent
(in such capacity, “Agent”), and as funding and disbursement agent with
respect to the Canadian Revolving Loans (in such capacity, “Canadian Agent”).


 


R E C I T A L S:


 


WHEREAS, Borrowers desire that Lenders extend a credit
facility to refinance its existing senior debt, to provide working capital
financing and to provide funds for other general corporate purposes;


 


WHEREAS, each of the Borrowers desires to secure all
of its Obligations (as hereinafter defined) under the Loan Documents (as
hereinafter defined) by granting to Agent, for the benefit of Agent, Canadian
Agent, each of the applicable Lenders and Issuing Lenders, a security interest
in and lien upon substantially all of its property;


 


WHEREAS, CA Holding, Inc., a Delaware corporation
(“Holdings”), owns directly or indirectly all of the Stock of Borrowers
and is willing to guaranty all of the Obligations and to pledge to Agent, for
the benefit of Agent, Canadian Agent, each of the Lenders and Issuing Lenders,
all of the Stock of US Borrower and substantially all of its other property to
secure the Obligations;


 


WHEREAS, each wholly-owned direct and indirect US
Subsidiary of Holdings (other than US Borrower, Collect Air, Astrum and CA
Marketing) is willing to guaranty all of the Obligations of Borrowers and to
grant to Agent, for the benefit of Agent and each of the Lenders and Issuing
Lenders, a security interest in and lien upon substantially all of its property
to secure the Obligations;


 


WHEREAS, US Borrower is willing to guaranty all of the
Obligations of Canadian Borrower and to grant to Agent, for the benefit of
Agent, Canadian Agent, each of the Lenders and Canadian Letter of Credit
Issuer, a security interest in and lien upon substantially all of its property
to secure such Obligations; and


 


WHEREAS, each direct and indirect Canadian Subsidiary
of Holdings (other than Canadian Borrower) is willing to guaranty all of the
Obligations of Canadian Borrower and to grant to Agent, for the benefit of
Agent, Canadian Agent, Lenders and Canadian Letter of Credit Issuer, a security
interest in and lien upon substantially all of its property to secure its
Obligations.


 

















 


NOW, THEREFORE, in consideration of the premises and
the agreements, provisions and covenants herein contained, Borrowers, Loan
Parties, Lenders, Canadian Agent and Agent agree as follows:


 


SECTION 1.             DEFINITIONS AND ACCOUNTING TERMS


 


1.1.         Certain Defined Terms.  The capitalized terms not otherwise defined
in this Agreement shall have the meanings set forth below:


 


“956 Impact” has the meaning assigned to that
term in subsection 8.7(a).


 


“Acceptable Standby Letter of Credit” means one
or more standby letters of credit, issued by a bank or financial institution
reasonably acceptable to Agent (or Canadian Agent, as applicable) and the
relevant Issuing Lender(s) in their sole discretion, in form and substance
reasonably satisfactory to Agent (or Canadian Agent, as applicable) and the
relevant Issuing Lender(s) in their sole discretion, in an amount equal to
one hundred five percent (105%) of the aggregate outstanding Letter of Credit
Liability (or such other amount described in subsection 2.4(C)(1)) to be
available to Agent (or Canadian Agent, as applicable) to reimburse payments of
drafts drawn under outstanding Lender Letters of Credit and to pay any fees and
expenses related thereto.


 


“Accounting Changes” has the meaning assigned
to that term in subsection 1.3.


 


“Acquisition” means the acquisition by Holdings
of all of the Stock of US Borrower on August 5, 2005, pursuant to the
merger of CA Merger Sub, Inc., a Delaware corporation, with and into US
Borrower, with US Borrower as the surviving entity.


 


“Adjusted EBITDA” means Consolidated Net Income
less (to the extent included in the calculation of Consolidated Net Income, but
without duplication):  (i) income
and franchise tax credits, (ii) interest income, (iii) gain from
extraordinary items, (iv) any gain arising from the sale, exchange or
other disposition of assets outside of the ordinary course of business, other
than Accounts and Inventory, (v) any other non-cash gains, (vi) cash
charges associated with interest swaps that result from such swaps not
qualifying for effective hedge accounting due to interest rate floors to the
extent such cash charges are not included in the calculation of Consolidated
Net Income and (vii) non-recurring gains; plus: (in each case to the
extent deducted in the calculation of Consolidated Net Income, but without
duplication):  (i) any provision for
income and franchise taxes, (ii) interest expense and any interest paid
in-kind, (iii) depreciation and amortization, (iv) amortized debt
discount, (v) loss from extraordinary items, (vi) any loss arising
from the sale, exchange or other disposition of assets outside of the ordinary
course of business, other than Accounts and Inventory, but including
amortization of intangibles (including but not limited to goodwill), (vii) any
other non-cash losses (other than non-cash losses relating to write-offs,
write-downs or reserves with respect to Accounts and Inventory), (viii) expenses
of the Related Transactions, (ix) fees and other amounts paid pursuant to
the Management Services Agreement, (x) additional non-cash amortization
expenses resulting from any premiums over the asset value of purchased pools of
Accounts as a result of purchase accounting adjustments in accordance with GAAP
relating to the Acquisition, (xi) non-cash charges associated with
interest 


 


2

















 


rate swaps that result from such swaps not qualifying
for effective hedge accounting due to interest rate floors, and (xii) Other
Cash Expenses.


 


“Advance” means an advance under the Revolving
Loan.


 


“Affected Lender” has the meaning assigned to
that term in subsection 2.11.


 


“Affiliate” means any Person (other than Agent,
Canadian Agent or any Lender): (a) directly or indirectly controlling,
controlled by, or under common control with, any Loan Party; (b) directly
or indirectly owning or holding ten percent (10%) or more of any Stock in any
Loan Party; (c) ten percent (10%) or more of whose Stock or other equity
interest having ordinary voting power for the election of directors or the
power to direct or cause the direction of management, is directly or indirectly
owned or held by any Loan Party; or (d) which has a senior officer who is
also a senior officer of any Loan Party. 
For purposes of this definition, “control” (including with correlative
meanings, the terms “controlling”, “controlled by” and “under common control
with”) means the possession directly or indirectly of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities or other equity interest, or by contract or
otherwise; provided, however, that the term “Affiliate” shall
specifically exclude Agent, Canadian Agent, each Lender, each portfolio company
of the Sponsor unrelated to the Loan Parties, each limited partner of Sponsor
and each Institutional Investor.


 


“Affiliated Entity” means an “Affiliate”
without giving effect to the proviso set forth therein.


 


“Agent” means GMAC CF in its capacity as Agent
for itself and Lenders, or its successor in such capacity.


 


“Agent’s Account” means the following Deposit
Account of Agent:


 


	
   

  	
  JPMorgan Chase Bank, N.A.

  	
   

  
	
   

  	
  New York, New York

  	
   

  
	
   

  	
  ABA No.:

  	
  021-000-021

  
	
   

  	
  Account Name:

  	
  GMAC Commercial Finance

  
	
   

  	
   

  	
  Structured Finance Division

  
	
   

  	
  Account No.:

  	
  3613249-84

  
	
   

  	
  Reference:

  	
  SquareTwo Financial Corporation

  
				



 


“Agent Overadvance” has the meaning set forth
in subsection 9.13.


 


“Agreement” means this Loan Agreement as it may
be amended, restated, supplemented or otherwise modified from time to time.


 


“Anti-Terrorism Law” means any Applicable Law
relating to terrorism or money laundering, including Executive Order No. 
13224, the USA PATRIOT Act, the Applicable Laws comprising or implementing the
Bank Secrecy Act, and the Applicable Laws administered by the United States
Treasury Department’s Office of Foreign Asset Control (as any of the foregoing
Applicable Laws may from time to time be amended, renewed, extended, or
replaced).


 


3














 


“Applicable Law” means all laws, ordinances, rules and
regulations, orders or other requirements of any Governmental Authority
applicable to the Person, conduct, transaction, covenant, Loan Document or
contract in question, including all applicable common law and equitable
principles; all provisions of all applicable state, provincial, federal and
foreign constitutions, statutes, rules, regulations and orders of any
Governmental Authority, and all orders, judgments and decrees of all courts and
arbitrators


 


“Applicable Margin” for each type of Loan shall
mean the applicable percentage specified below:


 


	
  TYPE OF LOAN

  	
   

  	
  APPLICABLE

  MARGIN FOR

  BASE RATE

  LOANS

  	
   

  	
  APPLICABLE

  MARGIN FOR

  LIBOR LOANS

  	
   

  	
  APPLICABLE

  MARGIN FOR

  CANADIAN BA

  RATE LOANS

  
	
  US Revolving Advances

  	
   

  	
  4.00%

  	
   

  	
  5.00%

  	
   

  	
  Not Available

  
	
  Canadian Revolving Advances

  	
   

  	
  4.00%

  	
   

  	
  Not Available

  	
   

  	
  5.50%

  
	
  US Obligations for which no other interest rate is
  specified

  	
   

  	
  4.00%

  	
   

  	
  Not Available

  	
   

  	
  Not Available

  
	
  Canadian Obligations for which no other interest
  rate is specified

  	
   

  	
  4.00%

  	
   

  	
  Not Available

  	
   

  	
  Not Available

  



 


“Application” means any Canadian Letter of
Credit Application or any US Letter of Credit Application.


 


“Asset(s)” shall mean each purchased Receivable
and any property or other right obtained by any Loan Party (other than
Holdings) in connection with collection of any such purchased Receivable or in
substitution therefor, all of which constitutes part of the Asset Pool into
which such purchased Receivable was initially delivered.


 


“Asset Disposition” means the disposition,
whether by sale, lease, transfer, loss, damage, destruction, condemnation or
otherwise, of any or all of the assets of any Loan Party or any of their
respective Subsidiaries other than sales and dispositions described in
subsections 7.3(A)(c) and 7.3(A)(f).


 


“Asset Pool” means all Receivables and other
Assets, as the context may require, which Receivables shall all have been
purchased by any Loan Party (other than Holdings) from a single creditor and
from which any Loan Party (other than Holdings) has purchased such Receivables
on the same Business Day, together with (i) each and every Asset obtained
in replacement or satisfaction of or substitution for, any such Receivable so
purchased, (ii) each and every item of property obtained by any Loan Party
(other than Holdings) as a result of its 


 


4

















 


collection activities with respect to any such
purchased Receivable, (iii) each and every item of collateral or security,
including all security interests, liens, guarantees and other interests
securing payment of any purchased Receivable, and all other rights and
interests of any Loan Party (other than Holdings) with respect to each
purchased Receivable, (iv) each judgment rendered against a purchased
Account Debtor in respect to a Receivable, together with all lien rights
related thereto, (v) Asset Pool Proceeds derived from or paid or payable
with respect thereto, together with any and all earnings thereon, and (vi) each
and every other right, claim and interest associated therewith.


 


“Asset Pool Proceeds” means, with respect to an
Asset Pool, any and all payments, revenues, income, receipts, collections,
recoveries and other proceeds or assets received with respect to such Asset
Pool, including, without limitation, (i) payments of principal, interest,
fees, late charges, insufficient funds charges, guaranty payments and any
interest thereon, credit insurance costs, guaranty fees and other amounts
recovered on account of any Asset in such Asset Pool, and (ii) settlements,
compromises, liquidations, foreclosure proceeds, dispositions, sales, transfers
or other proceeds, whether cash or otherwise, received as a result of or in any
way in connection with collection activities related to any Asset or in
connection with the sale of any Asset constituting a part of such Asset Pool.


 


“Asset Pool Seller” means, with respect to an
Asset Pool, the party which has agreed to sell a specified Asset Pool to any
Loan Party pursuant to the terms of a purchase agreement between any Loan Party
and any Asset Pool Seller for the purchase of an Asset Pool.


 


“Assets Available For Purchase Agreements”
shall mean any and all Assets Available For Purchase Agreements between CACH,
LLC or other Subsidiaries of US Borrower which purchase debt and are Loan
Parties, on the one hand, and the Franchisees, on the other hand, which are in
the form of Exhibit I to this Agreement, as may be modified with
the prior written consent of Agent, which consent shall not be unreasonably
withheld or delayed; provided, that the consent of Agent and Requisite
Lenders (each of whom may grant or withhold consent in its own sole discretion)
shall be required for any amendment or modification that increases the
aggregate dollar value of the participation interests available to all
Franchisees with respect to any applicable level of quarterly assets purchased
during any period in excess of the amounts determined in accordance with Section 3
of such agreements or increases the amounts payable to a Franchisee pursuant to
Sections 6, 7, or 8 of such agreements; provided, further, that
neither the consent of Agent nor Lenders is required to amend such agreements
to decrease the aggregate dollar value of the participation interests available
to all Franchisees with respect to any applicable level of quarterly assets
purchased during any period below the amounts determined in accordance
with  Section 3 of such agreements
or decrease the amounts payable to a Franchisee pursuant to Sections 6, 7, or 8
of such agreements.


 


“Assigning Lender” has the meaning set forth in
subsection 9.9(A).


 


“Assignment and Acceptance Agreement” shall
mean an Assignment and Acceptance Agreement substantially in the form of Exhibit A.


 


“Astrum” means Astrum Financial LLC, a Colorado
limited liability company.


 


5

















 


“BA Breakage Costs” means an amount equal to
the amount of any losses, costs, expenses, liabilities (including, without
limitation, any loss (including interest paid) and additional amounts, if any, consisting
of the present value of the difference between the Canadian BA Rate in effect
for the relevant BA Period and any lower Canadian BA Rate in effect at the time
of prepayment for the remainder of that BA Period in connection with the
re-employment of such funds) that any Lender sustains as a result of (i) any
default by Canadian Borrower in making any borrowing of, conversion into, or
continuation of any Canadian BA Rate Loan following Borrowing Agent’s delivery
to Agent (and Canadian Agent, to the extent required by this Agreement) of a
Notice of Borrowing in respect thereof or (ii) any payment of a Canadian
BA Rate Loan on any day that is not the last day of the BA Period applicable
thereto (regardless of the source of such prepayment and whether voluntary, by
acceleration or otherwise).  The
assumptions set forth in subsection 2.14 shall be utilized in calculating BA
Breakage Costs.


 


“BA Period” means, with respect to any Canadian
BA Rate Loan, a period of 30, 60 or 90 days commencing on a Business Day
selected by Borrowing Agent pursuant to subsection 2.1(D)(4) to be
applicable to such Loan, provided that the foregoing provision relating
to BA Periods is subject to the following: (a) any BA Period that would
otherwise extend beyond the Termination Date shall end on the Business Day
immediately preceding the Termination Date, (b) if any BA Period would
otherwise end on a day that is not a Business Day, such BA Period shall be
extended to the next succeeding Business Day, (c) Borrowing Agent shall
select BA Periods so as not to require a payment or prepayment of any Canadian
BA Rate Loan during a BA Period for such Canadian Revolving Loan, and (d) Borrowing
Agent shall select BA Periods so there shall be no more than three (3) separate
Canadian BA Rate Loans in existence at any one time.


 


“Bank Letter of Credit” means each letter of
credit issued by a bank acceptable to and approved by Agent for the account of
a Borrower and supported by guaranty or risk participation agreement issued by
GMAC CF or Agent.


 


“Bank Prime Loan” has the meaning assigned to
that term in the definition of Base Rate.


 


“Bankruptcy Code” means the provisions of Title
11 of the United States Code, 11 U.S.C. §§ 101 et seq. or other applicable
bankruptcy, insolvency or similar laws.


 


“Bank Secrecy Act” means 31 U.S.C.  Sections 5311-5330, as the same has been, or
shall hereafter be, extended, amended or replaced.


 


“Base Rate” means (i) with respect to
Loans in Dollars, a variable rate of interest per annum equal to the highest of
(a) the rate of interest from time to time published by the Board of
Governors of the Federal Reserve System as the “Bank Prime Loan” rate in
Federal Reserve Statistical Release H.15(519) entitled “Selected Interest Rates”
or any successor publication of the Federal Reserve System reporting the Bank
Prime Loan rate or its equivalent (the “Bank Prime Loan”), (b) the
Federal Funds Effective Rate plus fifty (50) basis points, or (c) LIBOR
for an Interest Period of one month plus one hundred (100) basis points, and (ii) with
respect to Loans in Canadian Dollars, a floating rate equal to the higher of (a) a
per annum rate 


 


6

















 


of interest quoted by The Toronto-Dominion Bank, or
another financial institution selected by Canadian Agent in its reasonable
discretion, as its reference rate for commercial loans made by it in Canada in
Canadian Dollars and used as a reference point for pricing some loans, which
may be priced at, above, or below, such quoted rate and (b) the Canadian
BA Rate as of such day for a BA Period of thirty (30) days plus one hundred
(100) basis points per annum.  The
statistical release generally sets forth a Bank Prime Loan rate for each
Business Day.  The applicable Bank Prime
Loan rate for any date not set forth shall be the rate set forth for the last
date on which such rate was published. 
With respect to Loans in Dollars, in the event the Board of Governors of
the Federal Reserve System ceases to publish a Bank Prime Loan rate or its
equivalent, the term “Base Rate” shall mean a variable rate of interest per
annum equal to the highest of the “prime rate”, “reference rate”, “base rate”,
or other similar rate announced from time to time by any of the three largest
banks (based on combined capital and surplus) headquartered in New York, New
York (with the understanding that any such rate may merely be a reference rate
and may not necessarily represent the lowest or best rate actually charged to
any customer by any such bank). 
Notwithstanding the foregoing, in no event shall the Base Rate be less
than three percent (3.00%).


 


“Base Rate Loans” means Loans bearing interest
at rates determined by reference to the Base Rate.


 


“Blocked Person” has the meaning assigned to
that term in subsection 7.22.


 


“BMO” means the Bank of Montreal, a Canadian
chartered bank.


 


“Borrower” and “Borrowers” have the
meanings ascribed to such terms in the preamble to this Agreement.


 


“Borrowing Agent” means US Borrower.


 


“Borrowing Base” means, as of any date of
determination, an amount equal to the lesser of (a) 30% of Estimated
Remaining Proceeds of Eligible Asset Pools and (b) the Adjusted EBITDA of
Loan Parties for the most recently completed trailing twelve consecutive month
period and less, in each case, such reserves as Agent in its reasonable credit
judgment may from time to time elect to establish, including without limitation
the Franchisee Program Reserve, the Cargill Reserve, the Canadian Priority
Reserve, the Interest Rate Agreement Reserve, the Judgment Reserve, and the
Rent Reserve.  Unless otherwise specified
herein, all of the foregoing shall be calculated in US Dollar Equivalents.


 


“Borrowing Base Certificate” means a
certificate and schedule duly executed by an officer of Borrowing Agent
appropriately completed and in substantially the form of Exhibit B.


 


“Business Day” means any day excluding
Saturday, Sunday and any day which is a legal holiday under the laws of the
States of New York or Michigan or is a day on which banking institutions
located in any such state are closed. 
With respect to LIBOR Loans, in addition to the days excluded from the
definition of Business Day in the immediately preceding sentence, Business Day
shall also exclude any day that dealings in Dollar deposits are not transacted
in the London interbank market.  With
respect to Canadian Revolving Loans and 


 


7

















 


Canadian Lender Letters of Credit, in addition to the
days excluded from the definition of Business Day in the first sentence of this
definition, Business Day shall also exclude any day which is a legal holiday
under the laws of the Province of Ontario, Canada or is a day on which banking
institutions in such province are closed.


 


“CA Marketing” means CA Internet Marketing,
LLC, a Colorado limited liability company.


 


“CACV” means CACV of Colorado, LLC, a Colorado
limited liability company.


 


“CACV-NJ” means CACV of New Jersey, LLC, a
Colorado limited liability company.


 


“Canadian Agent” means GMAC CF in its capacity
as funding and disbursement agent with respect to the Canadian Revolving Loans,
or its successor in such capacity.


 


“Canadian Agent’s Account” means the following
Deposit Account of Canadian Agent (or such other Deposit Account as shall be
designated by Canadian Agent):


 


	
   

  	
  The Toronto-Dominion Bank

  	
   

  
	
   

  	
  (Swift Code: TDOMCATT)

  	
   

  
	
   

  	
  433 Chabenel

  
	
   

  	
  Montreal Quebec

  
	
   

  	
  Transit No.:   
  42801-004

  
	
   

  	
  Account Name:

  	
  GMAC Commercial Finance

  
	
   

  	
  Account No.:

  	
  0111-5216849

  
	
   

  	
  Reference:

  	
  Preferred Credit Resources Limited

  
	
   

  	
   

  	
  SquareTwo Financial Corporation

  
				



 


“Canadian BA Rate” means for any BA Period
applicable to a Canadian BA Rate Loan, a rate of interest per annum equal to
the greater of (x) 2.00% and (y) the annual rate of interest quoted
on the Business Day which is the first day of the relevant BA Period by The
Toronto-Dominion Bank, or other financial institution selected by Canadian
Agent in its discretion, to Lenders as being its rate of interest for accepting
and purchasing such accepted bankers’ acceptances in Canadian Dollars for a
face amount similar to the amount of such Canadian BA Rate Loan and for a term
similar to such BA Period.  No adjustment
shall be made to account for the difference between the number of days in a
year on which the rates referred to in this definition are based and the number
of days in a year on the basis of which interest is calculated in this
Agreement.


 


“Canadian BA Rate Loans” means a Canadian
Revolving Loan or any portion thereof bearing interest by reference to the
Canadian BA Rate.


 


“Canadian Benefit Plans” means all material
employee benefit plans of any nature or kind whatsoever that are not Canadian
Pension Plans and are maintained or contributed to by any Loan Party having
employees in Canada, but excluding the Canadian Pension Plans and any statutory
benefit plans which any Loan Party having employees in Canada is required to 


 


8

















 


participate in or comply with, such as the Canada
Pension Plan, the Quebec Pension Plan and plans administered pursuant to
applicable health, tax, workplace safety insurance and employment insurance
legislation.


 


“Canadian Borrower” has the meaning ascribed to
it in the preamble to this Agreement.


 


“Canadian Collateral” means any and all
property and assets legally or beneficially owned by Canadian Borrower or any
other Canadian Loan Party, subject to certain exclusions set forth in the
Canadian Security Agreement.


 


“Canadian Controlled Accounts” has the meaning assigned to that term in subsection 5.12.


 


“Canadian Dollars” or “Cdn $” means the
lawful currency of Canada.


 


“Canadian Dollar Equivalent” means, with
respect to any amount denominated in Canadian Dollars, such amount of Canadian
Dollars, and with respect to any amount denominated in a currency other than
Canadian Dollars, the amount of Canadian Dollars, as of any date of
determination, into which such other currency can be converted in accordance
with prevailing exchange rates, as determined by Agent in its reasonable
discretion, on the applicable date.


 


“Canadian Guarantor” means any Guarantor that
is organized or incorporated under the laws of a jurisdiction in Canada.


 


“Canadian Indemnitees” has the meaning ascribed
to it in subsection 11.2.


 


“Canadian Interest Rate” has the meaning
assigned to that term in subsection 2.2(A)(ii).


 


“Canadian Lender Letter of Credit” has the
meaning assigned to that term in subsection 2.1(G).


 


“Canadian Letter of Credit Application” has the
meaning assigned to that term in subsection 2.1(G)(3).


 


“Canadian Letter of Credit Issuer” means BMO,
or such other Lender as may be approved by Agent (such consent not to be
unreasonably withheld) to issue Canadian Lender Letters of Credit hereunder.


 


“Canadian Letter of Credit Liability” means,
all reimbursement and other liabilities of Canadian Borrower or any of its
Subsidiaries with respect to each Canadian Lender Letter of Credit, whether
contingent or otherwise, including: (a) the amount available to be drawn
or which may become available to be drawn; (b) all amounts which have been
paid or made available by any Canadian Letter of Credit Issuer or any bank
issuing a Bank Letter of Credit to the extent not reimbursed by Borrowers; and (c) all
unpaid interest, fees and expenses related thereto.


 


9

















 


“Canadian Letter of Credit Reserve” means, at
any time, an amount equal to (a) the US Dollar Equivalent of the aggregate
amount of Canadian Letter of Credit Liability with respect to all Canadian
Lender Letters of Credit outstanding at such time plus, without duplication, (b) the
US Dollar Equivalent of the aggregate amount theretofore paid under Canadian
Lender Letters of Credit and not debited to the Canadian Revolving Loan
pursuant to subsection 2.1(G)(2) or otherwise reimbursed by Canadian
Borrower.


 


“Canadian Loan Party” means any Loan Party
organized, incorporated, amalgamated, or continued under the laws of Canada or
any Province of Canada.


 


“Canadian Maximum Revolving Loan Amount” means,
as of any date of determination, the Canadian Dollar Equivalent of the Canadian
Maximum Revolving Loan Commitment less the Canadian Dollar Equivalent of the
Canadian Letter of Credit Reserve.


 


“Canadian Maximum Revolving Loan Commitment”
means Cdn $20,000,000.


 


“Canadian Obligations” means all Obligations
with respect to Canadian Revolving Loans and all other Obligations owing by the
Canadian Loan Parties.


 


“Canadian Over Formula Advance” shall have the
meaning specified in subsection 2.4(B)(1).


 


“Canadian Pension Plans” means each “registered
pension plan” as defined under the ITA that is maintained or contributed to by
any Loan Party for its employees or former employees.


 


“Canadian PPSL” means Canadian provincial,
territorial or federal personal property security laws that are applicable to
Collateral or a Loan Party.


 


“Canadian PPSL Collateral” means all Collateral
to the extent that the perfection of a security interest therein is governed by
Canadian PPSL.


 


“Canadian Priority Reserve” means the aggregate
of any amounts accrued or payable (including interest and penalties) which arise
by the operation of any Applicable Law and rank prior to or pari passu with any Lien held by Agent, including, without
limitation, in respect of wages, salaries, commissions or other remuneration,
vacation pay, pension plan contributions and/or obligations, including without
limitation, under the Wage Earner Protection
Program Act (Canada), amounts required to be withheld from payments
to employees or other persons for federal and provincial income taxes, employee
Canada Pension Plan contributions and employee employment insurance premiums
and additional amounts payable on account of employer Canada Pension Plan
contributions and employer employment insurance premiums, federal or provincial
goods and services or excise tax, or other sales or consumption taxes, employer
health tax, amounts payable under the Workplace Safety and
Insurance Act, 1997 (Ontario) or similar legislation in other
applicable jurisdiction (all as may be amended or replaced from time to time),
arrears of rent, utilities or other amounts payable in respect of the use of
any real property, amounts payable for repair, storage, transportation or
construction or other services which may give rise to a possessory or
registerable Lien.


 


10

















 


“Canadian Proceeds” has the meaning assigned to
that term in subsection 8.7(a).


 


“Canadian Revolving Advance” has the meaning
ascribed to it in subsection 2.1(B).


 


“Canadian Revolving Loan(s)” means outstanding
principal balance of all Canadian Revolving Advances and any amounts added or
in addition to the principal balance of the Canadian Revolving Loan pursuant to
this Agreement.


 


“Canadian Revolving Loan Commitment” means (a) as
to any Lender, the commitment of such Lender to make Canadian Revolving
Advances pursuant to subsection 2.1(B) and to purchase participations in
Canadian Lender Letters of Credit pursuant to subsection 2.1(G) in the
aggregate amount set forth on the signature page of this Agreement
opposite such Lender’s signature or in the most recent Assignment and
Acceptance Agreement, if any, executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Canadian Revolving
Advances and to purchase participations in Canadian Lender Letters of
Credit.  The aggregate Canadian Revolving
Loan Commitment shall not exceed the Canadian Maximum Revolving Loan
Commitment.


 


“Canadian Revolving Notes” means the promissory
note or notes of Canadian Borrower in substantially the form of Exhibit E,
issued to evidence the Canadian Revolving Loan (if any).


 


“Canadian Security Agreement” means those
certain security agreements, share pledge agreements and such similar
agreements creating a security interest in favor of Agent, executed on or after
the Closing Date, by and among Canadian Borrower, each Canadian Guarantor and
Agent, as such agreements may be amended from time to time.


 


“Canadian Subsidiary” means any Subsidiary
organized, incorporated, amalgamated, or continued under the laws of Canada or
any Province of Canada.


 


“Capex Limit” has the meaning ascribed to it in
the Financial Covenants Rider.


 


“Capital Expenditures” means (i) all
expenditures (by the expenditure of cash or (without duplication) the
incurrence of Indebtedness) during any measuring period for any fixed asset or
improvements or replacements, substitutions, or additions thereto that have a
useful life of more than one year and are required to be capitalized under
GAAP, excluding Capital Expenditures to the extent financed by third party
lenders (so long as such third party financing is permitted under this
Agreement), plus (ii) deposits made during such measuring period for
Capital Expenditures less (iii) such deposits during a prior measuring
period and reflected in the amount calculated in clause (i) above.  For the avoidance of doubt, capitalized
litigations costs shall not be included in the calculation of Capital
Expenditures.


 


“Capital Lease” means any lease of any property
(whether real, personal or mixed) that, in conformity with GAAP, should be
accounted for as a capital lease.


 


“Cargill” means CFSC Capital Corp.  XXXIV, a Delaware corporation.


 


11

















 


“Cargill Claim” means an amount equal to the
Cargill Claim Percentage multiplied by the proceeds derived from Assets
purchased by CACV and/or CACV-NJ pursuant to the Cargill Documents.


 


“Cargill Claim Percentage” means a percentage
equal to 27% or such lesser percentage of “Asset Pool Proceeds” (as defined in
the Cargill Documents as in effect on the date hereof) representing Cargill’s
residual interest in the proceeds derived from assets purchased by CACV and/or
CACV-NJ, under the Cargill Documents.


 


“Cargill Documents” means that certain Amended
and Restated Credit Agreement dated as of August 5, 2005 between CACV and
Cargill and all agreements, documents and instruments executed in connection
therewith, in each case as amended, restated or otherwise modified from time to
time as permitted under subsection 7.20 hereof.


 


“Cargill Intercreditor Agreement” means that
certain Intercreditor Agreement dated as of August 5, 2005 (as amended,
restated or otherwise modified from time to time) among Agent, certain Loan
Parties and Cargill.


 


“Cargill Liens” means the junior subordinated
Liens of Cargill on receivables owned by CACV and CACV NJ as of the Closing
Date pursuant to the Cargill Documents, which Liens are subject to the terms of
the Cargill Intercreditor Agreement.


 


“Cargill Reserve” means an amount equal to the
Cargill Claim Percentage multiplied by the estimated remaining proceeds to be
derived from Assets purchased by CACV and CACV-NJ as of the date of
determination.


 


“Carry Over Amount” has the meaning ascribed in
Financial Covenants Rider.


 


“Cash Equivalents” means: (a) marketable
direct obligations issued or unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within six (6) months
from the date of acquisition thereof; (b) commercial paper maturing no
more than six (6) months from the date issued and, at the time of
acquisition, having a rating of at least A-1 from Standard & Poor’s
Ratings Group, a division of McGraw-Hill, Inc.,  or at least P-1 from Moody’s Investors
Services, Inc.; (c) certificates of deposit or bankers’ acceptances
maturing within six (6) months from the date of issuance thereof issued
by, or overnight reverse repurchase agreements from, any commercial bank
organized under the laws of the United States of America, or any state thereof
or the District of Columbia, having combined capital and surplus of not less
than $250,000,000 and not subject to setoff rights in favor of such bank; or (d) investments
in money market funds subject to the risk limiting conditions of Rule 2a-7
or any successor rule of the Commission under the Investment Company Act
of 1940, as amended.


 


“CERCLA” means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq).


 


“Certificate of Exemption” has the meaning
assigned to that term in subsection 2.9(C)(2).


 


12

















 


“Change of Control” means any event,
transaction or occurrence as a result of which (a) the Sponsor ceases to
own and control at least 80% of the Stock of Holdings owned by Sponsor as of
the Closing Date and ceases to have the voting or have the contractual right
sufficient to enable Sponsor to elect a majority of the board of directors of
Holdings, (b) Holdings ceases to own and control all of the economic and
voting rights associated with all of the outstanding Stock of US Borrower, (c) except
as a result of transactions permitted under subsections 7.3(A)(i) (regarding
Permitted Dispositions) or 7.7, US Borrower ceases to own and control all of
the economic and voting rights associated with all of the outstanding Stock of
any of its Subsidiaries, (d) so long as any Second Lien Debt Documents is
in effect, any “Change of Control” shall occur (as such term is defined in any
agreement governing Second Lien Debt), or (e) so long as the Cargill
Documents are in effect, any “Change of Control” shall occur (as such term is
defined in the Cargill Documents).


 


“Charges” means all federal, state, provincial,
territorial, county, city, municipal, local, foreign or other governmental
premiums, taxes and other amounts (including premiums and other amounts owed to
the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income, gross receipts or capital
of any Loan Party, (d) any Loan Party’s ownership or use of any properties
or other assets, or (e) any other aspect of any Loan Party’s business.


 


“Claims” has the meaning assigned to that term
in subsection 10.11.


 


“Closing Date” means April 7, 2010.


 


“Collateral” means the US Collateral and the
Canadian Collateral.


 


“Collect Air” means Collect Air, LLC, a
Delaware limited liability company.


 


“Commission” means the Securities and Exchange Commission.


 


“Compliance Certificate” has the meaning in
Item 8 of the Reporting Rider.


 


“Consolidated Net Income” means net income of
Loan Parties (provided, however, that for the calculation of
revenue on owned Accounts, revenue shall be calculated as total proceeds on
such Accounts in a given period and shall not be calculated using modified cost
recovery or level-yield accounting in accordance with GAAP) during the
measuring period on a consolidated basis excluding: (i) the income (or
deficit) of any Person accrued prior to the date it became a Subsidiary of, or
was merged or consolidated into or amalgamated with, a Borrower or any of such
Borrower’s Subsidiaries, (ii) the income (or deficit) of any Person (other
than a Subsidiary) in which a Loan Party has an ownership interest, except to
the extent any such income has actually been received by a Borrower or any of
its Subsidiaries in the form of cash dividends or distributions, (iii) the
undistributed earnings of any Subsidiary of a Borrower that is not a Loan Party
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary,
(iv) any restoration to income of any contingency reserve, except to the
extent that provision for such reserve was made out of income accrued during
such period, (v) any net gain attributable to the write-up of any asset, (vi) 


 


13

















 


any loss attributable to the write-down of any asset, (vii) any
net gain from the collection of the proceeds of life insurance policies, (viii) any
net gain arising from the acquisition of any securities, or the extinguishment
of any Indebtedness, of any Borrower or any of its Subsidiaries, (ix) any
deferred credit representing the excess of equity in any Subsidiary of any
Borrower at the date of acquisition of such Subsidiary over the cost to the
applicable Loan Party of the investment in such Subsidiary, and (x) any
impairment or similar charges on owned Asset Pools required under GAAP.


 


“Contingent Obligation” means, as applied to
any Person, any direct or indirect liability of that Person: (i) with
respect to Guaranteed Indebtedness and with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the purpose or intent of the
Person incurring such liability, or the effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto; (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (iii) under any foreign
exchange contract, currency swap agreement, interest rate swap agreement or
other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates, (iv) any
agreement, contract or transaction involving commodity options or future
contracts, (v) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement, or (vi) pursuant
to any agreement to purchase, repurchase or otherwise acquire any obligation or
any property constituting security therefor, to provide funds for the payment
or discharge of such obligation or to maintain the solvency, financial
condition or any balance sheet item or level of income of another.  The amount of any Contingent Obligation shall
be equal to the amount of the obligation so guaranteed or otherwise supported
or, if not a fixed and determined amount, the maximum amount so
guaranteed.  For purposes of clarity, any
payment obligations pursuant to sharing arrangements with Persons from whom
Asset Pools are purchased shall not constitute Contingent Obligations.


 


“Control Agreement” means a deposit account,
securities account or commodities account control agreement by and among the
applicable Loan Party, Agent and the depository, securities intermediary or
commodities intermediary (and, if applicable, the collateral agent for the Second
Lien Debt), and each in form and substance satisfactory in all respects to
Agent and in any event providing to Agent “control” of such deposit account,
securities account or commodities account within the meaning of Articles 8 and
9 of the UCC.


 


“Controlled Account” has the meaning specified
in subsection 5.12.


 


“Copyrights” means, collectively, all of the
following (a) all copyrights, rights and interests in copyrights, works
protectable by copyright, copyright registrations and copyright applications,
including those listed in the schedules to any Security Agreement; (b) all
renewals of any of the foregoing; (c) all income, royalties, damages and
payments now or hereafter due and/or payable under any of the foregoing or with
respect to any of the foregoing, including damages or payments for past,
present or future infringements of any of the foregoing; (d) the right to
sue for past, present and future infringements of any of the foregoing; and (e) all
rights included within any of the foregoing throughout the world.


 


14














 


“Daily Interest Amount” has the meaning
assigned to that term in subsection 9.12(A)(4)(c).


 


“Daily Interest Rate” has the meaning assigned
to that term in subsection 9.12(A)(4)(b).


 


“Daily Loan Balance” has the meaning assigned
to that term in subsection 9.12(A)(4)(a).


 


“Default” means a condition, act or event that,
after notice or lapse of time or both, would constitute an Event of Default if
that condition, act or event were not cured or removed within any applicable
grace or cure period.


 


“Default Rate” has the meaning assigned to that
term in subsection 2.2(A)(iii).


 


“Defaulted Amount” means, with respect to any
Lender at any time, any amount required to be paid hereunder or under any other
Loan Document by such Lender to Agent, Canadian Agent, any Issuing Lender or
any other Lender which has not been so paid.


 


“Defaulting Lender” means any Lender that (a) fails
to make any Advance (or other extension of credit) that it is required to make
hereunder on the date that it is required to do so hereunder, (b) has
notified any Loan Party, Agent, Canadian Agent, any Issuing Lender, the
Swingline Lender or any other Lender in writing that it does not intend to
comply with any of its funding obligations under the Agreement or has made a
public statement to the effect that it does not intend to comply with its
funding obligations under the Agreement, or (c)(i) has been adjudicated
as, or determined by any Governmental Authority having regulatory authority
over such Person or its assets to be, insolvent or (ii) has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
custodian, appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding
or appointment, unless in the case of any Lender referred to in this clause
(c), such Lender has all approvals required to enable it to continue to perform
its obligations as a Lender hereunder and has, upon the written request of
Borrowing Agent, provided written confirmation of its intention to so perform.


 


“Defaulting Lender-Impaired” means a Defaulting
Lender described in clause (c) of the definition of Defaulting Lender.


 


“Defaulting Lender-Payment” means a Defaulting
Lender described in clauses (a) and (b) of the definition of
Defaulting Lender.


 


“Disposition” has the meaning assigned to that
term in the definition of Permitted Dispositions.


 


“Dollars” or “$” means lawful currency
of the United States of America.


 


“Domestic Subsidiary” means any Subsidiary
organized under the laws of any of the states of the United States of America.


 


15

















 


“eAGLE Software” means the Loan Parties’
proprietary collection management software.


 


“Eligible Asset Pool” means, as at any date of
determination, the aggregate of all Asset Pools of US Loan Parties that Agent,
in its reasonable credit judgment, deems to be eligible for borrowing
purposes.  Without limiting the
generality of the foregoing, Agent may determine that the following Asset Pools
of any of US Loan Parties are not Eligible Asset Pools:


 


(i)            Asset
Pools acquired from any Asset Pool Seller that is an Affiliated Entity of any
Loan Party or a director, officer, agent, stockholder, member or employee of
any Loan Party or any of its Affiliates;


 


(ii)           More
than one percent (1%) of the Receivables in such Asset Pool constitute Receivables
with respect to which the Account Debtor thereon or any guarantor thereof is an
Affiliated Entity of any Loan Party or a director, officer, agent, stockholder,
member or employee or any of its Affiliated Entities;


 


(iii)          such
Asset Pool, taken as a whole, does not comply in all material respects with all
Applicable Laws, including, but not limited to, truth in lending and credit
disclosure laws and regulations;


 


(iv)          any
amounts and information appearing on the applicable Borrowing Base Certificate
furnished to Agent in connection with such Asset Pool is not true and correct
in all material respects;


 


(v)           a
Loan Party does not have good and marketable title and the right to pledge,
assign and deliver the Assets of such Asset Pool, free from all Liens, claims,
encumbrances or security interests whatsoever;


 


(vi)          since
the acquisition of the Asset Pool by any Loan Party, a sale of all or
substantially all of the Assets within the Asset Pool has occurred that is not
an arms length sales to a non-affiliated third party (other than sales or
transfers among US Loan Parties);


 


(vii)         an
Asset Pool with respect to which Agent, on behalf of itself and Canadian Agent, Issuing
Lenders and Lenders, does not have a valid, first priority and fully perfected
security interest;


 


(viii)        Accounts
subject to any Lien except those in favor of Agent, for the benefit of itself
Canadian Agent, Issuing Lenders and Lenders, and Permitted Encumbrances;
and


 


(ix)           Substantially
all of the Account Debtors obligated on the Receivables in such Asset Pool are
located or organized under the laws of a jurisdiction outside the United States
or Canada.


 


“Eligible Assignee” shall mean (a) a
commercial bank organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least $250,000,000; (b) a
commercial bank organized under the laws of any other country which is a 


 


16

















 


member of the Organization for Economic Cooperation
and Development (the “OECD”), or a political subdivision of any such country,
and having a combined capital and surplus of at least $250,000,000, provided
that such bank is acting through a branch or agency located in the country in
which it is organized or another country which is also a member of the OECD; (c) any
nationally recognized financial institution or any other entity which is an “accredited
investor” (as defined in Regulation D under the Securities Act of 1933 and as
defined under Ontario Securities Commission Rule 45-501, each as amended,
supplemented, replaced and otherwise modified from time to time) which extends
credit or buys loans as one of its businesses, including but not limited to,
commercial finance companies, insurance companies, mutual funds and lease financing
companies, (d) a Related Fund (as such term is defined in subsection
9.9(D)), and (e) a Person that is primarily engaged in the business of
lending that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a
Person of which a Lender is a Subsidiary, or (iii) a Person of which a
Lender is a Subsidiary; provided, however, that no Affiliated
Entity of any Loan Party shall be an Eligible Assignee.


 


“Environmental Laws” means any applicable
present or future federal, state, provincial, territorial, municipal, or local
law, rule, regulation or order relating to pollution, waste, disposal or the
protection of human health or safety, plant life or animal life, natural
resources or the environment, or Hazardous Materials.


 


“Environmental Liabilities” means, with respect
to any Person, all liabilities, obligations, responsibilities, response,
remedial and removal costs, investigation and feasibility study costs, capital
costs, operation and maintenance costs, losses, damages, punitive damages,
property damages, natural resource damages, consequential damages, treble
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts and consultants), fines, penalties, sanctions and
interest incurred as a result of or related to any claim, suit, action,
investigation, proceeding or demand by any Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute
or common law, including any arising under or related to any Environmental
Laws, Environmental Permits, or in connection with any Release or threatened
Release or presence of a Hazardous Material whether on, at, in, under, from or
about or in the vicinity of any real or personal property.


 


“Environmental Permits” has the meaning
assigned to that term in subsection 4.13.


 


“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and any successor statute
and all rules and regulations promulgated thereunder.


 


“ERISA Affiliate”, as applied to any Loan
Party, means any Person who is a member of a group which is under common
control with any Loan Party, who together with any Loan Party is treated as a
single employer within the meaning of Section 414(b) and (c) of
the IRC.


 


“ERISA Event” means, with respect to any Loan
Party or any ERISA Affiliate, (a) any event described in Section 4043(c) of
ERISA with respect to a Title IV Plan; (b) the withdrawal of any Loan
Party or ERISA Affiliate from a Title IV Plan subject to Section 4063 of 


 


17

















 


ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Loan Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate
a Title IV Plan or the treatment of a plan amendment as a termination under Section 4041
of ERISA; (e) the institution of proceedings to terminate a Title IV Plan
or Multiemployer Plan by the PBGC; (f) the failure by any Loan Party or
ERISA Affiliate to make when due required contributions to a Multiemployer Plan
or Title IV Plan unless such failure is cured within 30 days; (g) any
other event or condition that might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of
ERISA; (h) the termination of a Multiemployer Plan under Section 4041A
of ERISA or the reorganization or insolvency of a Multiemployer Plan under Section 4241
or 4245 of ERISA; or (i) the loss of a Title IV Plan’s qualification or
tax exempt status; or (j) the termination of a Plan described in Section 4064
of ERISA.


 


“Estimated Remaining Proceeds” means the
aggregate gross remaining cash proceeds (in US Dollar Equivalents) which any US
Loan Party (excluding Holdings) anticipates to receive from each Eligible Asset
Pool (excluding, for the avoidance of doubt, any amounts to be distributed to
Persons from whom Asset Pools are purchased pursuant to sharing arrangements),
which Estimated Remaining Proceeds shall be determined and reported by US Loan
Parties to Agent in each Borrowing Base Certificate and other reporting to
Agent and Lenders and calculated by US Loan Parties in a manner consistent with
past practice and consistent with US Borrower’s proprietary models; provided,
however, that each US Loan Party shall provide such other information
relating to the assumptions and method of such calculations as Agent may
reasonably request (and Agent shall promptly thereafter provide such
information to the Lenders).  Any
deviation from the current (i.e., as of the Closing Date) credit criteria,
method and assumptions used in computing Estimated Remaining Proceeds must be
acceptable to Agent in its sole and absolute discretion.


 


“Event of Default” has the meaning assigned to
that term in subsection 8.1.


 


“Excess Interest” has the meaning assigned to
that term in subsection 2.2(C).


 


“Excluded Taxes” has the meaning assigned to
that term in subsection 2.9(A).


 


“Executive Officer” means the following
officers of Holdings or any Borrower: Chairman, President, Chief Executive
Officer, Chief Financial Officer, General Counsel and any Executive Vice
President and, to the extent such Borrower is a limited liability company, any
Manager thereof.


 


“Executive Order No. 13224” means the
Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001, as the same has been, or shall hereafter be, renewed, extended, amended
or replaced.


 


“Existing Credit Agreement” means that certain
Amended and Restated Credit Agreement dated as of November 21, 2006 by and
among US Borrower, Astrum, Canadian Borrower, the other loan parties party
thereto, Freeport Financial LLC, GMAC CF, ING Capital 


 


18

















 


LLC, Fifth Third Bank and the other lenders party
thereto (as amended, restated, supplemented or otherwise modified prior to the
Closing Date).


 


“Federal Funds Effective Rate” means, for any
day, the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers,
as published on the immediately following Business Day by the Board of
Governors of the Federal Reserve System as the Federal Funds Rate or Federal
Reserve Statistical Release H.15(519) entitled “Selected Interest Rates” or any
successor publication of the Federal Reserve System reporting the Federal Funds
Effective Rate or its equivalent or, if such rate is not published for any
Business Day, the average of the quotations for the day of the requested Loan
received by Agent from three Federal funds brokers of recognized standing
selected by Agent.


 


“Fee Letter” has the meaning assigned to that
term in subsection 2.3(D).


 


“Field Review” has the meaning assigned to that
term in subsection 5.11.


 


“Financial Covenants Rider” means Rider B
attached to this Agreement and made a part hereof.


 


“Financial Statements” means the consolidated
income statements, statements of cash flows and balance sheets of US Borrower
and its Subsidiaries delivered to Agent, Canadian Agent or any Lender (x) prior
to the Closing Date in connection with the Related Transactions contemplated by
this Agreement and the other Loan Documents, and (y) on or after the
Closing Date in accordance with the Reporting Rider.


 


“Fiscal Month” means any of the monthly
accounting periods of US Borrower of each Fiscal Year.


 


“Fiscal Quarter” means any of the quarterly
accounting periods of US Borrower, ending on March 31, June 30, September 30
and December 31 of each year.


 


“Fiscal Year” means each twelve (12) month
period ending on the last day of December in each year.


 


“Foreign Lender” has the meaning assigned to
that term in subsection 2.9(C)(2).


 


“Foreign Subsidiary” means any Subsidiary
formed under the laws of a jurisdiction outside of the United States of
America.


 


“Franchisee” or “Franchisees” means
those Person(s) who have entered into Franchising Contracts.


 


“Franchisee Program Reserve” means as of any
date the Borrowing Base Certificate is delivered, the aggregate amount owed to
Franchisees in connection with investments made in pools of Receivables by
Franchisees, which amount shall be calculated in accordance with Schedule
1.1 hereto.


 


19

















 


“Franchising Contracts” means all contracts
pursuant to which a Borrower grants to any other Person any right, license or
right to license, option or right of first refusal or negotiation to operate
franchises and businesses using any of Borrower’s Intellectual Property.


 


“Funding Date” means the date of each funding
of a Loan or issuance of a Lender Letter of Credit.


 


“GAAP” means, with respect to any US Loan
Party, generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board that are applicable to the circumstances as of the
date of determination, and with respect to any Canadian Loan Party, generally
accepted accounting principles in Canada.


 


“GMAC CF” has the meaning assigned to it in the
introductory paragraph of this Agreement.


 


“Governmental Authority” means any federal,
provincial, state or municipal court or other governmental department,
commission, board, bureau, agency or instrumentality, governmental or
quasi-governmental, domestic or foreign.


 


“Guaranteed Indebtedness” means, as to any
Person, any obligation of such Person guaranteeing, providing comfort or
otherwise supporting any Indebtedness, lease, dividend, or other obligation (“primary
obligation”) of any other Person (the “primary obligor”) in any manner,
including any obligation or arrangement of such Person to (a) purchase or
repurchase any such primary obligation, (b) advance or supply funds (i) for
the purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, (d) protect
the beneficiary of such arrangement from loss (other than product warranties
given in the ordinary course of business) or (e) indemnify the owner of
such primary obligation against loss in respect thereof.  The amount of any Guaranteed Indebtedness at
any time shall be deemed to be an amount equal to the lesser at such time of (x) the
stated or determinable amount of the primary obligation in respect of which
such Guaranteed Indebtedness is incurred and (y) the maximum amount for
which such Person may be liable pursuant to the terms of the instrument
embodying such Guaranteed Indebtedness, or, if not stated or determinable, the
maximum reasonably anticipated liability (assuming full performance) in respect
thereof.


 


“Guarantors” means Holdings, each direct or
indirect Subsidiary of Holdings (other than Canadian Borrower, Astrum, CA
Marketing and Collect Air), and each other Person, if any, that executes a
guaranty or other similar agreement in favor of Agent for the benefit of Agent,
Canadian Agent, Issuing Lenders and Lenders, in connection with the
transactions contemplated by this Agreement and the other Loan Documents.


 


20

















 


“Hazardous Material” means all or any of the
following: (a) substances that are defined or listed in, or otherwise
classified pursuant to, any Environmental Laws or regulations as “hazardous
substances”, “hazardous materials”, “hazardous wastes”, “toxic substances” or
any other formulation intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, or toxicity; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources; (c) any
flammable substances or explosives or any radioactive materials; and (d) asbestos
in any form or electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls.


 


“Holdings” has the meaning ascribed to it in
the recitals to this Agreement.


 


“Indebtedness”, as applied to any Person, means
without duplication: (a) all indebtedness for borrowed money; (b) with
respect to Capital Leases, the amount of the obligations under such leases
which in accordance with GAAP would appear on the balance sheet of such lessee
in respect of such Capital Leases; (c) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (d) to the extent classified as debt in accordance with
GAAP, any obligation owed for all or any part of the deferred purchase price of
property or services if the purchase price is due six (6) months or more
from the date the obligation is incurred or is evidenced by a note or similar
written instrument; (e) all Indebtedness secured by any Lien on any
property or asset owned by that Person regardless of whether the Indebtedness
secured thereby shall have been assumed by that Person or is non-recourse to
the credit of that Person; (f) obligations in respect of letters of credit
or similar instruments; (g) all obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter
the risks of that Person arising from fluctuations in currency values or
interest rates; (h) “earnouts” and similar payment obligations (excluding,
however, sharing arrangements with Persons from whom Asset Pools are
purchased); (i) any advances under any factoring arrangement; and (j) all
guarantees by such Person of Indebtedness of others.


 


“Indemnitees” has the meaning assigned to that
term in subsection 11.2.


 


“Indenture” means that certain Indenture dated
as of April 7, 2010 between US Borrower and U.S. Bank National Association,  as trustee, as amended, restated, supplemented or otherwise
modified from time to time.


 


“Independent Determination Report” has the
meaning assigned to that term in subsection 5.11.


 


“Initial Funding Date” has the meaning assigned
to that term in Section 3.


 


“Insolvency Law” means any of the Bankruptcy
Code, the Bankruptcy and Insolvency Act (Canada), the Winding-Up and
Restructuring Act (Canada) and the Companies’ Creditors Arrangement Act
(Canada), each as now and hereafter in effect, any successors to such statutes
and any other applicable insolvency or other similar law of any jurisdiction
including, 


 


21

















 


without limitation, any law of any jurisdiction
permitting a debtor to obtain a stay or a compromise of the claims of its
creditors against it.


 


“Institutional Investors” means each of Goldman
Sachs Group, Inc., Apollo Investment Corporation, Credit Suisse, DLJ
Investment Partners, LP, DLJ Investment Partners II, LP, DLJIP II Holdings,
L.P., Norwest Mezzanine Partners II, L.P., Hexagon Investments, LLC, CMS/KRG
Collect America Partners, L.P. and each of their Affiliates.


 


“Intellectual Property” means, collectively,
all: Copyrights, Patents and Trademarks (including, without limitation, the
eAGLE Software).


 


“Intercompany Debt” has the meaning assigned to
that term in subsection 11.20(A).


 


“Intercreditor Agreement” means that certain
Intercreditor Agreement dated as of April 7, 2010 between GMAC CF as
Senior Agent and U.S. Bank National Association as Trustee, as amended,
restated, supplemented or otherwise modified pursuant to the terms thereof.


 


“Interest Period” means, in connection with
each LIBOR Loan, an interest period which Borrowing Agent shall elect to be
applicable to such Loan, which Interest Period shall be (subject to Lender
availability) either a one (1), two (2), three (3), six (6), nine (9) or
twelve (12) month period; provided that:


 


(1)           the
initial Interest Period for any LIBOR Loan shall commence on the Funding Date
of such Loan;


 


(2)           in
the case of successive Interest Periods, each successive Interest Period shall
commence on the day on which the immediately preceding Interest Period expires;


 


(3)           if
an Interest Period expiration date is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day; provided that if any
Interest Period expiration date is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the immediately preceding Business Day;


 


(4)           any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to part (5) below, end
on the last Business Day of a calendar month;


 


(5)           no
Interest Period shall extend beyond the Termination Date;


 


(6)           no
Interest Period may extend beyond a scheduled principal payment date of any
Loan, unless the aggregate principal amount of such Loan that is a Base Rate
Loan or that has Interest Periods expiring on or before such scheduled
principal payment date equals or exceeds the principal amount required to be
paid on such Loan on such scheduled principal payment date; and


 


22

















 


(7)           there
shall be no more than six (6) Interest Periods relating to LIBOR Loans
outstanding at any time.


 


“Interest Rate” has the meaning assigned to
that term in subsection 2.2(A)(ii).


 


“Interest Ratio” has the meaning assigned to
that term in subsection 9.12(A)(4)(d).


 


“Interest Rate Agreement” means any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement or similar agreement or arrangement designed to protect a Borrower
against fluctuations in interest rates with respect to the Loans, so long as
the purpose of any such agreement is a bona fide hedging activity (and is not
for speculative purposes).


 


“Interest Rate Agreement Reserve” the amount
that would be payable to Agent, Canadian Agent or any Lender (or Affiliate
thereof) upon termination of any Interest Rate Agreement, including amounts
that would be payable to any Person who was Agent, Canadian Agent, a Lender or
an Affiliate thereof at the time such Interest Rate Agreement was entered into.


 


“Interest Settlement Date” has the meaning
assigned to that term in subsection 9.12(A)(5).


 


“Investment” means (i) any direct or
indirect purchase or other acquisition by a Loan Party or any of its
Subsidiaries of any Stock, or other ownership interest in, any other Person,
and (ii) any direct or indirect loan (including guarantees of Indebtedness
or other obligations), advance or capital contribution, purchase or other
acquisition for consideration of Indebtedness, Stock or other securities,
together with all items that would be classified as investments on a balance
sheet prepared in accordance with GAAP by a Loan Party or any of its
Subsidiaries to any other Person excluding Assets and deposits arising in the
ordinary course of business and any extension of trade credit in the ordinary
course of business.


 


“IRC” means the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.


 


“IRS” has the meaning assigned to that term in
subsection 4.9(a).


 


“Issuing Lender” means (i) in the case of
any US Lender Letter of Credit, the US Letter of Credit Issuer and (ii) in
the case of any Canadian Lender Letter of Credit, the Canadian Letter of Credit
Issuer.


 


“ITA” means the Income Tax Act (Canada), as the
same may be amended from time to time, in effect.


 


“Judgment Currency” has the meaning assigned to
that term in subsection 10.14.


 


“Judgment Reserve” means the amount of any
money judgments, writs or warrants of attachment, or similar process with
respect to which the appropriate Loan Party has 


 


23

















 


notified the insurance company but for which the
insurance company has not affirmatively acknowledged coverage within thirty
(30) days of receiving such notice.


 


“Lender” and “Lenders” have the meanings
ascribed to such terms in the preamble to this Agreement and shall include each
Person which becomes a transferee, successor or assignor of any Lender.


 


“Lender Letter of Credit” means, individually,
a Canadian Lender Letter of Credit or a US Lender Letter of Credit and
collectively, the Canadian Lender Letters of Credit and the US Lender Letters
of Credit.


 


“Letter of Credit Liability” means the US
Letter of Credit Liability and the Canadian Letter of Credit Liability.


 


“Letter of Credit Reserve” means, at any time,
an amount equal to (a) the aggregate US Dollar Equivalent of the amount of
Letter of Credit Liability with respect to all Lender Letters of Credit
outstanding at such time plus, without duplication, (b) the aggregate
amount theretofore paid under Lender Letters of Credit and not debited to the
US Revolving Loan pursuant to subsection 2.1(F)(2) or the US Dollar
Equivalent of the Canadian Revolving Loan pursuant to subsection 2.1(G)(2) or
otherwise reimbursed by Borrowers.


 


“Letter of Non-Exemption” has the meaning
assigned to that term in subsection 2.9(C)(2).


 


“Liabilities” shall have the meaning given that
term in accordance with GAAP and shall include, without limitation, Indebtedness.


 


“LIBOR” means, for each Interest Period, a rate
per annum equal to:


 


(1)           the
greater of (x) two percent (2.00%) and (y) the offered rate for
deposits in Dollars in an amount comparable to the amount of the applicable
Loan in the London interbank market for the relevant Interest Period which is
published by the British Bankers’ Association and currently appears on the
Telerate Page 3750 as of 11:00 a.m. (London time) on the day which is
two (2) Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, that
if such a rate ceases to be available to Agent on that or any other source from
the British Bankers’ Association, LIBOR shall be equal to a rate per annum
equal to the average rate (rounded upwards, if necessary, to the nearest 1/100
of 1%) at which Agent determines that Dollars in an amount comparable to the
amount of the applicable Loans are being offered to prime banks at
approximately 11:00 a.m. (London time) on the day which is two (2) Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period for settlement in immediately available funds by leading
banks in the London interbank market selected by Agent; divided by


 


(2)           a
number equal to one (1.0) minus the maximum reserve percentages (expressed as a
decimal fraction) (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as “Eurocurrency 


 


24

















 


Liabilities” in Regulation D of such Board) which are
required to be maintained by any Lender by the Board of Governors of the
Federal Reserve System; such rate to be rounded upward to the next whole
multiple of one-sixteenth of one percent (0.0625%).  LIBOR shall be adjusted automatically on and
as of the effective date of any change in any such reserve percentage.


 


“LIBOR Breakage Costs” means an amount equal to
the amount of any losses, expenses, liabilities (including, without limitation,
any loss (including interest paid) and additional amounts, if any, consisting
of the present value of the difference between LIBOR in effect for the relevant
Interest Period and any lower LIBOR in effect at the time of prepayment for the
remainder of that Interest Period in connection with the re-employment of such
funds) that any Lender sustains as a result of (i) any default by US
Borrower in making any borrowing of, conversion into or continuation of any
LIBOR Loan following Borrowing Agent’s delivery to Agent of a Notice of Borrowing
in respect thereof or (ii) any payment of a LIBOR Loan on any day that is
not the last day of the Interest Period applicable thereto (regardless of the
source of such prepayment and whether voluntary, by acceleration or
otherwise).  The assumptions set forth in
subsection 2.14 shall be utilized in calculating LIBOR Breakage Costs.


 


“LIBOR Loans” means at any time that portion of
the Loans bearing interest at rates determined by reference to LIBOR.


 


“Lien” means any lien (statutory or otherwise),
mortgage, deed of trust, pledge, security interest, charge, hypothec, trust
claim, adverse claim or encumbrance of any kind, whether or not filed, recorded
or otherwise perfected under applicable law, or voluntary or involuntary
(including any conditional sale or other title retention agreement, any lease
having the same economic effect as any of the foregoing, and any option or
other agreement to sell or grant a security interest and any filing of or
agreement to permit the filing of any financing statement under the UCC,
Canadian PPSL or equivalent statutes of any jurisdiction).


 


“Light Users” means those attorneys retained by
a Loan Party to collect an account through legal action.


 


“Loan” or “Loans” means an advance or
advances under the Swingline Loan or the Revolving Loan Commitment.


 


“Loan Documents” means this Agreement, the
Security Agreements, the Pledge Agreements, the Notes, if any, the
Intercreditor Agreement, the Fee Letter, Interest Rate Agreements, the
Cargill Intercreditor Agreement, any Application, all other documents,
instruments and agreements executed by or on behalf of any Loan Party and
delivered concurrently herewith or at any time hereafter to or for Agent,
Canadian Agent or any Lender in connection with the Loans and any Lender Letter
of Credit, all as amended, restated, supplemented or modified from time to
time.  Any reference in this Agreement or
any other Loan Document to a Loan Document shall include all appendices,
exhibits or schedules thereto, and all amendments, restatements, supplements or
other modifications thereto, and shall refer to this Agreement or such other
Loan Document as the same may be in effect at any and all times such reference
becomes operative.


 


25

















 


“Loan Parties” means Holdings, Borrowers and
each other Person (i) which executes or joins this Agreement as a “Loan
Party,” (ii) which executes or joins a Guaranty or (iii) which grants
a Lien on all or substantially all of its assets to secure payment of any of
the Obligations.


 


“Management Services Agreement” means that
certain Management Agreement dated as of the August 5, 2005 among KRG
Capital Management, L.P., Holdings and US Borrower, as in effect on August 5,
2005, as amended from time to time in accordance with the provisions herein.


 


“Material Adverse Effect” means a material
adverse effect on (a) the business, assets, operations, properties or
financial condition of the Loan Parties taken as a whole, (b) the ability
of the Loan Parties, taken as a whole, to perform their obligations under any
Loan Document to which they are a party, (c) the Collateral or Agent’s
Liens, on behalf of Agent, Canadian Agent, Issuing Lenders and Lenders, on
the Collateral or the priority of such Liens, or (d)  the ability of Agent
or any Lender to enforce or collect any of the Obligations or to exercise Agent’s
or any Lender’s aggregate rights and remedies under this Agreement and the
other Loan Documents.


 


“Maximum Commitment” means the principal amount
of $150,000,000, plus the aggregate amount of any US Borrower Revolver
Increases, as such amount may be reduced pursuant to subsection 2.4(F).


 


“Maximum Rate” has the meaning assigned to that
term in subsection 2.2(C).


 


“Maximum Revolving Loan Amount” means, as of
any date of determination, the lesser of (a) the aggregate of the US
Revolving Loan Commitments of all Lenders less the sum of the US Dollar
Equivalent of the Letter of Credit Reserve and the aggregate outstanding
principal balance of the Swingline Loan and (b) the Borrowing Base less
the sum of the US Dollar Equivalent of the Letter of Credit Reserve and the
aggregate outstanding principal balance of the Swingline Loan.


 


“Maximum Swingline Loan Amount” means at any
time the lesser of (a) $15,000,000 and (b) the amount that would cause
the Revolving Loan to exceed the Maximum Revolving Loan Amount.


 


“Multiemployer Plan” means a “multiemployer
plan” as defined in Section 4001(a)(3) of ERISA, and to which any
Loan Party or ERISA Affiliate is making or is obligated to make contributions
on behalf of participants who are or were employed by any of them or withdrawal
liability payments but, for greater certainty, does not include any Canadian
Benefit Plans or Canadian Pension Plans.


 


“Net Proceeds” means cash proceeds received by
Holdings or any of its Subsidiaries from any Asset Disposition (including
insurance proceeds, awards of condemnation, and payments under notes or other
debt securities received in connection with any Asset Disposition), net of (a) the
costs of such Asset Disposition (including taxes attributable to such sale,
lease or transfer) and any commissions and other customary transaction fees,
costs and expenses), (b) amounts applied to repayment of Indebtedness
(other than the Obligations) 


 


26

















 


secured by a Lien permitted under this Agreement on
the asset or property disposed (but only to the extent such Lien is expressly
permitted to be prior to the Lien of Agent pursuant to the terms of this
Agreement), and (c) any amounts required to be held in escrow until such
time as such amounts are released from escrow whereupon such amounts shall be
considered Net Proceeds.


 


“Note” or “Notes” means the Revolving
Notes and the Swingline Notes (in each case, if any).


 


“Notice of Borrowing” means a written notice
duly executed by an authorized representative of Borrowing Agent appropriately
completed and in the form of Exhibit G.


 


“Obligations” means all obligations,
liabilities and indebtedness of every nature of each Loan Party from time to
time owed to Agent, Canadian Agent, any Issuing Lender or to any Lender under
the Loan Documents (whether incurred before or after the Termination Date)
including, without limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or otherwise, heretofore,
now and/or from time to time hereafter owing, due or payable including, without
limitation, all obligations under Interest Rate Agreements (including amounts
owed thereunder to affiliates of Lenders and to Persons that were affiliates of
Lenders at the time any such Interest Rate Agreement was entered into), all
interest, fees, cost and expenses accrued or incurred after the filing of any
petition under any bankruptcy or insolvency law (regardless of whether allowed
or allowable in whole or in part as a claim therein).


 


“OECD” has the meaning assigned to that term in
the definition of Eligible Assignee.


 


“Original Currency” has the meaning assigned to
that term in subsection 11.23(A).


 


“Other Currency” has the meaning assigned to
that term in subsection 11.23(A).


 


“Other Cash Expenses” means expenses in an
aggregate amount during any trailing twelve (12) month period not to exceed
$2,500,000 consisting of (a) recruiting expenses that are incurred by any
Borrower or any of its Subsidiaries during such period, (b) lease breakage
costs associated with any Loan Party’s relocation to a new office, (c) severance
and related expenses that are incurred by any Borrower or any of its
Subsidiaries during such period, (d) reserves on franchise notes
receivable, (e) transaction expenses associated with any Permitted
Disposition, and (f) to the extent acceptable to Agent, other
non-recurring expenses.


 


“Paid in Full” and “Payment in Full”
means (i) the payment in full in cash of all Obligations other than (a) contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted and (b) obligations under Interest Rate Agreements constituting
Obligations to the extent that such obligations are not then due and payable, (ii) the
termination or expiration of all of the Revolving Loan Commitments, and (iii) either
(A) the cancellation and return to Agent of all Lender Letters of Credit
or (B) the collateralization of all Lender Letters of Credit consistent
with the cash collateralization provisions set forth in subsection 2.4(C) without
any claims threatened by any Loan Party.


 


27














 


“Patents” means collectively all of the
following:  (a) all patents and
patent applications including, without limitation, those listed on any schedule
to any Security Agreement and the inventions and improvements described and
claimed therein, and patentable inventions; (b) the reissues, divisions,
continuations, renewals, extensions and continuations-in-part of any of the
foregoing; (c) all income, royalties, damages and payments now or
hereafter due and/or payable under any of the foregoing or with respect to any
of the foregoing, including, without limitation, damages and payments for past,
present and future infringements of any of the foregoing; (d) the right to
sue for past, present and future infringements of any of the foregoing; and (e) all
rights included within any of the foregoing throughout the world.


 


“PBGC” means the Pension Benefit Guaranty
Corporation.


 


“Pension Plan” means a Plan described in Section 3(2) of
ERISA but does not include any Canadian Pension Plan.


 


“Permitted Business” means the purchase, management, collection and sale of charged-off,
delinquent or distressed receivables, loans or other obligations and any
business that is reasonably ancillary, incidental or related thereto, including
any development or expansion thereof, in each case as determined in good faith
by an officer of Borrowing Agent.


 


“Permitted Dispositions” means (a) the
sale, liquidation, wind-up or dissolution (each, a “Disposition”) of any
Subsidiary (or its assets) of Holdings; provided, that (i) no Event
of Default shall have occurred and be continuing at the time of, or after
giving effect to, such Disposition, and (ii) each Subsidiary subject to
such Disposition shall not have had Adjusted EBITDA on a stand-alone basis of
more than $2,500,000 for the immediately preceding Fiscal Year, (iii) Borrowing
Agent shall provide Agent written notice of such Disposition at least ten (10) Business
Days prior to such Disposition and (iv) the documentation governing such
Disposition shall be delivered to Agent at least ten (10) Business Days
prior to such Disposition and such documentation shall be in form and substance
reasonably acceptable to Agent or (b) Dispositions in connection with a
sale and leaseback transactions permitted by subsection 7.18.


 


“Permitted Encumbrances” means the following
types of Liens: (a) Liens (other than Liens relating to Environmental
Liabilities or ERISA) for taxes, assessments or other governmental charges not
yet due and payable or being contested in good faith and by appropriate
proceedings, excluding Liens in favor of the PBGC under ERISA and Liens which
by operation of law rank in priority senior to secured creditors’ Liens; (b) statutory
Liens of landlords, carriers, warehousemen, mechanics, materialmen and other
similar liens imposed by law, which are incurred in the ordinary course of
business for sums not more than thirty (30) days delinquent, or which are being
contested in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or asset subject to
such Lien; (c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security,
statutory obligations, trust accounts, surety and appeal bonds, license bonds,
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money); (d) easements, rights-of-way,
restrictions, and other similar charges or encumbrances not interfering in any
material respect with the ordinary conduct of the business of any Loan 


 


28

















 


Party or any of its Subsidiaries; (e) Liens for
purchase money obligations, provided that (i) the purchase of the
asset subject to any such Lien is permitted under Item B of the Financial
Covenants Rider, (ii) the Indebtedness secured by any such Lien is
permitted under subsection 7.1, and (iii) such Lien encumbers only the
asset so purchased; (f) Liens in favor of Agent, on behalf of itself and
Canadian Agent, Issuing Lenders and Lenders, (g) Liens set forth on Schedule
7.3(B); (h) Liens created pursuant to or in connection with leases or
Capital Leases permitted pursuant to this Agreement, provided that (1) such
Liens only serve to secure the payment of rent or Indebtedness arising under
such leases or Capital Leases and (2) the Liens encumbering the assets
leased or purported to be leased under such leases or Capital Leases do not
encumber any other assets of Holdings or any of its Subsidiaries (other than
letters of credit, payment undertaking agreements, guaranteed investment
contracts, deposits of cash or Cash Equivalents and other credit support
arrangements, in each case having an aggregate value not exceeding the fair
market value of the assets leased or purported to be leased under such leases
or Capital Leases (each of such values determined at the time when the lease
agreement relating to the relevant lease or Capital Lease is signed and
delivered)); (i) Liens arising from precautionary UCC or Canadian PPSL
financing statements regarding operating leases; (j) licenses,
sublicenses, leases or subleases granted to third Persons in the ordinary
course of business not interfering in any material respect with the business of
Holdings or any of its Subsidiaries; (k) rights of setoff upon deposits of
cash in favor of banks or other depository institutions as permitted by any
Control Agreement or, with respect to deposits of cash not subject to a Control
Agreement, customary rights of setoff in favor of such banks or depository
institutions; (l) Liens arising from judgments, decrees, awards or
attachments in circumstances not constituting an Event of Default; (m) Liens
securing Indebtedness or leases that refinance, refund, extend, renew and/or
replace Indebtedness or leases secured by Liens described in clauses (e), (f), (g) or
(h) above, as long as such Indebtedness is permitted hereunder; (n) the
Cargill Liens; (o) Liens under the Second Lien Debt Documents to the
extent permitted under the Intercreditor Agreement; (p) Liens on
Receivables deemed to exist pursuant to agreements whereby the Asset Pool
Seller of such Receivables retains the right to repurchase such Receivables so
long as the price for such repurchase is at least equal to the purchase price
paid to such Asset Pool Seller for such Receivable; (q) Liens arising from
the sale of Accounts, Payment Intangibles or Promissory Notes to the extent (i) such
sale is permitted pursuant to subsection 7.3 and (ii) such Liens relate
only to the assets that were the subject of such sale and are no longer owned
by any Loan Party; and (r) the pre-filing of any financing statements in
connection with (but in no event filed earlier than thirty (30) days prior to)
a refinancing of the Obligations; provided that no security agreement,
or Lien pursuant to such security agreement, in each case relating to such
financing statements becomes effective prior to the Payment in Full of the
Obligations, and provided  further that Agent shall have the right
to terminate such financing statements in the event that such refinancing of
the Obligations does not occur within thirty (30) days of filing.


 


“Person” means and includes natural persons,
corporations, limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.


 


29

















 


“Plan” means, at any time, an “employee benefit
plan,” as defined in Section 3(3) of ERISA that any Loan Party
maintains on behalf of participants who are or were employed by any Loan Party,
but excluding any Multiemployer Plan, Canadian Benefit Plan or Canadian Pension
Plan.


 


“Pledge Agreements” means the US Pledge
Agreement and any other pledge agreement entered into by any Loan Party in
respect of the Obligations.


 


“Pro Forma” means the unaudited consolidated
balance sheet of US Borrower and its Subsidiaries based on the unaudited
consolidated balance sheet of US Borrower and its Subsidiaries dated December 31,
2009 after giving effect to the transactions contemplated by this
Agreement.  The Pro Forma is attached to Schedule
4.4 hereto.


 


“Pro Rata Share” means with respect to all
matters relating to any Lender (a) with respect to the US Revolving Loan
or the US Revolving Loan Commitments, the percentage obtained by dividing (i) the
US Revolving Loan Commitment of that Lender by (ii) the aggregate US
Revolving Loan Commitments of all Lenders, (b) with respect to the
Canadian Revolving Loan or the Canadian Revolving Loan Commitments, the
percentage obtained by dividing (i) the Canadian Revolving Loan Commitment
of that Lender by (ii) the aggregate Canadian Revolving Loan Commitments
of all Lenders, (c) with respect to all Loans prior to the Termination
Date, the percentage obtained by dividing (i) the aggregate US Dollar
Equivalent of the US Revolving Loan Commitment of that Lender by (ii) the
aggregate US Dollar Equivalent of all US Revolving Loan Commitments of all
Lenders, and (d) with respect to all Loans on and after the Termination
Date, the percentage obtained by dividing (i) the aggregate US Dollar
Equivalent of the outstanding principal balance of the Loans held by that
Lender, by (ii) the outstanding US Dollar Equivalent principal balance of
the Loans held by all Lenders, as any such percentages may be adjusted by
assignments pursuant to subsection 9.9. Each Lender shall at all times hold the
same Pro Rata Share of the US Revolving Loan Commitments, the US Revolving
Loan, the Canadian Revolving Loan Commitments and the Canadian Revolving Loan.


 


“Projections” means US Borrower and its
Subsidiaries’ forecasted consolidated:  (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; (d) Revolving
Loan availability, all prepared consistent with US Borrower’s historical
Financial Statements and based upon good faith estimates and assumptions by
Borrowers believed to be reasonable at the time made, together with appropriate
supporting details and a statement of underlying assumptions.


 


“Qualified Plan” means a Pension Plan that is
intended to be tax-qualified under Section 401(a) of the IRC that is
maintained by any Loan Party or ERISA Affiliate.


 


“Reallocation Event” means (i) an acceleration
of the Loans, (ii) the occurrence and continuation of an Event of Default
under subsections 8.1(A), (G) or (H) or (iii) the sale,
liquidation or other realization on a material portion of the Collateral
(through a single disposition or a series of related dispositions) by Agent or
by any Loan Party at the direction of Agent upon the occurrence and during the
continuation of an Event of Default.


 


30

















 


“Receivable(s)” shall mean a purchased account
or accounts in the name of an Account Debtor, as set forth and described in a
purchase agreement between any Loan Party (other than Holdings) and any Asset
Pool Seller for the purchase of an Asset Pool, and all unpaid balances due from
such Account Debtor, together with (to the extent available) all documents
evidencing such Account Debtor’s agreement to make payment of such unpaid
balances, including, without limitation, each credit card application or
agreement, and each promissory note, receivable, obligation, chattel paper,
payment agreement, contract, installment sale agreement or other obligation or
promise to pay of an Account Debtor, all as described and referred to in such
purchase agreement.


 


“ReFinance America” means ReFinance America, Ltd.,
a corporation organized under the laws of the state of Nevada.


 


“Register” has the meaning assigned to that
term in subsection 9.9(E).


 


“Related Fund” has the meaning assigned to that
term in subsection 9.9(D).


 


“Related Transactions” means the initial
borrowing under the Revolving Loan on the Closing Date, the issuance of the
Second Lien Notes, the payment of all fees, costs and expenses associated with
all of the foregoing and the execution and delivery of all of the Loan
Documents and the Second Lien Debt Documents.


 


“Release” has the meaning set forth in CERCLA,
42 USC § 9601.


 


“Rent Reserve” means, at all times that there
is no landlord’s agreement in effect with respect to US Borrower’s chief
executive office, an amount equal to three (3) months’ rent under the
lease with respect to the US Borrower’s chief executive office.


 


“Replacement Lender” has the meaning assigned
to that term in subsection 2.11(A).


 


“Report” has the meaning assigned to that term
in subsection 9.4.


 


“Reporting Rider” means Rider A attached to
this Agreement and made a part hereof.


 


“Requisite Lenders” means Lenders (other than a
Defaulting Lender-Payment) having (a) more than 50% of the US Revolving
Loan Commitments of all Lenders (other than Defaulting Lenders-Payment) based
on the US Dollar Equivalent of such US Revolving Loan  Commitments, or (b) if the Revolving
Loan Commitments have been terminated, more than 50% of the aggregate
outstanding principal amount of the Loans and participation interests in the
Letter of Credit Liability based on the US Dollar Equivalent of such amounts.


 


“Restricted Payment” means, with respect to any
Loan Party (a) the declaration or payment of any dividend or the
incurrence of any liability to make any other payment or distribution of cash
or other property or assets in respect of Stock (other than non cash dividends
or other non cash distributions in the form of additional Stock issued by such
Loan Party to the extent such issuance is not prohibited hereunder); (b) any
payment on account of the purchase, 


 


31

















 


redemption, defeasance, sinking fund or other
retirement of such Loan Party’s Stock or any other payment or distribution made
in respect thereof, either directly or indirectly; (c) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Loan
Party now or hereafter outstanding (other than cashless exercises of warrants,
options or other similar rights not resulting in the incurrence of
Indebtedness); (d) any payment of a claim for the rescission of the
purchase or sale of, or for material damages arising from the purchase or sale
of, any shares of such Loan Party’s Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (e) any payment, loan, contribution, or other
transfer of funds or other property to any Stockholder of such Loan Party other
than payment of compensation in the ordinary course of business to Stockholders
who are employees of such Loan Party and other than payments to Franchisees
under the Franchising Contracts in the ordinary course of business and
consistent with past practices; and (f) any prepayment of the obligations
under the Second Lien Notes except as permitted under the Intercreditor
Agreement or hereunder.


 


“Revolving Advances” means, as the context may
require, Canadian Revolving Advances and/or US Revolving Advances.


 


“Revolving Loan” means the Canadian Revolving
Loan and the US Revolving Loan.


 


“Revolving Loan Commitment” means the Canadian
Revolving Loan Commitment and the US Revolving Loan Commitment.


 


“Revolving Notes” means Canadian Revolving
Notes and US Revolving Notes.


 


“Second Lien Debt” means all Indebtedness of US
Borrower evidenced by the Second Lien Debt Documents and any other Indebtedness
of any Loan Party secured by a Lien that is subordinated to the Lien of Agent
hereunder securing the Obligations to the extent such Indebtedness is permitted
under the Intercreditor Agreement.


 


“Second Lien Debt Documents” means the
Indenture, the Second Lien Notes and any other agreements or documents executed
in connection therewith.


 


“Second Lien Notes” means those certain 11.625%
Senior Secured Notes due April, 2017 issued by US Borrower in an aggregate
principal amount of $290,000,000 pursuant to the Indenture.


 


“Security Agreements” means the US Security
Agreement, the Canadian Agreement and any other security agreement entered into
by any Loan Party in respect of any of the Obligations.


 


“Settlement Date” has the meaning assigned to
that term in subsection 9.12(A)(3).


 


“Solvent” means, with respect to (a) any
Person that is subject to any Insolvency Law of the United States of America on
a particular date, that on such date (i) the fair value of the property of
such Person is greater than the total amount of liabilities, including
subordinated 


 


32

















 


and contingent liabilities, of such Person; (ii) the
present fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts and liabilities, including subordinated and contingent liabilities as
they become absolute and matured; (iii) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature; and (iv) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person’s property would constitute
an unreasonably small capital; and (b) any Person that is subject to any
Canadian Insolvency Law on a particular date, that on such date (i) the
aggregate property of such Person is sufficient at a fair valuation or, if
disposed of at a fairly conducted sale under legal process, to enable payment
of all its obligations, due and accruing due, (ii) such Person has not
ceased paying its current obligations in the ordinary course of business as
they generally become due; (iii) such Person is not for any reason unable
to meet its obligations as they generally become due; and (iv) such Person
has not committed an act of bankruptcy or admitted its insolvency.  The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that would reasonably be expected
to become an actual or matured liability.


 


“Sponsor” means KRG Capital Fund II, L.P., KRG
Capital Fund II (FF), L.P., KRG Capital Fund II (PA), L.P., KRG Co-Investment,
LLC and any of their Affiliates which they “control” (as defined in the
definition of Affiliate).


 


“SPV” has the meaning assigned to that term in
subsection 9.9(A).


 


“STA” means the Securities Transfer Act, 2006
(Ontario), as such legislation may be amended from time to time.


 


“Statement” has the meaning assigned to that
term in item 1 of the Reporting Rider.


 


“Stock” means all shares, options, warrants,
general or limited partnership interests, membership interests or other
equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity whether voting or nonvoting,
including common stock, preferred stock or any other “equity security” (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the Commission under the Securities Exchange Act of 1934, as
amended).


 


“Stockholder” means, with respect to any
Person, each holder of Stock of such Person.


 


“Subsidiary” means, with respect to any Person,
any corporation, association or other business entity of which more than fifty
percent (50%) of the total voting power of shares of Stock (or equivalent
ownership or controlling interest) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other subsidiaries of that Person or a combination
thereof.  Unless otherwise specified
herein, the 


 


33

















 


term “Subsidiary” shall refer to Holdings’ direct and
indirect Subsidiaries (excluding Astrum, CA Marketing and Collect Air).


 


“Supermajority Lenders” means Lenders (other
than Defaulting Lenders- Payment) having (a) 80% or more of the US
Revolving Loan Commitments of all Lenders (other than Defaulting
Lenders-Payment), or (b) if the Revolving Loan Commitments have been
terminated, 80% or more of the aggregate outstanding amount of the Revolving
Loan.


 


“Swingline Advance” means each US Revolving
Advance converted by Agent into an advance under the Swingline Loan pursuant to
subsection 2.1(C).


 


“Swingline Lender” means GMAC CF, or if GMAC CF
shall resign as Swingline Lender, another Lender approved pursuant to
subsection 9.14. Unless the context requires otherwise, the Swingline Lender is
a Lender for all purposes under this Agreement.


 


“Swingline Loan” means the outstanding balance
of all Swingline Advances and any amounts added to the principal balance of the
Swingline Loan pursuant to this Agreement.


 


“Swingline Note” means the promissory note of
US Borrower in substantially the form of Exhibit F, issued to
evidence the Swingline Loan (if any).


 


“Tax” or “Taxes” has the meaning
assigned to that term in subsection 10.1(a).


 


“Tax Distribution” means U.S. federal and state
income tax refunds related to the 2006 and 2007 Fiscal Years received by any
Loan Party.


 


“Tax Liabilities” has the meaning assigned to
that term in subsection 2.9(A).


 


“Termination Date” has the meaning assigned to
that term in subsection 2.5.


 


“Title IV Plan” means a “pension plan” as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan),
that is covered by Title IV of ERISA or Section 412 of the IRC, and that
any Loan Party or ERISA Affiliate maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by any of them.


 


“Trademarks” means collectively all of the
following: (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos, other business identifiers, prints and labels on which any of the
foregoing have appeared or appear, all registrations and recordings thereof,
and all applications in connection therewith including, without limitation,
those listed on any schedule to any Security Agreement; (b) all renewals
thereof; (c) all income, royalties, damages and payments now or hereafter
due and/or payable under any of the foregoing or with respect to any of the
foregoing including damages and payments for past, present and future
infringements of any of the foregoing; (d) the right to sue for past,
present and future infringements of any of the foregoing; (e) all rights
included in any of the foregoing throughout the world; and (f) all
goodwill associated with and symbolized by any of the foregoing.  Notwithstanding the foregoing, “Trademarks”
shall not include any “intent to use” trademark applications for which a 


 


34

















 


statement of use has not been filed (but the foregoing
exclusion shall apply only until such statement is filed).


 


“Trading with the Enemy Act” means the foreign
asset control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) and any enabling legislation or executive
order relating thereto.


 


“UCC” means the Uniform Commercial Code as in
effect from time to time in the State of New York; provided, however,
to the extent the law of any other state or other jurisdiction applies to the
attachment, perfection, priority or enforcement of any Lien granted to Agent in
any of the Collateral, “UCC” means the Uniform Commercial Code as in effect in
such other state or jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection, priority or enforcement of a Lien in such
Collateral; provided, further, that to the extent that the UCC is
used to define any term herein or in any Loan Document and such term is defined
differently in the Canadian PPSL with respect to Canadian PPSL Collateral, the
definition of such term contained in the Canadian PPSL (to the extent the
Canadian PPSL is applicable in the context with respect to Canadian PPSL
Collateral) shall govern.  To the extent
this Agreement defines the term “Collateral” by reference to terms used in the
UCC, each of such terms shall have the broadest meaning given to such terms
under the UCC as in effect in any state or other jurisdiction.


 


“Undrawn Availability” means an amount equal to
the Maximum Revolving Loan Amount less the US Dollar Equivalent of the
Revolving Loan.


 


“USA PATRIOT Act” means the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.


 


“US Borrower” has the meaning assigned to that
term in the preamble to this Agreement.


 


“US Borrower Increase Date” has the meaning
assigned to that term in subsection 2.16(A).


 


“US Borrower Revolver Increase” has the meaning
assigned to that term in subsection 2.16(A).


 


“US Collateral” means any and all property and
assets legally or beneficially owned by US Borrower or any other US Loan Party,
subject to certain exclusions set forth in the US Security Agreement.


 


“US Controlled Accounts” has the meaning
assigned to that term in subsection 5.12.


 


“US Dollar Equivalent” means, with respect to
any amount denominated in Dollars, such amount of Dollars, and with respect to
any amount denominated in a currency other than Dollars, the amount of Dollars,
as of any date of determination, into which such other 


 


35

















 


currency can be converted in accordance with
prevailing exchange rates, as determined by Agent in its reasonable discretion,
on the applicable date.


 


“US Guarantor” means any Guarantor that is
organized or incorporated under the laws of a jurisdiction in the United States
of America and includes US Borrower.


 


“US Indemnitees” has the meaning assigned to
that term in subsection 11.2.


 


“US Interest Rate” has the meaning assigned to
that term in subsection 2.2(A)(i).


 


“US Lender Letter of Credit” has the meaning
assigned to that term in subsection 2.1(F) and shall include all “Letters
of Credit” (as defined in the Existing Credit Agreement) outstanding under the
Existing Credit Agreement on the Closing Date.


 


“US Letter of Credit Application” has the
meaning assigned to that term in subsection 2.1(F)(3).


 


“US Letter of Credit Issuer” means U.S. Bank
National Association, or such other Lender as may be approved by Agent (such
consent not to be unreasonably withheld) to issue US Lender Letters of Credit
hereunder.


 


“US Letter of Credit Liability” means, all
reimbursement and other liabilities of any Loan Party with respect to each US
Lender Letter of Credit, whether contingent or otherwise, including: (a) the
amount available to be drawn or which may become available to be drawn; (b) all
amounts which have been paid or made available by any US Letter of Credit
Issuer or any bank issuing a Bank Letter of Credit to the extent not reimbursed
by Borrowers; and (c) all unpaid interest, fees and expenses related
thereto.


 


“US Letter of Credit Reserve” means, at any
time, an amount equal to (a) the aggregate amount of US Letter of Credit
Liability with respect to all US Lender Letters of Credit outstanding at such
time plus, without duplication, (b) the aggregate amount theretofore paid
under US Lender Letters of Credit and not debited to the US Revolving Loan
pursuant to subsection 2.1(F)(2) or otherwise reimbursed by US Borrower.


 


“US Loan Party” means any Loan Party organized
or incorporated under the laws of a jurisdiction in the United States of
America.


 


“US Loans” means the US Revolving Loans.


 


“US Maximum Revolving Loan Amount” means, as of
any date of determination, the lesser of (i) the aggregate of the US
Revolving Loan Commitments of all Lenders less the sum of (a) the US
Dollar Equivalent of the Letter of Credit Reserve and the aggregate outstanding
principal balance of the Swingline Loan and (b) the US Dollar Equivalent
of the aggregate outstanding principal balance of the Canadian Revolving Loan
and (ii) the Borrowing Base less the sum of the US Dollar Equivalent of
the Letter of Credit Reserve, the aggregate outstanding principal balance of
the Swingline Loan and the US Dollar Equivalent of the aggregate outstanding
principal balance of the Canadian Revolving Loan.


 


36

















 


“US New Revolving Lender” has the meaning
assigned to that term in subsection 2.16(A).


 


“US Obligations” means all US Loans, all
Obligations with respect to US Loans and all other Obligations owing by US
Borrower (other than the guaranty by US Borrower of any Canadian Obligations).


 


“US Over Formula Advance” shall have the meaning
assigned to that term in subsection 2.4(B)(1).


 


“US Pledge Agreement” means the Pledge
Agreement dated the Closing Date executed by Holdings, US Borrower and the
other US Loan Parties in favor of Agent for the benefit of Agent, Canadian
Agent, Issuing Lenders and Lenders.


 


“US Revolving Advance” has the meaning assigned
to that term in subsection 2.1(A).


 


“US Revolving Loan(s)” means the outstanding
principal balance of all US Revolving Advances and any amounts added to the
principal balance of US Revolving Loan pursuant to this Agreement.


 


“US Revolving Loan Commitment” means (a) as
to any Lender, the commitment of such Lender to make US Revolving Advances
pursuant to subsection 2.1(A), and to purchase participations in US Lender
Letters of Credit pursuant to subsection 2.1(F) and without duplication to
purchase a participation in the Swingline Loan pursuant to subsection 2.1(C) in
the aggregate amount set forth on the signature page of this Agreement
opposite such Lender’s signature or in the most recent Assignment and
Acceptance Agreement, if any, executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make US Revolving Advances
and to purchase participations in US Lender Letters of Credit and without
duplication to purchase participations in the Swingline Loan pursuant to
subsection 2.1(C).


 


“US Revolving Notes” means the promissory note
or notes of US Borrower in substantially the form of Exhibit D,
issued to evidence the US Revolving Loan (if any).


 


“US Security Agreement” means that certain
Security Agreement, dated as of the date hereof, by and among US Borrower, each
US Guarantor and Agent, as such agreement may be amended from time to time.


 


“US Subsidiary” means any Subsidiary organized
or incorporated under the laws of a jurisdiction in the United States of
America.


 


1.2.          UCC
Defined Terms.  The following terms
used in this Agreement or the other Loan Documents (unless otherwise defined in
such other Loan Document) shall have the respective meanings provided for in
the UCC: “Accounts”, “Account Debtor”, “Buyer in Ordinary Course of Business”, “Chattel
Paper”, “Commercial Tort Claim”, “Control”, “Deposit Account”, “Documents”, “Electronic
Chattel Paper”, “Equipment”, “Farm Products”, “Fixtures”, “General Intangibles”,
“Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter of Credit”,
“Letter-of-Credit Rights”, “Licensee in Ordinary Course of Business”, “Payment 


 


37

















 


Intangibles”,
“Proceeds”, “Promissory Note”, “Record”, “Software”, “Supporting Obligations”
and “Tangible Chattel Paper”.


 


1.3.          Accounting
Terms.  For purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to such terms in conformity with United States or Canadian
GAAP, as applicable to the Loan Parties. 
Financial Statements and other information furnished to Agent, Canadian
Agent or any Lender pursuant to subsection 5.1 shall be prepared in accordance
with GAAP (as in effect at the time of such preparation) on a consistent
basis.  In the event any “Accounting
Changes” (as defined below) shall occur and such changes affect financial
covenants, standards or terms in this Agreement, then Loan Parties and Agent
agree to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Changes with the desired
result that the criteria for evaluating the financial condition of Loan Parties
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made, and until such time as such an amendment shall have been
executed and delivered by Loan Parties and Requisite Lenders, (A) all
financial covenants, standards and terms in this Agreement shall be calculated
and/or construed as if such Accounting Changes had not been made, and (B) Loan
Parties shall prepare footnotes to each Compliance Certificate and the
Financial Statements required to be delivered hereunder that show the
differences between the Financial Statements delivered (which reflect such
Accounting Changes) and the basis for calculating financial covenant compliance
(without reflecting such Accounting Changes). 
“Accounting Changes” means: (a) changes in accounting principles
required by GAAP and implemented by Loan Parties and (b) changes in
accounting principles recommended by Loan Parties’ Accountants.


 


1.4.          Other
Definitional Provisions.  References
to “Sections”, “subsections”, “Riders”, “Exhibits”, “Schedules” and “Addenda”
shall be to Sections, subsections, Riders, Exhibits, Schedules and Addenda,
respectively, of this Agreement unless otherwise specifically provided.  Any of the terms defined in subsection 1.1 or
otherwise in this Agreement may, unless the context otherwise requires, be used
in the singular or the plural depending on the reference.  In this Agreement, words importing any gender
include the other genders; the words “including,” “includes” and “include”
shall be deemed to be followed by the words “without limitation”; the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or”; references to agreements and other contractual instruments
shall be deemed to include subsequent amendments, assignments, and other
modifications thereto, but only to the extent such amendments, assignments and
other modifications are not prohibited by the terms of this Agreement or any
other Loan Document; references to Persons include their respective permitted
successors and assigns or, in the case of governmental Persons, Persons
succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of same and any
successor statutes and regulations.  The US
Dollar Equivalent of any other relevant currency shall be used for the purpose
of any amount, covenant, threshold or limit expressed as an amount of Dollars
in any Loan Document.


 


38














 


SECTION 2.               LOANS AND COLLATERAL


 


2.1.          Loans.


 


(A)          US Revolving Loan.  Each
Lender, severally and not jointly, agrees to lend to US Borrower from time to
time its Pro Rata Share of each advance (each a “US Revolving Advance”)
requested by Borrowing Agent, on behalf of US Borrower, under the US Revolving
Loan Commitment.  The aggregate amount of
the US Revolving Loan Commitment shall not exceed at any time the Maximum
Commitment. Amounts borrowed under this subsection 2.1(A) may be repaid
and reborrowed at any time prior to the earlier of (1) the termination of
the US Revolving Loan Commitment pursuant to subsection 8.2 or (2) the
Termination Date.  Except as otherwise
provided herein, no Lender shall have any obligation to make a US Revolving
Advance to the extent such US Revolving Advance would cause the US Revolving
Loan (after giving effect to any immediate application of the proceeds thereof)
to exceed the US Maximum Revolving Loan Amount. 
All US Revolving Advances shall be made in Dollars.


 


(B)           Canadian Revolving Loans.  Each
Lender, severally and not jointly, agrees to lend to Canadian Borrower from
time to time its Pro Rata Share of each advance (each a “Canadian Revolving
Advance”) requested by Borrowing Agent, on behalf of Canadian Borrower,
under the Canadian Revolving Loan Commitment. 
Amounts borrowed under this subsection 2.1(B) may be repaid and
reborrowed at any time prior to the earlier of (1) the termination of the
Canadian Revolving Loan Commitment pursuant to subsection 8.2 or (2) the
Termination Date.  Except as otherwise
provided herein, no Lender shall have any obligation to make a Canadian
Revolving Advance to the extent that such Canadian Revolving Advance would
cause (x) the Canadian Revolving Loan (after giving effect to any
immediate application of the proceeds thereof) to exceed the Canadian Maximum
Revolving Loan Amount or (y) the sum of the US Dollar Equivalent of the
Letter of Credit Reserve, plus the US Revolving Loan, plus the Swingline Loan,
plus the US Dollar Equivalent of the Canadian Revolving Loan (after giving
effect to such Canadian Revolving Loan Advance) to exceed the lesser of (1) the
Borrowing Base and (2) the US Revolving Loan Commitments. All Canadian
Revolving Advances shall be made in Canadian Dollars.


 


(C)           Swingline Loan.  Agent may
convert any request by Borrowing Agent on behalf of US Borrower for a US
Revolving Advance that is requested to be made as a Base Rate Loan into a
request for an advance under the Swingline Loan.  The Swingline Loan shall be a Base Rate Loan
and shall not exceed in the aggregate at any time outstanding the Maximum
Swingline Loan Amount.  In the event that
on any Business Day Swingline Lender desires that all or any portion of the
Swingline Loan should be reduced in whole or in part, Swingline Lender shall
promptly notify Agent to that effect and indicate the portion of the Swingline
Loan to be reduced.  Agent agrees to
transmit to Lenders the information contained in each notice received by Agent
from Swingline Lender and shall concurrently notify Lenders of each Lender’s
Pro Rata Share of the obligation to make a US Revolving Advance to repay the
Swingline Loan (or portion thereof).  All
Swingline Loans shall be made in Dollars.


 


Each of the Lenders hereby unconditionally and
irrevocably, severally and not jointly, agrees to fund to Agent for the benefit
of Swingline Lender, in lawful money of the United States and in same day
funds, not later than 11:00 a.m. (New York City time) on the Business Day
immediately following the Business Day of such Lender’s receipt of such notice
from Agent (provided that if any Lender shall receive such notice at or
prior to 1:00 p.m. (New York City time) on a Business Day, such funding
shall be made by such Lender on such Business Day), such Lender’s Pro Rata
Share of a US Revolving Advance (which US Revolving 


 


39

















 


Advance shall be a Base Rate Loan and shall be deemed
to be requested by Borrowing Agent on behalf of US Borrower) in the principal
amount of such portion of the Swingline Loan which is required to be paid to
Swingline Lender under this subsection 2.1(C) (regardless of whether the
conditions precedent thereto set forth in Section 3 are then satisfied and
whether or not US Borrower has provided a notice of borrowing under subsection
2.1(D)(4) and whether or not any Default or Event of Default exists or all
or any of the Loans have been accelerated, but subject to the other provisions
of this subsection 2.1(C)).  The proceeds
of any such US Revolving Advance shall be immediately paid over to Agent for
the benefit of Swingline Lender for application to the Swingline Loan.


 


In the event that an Event of Default shall occur and
either (1) such Event of Default is of the type described in subsection
8.1 (G) or (H) hereof or (2) no further US Revolving Advances
are being made under this Agreement, so long as any such Event of Default is
continuing, then, each of the Lenders (other than Swingline Lender) shall be
deemed to have irrevocably, unconditionally and immediately purchased a
participation in the Swingline Loan from Swingline Lender in an amount equal to
such Lender’s Pro Rata Share of the US Revolving Loan Commitment multiplied by
the total amount of the Swingline Loan outstanding.  Each Lender shall effect such purchase by
making available the amount of such Lender’s participation in the Swingline
Loan in Dollars in immediately available funds to Agent’s Account for the
benefit of Swingline Lender.  In the
event any Lender fails to make available to Swingline Lender when due the
amount of such Lender’s participation in the Swingline Loan, Swingline Lender
shall be entitled to recover such amount on demand from such Lender together
with interest at the Federal Funds Effective Rate.  Each such purchase by a Lender shall be made
without recourse to Swingline Lender, without representation or warranty of any
kind, and shall be effected and evidenced pursuant to documents reasonably
acceptable to Swingline Lender.  The
obligations of the Lenders under this subsection 2.1 (C) shall be
absolute, irrevocable and unconditional, shall be made under all circumstances
and shall not be affected, reduced or impaired for any reason whatsoever.


 


(D)          Borrowing Mechanics.  (1) 
LIBOR Loans made on any Funding Date shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of such amount.  BA Rate Loans made on any Funding Date shall
be in an aggregate minimum amount of Cdn $100,000 and integral multiples of Cdn
$100,000 in excess of such amount.


 


(2)           On any day when US Borrower desires a US
Revolving Advance under this subsection 2.1 to be funded as a Base Rate Loan of
$15,000,000 or less, Borrowing Agent shall give Agent written or telephonic
notice of the proposed borrowing by 1:00 p.m. (New York City time) on the
Business Day on which the US Revolving Advance is to be made (or such earlier
time as Agent may instruct Borrowing Agent, which instruction shall only be
given by Agent when it is given to all of its borrowers due to early office
closings or other similar circumstances). 
On any day when US Borrower desires a US Revolving Advance to be funded
as a Base Rate Loan of more than $15,000,000, Borrowing Agent shall give Agent
written or telephonic notice of the proposed borrowing by 1:00 p.m. (New
York City time) at least one (1) Business Day before the US Revolving
Advance is to be made.  On any day when
US Borrower desires a US Revolving Advance to be funded as a LIBOR Loan,
Borrowing Agent 


 


40

















 


shall give Agent written or
telephonic notice of the proposed borrowing by 1:00 p.m. (New York City
time) at least three (3) Business Days before the US Revolving Advance is
to be made.


 


(3)           On any day when Canadian Borrower desires a
Canadian Revolving Advance under this subsection 2.1 to be funded as a Base
Rate Loan of Cdn $1,000,000 or less, Borrowing Agent shall give Agent written
or telephonic notice of the proposed borrowing by 11:30 a.m. (New York
City time) (with a copy to Canadian Agent in the circumstances described in the
last sentence of this clause (3)) on the Business Day on which the Canadian
Revolving Advance is to be made (or such earlier time as Agent may instruct
Borrowing Agent, which instruction shall only be given by Agent when it is
given to all of its borrowers due to early office closings or other similar
circumstances).  If Agent determines that
Canadian Borrower may borrow the amount of such proposed borrowing pursuant to
the terms hereof, Agent shall advise Canadian Agent of same, and Canadian Agent
shall give written notice of the proposed borrowing to the Lenders by 1:00 p.m.
(New York City time) on the same Business Day on which Borrowing Agent has
delivered notice to Agent.  On any day
when Canadian Borrower desires a Canadian Revolving Advance under this
subsection 2.1 to be funded as a Base Rate Loan of more than Cdn $1,000,000,
Borrowing Agent shall give Agent written or telephonic notice of the proposed
borrowing by 11:30 a.m. (New York City time) (with a copy to Canadian
Agent) at least one Business Day before the Canadian Revolving Advance is to be
made.  If Agent determines that Canadian
Borrower may borrow the amount of such proposed borrowing pursuant to the terms
hereof, Agent shall advise Canadian Agent of same, and Canadian Agent shall
give written or telephonic notice of the proposed borrowing to Lenders by 1:00 p.m.
(New York City time) on the same Business Day on which Borrowing Agent has
delivered notice to Agent.  On any day
when Canadian Borrower desires a Canadian Revolving Advance under this
subsection 2.1 to be funded as a Canadian BA Rate Loan, Borrowing Agent shall
give Agent written or telephonic notice of the proposed borrowing by 11:00 a.m.
(New York City time) (with a copy to Canadian Agent) at least three Business
Days before the Canadian Revolving Advance is to be made.  If Agent determines that Canadian Borrower
may borrow the amount of such proposed borrowing pursuant to the terms hereof,
Agent shall advise Canadian Agent of same, and Canadian Agent shall give
written or telephonic notice of the proposed borrowing to the Lenders by 1:00 p.m.
(New York City time) on the same Business Day on which Borrowing Agent has
delivered notice to Agent. Any telephonic notice delivered by Agent to any
Lender under this subsection 2.1(D)(3) shall be confirmed with a written
notice on the same day as such telephonic notice. In the event that Agent and
Canadian Agent are the same entity or are affiliated entities, (x) delivery
of any notice to Agent shall be deemed to constitute delivery of such notice to
Canadian Agent, and (y) Canadian Agent shall determine whether Canadian
Borrower may borrow the amount of any such proposed borrowing, and shall notify
the Lenders upon making any such determination that Borrower may borrow the
amount of any such proposed borrowing. Each of the parties to this Agreement
hereby acknowledges that as of the Closing Date, GMAC CF is acting as both
Agent and Canadian Agent. In the event that a Person that is acting as both Agent
and Canadian Agent (or, if applicable, affiliated Persons) shall cease to act
as Canadian Agent, Agent shall promptly notify Borrowing Agent of the
appointment of a new Canadian Agent, and Borrowing Agent shall, upon receipt of
such notice, deliver separate copies of all notices to Agent and to Canadian
Agent as provided herein.


 


41

















 


(4)           Any Notice of Borrowing required to be
delivered by Borrowing Agent hereunder shall specify the proposed Funding Date
(which shall be a Business Day), the requested amount of each Loan, whether
such Loans shall consist of Base Rate Loans, LIBOR Loans or Canadian BA Rate
Loans, and, for LIBOR Loans and Canadian BA Rate Loans, the Interest Period or
BA Period applicable thereto. Any such telephonic notice shall be confirmed
with a Notice of Borrowing on the same day as such request.  Neither Agent, Canadian Agent, nor any Lender
shall incur any liability to any Loan Party for acting upon any telephonic
notice or a Notice of Borrowing which Agent or Canadian Agent, as applicable,
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of any Borrower or for otherwise acting
in good faith under this subsection 2.1(D). 
None of Agent, Canadian Agent nor any Lender will be required to make
any advance pursuant to any telephonic or written notice or a Notice of
Borrowing, unless all of the terms and conditions set forth in Section 3
have been satisfied and Agent has also received the most recent Borrowing Base
Certificate and all other documents required under Section 5 and the
Reporting Rider in accordance with the requirements of subsection 2.1(D)(2) and
(3) above.  Each Advance shall be
deposited by wire transfer in immediately available funds in such account as
Borrowing Agent may from time to time designate to Agent or Canadian Agent, as
applicable, in writing.  The becoming due
of any amount required to be paid under this Agreement or any of the other Loan
Documents as principal, Lender Letter of Credit reimbursement obligation,
accrued interest, fees, compensation or any other amounts shall be deemed
irrevocably to be an automatic request by Borrowing Agent on behalf of US
Borrower or Canadian Borrower, as applicable, for a Revolving Advance, which
shall, unless (i) otherwise paid by Borrower on the due date, or (ii) funded
pursuant to a Notice of Borrowing, be a Base Rate Loan on the due date of, and
in the amount required to pay (as set forth on Agent’s books and records), such
principal, Lender Letter of Credit reimbursement obligation, accrued interest,
fees, compensation or any other amounts.


 


(E)           Notes.


 


(1)           If so requested by any Lender by written
notice to Borrowing Agent (with a copy to Agent) at least two (2) Business
Days prior to the Closing Date, or at any time thereafter, US Borrower shall
execute and deliver to such Lender (and/or, if applicable and if so specified
in such notice, to any Person who is an assignee of such Lender pursuant to
subsection 9.9) on the Closing Date (or, if such notice is delivered after the
Closing Date, promptly after Borrowing Agent’s receipt of such notice) a Note
or Notes to evidence such Lender’s Swingline Loan or Revolving Loan, as the
case may be.


 


(2)           If so requested by any Lender by written
notice to Borrowing Agent (with a copy to Agent) at least two (2) Business
Days prior to the Closing Date, or at any time thereafter, Canadian Borrower
shall execute and deliver to such Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of such Lender
pursuant to subsection 9.9) on the Closing Date (or, if such notice is
delivered after the Closing Date, promptly after Borrowing Agent’s receipt of
such notice) a Note or Notes to evidence such Lender’s Canadian Revolving Loan.


 


(F)           US Lender Letters of Credit.  The
US Revolving Loan Commitments may, in addition to US Revolving Advances, be
utilized, upon the request of Borrowing Agent, for (1) the issuance of
letters of credit by US Letter of Credit Issuer, or (2) the issuance by
Agent or US 


 


42

















 


Letter
of Credit Issuer of guaranties or risk participations to banks to induce such
banks to issue Bank Letters of Credit for the account of US Borrower (each of (1) and
(2) above a “US Lender Letter of Credit”).  Each Lender shall be deemed to have purchased
a participation in each US Lender Letter of Credit issued on behalf of US
Borrower in an amount equal to its Pro Rata Share thereof.  In no event shall any US Lender Letter of
Credit be issued to the extent that the issuance of such US Lender Letter of
Credit would cause the sum of the US Dollar Equivalent of the Letter of Credit
Reserve (after giving effect to such issuance), plus the US Revolving Loan,
plus the Swingline Loan, plus the US Dollar Equivalent of the Canadian
Revolving Loan to exceed the lesser of (1) the Borrowing Base and (2) the
aggregate US Revolving Loan Commitments. 
All US Lender Letters of Credit shall be denominated in Dollars.


 


(1)           Maximum Amount.  In addition
to the restrictions in clause (F) above, in no event shall any US Lender
Letter of Credit be issued to the extent that the issuance of such US Lender
Letter of Credit would cause the sum of (x) the aggregate amount of US Letter
of Credit Liability with respect to all US Lender Letters of Credit plus (y) the
US Dollar Equivalent of the Canadian Letter of Credit Reserve, to exceed
$7,500,000.


 


(2)           Reimbursement.  US Borrower
shall be irrevocably and unconditionally obligated forthwith without
presentment, demand, protest or other formalities of any kind, to reimburse
Agent or the issuer for any amounts paid with respect to a US Lender Letter of
Credit including all fees, costs and expenses paid to any bank that issues a US
Lender Letter of Credit.  US Borrower
hereby authorizes and directs Agent, at Agent’s option, to debit US Borrower’s
account (by increasing the US Revolving Loan) in the amount of any payment made
with respect to any US Lender Letter of Credit. 
In the event that Agent elects not to debit US Borrower’s account and US
Borrower fails to reimburse Agent or the issuer in full within one (1) Business
Day after a request therefor, Agent shall promptly notify each Lender of the
unreimbursed amount of such payment together with accrued interest thereon and
each Lender, on the next Business Day, shall deliver to Agent an amount equal
to its respective participation in same day funds.  The obligation of each Lender to deliver to
Agent an amount equal to its respective participation pursuant to the foregoing
sentence shall be absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of Default or
Default or the failure to satisfy any condition set forth in Section 3.  In the event any Lender fails to make
available to Agent the amount of such Lender’s participation in such US Lender
Letter of Credit, Agent shall be entitled to recover (for the benefit of the
Issuing Lender or the issuer) such amount on demand from such Lender together
with interest on such amount calculated at the Federal Funds Effective Rate.


 


(3)           Request for Letters of Credit. 
Borrowing Agent shall give Agent at least three (3) Business Days
prior notice specifying the date a US Lender Letter of Credit is to be issued,
identifying the beneficiary and describing the nature of the transactions
proposed to be supported thereby.  The
notice shall be accompanied by the form of the US Lender Letter of Credit being
requested.  Each request for a Letter of
Credit shall be accompanied by an application duly executed by the relevant
Borrower in the form then customarily prescribed by the Issuing Lender or
issuer for the Letter of Credit then being requested with such modifications as
may be mutually agreed for purposes of consistency with this Agreement (each a “US
Letter of Credit Application”) and, in the case of an extension or
amendment or an increase in the amount of a Letter of Credit, a written request
therefor, in a form acceptable to the Agent and the 


 


43

















 


Issuing Lender or issuer, in
each case, together with the fees called for by this Agreement. The Borrower’s
obligations to the Issuing Lender or issuer with respect to any Letters of
Credit issued by it shall be subject to the terms and conditions of the
relevant Application and this Agreement, provided that in the event of a
conflict between the terms thereof and the terms of this Agreement, the terms
of this Agreement shall control. Any US Lender Letter of Credit which Borrowing
Agent requests must be in such form, be for such amount, contain such terms and
support such transactions as are reasonably satisfactory to Agent and, if
issued by US Letter of Credit Issuer, US Letter of Credit Issuer.  The expiration date of each US Lender Letter
of Credit shall be on a date which is no later than the earlier of (x) twelve
(12) months from the date of issuance (or which is cancelable no later than
twelve (12) months from the date of issuance and each renewal) or (y) thirty
(30) days prior to the Termination Date. 
US Letter of Credit Issuer hereby commits to issue any US Lender Letter
of Credit requested hereunder in accordance with the requirements of this
subsection 2.1(F).


 


(G)           Canadian Letters of Credit.  The
Canadian Revolving Loan Commitments may, in addition to Canadian Revolving
Advances, be utilized, upon the request of Borrowing Agent, for (1) the
issuance of letters of credit by Canadian Letter of Credit Issuer, or (2) the
issuance by Canadian Agent or Canadian Letter of Credit Issuer of guaranties or
risk participations to banks to induce such banks to issue Bank Letters of
Credit for the account of Canadian Borrower (each of (1) and (2) above
a “Canadian Lender Letter of Credit”). 
Each Lender shall be deemed to have purchased a participation in each
Canadian Lender Letter of Credit issued on behalf of Canadian Borrower in an
amount equal to its Pro Rata Share thereof. 
In no event shall any Canadian Lender Letter of Credit be issued to the
extent that the issuance of such Canadian Lender Letter of Credit would cause (x) the
sum of the Canadian Letter of Credit Reserve after giving effect to such
issuance plus the Canadian Revolving Loan to exceed the Canadian Maximum
Revolving Loan Commitment or (y) the sum of the US Dollar Equivalent of
the Letter of Credit Reserve (after giving effect to such issuance), plus the
US Revolving Loan, plus the Swingline Loan, plus the US Dollar Equivalent of
the Canadian Revolving Loan to exceed the lesser of (1) the Borrowing Base
and (2) the aggregate US Revolving Loan Commitments.  All Canadian Lender Letters of Credit shall
be denominated in Canadian Dollars.


 


(1)           Maximum Amount.  In addition
to the restrictions in clause (G) above, (x) the aggregate amount of
the Canadian Letter of Credit Liability with respect to all Canadian Lender
Letters of Credit outstanding at any time shall not exceed Cdn$3,500,000, and (y) in
no event shall any Canadian Letters of Credit be issued to the extent that the
issuance of such Canadian Letter of Credit would cause the aggregate US Dollar
Equivalent of the Letter of Credit Liability with respect to all Lender Letters
of Credit, after giving effect to such proposed Canadian Lender Letter of
Credit request, to exceed the US Dollar Equivalent of $7,500,000.


 


(2)           Reimbursement.  Canadian
Borrower shall be irrevocably and unconditionally obligated forthwith without
presentment, demand, protest or other formalities of any kind, to reimburse
Canadian Agent or the issuer for any amounts paid with respect to a Canadian
Lender Letter of Credit including all fees, costs and expenses paid to any bank
that issues a Canadian Lender Letter of Credit. Canadian Borrower hereby
authorizes and directs Canadian Agent, at Canadian Agent’s option, to debit Canadian
Borrower’s account (by increasing the Canadian Revolving Loan) in the amount of
any payment made with respect to any Canadian Lender Letter of Credit; provided
that Canadian Agent shall provide Agent one (1) 


 


44

















 


Business Days notice thereof
in the event that Agent and Canadian Agent are neither the same entity nor
affiliated entities. In the event that Canadian Agent elects not to debit
Canadian Borrower’s account and Canadian Borrower fails to reimburse Canadian
Agent or the issuer in full within one (1) Business Day after a request
therefor, Canadian Agent shall promptly notify each Lender of the unreimbursed
amount of such payment together with accrued interest thereon and each Lender,
on the next Business Day, shall deliver to Canadian Agent an amount equal to
its respective participation in same day funds. 
The obligation of each Lender to deliver to Canadian Agent an amount
equal to its respective participation pursuant to the foregoing sentence shall
be absolute and unconditional and such remittance shall be made notwithstanding
the occurrence or continuation of an Event of Default or Default or the failure
to satisfy any condition set forth in Section 3.  In the event any Lender fails to make available
to Canadian Agent the amount of such Lender’s participation in such Canadian
Lender Letter of Credit, Canadian Agent shall be entitled to recover (for the
benefit of the Issuing Lender or the issuer) such amount on demand from such
Lender together with interest on such amount calculated at the Federal Funds
Effective Rate.


 


(3)           Request for Letters of Credit. 
Borrowing Agent shall give Canadian Agent (and Agent, in the event that
Agent and Canadian Agent are neither the same entity nor affiliated entities)
at least three (3) Business Days prior notice specifying the date a
Canadian Lender Letter of Credit is to be issued, identifying the beneficiary
and describing the nature of the transactions proposed to be supported
thereby.  The notice to Canadian Agent
(and Agent, if applicable) shall be accompanied by the form of the Canadian
Lender Letter of Credit being requested. 
Each request for a Letter of Credit shall be accompanied by an
application duly executed by the relevant Borrower in the form then customarily
prescribed by the Issuing Lender or issuer for the Letter of Credit then being
requested with such modifications as may be mutually agreed for purposes of
consistency with this Agreement (each a “Canadian Letter of Credit
Application”) and, in the case of an extension or amendment or an increase
in the amount of a Letter of Credit, a written request therefor, in a form
acceptable to the Canadian Agent and the Issuing Lender or issuer, in each
case, together with the fees called for by this Agreement.  The Borrower’s obligations to the Issuing
Lender or issuer with respect to any Letters of Credit issued by it shall be
subject to the terms and conditions of the relevant Application and this
Agreement, provided that in the event of a conflict between the terms thereof
and the terms of this Agreement, the terms of this Agreement shall control. Any
Canadian Lender Letter of Credit which Borrowing Agent requests must be in such
form, be for such amount, contain such terms and support such transactions as
are reasonably satisfactory to (x) Canadian Agent, (y) Agent (in the
event that Agent and Canadian Agent are neither the same entity nor affiliated
entities), and, (z) if issued by Canadian Letter of Credit Issuer,
Canadian Letter of Credit Issuer.  Canadian
Agent shall determine whether the issuance of such Canadian Lender Letter of
Credit is permitted under this Agreement (or, in the event that Agent and
Canadian Agent are neither the same entity nor affiliated entities, Agent shall
promptly advise Canadian Agent whether the issuance of such Canadian Lender
Letter of Credit is permitted under this Agreement), and in the event that such
issuance is permitted, Canadian Agent shall promptly give notice of such
request to the Lenders.  The expiration
date of each Canadian Lender Letter of Credit shall be on a date which is no
later than the earlier of (x) twelve (12) months from the date of issuance
(or which is cancelable no later than twelve (12) months from the date of
issuance and each renewal) or (y) thirty (30) days prior to the
Termination Date.  Canadian Letter of
Credit Issuer hereby commits 


 


45

















 


to issue any Canadian Lender
Letter of Credit requested hereunder in accordance with the requirements of this
subsection 2.1(G).


 


(H)          Other Letter of Credit Provisions.


 


(1)           Obligations Absolute.  The
obligation of Borrowers to reimburse Agent, Canadian Agent, any Issuing Lender
or any Lender for payments made under, and other amounts payable in connection
with, any Lender Letter of Credit shall be unconditional and irrevocable and
shall be paid under all circumstances strictly in accordance with the terms of
this Agreement including, without limitation, the following circumstances:


 


(a)           any lack of validity or enforceability of any
Lender Letter of Credit, or any other agreement;


 


(b)           the existence of any claim, set-off, defense or
other right which any Borrower, any of its Subsidiaries or Affiliates or any
other Person may at any time have against any beneficiary or transferee of any
Lender Letter of Credit (or any Persons for whom any such transferee may be
acting), Agent, Canadian Agent, any Issuing Lender, any Lender, any bank
issuing a Bank Letter of Credit, or any other Person, whether in connection with
this Agreement, any other Loan Document, or any other related or unrelated
agreements or transactions;


 


(c)           any draft, demand, certificate or any other
document presented under any Lender Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;


 


(d)           any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Loan
Parties or any of their Subsidiaries;


 


(e)           any breach of this Agreement or any other Loan
Document by any party thereto;


 


(f)            any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing;


 


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


 


(h)           payment under any Lender Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Lender Letter of Credit; provided that, in
the case of any payment by Agent, Canadian Agent, any Issuing Lender or any
Lender under any Lender Letter of Credit, Agent, Canadian Agent, such Issuing
Lender or such Lender has not acted with gross negligence or willful misconduct
(as determined by a final non-appealable order by a court of competent
jurisdiction) in determining that the demand for payment under such Lender
Letter of Credit complies on its face with any applicable requirements for a
demand for payment under such Lender Letter of Credit.


 


46

















 


(2)           Nature of the Borrowers’ Duties.  As
between any Issuing Lender, Agent, Canadian Agent and the Lenders on the one
hand, and the Borrowers on the other hand, the Borrowers assume all risks of
the acts and omissions of, or misuse of any Lender Letter of Credit by the
beneficiary thereof.  In furtherance and
not in limitation of the foregoing, none of Agent, Canadian Agent, any Issuing
Lender or any Lender shall be responsible: (a) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document by any party
in connection with the application for and issuance of any Lender Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (b) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Lender Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (c) for failure of the beneficiary
of any Lender Letter of Credit to comply fully with conditions required in
order to demand payment thereunder; provided that, in the case of any
payment under any such Lender Letter of Credit, any Issuing Lender has not
acted with gross negligence or willful misconduct (as determined by a final
non-appealable order by a court of competent jurisdiction) in determining that
the demand for payment under any such Lender Letter of Credit complies on its
face with any applicable requirements for a demand for payment thereunder; (d) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (e) for errors in interpretation of technical terms; (f) for
any loss or delay in the transmission or otherwise of any document required in
order to make a payment under any such Lender Letter of Credit; (g) for
the credit of the proceeds of any drawing under any such Lender Letter of
Credit; and (h) for any consequences arising from causes beyond the
control of Agent, Canadian Agent, any Issuing Lender or any Lender as the case
may be.


 


(3)           Liability.  In
furtherance and extension of and not in limitation of, the specific provisions
herein above set forth (but subject to subsection 2.1(H)(1)(h)), any action
taken or omitted by Agent, Canadian Agent, any Issuing Lender or any Lender
under or in connection with any Lender Letter of Credit, if taken or omitted in
good faith, shall not put Agent, Canadian Agent, and Issuing Lender or any
Lender under any resulting liability to any Loan Party or any other Lender.


 


(4)           Indemnification.  The Lenders
shall, to the extent of their respective Pro Rata Shares, indemnify the
relevant Issuing Lenders (to the extent not reimbursed by the relevant
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such Issuing Lender’s gross negligence or willful misconduct) that the
Issuing Lender may suffer or incur in connection with any Letter of Credit
issued by it.  The obligations of the
Lenders hereunder shall survive termination of this Agreement and of all
Applications, Letters of Credit and all drafts and other documents presented in
connection with drawings thereunder.


 


(I)            Availability of a Lender’s Pro Rata Share.


 


(1)           Lender’s Amounts Available on a Funding Date. 
Unless Agent receives written notice from a Lender on or prior to any
Funding Date that such Lender will not make available to Agent as and when
required such Lender’s applicable Pro Rata Share of any requested Loan or
Advance, Agent may assume that each Lender will make such amount 


 


47

















 


available to Agent in
immediately available funds on the Funding Date and Agent may (but shall not be
so required), in reliance upon such assumption, make available to Borrowers on
such date a corresponding amount.


 


(2)           Lender’s Failure to Fund.  A
Defaulting Lender shall pay interest to Agent at the Federal Funds Effective
Rate on the Defaulted Amount from the Business Day following the applicable
Funding Date of such Defaulted Amount until the date such Defaulted Amount is
paid to Agent.  Any notice by Agent
submitted to any Lender with respect to amounts owing under this subsection
2.1(I)(2) shall be conclusive, absent manifest error.  If such amount is not paid when due to Agent,
Agent, at its option, may notify Borrowing Agent of such failure to fund and,
upon demand by Agent, Borrowers shall pay the unpaid amount to Agent for Agent’s
account, together with interest thereon for each day elapsed since the date of
such borrowing, at a rate per annum equal to the interest rate applicable at
the time to the Loan made by the other Lenders on such Funding Date.  The failure of any Lender to make available
any portion of its Revolving Loan Commitments on any Funding Date or to fund
its participation in a Lender Letter of Credit or Swingline Loan shall not
relieve any other Lender of any obligation hereunder to fund such Lender’s
Revolving Loan Commitments on such Funding Date or to fund any such
participation, but no Lender shall be responsible for the failure of any other
Lender to honor its Revolving Loan Commitments on any Funding Date or to fund
any participation to be funded by any other Lender.


 


(3)           Payments to a Defaulting Lender. 
Notwithstanding any provision to the contrary contained in this
Agreement or the other Loan Documents, (i) neither Agent nor Canadian
Agent shall be obligated to, and, at the request of Borrowing Agent, shall not,
transfer to a Defaulting Lender-Payment any payment made by any Loan Party to
Agent or Canadian Agent of any amount otherwise received by Agent or Canadian
Agent for application to the Obligations nor shall a Defaulting Lender-Payment
be entitled to the sharing of any interest, fees or payments hereunder and (ii) the
obligations of Borrowers described in subsection 2.3(A) shall not apply to
any Revolving Loan Commitments held by a Defaulting Lender-Payment.


 


(4)           Defaulting Lender’s Right to Vote. 
Notwithstanding any provision to the contrary contained in this
Agreement or the other Loan Documents for purposes of voting or consenting to
matters with respect to (a) the Loan Documents or (b) any other
matter concerning the Loans, a Defaulting Lender-Payment shall be deemed not to
be a “Lender” and such Lender’s Revolving Loan Commitments and outstanding
Loans and Advances shall be deemed to be zero; provided, however,
that a Defaulting Lender-Payment shall have full voting rights as a Lender with
its Revolving Loan Commitments and outstanding Loans and Advances with respect
to votes under subsection 9.8(D).


 


2.2.          Interest.


 


(A)          Rate of Interest.  (i) 
The US Loans and all other US Obligations shall bear interest from the date
such US Loans are made or such other US Obligations become due to the date paid
at a rate per annum equal to (1) in the case of Base Rate Loans and US
Obligations for which no interest rate basis is specified, the Base Rate plus
the Applicable Margin and (2) in the case of LIBOR Loans, LIBOR plus the
Applicable Margin (collectively the “US Interest Rate”).  All US Loans made on the Closing Date shall
be Base Rate Loans and shall remain so until the 


 


48

















 


Business
Day that is four (4) Business Days after the Closing Date.  Such designation by Borrowing Agent may be
changed from time to time pursuant to subsection 2.2(D).  If on any day a US Loan or a portion of any
US Loan is outstanding with respect to which notice has not been delivered to
Agent in accordance with the terms of this Agreement specifying the basis for
determining the rate of interest or if LIBOR has been specified and no LIBOR
quote is available, then for that day that Loan or portion thereof shall bear
interest determined by reference to the Base Rate.


 


(ii)           The Canadian Revolving Loans and all other
Canadian Obligations shall bear interest from the date such Canadian Revolving
Loans are made or such other Canadian Obligations become due to the date paid
at a rate per annum equal to (1) in the case of Base Rate Loans and
Canadian Obligations for which no interest rate basis is specified, the Base
Rate plus the Applicable Margin and (2) in the case of Canadian BA Rate
Loans, the Canadian BA Rate plus the Applicable Margin (collectively the “Canadian
Interest Rate” and together with the US Interest Rate, the “Interest
Rate”).  All Canadian Revolving Loans
made on the Closing Date shall be Base Rate Loans and shall remain so until the
Business Day that is four (4) Business Days after the Closing Date.  Such designation by Borrowing Agent may be
changed from time to time pursuant to subsection 2.2(D).  If on any day a Canadian Revolving Loan or a
portion of any Canadian Revolving Loan is outstanding with respect to which
notice has not been delivered to Canadian Agent in accordance with the terms of
this Agreement specifying the basis for determining the rate of interest or if
Canadian BA Rate has been specified and no Canadian BA Rate quote is available,
then for that day that Canadian Revolving Loan or portion thereof shall bear
interest determined by reference to the Base Rate.


 


(iii)          After the occurrence and during the continuance
of an Event of Default (1) the Loans and all other Obligations that are
not paid when due shall, at the election of Agent or Requisite Lenders, bear
interest at a rate per annum equal to two percent (2%) plus the applicable
Interest Rate (the “Default Rate”), (2) each LIBOR Loan or Canadian
BA Rate Loan shall automatically convert to a Base Rate Loan at the end of any
applicable Interest Period and (3) no Loans may be converted to LIBOR
Loans or Canadian BA Rate Loans.  Agent
agrees to give prompt subsequent notice of the institution of the Default Rate;
provided that the failure to provide such notice shall not affect the
ability of Agent to change Borrowers’ obligation to pay the Default Rate.


 


(iv)          For purposes of calculating the amount of
interest due on Revolving Loans, any payments received by Agent or Canadian
Agent from the funds in the Controlled Accounts will be applied (conditional
upon final collection) to such Obligations on the Business Day of receipt by
Agent or Canadian Agent, as applicable, of immediately available funds in Agent’s
Account or Canadian Agent’s Account, as applicable, if received on or prior to
3:00 p.m. (New York City time) on such Business Day, or if received after
3:00 p.m. (New York City time), such payments will be applied on the
following Business Day.


 


(B)           Computation and Payment of Interest; Payment Dates. 
Interest on the Loans and all other Obligations shall be computed on the
daily principal balance on the basis of a three hundred sixty (360) day year
for the actual number of days elapsed. 
In computing interest on any Loan, the date of funding of the Loan or
the first day of an Interest Period or BA Period applicable to such Loan or,
with respect to a Base Rate Loan being converted from a LIBOR 


 


49

















 


Loan
or Canadian BA Rate Loan, the date of conversion of such LIBOR Loan or Canadian
BA Rate Loan to such Base Rate Loan, shall be included; and the date of payment
of such Loan or the expiration date of an Interest Period or BA Period
applicable to such Loan, or with respect to a Base Rate Loan being converted to
a LIBOR Loan or Canadian BA Rate Loan, the date of conversion of such Base Rate
Loan to such LIBOR Loan or Canadian BA Rate Loan, as applicable, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made,
one (1) day’s interest shall be paid on that Loan.  Interest on Base Rate Loans that are US Loans
shall be payable to Agent for the benefit of the Lenders and interest on Base
Rate Loans that are Canadian Revolving Loans shall be payable to Canadian Agent  for the benefit of the Lenders (with
contemporaneous notice to Agent by the Canadian Agent), as applicable, monthly
in arrears on the first day of each month, on the date of any prepayment of
Loans, and at maturity, whether by acceleration or otherwise.  Interest on LIBOR Loans shall be payable to
Agent for the benefit of the Lenders and interest on Canadian BA Rate Loans
shall be payable to Canadian Agent for the benefit of the Lenders (with
contemporaneous notice to Agent by the Canadian Agent), as applicable, on the
last day of the applicable Interest Period or BA Period, for such Loan, on the
date of any prepayment of the Loans, and at maturity, whether by acceleration
or otherwise.  In addition, for each
LIBOR Loan or Canadian BA Rate Loan having an Interest Period or BA Period, as
applicable, longer than three (3) months, interest accrued on such Loan
shall also be payable on the last day of each three (3) month interval
during such Interest Period or BA Period, as applicable.  In the event that Agent and Canadian Agent
are the same entity or are affiliated entities, the contemporaneous notice
referred to in this clause (B) need not be provided to Agent by Canadian
Agent with respect to the payment of interest on Base Rate Loans that are
Canadian Revolving Loans or with respect to the payment of interest on Canadian
BA Rate Loans. Each of the parties to this Agreement hereby acknowledges that
as of the Closing Date, GMAC CF is acting as both Agent and Canadian Agent.


 


(C)           Interest Laws. 
Notwithstanding any provision to the contrary contained in this
Agreement or any other Loan Document, no Borrower shall be required to pay, and
none of Agent, Canadian Agent nor any Lender shall be permitted to collect, any
amount of interest in excess of the maximum amount of interest permitted by
Applicable Law (“Excess Interest”). 
If any Excess Interest is provided for or determined by a court of
competent jurisdiction to have been provided for in this Agreement or in any
other Loan Document, then in such event: (1) the provisions of this
subsection 2.2(C) shall govern and control; (2) neither any Borrower
nor any other Loan Party shall be obligated to pay any Excess Interest; (3) any
Excess Interest that Agent, Canadian Agent or any Lender may have received
hereunder shall be, at such Lender’s option, (a) applied as a credit
against the outstanding principal balance of the US Obligations or the Canadian
Obligations, as applicable, or accrued and unpaid interest (not to exceed the
maximum amount permitted by law), (b) refunded to the payor thereof, or (c) any
combination of the foregoing; (4) the interest rate(s) provided for
herein shall be automatically reduced to the maximum lawful rate allowed from
time to time under Applicable Law (the “Maximum Rate”), and this
Agreement and the other Loan Documents shall be deemed to have been and shall
be, reformed and modified to reflect such reduction; and (5) neither any
Borrower nor any other Loan Party shall have any action against Agent, Canadian
Agent or any Lender for any damages arising out of the payment or collection of
any Excess Interest.  Notwithstanding the
foregoing, if for any period of time interest on any Obligations is calculated
at the Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the rate of
interest payable on such Obligations shall remain at the Maximum 


 


50

















 


Rate
until each Lender shall have received the amount of interest which such Lender
would have received during such period on such Obligations had the rate of
interest not been limited to the Maximum Rate during such period. The
Loan Parties acknowledge that the rates of interest applicable to the Canadian
Revolving Loan and Canadian Lender Letter of Credit may be computed on the
basis of a period of less than 365 days. 
For purposes of the Interest Act (Canada), whenever any interest is
calculated using a rate based on a period of less than 365 days, such rate
determined pursuant to such calculation, when expressed as an annual rate is
equivalent to (i) the applicable rate based on a period of less than 365
days, (ii) multiplied by the actual number of days in the calendar year in
which the period for such interest is payable (or compounded) ends, and
(iii) divided by the number of days in the period that is less than 365
days.


 


(D)          Conversion or Continuation.  (i) 
Subject to the other provisions of this Agreement, including, without
limitation, satisfying the conditions set forth in Section 3, US Borrower
shall have the option to (1) convert at any time all or any part of
outstanding US Loans equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount from Base Rate Loans to LIBOR Loans or (2) upon the
expiration of any Interest Period applicable to a LIBOR Loan, to (a) continue
all or any portion of such LIBOR Loan equal to $1,000,000 and integral
multiples of $100,000 in excess of that amount as a LIBOR Loan or (b) convert
all or any portion of such LIBOR Loan to a Base Rate Loan.  The succeeding Interest Period(s) of
such continued or converted Loan commence on the last day of the Interest
Period of the Loan to be continued or converted; provided that no
outstanding Loan may be continued as, or be converted into, a LIBOR Loan, when
any Event of Default or Default has occurred and is continuing.


 


Borrowing Agent shall
deliver a Notice of Borrowing with respect to any such conversion/continuation
to Agent no later than noon (New York City time) at least three (3) Business
Days in advance of the proposed conversion/continuation date.  The Notice of Borrowing with respect to such
conversion/continuation shall certify: (1) the proposed
conversion/continuation date (which shall be a Business Day); (2) the
amount of the US Loan to be converted/continued; (3) the nature of the
proposed conversion/continuation; (4) in the case of conversion to, or a
continuation of, a LIBOR Loan, the requested Interest Period; and (5) that
no Default or Event of Default has occurred and is continuing or would result
from the proposed conversion/continuation.


 


In lieu of delivering a
Notice of Borrowing with respect to any such conversion/continuation, Borrowing
Agent may give Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2(D) (in such telephonic
notice Borrowing Agent shall certify to the items set forth above with respect
to the Notice of Borrowing); provided that such telephonic notice shall
be promptly confirmed in writing by delivery of a Notice of Borrowing (in form
and substance described herein) with respect to such conversion/continuation to
Agent on or before the proposed conversion/continuation date.  Once given, US Borrower shall be bound by
such telephonic notice.  Upon the
expiration of an Interest Period for a LIBOR Loan, in the absence of a new
Notice of Borrowing or a telephonic notice submitted to Agent not less than
three (3) Business Days prior to the end of such Interest Period, the
LIBOR Loan then maturing shall be automatically converted to a Base Rate Loan.


 


51














 


Neither Agent nor any Lender
shall incur any liability to US Borrower or any other Loan Party in acting upon
any telephonic notice or a Notice of Borrowing referred to above that Agent
believes in good faith to have been given by an officer or other person
authorized to act on behalf of US Borrower or for otherwise acting in good
faith under this subsection 2.2(D).


 


(ii)                                  Subject to the other provisions of this
Agreement, including, without limitation, satisfying the conditions set forth
in Section 3, Canadian Borrower shall have the option to (1) convert
at any time all or any part of outstanding Canadian Revolving Loans equal to
Cdn $100,000 and integral multiples of Cdn $100,000 in excess of that amount
from Base Rate Loans to Canadian BA Rate Loans or (2) upon the expiration
of any BA Period applicable to a Canadian BA Rate Loan, to (a) continue
all or any portion of such Canadian BA Rate Loan equal to Cdn $100,000 and
integral multiples of Cdn $100,000 in excess of that amount as a Canadian BA
Rate Loan or (b) convert all or any portion of such Canadian BA Rate Loan
to a Base Rate Loan.  The succeeding BA
Period(s) of such continued or converted Canadian Loan commence on the
last day of the BA Period of the Canadian Loan to be continued or converted; provided
that no outstanding Loan may be continued as, or be converted into, a Canadian
BA Rate Loan, when any Event of Default or Default has occurred and is
continuing.


 


Borrowing Agent shall
deliver a Notice of Borrowing with respect to any such conversion/continuation
to Agent and, in the circumstances described in the penultimate paragraph of
this clause (ii), Canadian Agent no later than 11:00 a.m. (New York City
time) at least three (3) Business Days in advance of the proposed
conversion/continuation date. If Agent determines that such proposed
conversion/continuation may be made pursuant to the terms hereof, Agent shall
notify Canadian Agent of same, and Canadian Agent shall deliver such Notice of
Borrowing to Lenders no later than 1:00 p.m. (New York City time) on the
same Business Day as such notice was received. 
The Notice of Borrowing with respect to such conversion/continuation
shall certify: (1) the proposed conversion/continuation date (which shall
be a Business Day); (2) the amount of the Loan to be converted/continued; (3) the
nature of the proposed conversion/continuation; (4) in the case of
conversion to, or a continuation of, a Canadian BA Rate Loan, the requested BA
Period; and (5) that no Default or Event of Default has occurred and is
continuing or would result from the proposed conversion/continuation.


 


In lieu of delivering a
Notice of Borrowing with respect to any such conversion/continuation, Borrowing
Agent may give Agent and Canadian Agent telephonic notice by the required time
of any proposed conversion/continuation under this subsection 2.2(D) (in
such telephonic notice Borrowing Agent on behalf of Canadian Borrower shall
certify to the items set forth above with respect to the Notice of Borrowing); provided
that such telephonic notice shall be promptly confirmed in writing by delivery
of a Notice of Borrowing (in form and substance described herein) with respect
to such conversion/continuation to Agent on or before the proposed
conversion/continuation date.  If Agent
determines that such proposed conversion/continuation may be made pursuant to
the terms hereof, Agent shall promptly notify Canadian Agent and Lenders of
such telephonic notice request.  Once
given, Canadian Borrower shall be bound by such telephonic notice.  Upon the expiration of a BA Period for a
Canadian BA Rate Loan, in the absence of a new Notice of Borrowing or a
telephonic notice submitted to Agent and Canadian Agent not less than three (3) Business
Days prior to the end of such Interest 


 


52

















 


Period, the Canadian BA Rate
Loan then maturing shall be automatically converted to a Base Rate Loan.


 


In the event that Agent and
Canadian Agent are the same entity or are affiliated entities, (x) delivery
of any notice to Agent shall be deemed to constitute delivery of such notice to
Canadian Agent, and (y) Canadian Agent shall determine whether the
proposed conversion/continuation with respect to Canadian Revolving Loans may
be made pursuant to the terms hereof, and, upon making a determination that
such proposed conversion/continuation may be made, shall deliver such Notice of
Borrowing to Lenders. Each of the parties to this Agreement hereby acknowledges
that as of the Closing Date, GMAC CF is acting as both Agent and Canadian
Agent. In the event that a Person that is acting as both Agent and Canadian
Agent (or, if applicable, affiliated Persons) shall cease to act as Canadian
Agent, Agent shall promptly notify Borrowing Agent of the appointment of a new
Canadian Agent, and Borrowing Agent shall, upon receipt of such notice, deliver
separate copies of all notices with respect to any conversion/continuation to
Agent and to Canadian Agent as provided herein.


 


None of Agent, Canadian
Agent nor any Lender shall incur any liability to Canadian Borrower or any
other Loan Party in acting upon any telephonic notice or a Notice of Borrowing
referred to above that Agent believes in good faith to have been given by an
officer or other person authorized to act on behalf of Canadian Borrower or for
otherwise acting in good faith under this subsection 2.2(D).


 


2.3.                              Fees.


 


(A)                              Unused Line Fee.  Borrowers
shall pay to Agent, for the benefit of the Lenders, based on their Pro Rata
Shares of the US Revolving Loan Commitments, a fee in an amount equal to the
aggregate of the US Revolving Loan Commitments less the sum of (1) the US
Dollar Equivalent of the average daily balance of the each of the Revolving
Loan and the Swingline Loan, plus, (2) the US Dollar Equivalent of the
average daily face amount of the Letter of Credit Reserve during the preceding
month, multiplied by (3) (x) 0.75% per annum if the sum of the
amounts set forth in subclauses (1) and (2) above is less than or
equal to the product of 65% and the amount of the aggregate of the US Revolving
Loan Commitments and (y) 0.50% per annum if the sum of the amounts set
forth in subclauses (1) and (2) above is greater than the product of
65% and the amount of the aggregate of the US Revolving Loan Commitments. Fees
will be calculated on the basis of a three hundred sixty (360) day year for the
actual number of days elapsed and to be payable monthly in arrears on the first
day of each month following the Closing Date.


 


(B)                                Letter of Credit Fees.  US
Borrower shall pay to Agent a fee with respect to the US Lender Letters of
Credit for the benefit of all Lenders with a US Revolving Loan Commitment
(based on their respective Pro Rata Shares of the US Revolving Loan
Commitments) in the amount of the average daily amount of US Letter of Credit
Liability outstanding during such month multiplied by the Applicable Margin per
annum for LIBOR Loans.  Canadian Borrower
shall pay to Canadian Agent a fee (in Canadian Dollars) with respect to the
Canadian Lender Letters of Credit for the benefit of the Lenders with a
Canadian Revolving Loan Commitment (based on their respective Pro Rata Shares
of the Canadian Revolving Loan Commitments) in the amount of the average daily
amount of the Canadian Letter of Credit 


 


53

















 


Liability
outstanding during such month multiplied by the Applicable Margin per annum for
Canadian BA Rate Loans.  Such fees will
be calculated on the basis of a three hundred sixty (360) day year for the
actual number of days elapsed and will be payable monthly in arrears on the
first day of each month.  US Borrower
shall also reimburse Agent for any and all fees and expenses, if any, paid by
Agent or any Lender to the issuer of any Bank Letter of Credit and Canadian
Borrower shall also reimburse Canadian Agent  for
any fees and expenses, if any, paid by Canadian Agent  or any Lender to the issuer of any Bank Letter of Credit. In
addition, US Borrower and Canadian Borrower agree to pay to any Issuing Lender
such fronting fees and other customary charges as such Issuing Lender may
require.


 


(C)                                Other Fees and Expenses. 
Borrower shall pay to Agent (and to Canadian Agent, to the extent that
Agent and Canadian Agent are neither the same entity nor affiliated entities),
for its own account, all charges for returned items and all other bank charges
incurred by Agent (and Canadian Agent, if applicable), as well as Agent’s (and
Canadian Agent’s, if applicable) standard wire transfer charges for each wire
transfer made under this Agreement.


 


(D)                               Fee Letter.  Borrowers
shall pay to GMAC CF, individually, the fees specified in that certain letter
agreement dated March 23, 2010, between Borrowers and GMAC CF (the “Fee
Letter”).


 


2.4.                              Payments and Prepayments.


 


(A)                              Manner and Time of Payment.  (1) In
its sole discretion, Agent may elect to honor the automatic requests by
Borrowing Agent for US Revolving Advances for all principal, US Lender Letter
of Credit reimbursement obligations, interest, fees, compensation and any other
amounts due hereunder or under any of the other Loan Documents on their
applicable due dates pursuant to subsection 2.1(E), and the proceeds of each
such US Revolving Advance, if made, shall be applied as a direct payment of the
relevant US Obligation. To the extent such amounts exceed the US Revolving Loan
Commitment of all Lenders, or if Agent, upon not less than one (1) Business
Day’s notice, elects to bill US Borrower for any amount due hereunder or under
any of the other Loan Documents, such amount shall be immediately due and
payable with interest thereon accruing from the applicable due date.  All payments made by US Borrower with respect
to the US Obligations shall be made without deduction, defense, setoff or
counterclaim.  All payments to Agent
hereunder shall, unless otherwise directed by Agent, be made to Agent’s Account
or from funds that are transferred from certain Controlled Accounts maintained
by US Loan Parties, on a daily basis, to Agent’s Account in accordance with the
procedures agreed upon by Agent and Borrowing Agent in subsection 5.12.  All payments remitted to Agent’s Account
shall be credited to the US Obligations on the same Business Day as such
payments are received by Agent in immediately available funds; provided,
however, payments received by Agent after 3:00 P.M. (New York City
time) shall be deemed received on the next Business Day. So long as no Event of
Default has occurred and is continuing, such funds shall be applied to that
portion of the US Revolving Loan bearing interest at the Base Rate until all
Base Rate Loans have been paid in full and to pay amounts that would otherwise
be funded by an Advance pursuant to this subsection 2.4(A)(1) with any
remaining funds being either (a) at the election of Agent, during the
occurrence and continuance of an Event of Default, applied to that portion of
the US Revolving Loan bearing interest at LIBOR and all other Obligations in
accordance with subsection 2.4(E) or subsection 8.7, as applicable, or (b) to
the extent no Event of Default has occurred and is 


 


54

















 


continuing
or no election is made under clause (a) above, returned (on the Business
Day received in Agent’s Account if received prior to 3:00 p.m. (New York
City time) and otherwise on the next Business Day) to a Controlled Account
designated by Borrowing Agent.


 


(2)                                  In its sole discretion, Canadian Agent may
(upon notice to and with the consent of Agent, in the event that Agent and
Canadian Agent are neither the same entity nor affiliated entities) elect to
honor the automatic requests by Borrowing Agent for Canadian Revolving Advances
for all principal, Canadian Lender Letter of Credit reimbursement obligations,
interest, fees, compensation and any other amounts due hereunder or under any
of the other Loan Documents on their applicable due dates pursuant to
subsection 2.1(E), which shall be applied by Canadian Agent as a direct payment
of the relevant Canadian Obligation.  To
the extent such amounts exceed the Canadian Revolving Loan Commitment of all
Lenders, or if Canadian Agent (with the consent of Agent, in the event that
Agent and Canadian Agent are neither the same entity nor affiliated entities),
upon not less than one (1) Business Day’s notice, elects to bill Canadian
Borrower for any amount due hereunder or under any of the other Loan Documents,
such amount shall be immediately due and payable with interest thereon accruing
from the applicable due date.  All
payments made by Canadian Borrower with respect to the Canadian Obligations shall
be made without deduction, defense, setoff or counterclaim.  All payments to Canadian Agent hereunder
shall, unless otherwise directed by Canadian Agent, be made to Canadian Agent’s
Account or from funds that are transferred from certain Controlled Accounts
maintained by Canadian Loan Parties, to the extent such procedures are
established and agreed upon by Agent and Borrowing Agent. All payments remitted
to Canadian Agent’s Account shall be credited to the Canadian Obligations on
the same Business Day as such payments are received by Canadian Agent in
immediately available funds; provided, however, payments received
by Canadian Agent after 3:00 P.M. (New York City time) shall be deemed
received on the next Business Day. So long as no Event of Default has occurred
and is continuing, such funds shall be applied to that portion of the Canadian
Revolving Loan bearing interest at the Base Rate until all Base Rate Loans have
been paid in full and to pay amounts that would otherwise be funded by an
Advance pursuant to this subsection 2.4(A)(2) with any remaining funds
being either (a) at the election of Agent, during the occurrence and
continuance of an Event of Default, applied to that portion of the Canadian
Revolving Loan bearing interest at the Canadian BA Rate and to all other
Canadian Obligations in accordance with subsection 2.4(E) or subsection
8.7, as applicable, or (b) to the extent no Event of Default has occurred
and is continuing or no election is made under clause (a) above, returned
(on the Business Day received in the Canadian Agent’s Account if received prior
to 3:00 p.m. (New York City time) and otherwise on the next Business Day)
to a Controlled Account designated by Borrowing Agent. Borrowing Agent shall
notify Canadian Agent by noon (New York City time) if it intends to make any voluntary
payment or repayment of the Canadian Obligations to the Canadian Agent’s
Account. In the event that Agent and Canadian Agent are neither the same entity
nor affiliated entities, Canadian Agent shall notify Agent of any payment or
repayment (as well as any notice received from Borrowing Agent with respect
thereto) by 1:00 p.m. (New York City time) on the Business Day received by
Canadian Agent.


 


(B)                                Mandatory Prepayments.


 


(1)                                  Over Formula Advance.  At
any time that the US Revolving Loan exceeds the US Maximum Revolving Loan
Amount (a “US Over Formula Advance”), including, 


 


55

















 


without limitation, as a
result of any conversion of loans or as a result of any changes in asset values
or foreign exchange rates, US Borrower shall, within one (1) Business Day
after the occurrence thereof (or within one (1) Business Day after
receiving notice thereof from Agent solely if such US Over Formula Advance is
the result of changes in foreign exchange rates, any Agent Overadvance pursuant
to subsection 9.13 or any Advance made by Agent or Canadian Agent as a result
of an automatic Advance pursuant to subsections 2.4(A)(1) or 2.4(A)(2)),
repay the US Revolving Loan and the Swingline Loan to the extent necessary to
eliminate the US Over Formula Advance (unless Canadian Borrower shall have
eliminated the US Over Formula Advance by means of repayments of the Canadian
Revolving Loans).  At any time that (1) the
Canadian Revolving Loan exceeds the Canadian Maximum Revolving Loan Amount, or
at any time that (2) the US Dollar Equivalent of the Canadian Revolving
Loan exceeds the lesser of (x) the aggregate of the US Revolving Loan
Commitments of all Lenders less the sum of (a) the US Dollar Equivalent of
the Letter of Credit Reserve and the aggregate outstanding principal balance of
the Swingline Loan and (b) the aggregate outstanding principal balance of
the US Revolving Loan and (y) the Borrowing Base less the sum of the US
Dollar Equivalent of the Letter of Credit Reserve, the aggregate outstanding
principal balance of the US Revolving Loan and the aggregate outstanding
principal balance of the  Swingline Loan,
each as of the applicable date of determination ((1) and (2) each a “Canadian
Over Formula Advance”), including, without limitation, as a result of any
conversion of loans or as a result of any changes in asset values or foreign
exchange rates, Canadian Borrower shall, within one (1) Business Day after
the occurrence thereof (or within one (1) Business Day after receiving
notice thereof from Agent solely if such Canadian Over Formula Advance is the
result of changes in foreign exchange rates, any Agent Overadvance pursuant to
subsection 9.13 or any Advance made by Agent or Canadian Agent as a result of
an automatic Advance pursuant to subsections 2.4(A)(1) or 2.4(A)(2)),
repay the Canadian Revolving Loan to the extent necessary to eliminate the
Canadian Over Formula Advance (unless US Borrower shall have eliminated the
Canadian Over Formula Advance by means of repayments of the US Revolving
Loans).


 


(2)                                  Prepayments.  Upon the
occurrence of an Event of Default and acceleration of the Obligations and/or
any Event of Default under subsection 8.1(G) or subsection 8.1(H), Loan
Parties shall, immediately upon receipt thereof by any Loan Party, apply each
of (a) any Asset Pool Proceeds, (b) the proceeds of any disposition
of the eAGLE Software or other General Intangibles used in connection with the
collection or monitoring of Asset Pools, (c) any Net Proceeds from Asset
Dispositions, (d) the net cash proceeds of the issuance of Stock, (e) the
net proceeds of the Tax Distribution, and (f) all other Proceeds of
Collateral, to prepay the Obligations as a prepayment pursuant to subsection
8.7 hereof.


 


(C)                                Voluntary Prepayments of Loans.


 


(1)                                  Any prepayment of the Obligations permitted in
this subsection 2.4(C) shall be subject to the payment of all fees set
forth in subsection 2.3 that are due and owing, including, without limitation,
the payment of any amounts owing pursuant to subsection 2.12 resulting from
such prepayment.  In the event any Lender
Letters of Credit are outstanding at the time that Borrowers prepay the
Obligations and desire to terminate the Revolving Loan Commitment, (i) US
Borrower shall cause Agent and each Lender to be released from all liability
under any US Lender Letters of Credit or, at Borrowing Agent’s option, US
Borrower shall either (1) deposit with Agent for the benefit of all
Lenders cash in an amount equal to the 


 


56

















 


sum of (x) one hundred
and five percent (105%) of the aggregate outstanding US Letter of Credit
Reserve and (y) the fees payable under subsection 2.3(B) with respect
to such US Lender Letters of Credit for the full remaining terms of such US Lender
Letters of Credit, or (2) furnish an Acceptable Standby Letter of Credit
in an amount equal to the amount of cash required pursuant to the immediately
preceding clause (1), in either case, to be available to Agent (for the benefit
of the Lenders and the Issuing Lenders) to reimburse payments of drafts drawn
under such US Lender Letters of Credit and pay any fees and expenses related
thereto and (ii) Canadian Borrower shall cause Canadian Agent and Lenders
to be released from all liability under any Canadian Lender Letters of Credit
or, at Borrowing Agent’s option, Canadian Borrower shall either (1) deposit
with Agent cash in an amount at all times not less than the sum of (x) one
hundred and five percent (105%) of the US Dollar Equivalent of the aggregate
outstanding Canadian Letter of Credit Reserve and (y) the fees payable
under subsection 2.3(B) with respect to such Canadian  Lender Letters of Credit for the full
remaining terms of such Canadian Lender Letters of Credit, or (2) furnish
an Acceptable Standby Letter of Credit in an amount equal to the amount of cash
required pursuant to the immediately preceding clause (1), in either case, to
be available to Agent (for the benefit of the Lenders and the Issuing Lenders)
to reimburse payments of drafts drawn under such Canadian Lender Letters of
Credit and pay any fees and expenses related thereto.


 


(2)                                  Upon termination of any such Lender Letter of
Credit, the unearned portion of such prepaid fee attributable to such Lender
Letter of Credit shall be refunded to Borrowers.


 


(3)                                  At any time, Borrowers may prepay the Loans,
in whole or in part, without premium or penalty (but subject to the payment of
LIBOR Breakage Costs and BA Breakage Costs, if applicable).


 


(4)                                  Borrowing Agent shall notify Agent by noon (New
York City time) on the date of any voluntary prepayment if any Borrower intends
to make any voluntary payment or repayment of (i) US Obligations to Agent’s
Account or (ii) Canadian Obligations to the Canadian Agent’s Account.


 


(D)                               Payments on Business Days. 
Whenever any payment to be made hereunder shall be stated to be due on a
day that is not a Business Day, the payment may be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the amount of interest or fees due hereunder.


 


(E)                                 Application of Proceeds.


 


(i)                                     So long as a Reallocation Event has not
occurred and is continuing as of the time of any prepayment by US Borrower
pursuant to subsection 2.4(B), such prepayment by US Borrower shall be applied to
the US Revolving Loan and, upon payment in full of all US Loans (including the
cash collateralization of outstanding US Lender Letters of Credit), to the
Canadian Revolving Loan.  So long as a
Reallocation Event has not occurred and is continuing as of the time of any
prepayment by Canadian Borrower pursuant to subsection 2.4(B), such prepayment
by Canadian Borrower shall be applied to the Canadian Revolving Loan (including
the cash collateralization of outstanding Canadian Lender Letters of Credit).


 


57

















 


(ii)                                  If a Reallocation Event has occurred and is
continuing at the time of any prepayment pursuant to subsection 2.4(B), such
prepayment shall be applied to the Obligations in the order of priority set
forth in subsection 8.7.


 


(iii)                               Considering each type of Loan being prepaid
separately, any such prepayment shall be applied first to Base Rate Loans of
the type required to be prepaid before application to LIBOR Loans or Canadian
BA Rate Loans, as applicable, of the type required to be prepaid, in each case
in a manner which minimizes any resulting LIBOR Breakage Costs or BA Breakage
Costs, as applicable.


 


(iv)                              For purposes of clarity, any prepayment
pursuant to this subsection 2.4 shall not result in a corresponding reduction
in the Revolving Loan Commitments except as otherwise expressly provided in
this Agreement.


 


(F)                                 Voluntary Reduction of Revolving Loan
Commitments.  Borrowers shall be permitted, at the request
of Borrowing Agent, to reduce the Revolving Loan Commitments to an amount not
in excess of the then outstanding principal amount of US Revolving Loans,
Swingline Loans and the US Dollar Equivalent of the Canadian Revolving Loans
plus the Letter of Credit Reserve; provided that the Pro Rata Share of all
Lenders shall remain unchanged, and provided, further, that any
such reduction shall be in an amount (x) not less than $10,000,000, and (y) that
is a multiple of $5,000,000 in excess thereof.


 


2.5.                              Term of this Agreement.  This Agreement shall be effective until the
earlier of (a) April 6, 2014 and (b) the acceleration of all
Obligations pursuant to subsection 8.3 (the “Termination Date”).  The Revolving Loan Commitments shall
terminate (unless earlier terminated pursuant to the terms hereunder) upon the
Termination Date and all Obligations shall become immediately due and payable
without notice or demand. 
Notwithstanding any termination, until all Obligations have been Paid in
Full, Agent, on behalf of itself, Canadian Agent, Issuing Lenders and
Lenders, shall be entitled to retain security interests in and liens upon all
Collateral, and even after payment of all Obligations hereunder, Borrowers’
obligation to indemnify Agent, Canadian Agent, each Issuing Lender and each
Lender in accordance with the terms hereof shall continue.


 


2.6.                              Statements.  Agent shall render a monthly statement of
account to Borrowing Agent within twenty (20) days after the end of each
month.  Such statement of account shall
constitute an account stated unless Borrowing Agent makes written objection
thereto within ninety (90) days from the date such statement is mailed to
Borrowing Agent.  Agent shall record in
its books and records, including computer records, (a) all Loans, interest
charges and payments thereof, (b) all Letter of Credit Liability, (c) the
charging and payment of all fees, costs and expenses in connection with the
Obligations and (d) all other debits and credits with respect to the
Obligations pursuant to this Agreement. 
The balance in the loan accounts shall constitute presumptive evidence,
absent manifest error, of the accuracy of the information contained therein; provided,
however, that any failure by Agent to so record shall not limit or
affect any Borrower’s obligation to pay.


 


2.7.                              Intentionally Omitted.


 


58

















 


2.8.                              Yield Protection.


 


(A)                              Capital Adequacy and Other Adjustments.  In
the event any Lender shall have determined that the adoption after the date
hereof of any Applicable Law regarding capital adequacy, reserve requirements
or similar requirements or compliance by such Lender or any Person controlling
such Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) from any central
bank or Governmental Authority or body having jurisdiction does or shall have
the effect of increasing the amount of capital, reserves or other funds
required to be maintained by such Lender or any Person controlling such Lender
and thereby reducing the rate of return on such Lender’s or such Person’s
capital as a consequence of its obligations hereunder, then Borrowers shall
within fifteen (15) days after notice and demand from such Lender (together
with the certificate referred to in the next sentence and with a copy to Agent)
pay to Agent for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction; provided that Borrowers shall
not be required to compensate a Lender pursuant to this subsection 2.8(A) for
any reductions in return incurred more than one hundred eighty (180) days prior
to the date that such Lender notifies Borrowers of such Applicable Law giving
rise to such reductions and of such Lender’s intention to claim compensation
therefor.  A certificate as to the amount
of such cost and showing the basis of the computation of such cost submitted by
such Lender to Borrowing Agent shall, absent manifest error, be final, conclusive
and binding for all purposes.


 


(B)                                Increased LIBOR Funding Costs.  If,
after the date hereof, the introduction of, change in or interpretation of any
Applicable Law would impose or increase reserve requirements (other than as
taken into account in the definition of LIBOR) or otherwise increase the cost
to any Lender of making or maintaining a LIBOR Loan, then Borrowers shall from
time to time within fifteen (15) days after notice and demand from such
affected Lenders (together with the certificate referred to in the next
sentence and with a copy to Agent) pay to Agent for the account of such
affected Lenders, additional amounts sufficient to compensate such Lenders for
such increased cost; provided that Borrowers shall not be required to
compensate a Lender pursuant to this subsection 2.8(B) for any additional
or increased costs incurred more than one hundred eighty (180) days prior to
the date that such Lender notifies Borrowers of such Applicable Law giving rise
to such additional or increased costs and of such Lender’s intention to claim
compensation therefor.  A certificate as
to the amount of such cost and showing the basis of the computation of such
cost submitted by such affected Lenders to Borrowers and Agent shall, absent manifest
error, be final, conclusive and binding for all purposes.


 


2.9.                              Taxes.


 


(A)                              No Deductions.  Any and all
payments or reimbursements made hereunder shall be made free and clear of and
without deduction for any and all taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto; excluding, however, (i) taxes
imposed on (or measured by) the net income or net profits of any Lender, Agent
or Canadian Agent (including franchise taxes and branch profit taxes), in each
case imposed by the jurisdiction (or by any political subdivision or taxing
authority thereof) in which such Agent or Lender is organized or doing
business, or in which such Agent’s or Lender’s applicable lending office is
located; (ii) taxes resulting from a Lender’s failure to comply with the
requirements of 


 


59

















 


subsection
2.9(C); and (iii) any United States withholding taxes that would be
imposed on amounts payable to a Foreign Lender (as defined below) based upon
the applicable withholding rate in effect at the time such Lender becomes a
party to this Agreement (or designates a new lending office) ((i), (ii), and (iii) collectively
referred to herein as “Excluded Taxes” and all taxes, levies, imposts,
deductions, charges or withholdings and all liabilities with respect thereto,
except Excluded Taxes, referred to herein as “Tax Liabilities”).  If any Borrower shall be required by law to
deduct any such Tax Liabilities from or in respect of any sum payable hereunder
to Agent, Canadian Agent or any Lender, then the sum payable hereunder shall be
increased as may be necessary so that, after making all required deductions,
Agent or such Lender receives an amount equal to the sum it would have received
had no such deductions been made.


 


(B)                                Changes in Tax Laws.  In
the event that, subsequent to the Closing Date, (1) any changes in any
existing Applicable Law or in the interpretation or application thereof, (2) any
new law, regulation, treaty or directive enacted or any interpretation or
application thereof, or (3) compliance by a Lender with any request or
directive (whether or not having the force of law) from any Governmental
Authority:


 


(1)                                  does or shall subject Agent, Canadian Agent or
any Lender to any tax of any kind whatsoever with respect to this Agreement,
the other Loan Documents or any Loans made or Lender Letters of Credit issued
hereunder, or change the basis of taxation of payments to Agent or such Lender
of principal, fees, interest or any other amount payable hereunder (except for
net income taxes, or franchise taxes imposed in lieu of net income taxes,
imposed generally by federal, provincial, state or local taxing authorities
with respect to interest or commitment or other fees payable hereunder or
changes in the rate of tax on the overall net income of Agent or such Lender);
or


 


(2)                                  does or shall impose on Agent, Canadian Agent
or any Lender any other condition or increased cost in connection with the
transactions contemplated hereby or participations herein; and the result of
any of the foregoing is to increase the cost to Agent or such Lender of issuing
any Lender Letter of Credit or making or continuing any Loan hereunder, as the
case may be, or to reduce any amount receivable hereunder;


 


then, in any such case, Borrowers shall promptly pay
to Agent or such Lender, upon its notice and demand, as additional interest,
any additional amounts necessary to compensate Agent or such Lender, on an
after-tax basis, for such additional cost or reduced amount receivable, as reasonably
determined by Agent or such Lender with respect to this Agreement or the other
Loan Documents.  If Agent, Canadian Agent
or any Lender becomes entitled to claim any additional amounts pursuant to this
subsection 2.9(B), it shall promptly notify Borrowing Agent of the event by
reason of which Agent or such Lender has become so entitled (with any such
Lender concurrently notifying Agent) and the amount of the additional cost or
reduced amount receivable to the extent determinable.  A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Agent, Canadian Agent
or any Lender to Borrowing Agent shall, absent manifest error, be final,
conclusive and binding for all purposes.


 


(C)                                Foreign Lenders.  (1) 
If any Lender is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which Canadian Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this 


 


60

















 


Agreement,
such Lender shall deliver to Borrowing Agent (with a copy to Agent), as
reasonably requested by Borrowing Agent, such properly completed and executed
documentation prescribed by Applicable Law as will permit such payments to be
made without withholding or at a reduced rate; provided that such Lender
is legally entitled to complete, execute and deliver such documentation.  Each Lender shall provide new documentation
upon the expiration or obsolescence of previously delivered documentation, and
shall promptly notify Borrowing Agent (with a copy to Agent) of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.


 


(2)                                  Each Lender organized under the laws of a
jurisdiction outside the United States (a “Foreign Lender”) as to which
payments to be made under this Agreement are exempt from United States
withholding tax or are subject to United States withholding tax at a reduced
rate under an applicable statute or tax treaty shall provide to Borrowing Agent
and Agent (1) a properly completed and executed Internal Revenue Service Form W-8BEN
or Form W-8ECI or other applicable form, certificate or document
prescribed by the Internal Revenue Service of the United States of America
certifying as to such Foreign Lender’s entitlement to such exemption or reduced
rate of withholding with respect to payments to be made to such Foreign Lender
under this Agreement, (a “Certificate of Exemption”), or (2) a
letter from any such Foreign Lender stating that it is not entitled to any such
exemption or reduced rate of withholding (a “Letter of Non-Exemption”).  Prior to becoming a Lender under this
Agreement and within fifteen (15) days after a reasonable written request of
Borrowing Agent or Agent from time to time thereafter, each Foreign Lender that
becomes a Lender under this Agreement shall provide a Certificate of Exemption
or a Letter of Non-Exemption to Borrowing Agent and Agent.  Each Foreign Lender shall provide new
documentation upon the expiration or obsolescence of any previously delivered
documentation and shall promptly notify Borrowing Agent (with a copy to Agent)
of any change in circumstances which would modify or render invalid any claimed
exemption or reduction.


 


If a Foreign Lender is entitled to an exemption with
respect to payments to be made to such Foreign Lender under this Agreement (or
to a reduced rate of withholding) and does not provide a Certificate of
Exemption to Borrowing Agent and Agent within the time periods set forth in the
preceding paragraph, Borrowers shall withhold taxes from payments to such
Foreign Lender at the applicable statutory rates and Borrowers shall not be
required to pay any additional amounts as a result of such withholding; provided,
however, that all such withholding shall cease upon delivery by such
Foreign Lender of a Certificate of Exemption to Borrowing Agent and Agent.


 


2.10.                        Required Termination and
Prepayment.  If on any
date any Lender shall have reasonably determined (which determination shall be
final and conclusive and binding upon all parties) that the making or
continuation of its LIBOR Loans or Canadian BA Rate Loans, as applicable, has
become unlawful or impossible by compliance by such Lender in good faith with
any law, governmental rule, regulation or order (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful),
then, and in any such event, that Lender shall promptly give notice (by
telephone confirmed in writing) to Borrowing Agent and Agent of that
determination.  Subject to prior
withdrawal of a Notice of Borrowing or prepayment of LIBOR Loans or Canadian BA
Rate Loans, as applicable, as contemplated by subsection 2.12, the obligation
of such Lender to make or maintain its LIBOR Loans or 


 


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Canadian
BA Rate Loans, as applicable during any such period shall be terminated at the
earlier of the termination of the Interest Period or BA Period then in effect
or when required by law and Borrowers shall no later than the termination of
the Interest Period or BA Period in effect at the time any such determination
pursuant to this subsection 2.10 is made or, earlier when required by law,
repay or prepay LIBOR Loans or Canadian BA Rate Loans, as applicable, together
with all interest accrued thereon or convert LIBOR Loans  or Canadian BA Rate Loans, as applicable, to
Base Rate Loans.


 


2.11.                        Optional
Prepayment/Replacement of Lenders.  Within thirty (30) days after receipt by
Borrowing Agent of: (a) written notice and demand from any Lender for
payment of additional costs as provided in subsection 2.8 or subsection 2.9, or
(b) written notice of any Lender’s inability to make LIBOR Loans or
Canadian BA Rate Loans as provided in subsection 2.10 (any such Lender
demanding such payment, having such inability or satisfying the conditions set
forth in subsection 9.8(F) being referred to herein as an “Affected
Lender”), Borrowing Agent may, at its option notify Agent and such Affected
Lender of its intention to take one of the actions set forth herein in
subparagraphs (A) or (B) below.


 


(A)                              Borrowing Agent may obtain, at Borrowers’
expense, a replacement Lender (“Replacement Lender”) for an Affected
Lender, which Replacement Lender shall be reasonably satisfactory to
Agent.  In the event Borrowing Agent
obtains a Replacement Lender that will purchase all outstanding Obligations
owed to such Affected Lender and assume its Revolving Loan Commitments
hereunder within ninety (90) days following notice of Borrower’s intention to
do so, the Affected Lender shall sell and assign its Loans and Revolving Loan
Commitments to such Replacement Lender in accordance with the provisions of
subsection 9.9, provided, however, Borrowers have (1) reimbursed
such Affected Lender for any administrative fee payable by such Affected Lender
to Agent pursuant to subsection 9.9 and, (2) in any case where such
replacement occurs as the result of a demand for payment of certain costs
pursuant to subsection 2.8 or subsection 2.9, paid all increased costs for
which such Affected Lender is entitled to under subsection 2.8 or subsection
2.9 through the date of such sale and assignment; provided, that each
Replacement Lender shall be an Eligible Assignee; or


 


(B)                                Prepayment of an Affected Lender. 
Borrowers may, with Agent’s consent, prepay in full all outstanding
Obligations owed to an Affected Lender and terminate such Affected Lender’s Pro
Rata Share of the applicable Revolving Loan Commitments, in which case the
applicable Revolving Loan Commitments will be reduced by the amount of such Pro
Rata Share; provided that this subsection 2.11(B) shall not apply
after the occurrence and during the continuance of an Event of Default with
respect to any Affected Lender that has made a demand for payment under
subsections 2.8 or 2.9 or has provided written notice of such Lender’s
inability to make LIBOR Loans or Canadian BA Rate Loans as provided in
subsection 2.10. Borrowers shall, within ninety (90) days following notice of
such intention to do so, prepay in full all outstanding Obligations owed to
such Affected Lender, including, if applicable, such Affected Lender’s
increased costs for which it is entitled to under subsection 2.8 or subsection
2.9 through the date of such prepayment and terminate such Affected Lender’s
obligations under the Revolving Loan Commitments. Notwithstanding anything to
the contrary in the Loan Documents, payments made pursuant to this subsection
2.11(B) shall be made solely to the Affected Lender without any
requirement of such payments being made to Lenders according to their Pro Rata
Shares.


 


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2.12.                        Compensation.  Borrowers shall, if requested by any Lender,
promptly pay to Agent for the benefit of such Lender (such Lender’s calculation
of such amounts shall, absent manifest error, be conclusive and binding upon
all parties hereto), for any LIBOR Breakage Costs or BA Breakage Costs, as
applicable, sustained by such Lender in connection with the re-employment of
funds: (a) if for any reason (other than a default by any Lender) a
borrowing of any LIBOR Loan or Canadian BA Rate Loans does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request of
borrowing by Borrowing Agent; (b) if any prepayment of any of its LIBOR
Loans or Canadian BA Rate Loans occurs on a date that is not the last day of an
Interest Period or BA Period applicable to that Loan (regardless of the source
of such prepayment and whether voluntary, by acceleration or otherwise); (c) if
any prepayment of any of its LIBOR Loans or Canadian BA Rate Loans is not made
on any date specified in a notice of prepayment given by Borrowing Agent; or (d) as
a consequence of any other default by any Borrower to repay its LIBOR Loans or
Canadian BA Rate Loans, as applicable, when required by the terms of this
Agreement; provided, however, during the period while any such
amounts have not been paid, Agent may, in its sole discretion, (i) in
accordance with subsection 2.4(A), elect to honor the automatic request by
Borrowing Agent for a Revolving Advance for such amount pursuant to subsection
2.1(D) or (ii) reserve an equal amount from amounts otherwise
available to be borrowed under the Revolving Loan.


 


2.13.                        Booking of LIBOR Loans;
Canadian Revolving Loans.  Each
Lender may make, carry or transfer US Revolving Loans consisting of LIBOR Loans
or Canadian Revolving Loans at, to, or for the account of, any of its branch
offices or the office of an affiliate of such Lender, so long as the making,
carrying or transferring of such LIBOR Loan or such Canadian Revolving Loans
does not result in any increased costs pursuant to subsection 2.8 or 2.9.


 


2.14.                        Assumptions Concerning
Funding of LIBOR Loans and Canadian BA Rate Loans.  Calculation of all amounts payable to each
Lender under subsection 2.12 shall be made as though each Lender had actually
funded its relevant LIBOR Loan or Canadian BA Rate Loan, as applicable, through
the purchase of a LIBOR deposit or BA deposit, as applicable, bearing interest
at LIBOR or the Canadian BA Rate, as applicable, in an amount equal to the
amount of that LIBOR Loan or Canadian BA Rate Loan, as applicable, and having
maturity comparable to the relevant Interest Period or BA Period and through
the transfer of such LIBOR deposit or BA deposit, as applicable, from an
offshore office to a domestic office in the United States of America; provided,
however, each Lender may fund each of its LIBOR Loans or Canadian BA
Rate Loans, as applicable, in any manner it sees fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
subsection 2.12.


 


2.15.                        Endorsement; Insurance
Claims.  Each Borrower hereby
constitutes and appoints Agent and all Persons designated by Agent for that
purpose as such Borrower’s true and lawful attorney-in-fact, with power in the
place and stead of such Borrower and in the name of such Borrower (a) to
endorse such Borrower’s name to any of the items of payment or proceeds
described in subsection 5.12 below and all proceeds of Collateral that come
into Agent’s possession or under Agent’s control, including without limitation,
with respect to any drafts, Instruments, Documents and Chattel Paper, and (b) after
the occurrence and during the continuation of an Event of Default, to obtain,
adjust and settle insurance claims, which are required to be paid to
Agent.  Each Borrower hereby ratifies and
approves all acts of Agent made or taken pursuant to this subsection 2.15.  Both the appointment of Agent as Borrowers’ 


 


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attorney-in-fact
and Agent’s rights and powers are coupled with an interest and are irrevocable,
so long as any of the Revolving Loan Commitments hereunder shall be in effect
and until all Obligations have been Paid in Full.


 


2.16.                        Increase of the US
Maximum Revolving Advance Amount by US Borrower.


 


(A)                              (a)                                  US Borrower may at any time prior to the
Termination Date, by written notice to Agent, request that Agent increase the
aggregate US Revolving Loan Commitments (each a “US Borrower Revolver
Increase”) by (i) adding one or more new lenders to the revolving
credit facility under this Agreement (each a “US New Revolving Lender”)
who wish to participate in such US Borrower Revolver Increase and/or (ii) increasing
the US Revolving Loan Commitments of one or more Lenders party to this
Agreement who wish to participate in such US Borrower Revolver Increase; provided,
however, that (w) US Borrower may only add a US New Revolving
Lender if, and only to the extent, there is insufficient participation on
behalf of the existing Lenders after ten (10) Business Days’ written
notice of such offer has been given to the Lenders with respect to such US
Borrower Revolver Increase (provided, that, for the avoidance of doubt,
Borrowing Agent and the Lenders party to this agreement may agree that such
Lenders will participate in such US Borrower Revolver Increase after the
expiration of such ten (10) Business Day period, but Lenders shall have no
further right of first refusal after the expiration of such ten (10) Business
Day period), (x) no Default or Event of Default shall have occurred and be
continuing as of the date of such request or as of the effective date of such
US Borrower Revolver Increase (each a “US Borrower Increase Date”) or
shall occur as a result thereof, (y) any US New Revolving Lender that
becomes party to this Agreement pursuant to this subsection 2.16 shall satisfy
the requirements of subsection 9.9 hereof and shall be acceptable to Agent (in
each case which acceptance shall not be unreasonably withheld or delayed and
which acceptance is not required for an Affiliate of a Lender or from a Person
that is not an Affiliated Entity meeting the requirements of clause (a) of
the definition of Eligible Assignee) and consented to by Borrowing Agent and (z) the
other conditions set forth in this subsection 2.16 are satisfied.  Agent shall promptly inform Lenders of any
such request made by US Borrower.  The
aggregate amount of the US Borrower Revolver Increases hereunder shall not
exceed $50,000,000 and no single US Borrower Revolver Increase shall be for an amount
less than $10,000,000.  The terms and
conditions (exclusive of upfront fees) of the US Borrower Revolver Increase
shall be in all respects the same as the other US Loans under this Agreement
and the Obligations of Borrowers thereunder shall be pari passu with the other
Obligations of Borrowers under this Agreement.


 


(B)                                On a US Borrower Increase Date, (i) each
US New Revolving Lender that has chosen to participate in such US Borrower
Revolver Increase shall, subject to the conditions set forth in subsection
2.16(A), become a Lender party to this Agreement as of such US Borrower
Increase Date and shall have a US Revolving Loan Commitment (and a
corresponding Canadian Revolving Loan Commitment as described in subsection
2.16(C)(iii)) in an amount equal to its share of such US Borrower Revolver
Increase as allocated by US Borrower and (ii) each existing Lender that
has chosen to increase its US Revolving Loan Commitment pursuant to this
subsection 2.16 will have its US Revolving Loan Commitment increased (with a
corresponding increase to its Canadian Revolving Loan Commitment as described
in subsection 2.16(C)(iii)) by the amount of its share of the US Borrower
Revolver Increase as of such US Borrower Increase Date as allocated by US
Borrower; provided, however, that (y) Agent shall have
received from 


 


64

















 


US
Borrower payment of any fees and/or expenses then due with respect to such US
Borrower Revolver Increase and Agent shall have received from US Borrower
payment of all out-of-pocket costs and expenses incurred by Agent in connection
with such US Borrower Revolver Increase, and (z) Agent shall have received
on or before such US Borrower Increase Date the following, each dated such
date:


 


(1)                                  an Assignment and Acceptance Agreement from
each US New Revolving Lender participating in such US Borrower Revolver
Increase, if any, in form and substance reasonably satisfactory to Agent, duly
executed by such US New Revolving Lender, Agent and US Borrower;


 


(2)                                  confirmation from each Lender participating in
such US Borrower Revolver Increase of the increase in the amount of its US
Revolving Loan Commitment, in form and substance reasonably satisfactory to
Agent;


 


(3)                                  a certificate of Borrowing Agent certifying
that no Default or Event of Default shall have occurred and be continuing or
shall occur as a result of such US Borrower Revolver Increase;


 


(4)                                  a certificate of Borrowing Agent certifying
that the representations and warranties made by each US Loan Party herein and
in the other Loan Documents are true, correct and complete in all material
respects on and as of that US Borrower Increase Date to the same extent as
though made on and as of that date, except for any representation or warranty
limited by its terms to a specific date, taking into account any amendments to
the Schedules or Exhibits as a result of any disclosures made by any Borrower
to Agent after the Closing Date and approved by Agent in writing;


 


(5)                                  supplements or modifications to this Agreement
and the other Loan Documents, including any new US Revolving Notes to US New
Revolving Lenders and replacement US Revolving Notes to existing Lenders that
agree to participate in such US Borrower Revolver Increase, that Agent or any
such US New Revolving Lenders reasonably requests in order to document such US
Borrower Revolver Increase and otherwise assure and give effect to the rights
of Agent and Lenders in this Agreement and the other Loan Documents; and


 


(6)                                  such other documents, instruments and
information as Agent or its counsel shall reasonably request in connection with
such US Borrower Revolver Increase.


 


(C)                                On such US Borrower Increase Date, upon
fulfillment of the conditions set forth in this subsection 2.16, Agent and
Lenders shall (i) effect a settlement of all outstanding US Revolving Advances
among the Lenders that will reflect the adjustments to the US Revolving Loan
Commitments of the Lenders as a result of such US Borrower Revolver Increase; (ii) effect
a settlement of all outstanding Canadian Revolving Advances among the Lenders
that will reflect the adjustments to the US Revolving Loan Commitments of the
Lenders as a result of such US Borrower Revolver Increase and the requirement
under the definition of Pro Rata Share that all Lenders, including the US New
Revolving Lenders, shall hold the same Pro Rata Share of the US Revolving Loan,
US Revolving Loan Commitment, the Canadian Revolving Loan and the 


 


65

















 


Canadian
Revolving Loan Commitment, (iii) effect an adjustment of the Lenders’ Canadian
Revolving Loan Commitments to reflect the requirement under the definition of
Pro Rata Share that all Lenders shall hold the same Pro Rata Share of the US
Revolving Loan Commitment and the 
Canadian Revolving Loan Commitment and (iv) notify Lenders, any US
New Revolving Lenders participating in such US Borrower Revolver Increase and
US Borrower, on or before noon (New York City time), by telecopier or e-mail,
of the occurrence of such US Borrower Revolver Increase to be effected on such
US Borrower Increase Date.


 


(D)                               Agent shall make reasonable efforts to manage
any reallocation of Loans in connection with the US Borrower Revolver Increase
in a manner that will minimize the incurrence of any LIBOR Breakage Costs and
BA Breakage Costs, as applicable.


 


2.17.                        Mitigation Obligation.  If any Lender requests payment of additional
costs as provided in subsection 2.8, or if Borrowers are required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to subsection 2.9, then such Lender shall, at the timely
written request of Borrowing Agent, use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
subsections 2.8 or 2.9, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. 
Borrowers hereby agree to pay promptly all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.


 


SECTION 3.                                            CONDITIONS TO LOANS


 


The obligations of Agent and each Lender to make Loans
and the obligation of Agent or any Lender to issue (or cause the issuance of)
Lender Letters of Credit on the Closing Date (the “Initial Funding Date”)
and on each Funding Date are subject to satisfaction of all of the terms and
conditions set forth below:


 


(A)                              Closing Deliveries.  With
respect to the Initial Funding Date, Agent shall have received, in form and
substance satisfactory to Agent, all documents, instruments and information
identified on the Closing Checklist attached hereto as Exhibit H
and all other agreements, notes, certificates, orders, authorizations,
financing statements, mortgages and other documents which Agent may at any time
reasonably request.


 


(B)                                Security Interests.  Agent
shall have received satisfactory evidence that all security interests and liens
granted to Agent for the benefit of Agent and Lenders pursuant to this
Agreement or the other Loan Documents have been duly perfected and, to the extent
required by the applicable Loan Document, constitute first priority liens on
the Collateral, subject only to Permitted Encumbrances.


 


(C)                                Closing Date Availability.  After
giving effect to the consummation of the transactions contemplated hereunder on
the Closing Date and the payment by Borrowers of all costs, fees and expenses
relating thereto, Undrawn Availability as of the Closing Date shall not be less
than $55,000,000.


 


66

















 


(D)                               Representations and Warranties.  The
representations and warranties contained herein and in the Loan Documents shall
be true, correct and complete in all material respects on and as of that
Funding Date to the same extent as though made on and as of that date, except
for any representation or warranty limited by its terms to a specific date and
taking into account any amendments to the Schedules or Exhibits as a result of
any disclosures made by any Borrower to Agent after the Closing Date pursuant
to subsection 4.23.


 


(E)                                 Fees.  With
respect to Loans or Lender Letters of Credit to be made or issued on the
Closing Date, Borrowers shall have paid all fees due to Agent and Lenders and
payable on the Closing Date.


 


(F)                                 No Default.  No event
shall have occurred and be continuing or would result from funding a Loan or
issuing a Lender Letter of Credit requested by any Borrower that would
constitute an Event of Default or a Default.


 


(G)                                Performance of Agreements.  Each
Loan Party shall have performed in all material respects all agreements and
satisfied all conditions which any Loan Document provides shall be performed by
it on or before that Funding Date.


 


(H)                               No Prohibition.  No order,
judgment or decree of any court, arbitrator or Governmental Authority shall
purport to enjoin or restrain Agent, Canadian Agent or any Lender from making
any Loans or issuing or causing the issuance of any Lender Letters of Credit.


 


(I)                                    No Litigation.  There shall
not be pending or, to the knowledge of any Loan Party, threatened, any action,
charge, claim, demand, suit, proceeding, petition, governmental investigation
or arbitration by, against or affecting any Loan Party or any of its
Subsidiaries or any property of any Loan Party or any of its Subsidiaries that
has not been disclosed to Agent by Borrowers in writing, and there shall have
occurred no development in any such action, charge, claim, demand, suit,
proceeding, petition, governmental investigation or arbitration that, in either
case, would reasonably be expected to have a Material Adverse Effect.


 


(J)                                   Delivery of Second Lien Debt Documents.  Agent
shall have received complete copies of the Second Lien Debt Documents.  None of such documents and agreements has
been amended or supplemented, nor have any of the provisions thereof been
waived, except pursuant to a written agreement or instrument which has
heretofore been delivered to Agent.


 


(K)                               Adjusted EBITDA.  Adjusted
EBITDA of Loan Parties for the trailing twelve month period ending December 31,
2009, after giving pro forma effect to the Related Transactions (including
adjustments, if any, reasonably satisfactory to Agent) shall have been at least
$165,000,000.


 


(L)                                 Indebtedness.  After
giving effect to the Loans, the issuance of Lender Letters of Credit, the
Related Transactions, the payment of all fees and expenses in connection
therewith and any accounts payable outstanding beyond normal terms, the total
Indebtedness of Holdings and its Subsidiaries on a consolidated basis on the
Closing Date shall not be greater than $405,000,000.


 


67

















 


(M)                            Loans and Letter of Credit Liability.  After
giving effect to the Loans, the issuance of Lender Letters of Credit, the
Related Transactions, the payment of all fees and expenses in connection
therewith and any accounts payable outstanding beyond normal terms, the total
Loans and Letter of Credit Liability under this Agreement on the Closing Date
shall not be greater than $95,000,000.


 


(N)                               Material Adverse Effect.  No
Material Adverse Effect shall have occurred and/or shall occur immediately
after giving effect to the Related Transactions on the Closing Date;


 


(O)                               Solvency.  With
respect to the Initial Funding Date, Agent shall be satisfied, based on
Financial Statements (actual and pro forma), Projections and other evidence
provided by Borrowers, or requested by Agent, that as of the Closing Date, US
Borrower and its Subsidiaries on a consolidated basis, after giving effect to
the Loans, the issuance of the Lender Letters of Credit and the Related
Transactions, will be Solvent.


 


(P)                                 Approvals.  With
respect to the Initial Funding Date, Agent shall be satisfied that all
third-party and regulatory approvals and consents necessary to consummate the
Related Transactions shall have been obtained and shall be final and non-appealable
as of the Closing Date.


 


(Q)                               Foreign Asset Control.  None
of Borrowers, Holdings or their Subsidiaries shall have become sanctioned or
targeted under any Federal regulation governing foreign asset control, or any
other comparable statue or regulation.


 


(R)                                Second Lien Notes.  US
Borrower shall have issued the Second Lien Notes pursuant to the Second Lien
Debt Documents and no less than $275,000,000 of principal amount of Second Lien
Notes shall be outstanding under the Second Lien Debt Documents on the Closing
Date.


 


(S)                                 Intercreditor Agreement.  Agent
shall have received a fully executed copy of the Intercreditor Agreement.


 


(T)                                Copies of Agreements.  With
respect to the Initial Funding Date, to the extent requested by Agent, Agent
has received accurate and complete copies (or summaries) of all of the
following agreements or documents: (1) franchise license agreements
involving transactions in excess of $500,000 per annum; (2) all leases of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $1,000,000 per annum (other than
purchase orders entered into in the ordinary course of business); (3) all
licenses and permits held by the Loan Parties, the absence of which would
reasonably be expected to have a Material Adverse Effect; (4) all
operative agreements evidencing any Indebtedness or Guaranteed Indebtedness in
respect of obligations in excess of $5,000,000 of such Loan Party and any Lien
granted by such Loan Party with respect thereto; and (5) all operative
agreements evidencing any obligation of the Loan Parties  in respect of the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Loan Party.


 


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(U)                               Determination of Estimated Remaining Proceeds. With respect to the Initial Funding Date,
Agent shall have received a final copy of the determination of Loan Parties’
Estimated Remaining Proceeds as of December 31, 2009 performed by Kaulkin Ginsberg,
which determination shall be satisfactory to Agent in its sole discretion.


 


SECTION 4.                                            REPRESENTATIONS AND WARRANTIES


 


To induce Agent, Canadian Agent and each Lender to
enter into the Loan Documents, to make and to continue to make Loans and to issue
and to continue to issue Lender Letters of Credit or risk participations to the
banks that issue Bank Letters of Credit, each Loan Party represents and
warrants to Agent, Canadian Agent and each Lender that the following statements
are true, correct and complete:


 


4.1.                              Organization, Powers,
Capitalization.


 


(A)                              Organization and Powers.  Each
of the Loan Parties is an entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and qualified to do
business in all states and other jurisdictions where such qualification is
required except where failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect. 
Each of the Loan Parties has all requisite power and authority to own
and operate its properties, to carry on its business as now conducted and
proposed to be conducted and to enter into each Loan Document.


 


(B)                                Capitalization.  As of the
Closing Date, the authorized Stock of each of the Loan Parties and its
respective Subsidiaries is as set forth on Schedule 4.1(B), including all
preemptive or other outstanding rights, options, warrants, conversion rights or
similar agreements or understandings for the purchase or acquisition from any
Loan Party of any Stock of any such entity. 
All issued and outstanding Stock (i) of each of the Loan Parties is
duly authorized and validly issued, fully paid, nonassessable (as applicable)
and (ii) of each of the Loan Parties (other than the Stock issued by
Holdings) is free and clear of all Liens other than Permitted Encumbrances. All
of the foregoing Stock was issued in compliance with all applicable state and
federal laws concerning the issuance of securities.


 


4.2.                              Authorization of
Borrowing, No Conflict.  Each
Loan Party has the power and authority to incur the Obligations and to grant
security interests in the Collateral.  On
the Closing Date, the execution, delivery and performance of the Loan Documents
by each Loan Party signatory thereto will have been duly authorized by all
necessary corporate and shareholder action. 
The execution, delivery and performance by each Loan Party of each Loan
Document to which it is a party and the consummation of the transactions
contemplated by the Loan Documents by each Loan Party do not contravene any
Applicable Law, the corporate charter or bylaws or other organizational
documents of any Loan Party or any agreement or order by which any Loan Party
or any Loan Party’s property is bound. 
The Loan Documents are the legally valid and binding obligations of the
applicable Loan Parties respectively, each enforceable against the Loan
Parties, as applicable, in accordance with their respective terms.


 


4.3.                              Financial Condition.  All Financial Statements concerning US
Borrower and its Subsidiaries furnished by or on behalf of US Borrower or any
Subsidiaries to Agent, Canadian 


 


69

















 


Agent
or any Lender pursuant to this Agreement have been prepared in accordance with
GAAP consistently applied throughout the periods involved (except as disclosed
therein) and present fairly in all material 
respects the financial condition of Persons covered thereby as at the
dates thereof and the results of their operations for the periods then ended,
subject to, in the case of unaudited Financial Statements, the absence of
footnotes and normal year-end adjustments. 
The Pro Forma was prepared by Borrowers based on the unaudited
consolidated balance sheet of US Borrower and its Subsidiaries dated December 31,
2009.  All Projections delivered by or on
behalf of any Loan Party were and are prepared on the basis of the assumptions
stated therein and such assumptions were believed by the Loan Parties to be
reasonable at the time prepared.  It is
understood by all parties hereto that uncertainty is inherent in any forecasts
or projections and that no assurance can be given that the results set forth in
the Projections will actually be obtained.


 


4.4.                              Indebtedness and
Liabilities.  (a) As
of the Closing Date, neither US Borrower nor any of its Subsidiaries has (i) any
Indebtedness that would be required to be reflected on a balance sheet prepared
in accordance with GAAP except as reflected on Schedule 7.1 or the Pro
Forma attached to this Agreement; or (ii) any Liabilities that would be
required to be reflected on a balance sheet prepared in accordance with GAAP
other than as reflected on the most recent financial statements delivered to
Agent and Lenders or as incurred in the ordinary course of business following
the date of the most recent financial statements delivered to Agent and
Lenders.


 


4.5.                              Holdings; Astrum; CA
Marketing and Collect Air.


 


(A)                              Holdings.   Holdings (i) owns
no assets other than the Stock of US Borrower and Astrum and miscellaneous
assets used in connection with its ownership of the Stock of its Subsidiaries; (ii) conducts
no business activity other than as the owner of the Stock of its Subsidiaries;
and (iii) owes no Indebtedness or Liabilities, except as permitted under
this Agreement.


 


(B)                                Astrum.   So long as
Astrum is not a Loan Party, Astrum (i) owns no assets other than the Stock
of CA Marketing and miscellaneous assets used in connection with its ownership
of the Stock of its Subsidiaries; (ii) conducts no business activity other
than as the owner of the Stock of its Subsidiaries; and (iii) owes no
Indebtedness or Liabilities, except as permitted under this Agreement.


 


(C)                                CA Marketing.   So long as
CA Marketing is not a Loan Party, CA Marketing (i) owns no material
assets; (ii) conducts no material business activity; and (iii) owes
no Indebtedness or Liabilities, except as permitted under this Agreement.


 


(D)                               Collect Air.   So long as
Collect Air is not a Loan Party, Collect Air (i) owns no assets other than
aircraft described on Schedule 4.5 and miscellaneous assets used in
connection with its ownership, operation and maintenance of such aircraft; and (ii) conducts
no business activity other than as the owner of the aircraft and assets
described in clause (i) above.


 


4.6.                              Intentionally Omitted.


 


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4.7.                              Title to Properties;
Liens.  Each Loan Party has good,
sufficient and legal title to all of the Collateral (and any other material
properties and assets, if any) and will have good, sufficient and legal title
of all after-acquired Collateral (and any other after-acquired material
properties and assets, if any), in each case, free and clear of all Liens
except for the Permitted Encumbrances. 
Agent has a valid, and to the extent required by the applicable Loan
Document, perfected and, except for (x) Liens set forth in clauses (b),
(c), (e), (h), (k), (m) and (p) of the definition of Permitted
Encumbrances, to the extent such priority over the Liens of Agent arises by
operation of law, and (y) Liens set forth on Schedule 7.3(B) that are
noted to be first priority liens, first priority Liens in the Collateral
pursuant to the Security Agreements, securing the payment of the Obligations,
and such Liens are entitled to all of the rights, priorities and benefits
afforded by the UCC, the Canadian PPSL or other Applicable Law as enacted in
any relevant jurisdiction which relates to perfected Liens. None of the
properties and assets of any Loan Party or any of its Subsidiaries are subject
to any Lien other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to Borrowers that are reasonably likely to
result in any Liens other than Permitted Encumbrances against the properties
and assets of any Loan Party.


 


4.8.                              Litigation; Adverse Facts.  Except as set forth on Schedule 4.8,
there are no judgments outstanding against any Loan Party or affecting any
property of any Loan Party or any of their respective Subsidiaries nor is there
any action, charge, claim, demand, suit, proceeding, petition, governmental investigation
or arbitration now pending or, to the best knowledge of any Loan Party after
due inquiry, threatened against or affecting any Loan Party or any of their
respective Subsidiaries or any property of any Loan Party or any of their
respective Subsidiaries in each case which would reasonably be expected to
result in any Material Adverse Effect.


 


4.9.                              Payment of Taxes.  (A) All material tax returns and reports
of Loan Parties and their Subsidiaries required to be filed by any of them have
been timely filed and are complete and accurate in all material respects.  All material taxes, assessments, fees and
other governmental charges which are due and payable by Loan Parties and their
Subsidiaries have been paid when due; provided that no such tax need be
paid if a Loan Party or any of its Subsidiaries is contesting same in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if Loan Parties or any of their Subsidiaries have established appropriate
reserves as shall be required in conformity with GAAP.  As of the Closing Date and except as set
forth on Schedule 4.9(a), none of the income tax returns of Loan Parties
or any of their Subsidiaries are under audit. 
No tax liens have been filed against Loan Parties.  The charges, accruals and reserves on the
books of Loan Parties and each of their Subsidiaries in respect of any taxes or
other governmental charges are in accordance with GAAP.  Each US Loan Party has executed United States
of America Internal Revenue Service (“IRS”) Form 8821 designating
Agent as such Loan Party’s appointee to receive directly from the IRS, on an
on-going basis, certain tax information, notices and other written
communication and each US Loan Party authorizes Agent to file such Form 8821
with the IRS.  The federal tax
identification number of each US Loan Party and its subsidiaries are set forth
on Schedule 4.9(a).


 


(B)  None of the Loan Parties has been notified
that the IRS, the Canada Revenue Agency or any other Governmental Authority,
has raised or intends to raise, any adjustments with respect to Tax Liabilities
of the Loan Parties, which adjustments would be reasonably likely to have a
Material Adverse Effect.


 


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4.10.                        Performance of Agreements.  None of the Loan Parties and none of their
respective Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
contractual obligation of any such Person, and no condition exists that, with
the giving of notice or the lapse of time or both, would constitute such a
default, which default would be reasonably likely to have a Material Adverse
Effect.


 


4.11.                        Employee Benefit Plans.


 


(A)                              U.S. Employee Benefits.


 


(1)                                  Except as would not reasonably be expected to
have a Material Adverse Effect, each Plan is in compliance with the applicable
provisions of ERISA and the IRC. Except as would not reasonably be expected to
have a Material Adverse Effect, neither any Loan Party nor ERISA Affiliate has
failed to make any contributions or pay any amount due as required by either Section 412
of the IRC or Section 302 of ERISA or the terms of any such Title IV
Plan.  No Loan Party has engaged in a “prohibited
transaction” as defined in Section 406 of ERISA and Section 4975 of
the IRC, in connection with any Plan, that would subject any Loan Party to a
material tax on prohibited transactions imposed by Section 502(i) of
ERISA or Section 4975 of the IRC in an amount that would reasonably be
expected to have a Material Adverse Effect.


 


(2)                                  As of the Closing Date, except as set forth in
Schedule 4.11(A), (i) no ERISA Event or event described in Section 4062(e) of
ERISA with respect to any Title IV Plan has occurred or is reasonably expected
to occur; (ii) except as would not reasonably be expected to have a
Material Adverse Effect, no Loan Party or ERISA Affiliate has incurred or
reasonably expects to incur any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan; and (iii) except as would not
reasonably be expected to have a Material Adverse Effect, within the last five
years no Title IV Plan of any Loan Party or ERISA Affiliate has been
terminated, whether or not in a “standard termination” as that term is used in Section 404(b)(1) of
ERISA.


 


(B)                                Canadian Employee Benefit Plans.  As of
the Closing Date, the Canadian Pension Plans are duly registered under the ITA
and all other Applicable Laws which require registration and no event has occurred
which is reasonably likely to cause the loss of such registered status.  As of the Closing Date, the Canadian Pension
Plans and Canadian Benefit Plans have been administered and invested in
compliance with their terms and Applicable Laws and there have been no improper
withdrawals or applications of the assets of the Canadian Pension Plans or the
Canadian Benefit Plans, except as would not reasonably be expected to have a
Material Adverse Effect.  As of the Closing
Date, there are no outstanding disputes concerning the assets of the Canadian
Pension Plans or the Canadian Benefit Plans, which disputes would reasonably be
expected to have a Material Adverse Effect. 
As of the Closing Date, except to the extent of any deficiency specified
in Schedule 4.11(B), each of the Canadian Pension Plans is fully funded
on both a solvency basis and ongoing basis (using actuarial methods and
assumptions which are consistent with the valuations last filed with the
applicable Governmental Authorities and which are consistent with generally
accepted actuarial principles).  As of
the Closing Date, all payments, contributions (which in the case of such
Canadian Pension Plan shall 


 


72

















 


be
limited to those contributions determined by the plan actuary and identified in
the most recently completed and filed actuarial valuation report) or premiums
required to be made by any Loan Party to or in respect of any Canadian Benefit
Plan or Canadian Pension Plan have been made on a timely basis in accordance
with the current terms of such plans and all Applicable Laws.  As of the Closing Date, no promises of
benefit improvements under the Canadian Pension Plans or the Canadian Benefit
Plans have been made and there are no taxes, penalties or interest owing in
respect of any Canadian Pension Plan, except as would not reasonably be
expected to have a Material Adverse Effect. 
As of the Closing Date, there has been no partial termination of any Canadian
Pension Plan and no facts or circumstances have occurred or existed that could
result, or be reasonably expected to result, in the declaration of a partial
termination of any Canadian Pension Plan under Applicable Laws, except as would
not reasonably be expected to have a Material Adverse Effect.  Schedule 4.11(B) lists all
Canadian Benefit Plans and Canadian Pension Plans.  This subsection 4.11(B) contains the
sole and exclusive representation and warranty by the Loan Parties with respect
to the Canadian Benefit Plans and Canadian Pension Plans.


 


4.12.                        Broker’s Fees.  No broker’s or finder’s fee or commission
will be payable with respect to (x) the transactions contemplated by this
Agreement and the other Loan Documents other than any fees payable pursuant to
the Fee Letter or to the Lenders and (y) the Related Transactions
(excluding the transactions contemplated by this Agreement and the other Loan
Documents) other than any discount on the Second Lien Notes and any broker’s or
finder’s fees or commissions set forth in Schedule 4.12.


 


4.13.                        Environmental Compliance.  Except as set forth in Schedule 4.13,
as of the Closing Date: (i) the Loan Parties and their Subsidiaries are
and have been in compliance with all Environmental Laws, except for such
noncompliance that could not reasonably be expected to result in Environmental
Liabilities of the Loan Parties or their Subsidiaries in excess of $250,000 in
the aggregate; (ii) the Loan Parties and their Subsidiaries have obtained,
and are in compliance with, all environmental permits required by Environmental
Laws (“Environmental Permits”) for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except where
the failure to so obtain or comply with such Environmental Permits could not
reasonably be expected to result in Environmental Liabilities of the Loan
Parties or their Subsidiaries in excess of $250,000 in the aggregate, and all
such Environmental Permits are valid, uncontested and in good standing; (iii) no
Loan Party nor any Subsidiary of a Loan Party (A) is engaged in
operations, (B) knows of any facts, circumstances or conditions, including
any Releases of Hazardous Materials, that are likely to result in any
Environmental Liabilities of such Loan Party or Subsidiary, or (C) has
permitted any current or former tenant or occupant of any Loan Party’s real
property to engage in any such operations in each case (A), (B), or (C) which
could reasonably be expected to be in excess of $250,000 in the aggregate; (iv) there
is no litigation arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material that seeks damages, penalties,
fines, costs or expenses in excess of $250,000 in the aggregate or injunctive
relief against, or that alleges criminal misconduct by any Loan Party or any
Subsidiary of a Loan Party; and (v) no notice has been received by any
Loan Party or any Subsidiary of a Loan Party identifying any of them as a “potentially
responsible party” or requesting information under CERCLA Section 104(e) or
analogous state, federal or provincial statutes, and to the knowledge of the
Loan Parties, there are no facts, circumstances or conditions that could
reasonably be expected to result in any of the Loan Parties or their
Subsidiaries being 


 


73

















 


identified
as a “potentially responsible party” under CERCLA or analogous state, federal
or provincial statutes. Loan Parties and their Subsidiaries are and have been
in compliance with all federal, state and local laws relating to occupational
safety and health, except as could not reasonably be expected to result in a
Material Adverse Effect.


 


4.14.                        Solvency.  US Borrower and its Subsidiaries on a
consolidated basis are Solvent.


 


4.15.                        Disclosure.  No representation or warranty of any Loan
Party contained in this Agreement, the Financial Statements (other than
Projections, as to which the only representation and warranty made is as set
forth in subsection 4.3 hereof), the other Loan Documents, or any other
document, certificate or written statement furnished to Agent, Canadian Agent
or any Lender by or on behalf of any such Person for use in connection with the
Loan Documents contains any untrue statement of a material fact or omitted,
omits or will omit to state, when taken together with all other information
furnished, a material fact necessary in order to make the statements contained
herein or therein not misleading in any material respect in light of the
circumstances in which the same were made. 
There is no material fact known to any Loan Party or any of its
Subsidiaries that has had or could reasonably be expected to have a Material
Adverse Effect and that has not been disclosed herein or in such other
documents, certificates and statements furnished to Agent, Canadian Agent or
any Lender for use in connection with the transactions contemplated hereby.


 


4.16.                        Insurance.  Each Loan Party maintains all insurance
required by subsection 5.8. No notice of cancellation has been received with
respect to such policies and each Loan Party is in compliance with all
conditions contained in such policies except with respect to policies that have
been replaced.


 


4.17.                        Compliance with Laws;
Government Authorizations; Consents.  No Loan Party nor any of its Subsidiaries is
in violation of any law, ordinance, rule, regulation, order, policy, guideline
or other requirement of (a) any Governmental Authority in all
jurisdictions in which such Loan Party or any of its Subsidiaries is now doing
business, and (b) any government authority otherwise having jurisdiction
over the conduct of such Loan Party or any of its Subsidiaries or any of its
respective businesses, or the ownership of any of its respective properties,
which violation would subject such Loan Party or any of its Subsidiaries, or
any of their respective officers to criminal liability or reasonably be
expected to have a Material Adverse Effect and no such violation has been
alleged. No authorization, approval or other action by, and no notice to or
filing with, any domestic or foreign Governmental Authority or regulatory body
or consent of any other Person is required for (a) the grant by any Loan
Party of the Liens granted hereby or for the execution, delivery or performance
of this Agreement or the other Loan Documents by any Loan Party; (b) the
perfection, to the extent required by the applicable Loan Document, of the
Liens granted pursuant to any Loan Documents (except for authorization,
approval, or other actions already made or received and except for filing UCC
or Canadian PPSL financing statements with the appropriate jurisdiction and
filing any patent, trademark or copyright assignment of security interest with
the U.S.  Copyright Office and the
U.S.  Patent and Trademark Office, as
applicable); or (c) the exercise by Agent of its rights and remedies
hereunder and under the Loan Documents (except for non-material actions by or
consents of Governmental Authorities with respect to Collateral that does not
constitute Assets, 


 


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Asset
Pools, Asset Pool Proceeds or Collateral necessary for the collection thereof
and except as may have been taken by or at the direction of any Loan Party or
Agent).


 


4.18.                        Employee Matters.  As of the Closing Date, except as set forth
on Schedule 4.18, (a) no Loan Party nor any of such Loan Party’s
employees is subject to any collective bargaining agreement, (b) no
petition for certification or union election is pending with respect to the
employees of any Loan Party and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of any
Loan Party and (c) there are no strikes, slowdowns, work stoppages or
controversies pending or, to the best knowledge of any Loan Party after due
inquiry, threatened between any Loan Party and its respective employees, other
than employee grievances arising in the ordinary course of business, which
could reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect.  As of the
Closing Date, except as set forth on Schedule 4.18, no Loan Party nor
any of its Subsidiaries is subject to an employment contract.


 


4.19.                        Governmental Regulation.  None of the Loan Parties is subject to
regulation under the Federal Power Act or the Investment Company Act of 1940 or
to any federal or state statute or regulation limiting its ability to incur
indebtedness for borrowed money.


 


4.20.                        Intentionally Omitted.


 


4.21.                        Intentionally Omitted.


 


4.22.                        Intentionally Omitted.


 


4.23.                        Amendment of Schedule.  Each Loan Party may amend any one or more of
the Schedules referred in this Section 4 (subject to the prior written
consent of Agent) and any representation, warranty, or covenant contained
herein which refers to any such Schedule shall from and after the date of any
such amendment refer to such Schedule as so amended; provided,  however,
that in no event shall the amendment of any such Schedule constitute a waiver
by Agent and Lenders of any Default or Event of Default that existed prior to
such amendment without giving effect to such amendment of such Schedule.


 


4.24.                        Senior Credit Agreement
and Designated Senior Lien Obligations.  This Agreement, the credit facilities created
hereunder and all present and future Obligations constitute the “Senior
Credit Agreement,” and “Senior Lien Obligations” under and as such
terms are defined in the Intercreditor Agreement.  Without limiting the foregoing, all present
and future Obligations are hereby designated as “Senior Lien Obligations”
as such term is used in the Intercreditor Agreement.


 


4.25.                        Patriot Act.  Each Loan Party is in compliance, in all
material respects, with the (i) the Trading with the Enemy Act, and each
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) the USA PATRIOT
Act.  No part of the proceeds of the
Loans or Lender Letter of Credit will be used, directly or indirectly, for any
payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an
official capacity, in order to 


 


75

















 


obtain,
retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended.


 


SECTION 5.                                            REPORTING AND OTHER AFFIRMATIVE COVENANTS


 


Each Loan Party covenants and agrees that, so long as
any of the Revolving Loan Commitments hereunder shall be in effect and until
all Obligations have been Paid in Full, each Loan Party shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section 5.


 


5.1.                              Financial Statements and
Other Reports.  Borrowing
Agent will deliver to Agent the Financial Statements and reports contained in
the Reporting Rider attached hereto, and Agent shall deliver such Financial
Statements and reports to Lenders upon receipt.


 


5.2.                              Maintenance of Properties.  Each Loan Party will maintain or cause to be
maintained in good repair, working order and condition all material properties
used in the business of such Loan Party (ordinary wear and tear, casualty
events and Permitted Dispositions excepted) and, except as could reasonably be
expected to result in a Material Adverse Effect, will make or cause to be made
all appropriate repairs, renewals and replacements thereof.


 


5.3.                              Further Assurances.  Each Loan Party shall, from time to time,
execute such guaranties, financing statements, documents, security agreements
and reports and take such other actions and enter into such other agreements as
Agent or Requisite Lenders at any time may reasonably request to evidence,
perfect or maintain the perfection or priority of, or otherwise implement
(including, without limitation, with respect to obtaining “control” (as
such term is defined in the UCC, the STA or any other Canadian PPSL) of any
Collateral), the guaranties and security for repayment of the Obligations
contemplated by the Loan Documents (including, without limitation, as a result
of any amendment to the UCC, the STA or any analogous legislation or amendment
to any other Canadian PPSL).


 


(A)                              In the event any Loan Party acquires an
ownership fee interest in any real property after the Closing Date, such Loan
Party shall provide  reasonable prior
written notice of such acquisition to Agent and upon Agent’s request, deliver
to Agent within thirty (30) days of such request, or such later date as
permitted by Agent, a fully executed mortgage, deed of trust or immovable
hypothec over such real property in form and substance reasonably satisfactory
to Agent, together with such title insurance policies, surveys, appraisals,
evidence of insurance, legal opinions, environmental assessments and any other
pledges or other documents and certificates as shall be reasonably required by
Agent.  In addition to and without
limiting the foregoing, upon the initial acquisition by any Loan Party of any
owned real or personal property in Quebec with a value in excess of $250,000,
such Loan Party shall provide prompt written notice of such acquisition and, if
requested by Agent, Agent and the applicable Loan Party shall take such steps
as are reasonably necessary from time to time to perfect a security interest in
such Loan Party’s property in Quebec, and such Loan Party shall, upon Agent’s
request, deliver to Agent within thirty (30) days of such request, or such
later date as permitted by Agent, such fully executed security documents,
including without limitation a moveable hypothec and deed of trust, and
certificates as shall be reasonably required by Agent in order to perfect such
security interest. For the avoidance of doubt, the residence of any Account
Debtor in Quebec who is obligated on the 


 


76

















 


Receivables
in any Asset Pool shall not be considered to constitute the ownership of
personal property in Quebec by any Loan Party.


 


(B)                                At any time following the Closing Date that US
Borrower or any of its Subsidiaries forms any direct or indirect Subsidiary or
acquires any direct or indirect Subsidiary, US Borrower or such Subsidiary, as
applicable, shall cause each  such formed
or acquired Subsidiary, within thirty (30) days of its becoming a Subsidiary of
US Borrower or its Subsidiary, or such later date as permitted by Agent (provided
that this shall not be construed to constitute consent by any of Agent or
Lenders to any transaction not permitted by the terms of this Agreement), to
execute or join this Agreement as a Loan Party, to guarantee the Obligations
and to cause each such Subsidiary to grant to Agent, for the benefit of Agent
and Lenders, a security interest in all of such Subsidiary’s personal and mixed
property, and real property, if applicable, on the time frame provided under
subsection 5.3(A), to secure such guaranty. Furthermore, (x) such new Loan
Party shall, and shall cause each of its Subsidiaries to, pledge all of the
Stock of each of its Subsidiaries to secure the Obligations, and (y) any
existing Loan Party that formed or acquired such new Subsidiary shall pledge
all of the Stock in such new Subsidiary to secure the Obligations.
Notwithstanding the foregoing, (i) the requirements set forth in this
subsection 5.3(B) shall not apply to any newly acquired Foreign Subsidiary
(excluding Canadian Subsidiaries), so long as there are adverse tax or legal
consequences with respect to such grant of a security interest, guaranty or
pledge, (ii) with respect to any new Canadian Subsidiary, such
guaranty, Liens, grant of security interest and pledge of Stock or other equity
interest shall secure the repayment of its Obligations (but not, except as
provided in the following clause (iii), the US Obligations), and (iii) with
respect to any Foreign Subsidiary (including Canadian Subsidiaries) all of the
outstanding voting equity interests of which are owned by a US Loan Party,
sixty-five percent (65%) of such Foreign Subsidiary’s outstanding voting Stock
and one hundred percent (100%) of such Foreign Subsidiary’s outstanding
non-voting Stock shall be pledged to Agent to secure the US Obligations.  In connection with each pledge of Stock, US
Borrower or its Subsidiary, as applicable, shall deliver, or cause to be
delivered, to Agent, irrevocable proxies and stock powers and/or assignments,
as applicable, duly executed in blank. 
The documentation for such guaranty, security and pledge shall be
substantially similar to the Loan Documents executed concurrently herewith with
such modifications as are reasonably requested by Agent.


 


5.4.                              Use of Proceeds and
Margin Security.  Borrowers
shall use the proceeds of all Loans for proper general corporate purposes (as
described in the recitals to this Agreement) consistent with all Applicable
Laws.  No portion of the proceeds of any
Loan shall be used for the purpose of purchasing or carrying margin stock
within the meaning of Regulation U, or in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation T or
Regulation X or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act of 1933, as amended.


 


5.5.                              Landlords’ Agreements,
Mortgagee Agreements, Bailee Letters and Real Estate Purchases.  Each Loan Party shall use reasonable efforts
to obtain a landlord’s agreement, mortgagee agreement or bailee letter, as
applicable, from the lessor of each leased property, mortgagee of owned
property or bailee with respect to each Loan Party’s chief executive office and
any other location where Collateral  with
a book value greater than $250,000 (including books and records relating to
Collateral with a book value greater than $250,000) is stored or located, which
agreement or letter shall, unless otherwise approved by Agent, contain a waiver



 


77

















 


or
subordination of all Liens or claims that the landlord, mortgagee or bailee may
assert against the Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to Agent; provided, however,
that the foregoing requirement shall not apply to Franchisees or Light Users or
their agents. Each Loan Party shall, and shall cause each of its Subsidiaries
to, timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral with a book value greater than $250,000 (including books and records
relating to Collateral with a book value greater than $250,000) is or may be
located, unless such failure to timely and fully perform such obligations would
not reasonably be expected to have a Material Adverse Effect.


 


5.6.                              Organizational Existence.  Except as otherwise permitted by subsections
7.3(A), and 7.7, each Loan Party will, and will cause each of its material
Subsidiaries to, at all times preserve and keep in full force and effect (x) its
organizational existence and (y) to the extent material to the business of
the Loan Parties taken as a whole, all rights and franchises material to its
business.


 


5.7.                              Patriot Act Documentation.  Each Loan Party shall provide information
sufficient to allow each Lender subject to the requirements of the USA PATRIOT
Act to identify such Loan Party in accordance with the USA PATRIOT Act.


 


5.8.                              Insurance.  Each Loan Party shall maintain adequate
insurance policies and shall provide Agent with evidence of such insurance
coverage for public liability and property damage, with respect to its business
and properties and the business and properties of its Subsidiaries against loss
or damage of the kinds customarily carried or maintained by corporations of
established reputation engaged in similar businesses and in amounts reasonably
acceptable to Agent.  Agent confirms that
the insurance in effect on the Closing Date (as described in the documents
delivered to Agent) is acceptable to Agent as of the Closing Date.  Each Loan Party shall cause Agent at all
times to be named as lender loss payee on all insurance policies relating to any
Collateral and shall cause Agent at all times to be named as additional insured
under all liability policies, in each case pursuant to appropriate endorsements
in form and substance reasonably satisfactory to Agent. Any proceeds received
from any policies of insurance relating to any Collateral shall be applied to
the Obligations as set forth in subsection 2.4(E).  Each Loan Party shall provide Agent evidence
of the insurance coverage and of the assignments and endorsements required by
this Agreement promptly upon request by Agent and upon renewal of any existing
policy.  In the event any Loan Party
fails to provide Agent with evidence of the insurance coverage required by this
Agreement, Agent may, but is not required to, purchase insurance at each Loan
Party’s expense to protect Agent’s and the Lenders’ interests in the
Collateral.  This insurance may, but need
not, protect such Loan Party’s interests. 
The coverage purchased by Agent may not pay any claim made by any Loan
Party or any claim that is made against such Loan Party in connection with the
Collateral.  Loan Parties may later
cancel any insurance purchased by Agent, but only after providing Agent with
evidence that each Loan Party has obtained insurance as required by this
Agreement.  If Agent purchases insurance
for the Collateral, Loan Parties will be responsible for the costs of that
insurance, including interest thereon and other charges imposed on Agent in
connection with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance, and such costs may be added to the
Obligations.  The costs of the insurance
may be more than the cost of insurance Loan Parties are able to obtain on their
own.


 


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5.9.                              Compliance with Laws;
Consents.  Each Loan
Party will, and will cause each of its Subsidiaries to, comply with the
requirements of all Applicable Laws of (a) any Governmental Authority as
now in effect and which may be imposed in the future in all jurisdictions in
which such Loan Party or any of its Subsidiaries is now doing business or may
hereafter be doing business, and (b) any Government Authority otherwise
having jurisdiction over the conduct of such Loan Party or any of its
Subsidiaries or any of its respective businesses, or the ownership of any of
its respective properties, except, in either case, to the extent the
noncompliance with which would not be reasonably likely to have a Material
Adverse Effect.  Each Loan Party will,
and will cause each of its Subsidiaries 
to, maintain all third-party regulatory approvals and consents issued to
such Loan Party or such Subsidiary by any Governmental Authority except to the
extent that the failure to so maintain such approval or license would not be
reasonably likely to have a Material Adverse Effect.


 


5.10.                        Intentionally Omitted.


 


5.11.                        Inspection; Lender
Meeting.  Upon three (3) Business
Days’ prior written notice to the Loan Parties, each Loan Party shall permit
any authorized representatives of Agent to visit, audit and inspect any of the
properties of such Loan Party and its Subsidiaries, during regular business
hours, including its and their financial and accounting records, and to make
copies and take extracts therefrom, and to discuss its and their Financial
Statements, affairs, finances, operations and business with its and their
officers and management and use reasonable efforts to arrange for discussions
with their certified public accountants, at such reasonable times during normal
business hours and as often as may be reasonably requested (collectively a “Field
Review”); provided, that, upon the occurrence and continuance of an
Event of Default, Agent shall not be required to provide any notice to the Loan
Parties prior to the performance of a Field Review; provided  further,
that, so long as no Default or Event of Default has occurred and is continuing,
Borrowers shall only be obligated to reimburse Agent for two (2) Field
Reviews during any calendar year.  Upon
the occurrence and continuance of an Event of Default, representatives of each
Lender will be permitted to accompany representatives of Agent during each
Field Review at the expense of Borrowers. Borrowers agree to pay all fees and
expenses of the firm or individual(s) engaged by Agent to perform audits
of Borrowers’ assets and/or operations (to the extent relating to Borrowers’
Financial Statements or Collateral). 
Notwithstanding the foregoing, if Agent uses its internal auditors to
perform any such audit, Borrowers agree to pay to Agent, for its own account,
an audit fee with respect to each such audit equal to $1,000 per internal
auditor per day or any portion thereof together with all out of pocket
expenses. In addition to Field Reviews, and the other items described above,
upon the election of Agent, Agent may obtain, at Borrowers’ expense, an annual
determination report (“Independent Determination Report”) by an
independent third-party firm, that has reasonable industry or collateral
experience, retained by Agent and satisfactory to Agent after consultation with
Borrowing Agent, to confirm that the determination of Estimated Remaining
Proceeds included in the Borrowing Base for the previous Fiscal Month is not
unreasonable in any material respect, which Independent Determination Report
shall be in form reasonably satisfactory to Agent; provided, that, upon
the occurrence and continuance of an Event of Default, Agent shall be entitled
to obtain, at Borrowers’ expense, such Independent Determination Reports from
time to time as frequently as requested by Agent.  Agent shall provide Borrowing Agent the
opportunity to review, comment and confer with the subject third-party firm on
drafts of each Independent Determination Report and to discuss same with Agent
prior to finalization of such Independent 


 


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Determination
Report.  Each Loan Party shall reasonably
cooperate with Agent and the subject firm in preparing each Field Review and
Independent Determination Report requested by Agent. In addition to the
foregoing, key management personnel of US Borrower shall participate in a
meeting with Agent and Lenders at least once during each calendar year and upon
the occurrence and continuance of an Event of Default, at such other times as
are requested by Agent and Lenders, which meeting shall be held at such time
and such place as may be reasonably requested by Agent and Lenders.


 


5.12.                        Collection of Assets and
Payments.  US Loan
Parties shall enter into separate Control Agreements with respect to each
deposit account maintained by such US Loan Party (other than any payroll,
employee benefit and similar trust accounts and other than trust accounts
pursuant to which any Loan Party receives collections on behalf of third
parties) as of the Closing Date (“US Controlled Accounts”). Each
Canadian Loan Party shall use commercially reasonable efforts to enter into
Control Agreements with respect to each deposit account maintained by such
Canadian Loan Party (other than any payroll account and other than trust
accounts pursuant to which any Loan Party receives collections on behalf of
third parties) as of the Closing Date (“Canadian Controlled Accounts”
and together with the US Controlled Accounts, the “Controlled Accounts”).
Each such deposit account Control Agreement shall be in form and substance reasonably
satisfactory to Agent.  Loan Parties
shall promptly deposit and direct their respective Account Debtors, Franchisees
and Light Users, as applicable, to directly remit payments on Assets and other
receivables (including all Receivables) in accordance with the procedures
agreed upon by Agent and Borrowing Agent and to the extent required by any of
the Loan Documents, all payments constituting proceeds of other Collateral, in
the identical form in which such payments are made, into their respective Controlled
Accounts.  Subject to the occurrence and
during the continuance of an Event of Default, Agent shall have the right to
deliver a notice of exclusive control to the applicable depository under each
Control Agreement, and upon delivery of such notice, all funds in such US
Controlled Accounts will be transferred, on a daily basis, to Agent’s Account,
and all funds in such Canadian Controlled Accounts will be transferred, on a
daily basis, to Canadian Agent’s Account. All such transferred funds shall be applied
(x) to the US Revolving Loan in accordance with the provisions of
subsection 2.4(A)(1), and (y) to the Canadian Revolving Loan in accordance
with the provisions of subsection 2.4(A)(2).


 


5.13.                        Legal Opinion.  In the event that ReFinance America acquires
assets valued in an amount deemed to be substantial in Agent’s reasonable
discretion, Loan Parties shall, upon Agent’s request, promptly deliver an
opinion of Nevada counsel in form and substance satisfactory to Agent in all
respects.


 


SECTION 6.                                            FINANCIAL COVENANTS


 


Each Loan Party covenants and agrees that so long as
any of the Revolving Loan Commitments remain in effect and until all
Obligations have been Paid in Full, each Loan Party shall comply with all
covenants contained in the Financial Covenants Rider.


 


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SECTION 7.                                            NEGATIVE COVENANTS


 


Each Loan Party covenants and agrees that so long as
any of the Revolving Loan Commitments remain in effect and until all
Obligations have been Paid in Full, each Loan Party shall not violate the
covenants set forth in this Section 7.


 


7.1.                              Indebtedness and
Liabilities.  Each Loan
Party shall not, and shall not cause or permit its Subsidiaries to, directly or
indirectly create, incur, assume, guaranty, or otherwise become or remain
directly or indirectly liable, on a fixed or contingent basis, with respect to
any Indebtedness except:


 


(a)                                  Indebtedness described on
Schedule 7.1;


 


(b)                                 the Obligations;


 


(c)                                  intercompany Indebtedness
arising from loans made by (i) Canadian Borrower or any other Canadian
Loan Party to any Loan Party other than Holdings, CACV and CACV-NJ, (ii) 
any US Loan Party to any other US Loan Party other than Holdings, CACV and
CACV-NJ, (iii) US Loan Parties  to
any Canadian Loan Parties at any time outstanding not to exceed (together with
any Investments made under subsection 7.4(o)) $3,500,000 in the aggregate, (iv) Loan
Parties or their Subsidiaries to any Subsidiary of Holdings that is not a Loan
Party not to exceed (together with any Investments made under subsection
7.4(p)) $250,000 in any Fiscal Year in the aggregate, (v) Loan Parties or
their Subsidiaries to Collect Air to cover ordinary course operating,
maintenance and related costs relating to Collect Air’s aircraft and (vi) any
Subsidiary that is not a Loan Party to any other Subsidiary that is not a Loan
Party; provided, however, that in each case upon the request of
Agent at any time, such Indebtedness shall be evidenced by promissory notes
having terms reasonably satisfactory to Agent, the sole originally executed
counterparts of which shall be pledged and delivered to Agent, for the benefit
of Agent and Lenders, as security for the Obligations in the event that the
pledgor of such note is a Subsidiary organized under the laws of any State of
the United States, or as security for the Obligations of Canadian Borrower only
in the event that the pledgor of such note is a Subsidiary organized under the
laws of Canada or the laws of any province or territory thereof.


 


(d)                                 Second Lien Debt of
Borrowers pursuant to the Second Lien Debt Documents in an aggregate principal
amount at any time outstanding not to exceed $350,000,000;


 


(e)                                  Indebtedness not to
exceed $10,000,000 (less the aggregate amount of all Indebtedness permitted
pursuant to subsection 7.1(g) hereof that refinanced Indebtedness
previously permitted pursuant to this subsection 7.1(e)) in an aggregate
principal amount at any time outstanding secured by purchase money Liens or
incurred with respect to Capital Leases and purchase money Indebtedness for the
purchase of fixed assets;


 


(f)                                    any other unsecured
Indebtedness not to exceed $10,000,000 in an aggregate principal amount at any
time outstanding;


 


(g)                                 refinancings of
Indebtedness permitted under clauses (a), (c), (d), (e) and (f) of
this subsection 7.1 that do not accelerate the scheduled dates for payment
thereof, increase the principal amounts thereof, increase any interest rate or
fees applicable


 


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thereto
beyond prevailing market interest rates or fees at the time of such
refinancing, add additional obligors therefor, or enhance the collateral
therefor or the priority thereof;


 


(h)                                 Contingent Obligations
permitted by subsection 7.5;


 


(i)                                     Indebtedness pursuant to
the Cargill Documents in an amount not exceeding the Cargill Claim; provided,
that no payments may be made on such Indebtedness unless permitted under the
Cargill Intercreditor Agreement; provided, further,
notwithstanding the foregoing proviso, Borrowers may repay the Indebtedness
pursuant to the Cargill Documents in full (but not part) in connection with
termination of the Cargill Documents so long as (x) no Event of Default
has occurred and is continuing at the time of, or after giving effect to, any
such prepayment, and (y) the aggregate amount of such prepayment does not
exceed $3,000,000 and the terms and conditions of such prepayment shall have
been approved in writing by Agent in its reasonable discretion; and


 


(j)                                     Indebtedness in
connection with sale and leaseback transactions permitted under subsection
7.18.


 


7.2.                              Intentionally Omitted.


 


7.3.                              Disposal of Assets or
Subsidiary Stock, Liens and Related Matters.


 


(A)                              Disposal of Assets or Subsidiary Stock.  Each
Loan Party shall not, and shall not cause or permit its Subsidiaries to,
directly or indirectly convey, sell, lease, sublease, transfer or otherwise
dispose of, or grant any Person an option to acquire, in one transaction or a
series of related transactions, any of its property, business or assets,
whether now owned or hereafter acquired, except for (a) dispositions of obsolete
equipment not necessary to the business; (b) any condemnation or taking of
such assets by eminent domain proceedings; (c) sales or dispositions of
Cash Equivalents for not less than fair market value thereof and in return for
cash or Cash Equivalents; (d) sales of individual Asset Pools in the
ordinary course of business and consistent with past practices; provided
that (i) to the extent Undrawn Availability is less than $10,000,000 after
giving pro forma effect to such sale (or group of related transactions) and
such sale (or group of related transactions) is expected to generate proceeds
in excess of $2,500,000, Borrowing Agent shall have delivered to Agent a
revised Borrowing Base Certificate reflecting the deletion of such Assets from
the Borrowing Base if any such Assets were included in the Borrowing Base
immediately prior such sale, (ii) the cash proceeds thereof shall be
deposited in a Controlled Account pursuant to the terms of subsection 5.12, (iii) the
consideration received is at least equal to the fair market value of such
assets, and (iv) at least 85% of the consideration received shall be in
cash, except for Assets sold in consideration of notes receivable to the extent
permitted by subsection 7.4(l); (e) transactions permitted by subsection
7.7 and 7.18; (f) transfers which consist of Liens and security interests
to the extent permitted under subsection 7.3(B); (g) transfers permitted
by subsection 7.4; (h) the sale of Collect Air’s Cessna Citation airplane,
provided that the consideration received is at least equal to the
outstanding amount of any Indebtedness secured by such airplane; and (i) sales
in connection with Permitted Dispositions.


 


(B)                                Liens.  Except for
Permitted Encumbrances, each Loan Party shall not, and shall not cause or permit
its Subsidiaries to, directly or indirectly create, incur, assume or


 


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permit
to exist any Lien on or with respect to any of the Collateral or the assets of
any Loan Party or any proceeds, income or profits therefrom.


 


(C)                                No Negative Pledges.  Each
Loan Party shall not, and shall not cause or permit its Subsidiaries to, enter
into or assume any agreement (other than the Loan Documents, the Cargill
Documents, the Second Lien Debt Documents or any agreements entered into in
connection with the issuance of Second Lien Debt permitted hereunder)
prohibiting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, other than (i) provisions
restricting subletting or assignment under any lease governing a leasehold
interest or lease of personal property; (ii) restrictions with respect to
a Subsidiary imposed pursuant to any agreement which has been entered into for
the sale or disposition of all or substantially all of the equity interests or
assets of such Subsidiary, so long as such sale or disposition of all or
substantially all of the equity interests or assets of such Subsidiary is
permitted under this Agreement; (iii) restrictions on assignments or sublicensing
of licensed Intellectual Property; (iv) restrictions contained in any
agreements governing any purchase money Liens, Capital Lease obligations, or
other secured Indebtedness, in each case, otherwise permitted hereby (in which
case, any prohibition or limitation shall only be effective against the assets
financed thereby); and (v) customary nonassignment provisions or other
restrictions on Liens arising under leases, subleases, licenses, joint venture
agreements and other contracts entered into in the ordinary course of business.


 


(D)                               No Restrictions on Subsidiary Distributions to
Borrowers.  Except as provided herein or in the other
Loan Documents, each Loan Party shall not, and shall not cause or permit its
Subsidiaries to, directly or indirectly create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Subsidiary to: (1) pay dividends or make any
other distribution on any of such Subsidiary’s Stock owned by Borrowers or any
other Subsidiary; (2) pay any Indebtedness owed to Borrowers or any other
Subsidiary; (3) make loans or advances to Borrowers or any other
Subsidiary; or (4) transfer any of its property or assets to Borrowers or
any other Subsidiary, except for, (i) with respect to clauses (1) through
(4), restrictions under the Second Lien Debt Documents or any agreements
entered into in connection with the issuance of Second Lien Debt permitted
hereunder, (ii) with respect to clauses (1) through (4), restrictions
contained in the Cargill Documents on the ability of CACV and CACV-NJ to
transfer their property or assets, and (iii) with respect to clause (4),
the restrictions described in clauses (i) through (v) of subsection
7.3(C).


 


7.4.                              Investments.                         Each Loan Party
shall not, and shall not cause or permit its Subsidiaries to, directly or
indirectly make or own any Investment in any Person except:


 


(a)                                  Borrowers and their
Subsidiaries may make and own Investments in Cash Equivalents subject to
Control Agreements in favor of Agent; provided that such Cash
Equivalents are not subject to setoff rights;


 


(b)                                 Loan Parties may make
intercompany loans to other Loan Parties to the extent permitted under
subsection 7.1(c);


 


(c)                                  Borrowers and their
Subsidiaries may make loans and advances to employees of Holdings and its
Subsidiaries for moving, entertainment, travel and


 


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other
similar expenses in the ordinary course of business not to exceed $1,000,000 in
the aggregate at any time outstanding;


 


(d)                                 (i) US Loan Parties
and their US Subsidiaries may make capital or asset contributions to their
wholly-owned US Subsidiaries that are Loan Parties and Canadian Loan Parties
and their Canadian Subsidiaries may make capital contributions to their
wholly-owned Canadian Subsidiaries that are Loan Parties; provided, that
no capital contributions may be made to CACV or CACV-NJ; and (ii) Subsidiaries
that are not Loan Parties may make capital contributions to any other
Subsidiary;


 


(e)                                  non-cash consideration
received in accordance with subsection 7.3(A);


 


(f)                                    Investments existing on
the Closing Date (including unfunded commitments), as set forth on Schedule
7.4 and any renewals, amendments and replacements thereof that do not
increase the amount thereof;


 


(g)                                 each Loan Party may hold
investments comprised of notes payable, or Stock or other securities issued by
financially troubled Account Debtors (excluding Affiliates) to such Loan Party
pursuant to agreements with respect to settlement of such Account Debtor’s
Assets with such Loan Party negotiated in the ordinary course of business or as
a result of proceedings under any Insolvency Law involving an Account Debtor or
upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its
Subsidiaries;


 


(h)                                 Investments consisting of
loans by Borrowers to employees of Holdings or its Subsidiaries or Franchisees
which are used solely by such Person to simultaneously purchase the Stock of
Holdings, provided that Holdings contemporaneously contributes the
proceeds of such Stock to the capital of Borrowers;


 


(i)                                     Borrowers and their
Subsidiaries may make advances and loans to Franchisees in the ordinary course
of business and consistent with past practices, provided that (x) the
aggregate amount of any such loans and advances to a Franchisee does not  exceed $1,000,000 (y) the aggregate
amount of loans and advances made under this subsection 7.4(i) to all
Franchisees does not exceed $5,000,000 and (z) no Default or Event of
Default has occurred and is continuing at the time of, or would result after
giving effect to, any such advance or loan;


 


(j)                                     Borrowers and their
Subsidiaries may make advances in the form of a prepayment of expenses, so long
as such expenses were incurred in the ordinary course of business and are being
paid in accordance with customary trade terms of Borrowers or such Subsidiary;


 


(k)                                  Investments permitted
under subsection 7.7(d);


 


(l)                                     Loan Parties may hold
investments comprised of notes receivable obtained in partial consideration for
the sales of Assets permitted under subsection 7.3(A); provided, that (i) the
aggregate principal amount of all such notes receivable shall not exceed
$1,000,000 at any one time outstanding, (ii) such notes shall be secured
by a first priority


 


84

















 


perfected
Lien on the Assets sold, (iii) such notes shall mature no later than
twelve (12) months from their respective issuance dates and (iv) such
notes in excess of $500,000 and related security interests shall be delivered,
pledged and assigned to Agent as additional collateral securing the Obligations
(provided, that Agent shall continue to have a perfected security
interests in all such notes and security interests through applicable UCC and
Canadian PPSL filings);


 


(m)                               Guarantees permitted by
subsection 7.5 and guarantees by a US Loan Party of obligations of any other US
Loan Party and guarantees by a Canadian Loan Party of any other Canadian Loan
Party;


 


(n)                                 Investments pursuant to
Interest Rate Agreements;


 


(o)                                 US Loan Parties and their
US Subsidiaries may make capital or asset contributions to Canadian Loan
Parties not to exceed (together with any intercompany loans described in
subsection 7.1(c)(iii)) $3,500,000 at any one time outstanding;


 


(p)                                 Loan Parties or their
Subsidiaries may make capital or asset contributions to any Subsidiary of
Holdings that is not a Loan Party not to exceed (together with any intercompany
loans described in subsection 7.1(c)(iv)) $250,000 in any Fiscal Year; and


 


(q)                                 Loan Parties or their
Subsidiaries may make capital contributions to Collect Air to cover ordinary
course operating, maintenance and related costs relating to Collect Air’s
aircraft.


 


7.5.                              Contingent Obligations.  Each Loan Party shall not, and shall not
cause or permit its Subsidiaries to, directly or indirectly create or become or
be liable with respect to any Contingent Obligation except:


 


(a)                                  Letter of Credit
Liability;


 


(b)                                 those resulting from
endorsement of negotiable instruments for collection in the ordinary course of
business;


 


(c)                                  those existing on the
Closing Date and described in Schedule 7.5;


 


(d)                                 those arising under
indemnity agreements to title insurers to cause such title insurers to issue to
Agent mortgagee title insurance policies;


 


(e)                                  those incurred in the
ordinary course of business with respect to surety and appeal bonds,
performance and return-of-money bonds and other similar obligations not
exceeding at any time outstanding $5,000,000 in aggregate liability;


 


(f)                                    those incurred with
respect to Indebtedness permitted by subsection 7.1 provided that (i) any
such Contingent Obligation is subordinated to the Obligations to the same
extent as the Indebtedness to which it relates is subordinated to the
Obligations and (ii) no Loan Party may incur Contingent Obligations under
this clause (f) in


 


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respect
of Indebtedness incurred by any Person that is not a Loan Party unless
permitted pursuant to subsection 7.7;


 


(g)                                 those arising under that
certain Guaranty dated as of August 5, 2005 and executed by US Borrower in
favor of Cargill pursuant to which US Borrower agreed to guarantee certain
Indebtedness pursuant to the Cargill Documents (to the extent such Indebtedness
is permitted to be incurred pursuant to subsection 7.1(i));


 


(h)                                 those arising under
Interest Rate Agreements entered into by Borrowers to protect against
fluctuations in interest rates with respect to the Loans so long as the purpose
of any such agreement is a bona fide hedging activity (and is not for
speculative purposes);


 


(i)                                     those arising with
respect to customary indemnification obligations incurred in connection with
asset dispositions permitted hereunder; and


 


(j)                                     any other Contingent
Obligation to the extent not permitted by clauses (a) through (i) above,
so long as any such other Contingent Obligations, in the aggregate at any time
outstanding, do not exceed $4,000,000 (minus any Contingent Obligations
permitted under clause (i) above, valued based on the reasonably anticipated
liability therefor) and no Loan Party may incur Contingent Obligations in
respect of Indebtedness incurred by any Person that is not a Loan Party under
this clause (j).


 


7.6.                              Restricted Payments.                                Each Loan Party
shall not, and shall not cause or permit its Subsidiaries to, directly or
indirectly declare, order, pay, make or set apart any sum for any Restricted
Payment, except that:


 


(a)                                  Each Loan Party other
than Holdings may make payments and distributions to Holdings (whether directly
or through sequential upstream Restricted Payments) that are used by Holdings
to pay federal and state income taxes and franchise taxes then due and owing,
subject to subsection 7.11;


 


(b)                                 Each Loan Party other
than Holdings may make payments and distributions to Holdings (whether directly
or through sequential upstream Restricted Payments) that are used by Holdings
to pay general administrative costs and expenses incurred in the ordinary
course of business, including, without limitation, licensing expenses incurred
in the ordinary course of business and director fees and expenses, which
director fees and expenses shall not exceed $500,000 per Fiscal Year in the
aggregate without Agent’s consent;


 


(c)                                  Direct or indirect
Subsidiaries of Borrowers may make Restricted Payments to such Borrowers or to
any Loan Party excluding Holdings; and


 


(d)                                 Each Loan Party other
than Holdings may make payments and distributions to Holdings (whether directly
or through sequential upstream Restricted Payments) to permit Holdings to repurchase
Stock owned by employees of such Loan Party or Franchisees whose employment or
Franchisee relationship with such Loan Party and its Subsidiaries has been
terminated, provided that such Restricted Payments shall not exceed
$2,000,000 in any Fiscal Year or $5,000,000 during the term of this Agreement
in the aggregate


 


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and
provided that no Event of Default exists at the time of such Restricted
Payment or would occur as a result thereof.


 


7.7.                              Restriction on
Fundamental Changes.  Each Loan
Party shall not, and shall not cause or permit its Subsidiaries to, directly or
indirectly:  (a) amend, modify or
waive any term or provision of its organizational documents in a manner adverse
to Agent or Lenders, including its articles of incorporation, articles or
memoranda of association, certificates of designations pertaining to preferred
Stock, by laws, partnership agreements or operating agreements in any manner
adverse to Agent or Lenders unless required by law (in which case prompt
written notice thereof shall be given to Agent); (b) enter into any
transaction of merger or consolidation or amalgamation except, upon not less
than five (5) Business Days prior written notice to Agent, any
wholly-owned Subsidiary of Holdings (other than CACV, CACV-NJ or another
Borrower) may be merged or amalgamated with or into US Borrower (so long as US
Borrower is the surviving entity) or any other wholly-owned Subsidiary of US
Borrower (provided that, in the case of any such merger or amalgamation
of any Domestic Subsidiary with or into a Foreign Subsidiary, the Domestic
Subsidiary is the surviving entity; and provided, further, that
in the case of any such merger or amalgamations involving a Loan Party and a
Subsidiary that is not a Loan Party, the Loan Party shall be the surviving
entity); (c) liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution) other than (i) in connection with a Permitted
Disposition or (ii) in the case of any Subsidiary that no longer owns any
assets or conducts any business;  or (d) acquire
by purchase or otherwise all or any substantial part of the Stock, business or
assets of any other Person, except for purchases of Assets in the ordinary
course of business and consistent with past practices.


 


7.8.                              Changes Relating to
Second Lien Debt.  Each Loan
Party shall not, and shall not cause or permit its Subsidiaries to,
directly  or indirectly change or amend
the terms of the Second Lien Debt if the effect of such amendment is or would
be to:  (a) increase the interest
rate on such Indebtedness; (b) change to earlier dates any dates upon
which payments of principal or interest are due; (c) change or add any
event of default or change or add any covenant with respect to such
Indebtedness to the extent such change or addition is more restrictive with
respect to any Loan Party or would be materially adverse to Agent, Canadian
Agent or any Lender; (d) change the payment provisions of such
Indebtedness to the extent such change increases any cash payment obligation
due prior to June 7, 2014; (e) change or amend any other term if such
change or amendment would materially increase the obligations of the obligors
thereunder or confer any additional material rights on any holder of such
Indebtedness in a manner that would be materially adverse to Agent or the
Lenders; or (f) contravene the provisions of the Intercreditor Agreement; provided,
however, that the incurrence of additional Second Lien Debt permitted
pursuant to subsection 7.1(d) shall not violate clauses (d) and (e) hereof
solely as a result of the increase of payment obligations relating to such
increase.


 


7.9.                              Transactions with
Affiliates.  Each Loan
Party shall not, and shall not cause or permit its Subsidiaries to, directly or
indirectly enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
management, consulting, investment banking, advisory or other similar services)
with any Affiliate or with any director, officer or employee of any Loan Party,
except (a) as set forth in Schedule 7.9, (b) transactions in
the ordinary course of and pursuant to the reasonable requirements of the
business of such Loan Party or any of its Subsidiaries and upon fair and


 


87

















 


reasonable
terms which (except in the case of transactions among US Loan Parties) are no
less favorable to such Loan Party or any of its Subsidiaries than would be
obtained in a comparable arm’s length transaction with a Person that is not an
Affiliate (which for the purposes of clarity includes the payment of servicing
fees and other payments to Franchisees in the ordinary course of business); provided
that Borrowing Agent shall provide Agent with prompt notice of any transaction
that involves payments, receipts or transfers in excess of $500,000 in value in
a single transaction or series of related transactions in any Fiscal Year, (c) payment
of reasonable compensation to officers and employees for services actually
rendered to any such Loan Party or any of its Subsidiaries, (d) payment of
director’s fees not to exceed $500,000 in the aggregate for any Fiscal Year of
Borrowers, (e) any Investment 
permitted pursuant to subsection 7.4, (f) reimbursement of employee
travel and lodging costs incurred in the ordinary course of business, (g) the
guaranty of the Obligations by Loan Parties, (h) employment agreements,
equity incentive agreements and other employee and management arrangements in
the ordinary course of business which are fully disclosed to Agent, (i) (A) payment
by Borrowers of fees pursuant to the Management Services Agreement; provided
that no Event of Default has occurred and is continuing at the time of any such
Restricted Payment or would result after giving effect thereto; provided,
further, that it is expressly agreed that any such fees not permitted to
be so paid shall be accrued and paid when such Event of Default has been cured
and waived, and (B) Borrowers may reimburse KRG Capital Management, L.P.
for reasonable, out-of-pocket expenses pursuant to the terms of the Management
Services Agreement, (j) issuances of Stock of Holdings, (k) any
transactions among US Loan Parties (other than CACV and CACV-NJ) or
transactions among Canadian Loan Parties, (l) any intercompany
Indebtedness permitted pursuant to subsection 7.1, and (m) any Restricted
Payment permitted pursuant to subsection 7.6.


 


7.10.                        Conduct of Business.  Holdings shall not engage in any business
activity other than its ownership of the Stock of its Subsidiaries, its
performance of the Related Transactions, guarantees of Indebtedness permitted
under subsections 7.1 and 7.5 and performance of duties incidental to the
management of its Subsidiaries.  The Loan
Parties shall not and shall not cause or permit their Subsidiaries to directly
or indirectly engage in any business other than Permitted Businesses.


 


7.11.                        Tax Consolidations.  Holdings shall not file or consent to the
filing of any consolidated income tax return with any Person other than any of
its Subsidiaries, or any Guarantor; provided that the aggregate
contribution to taxes of the Loan Parties as a result of the filing of a
consolidated or combined return by Holdings shall not be materially greater,
nor the aggregate receipt of tax benefits materially less, than the sum of each
Loan Party’s individual contribution to taxes or receipt of tax benefits (as
applicable) would have been had such Loan Party not filed a consolidated or
combined return with Holdings but had instead filed individually.


 


7.12.                        Subsidiaries.  Unless the Loan Parties have complied with or
will comply with the requirements set forth in subsection 5.3(B), each Loan
Party shall not, and shall not cause or permit its Subsidiaries to, directly or
indirectly establish, create or acquire any new Subsidiary.


 


7.13.                        Fiscal Year; Tax
Designation.  Any Loan
Party that has elected to be treated as a C corporation as of the Closing Date
shall not elect to be treated for U.S. federal tax purposes as


 


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other
than a C corporation as defined in the IRC. 
Each Loan Party shall not, and shall not cause or permit its
Subsidiaries to, change their Fiscal Year.


 


7.14.                        Press Release; Public
Offering Materials.  No Loan
Party shall cause or permit the issuance of any press releases or other similar
public disclosure, using the name of Agent, any Lender or their respective
affiliates in their capacity as Agent or Lender pursuant to this Agreement or
referring to this Agreement, without giving Agent or such Lender, as
applicable, a reasonable opportunity to review, comment and consent thereto
prior to issuance, unless required by Applicable Law or the Commission.


 


7.15.                        Bank Accounts.  Each Loan Party shall not, and shall not
cause or permit its Subsidiaries to, establish any new deposit accounts (other
than any payroll, employee benefit and similar trust accounts and other than
trust accounts pursuant to which any Loan Party receives collections on behalf
of third parties) without prior written notice to Agent and unless Agent and
the bank at which the account is to be opened enter into a Control Agreement in
form and substance reasonably acceptable to Agent; provided that with
respect to the Canadian Loan Parties, the obligations pursuant to this
subsection 7.15 shall be limited to using commercially reasonable efforts to
enter into such Control Agreements upon the establishment of a new deposit
account.


 


7.16.                        Intentionally Omitted.


 


7.17.                        ERISA; Canadian Pension
Plans and Canadian Benefit Plans.


 


(a)                                  Each Loan Party shall
not, and shall not cause or permit any ERISA Affiliate to, cause or permit to
occur an ERISA Event to the extent such ERISA Event could reasonably be
expected to have a Material Adverse Effect.


 


(b)                                 For each existing Canadian
Pension Plan and Canadian Benefit Plan and each plan adopted in the future that
would be considered a Canadian Benefit Plan or Canadian Pension Plan were it in
existence at the Closing Date, each Loan Party shall perform in a timely manner
all obligations (including funding, investment and administration obligations)
required to be performed in connection with such plan and the funding media
therefor except, in the case of any obligation other than a funding obligation,
to the extent that failure to so perform such obligations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.


 


(c)                                  Each Loan Party shall
deliver to Agent, (i) if requested by Agent, promptly after the filing
thereof by any Loan Party with any applicable Governmental Authority, copies of
each annual and other return, report or valuation with respect to each Canadian
Pension Plan, and promptly after its preparation and transmittal to the funding
agent, copies of the annual summary of contributions in respect of any Canadian
Pension Plan; (ii) promptly after receipt thereof, a copy of any
direction, order, notice, ruling or opinion that any Loan Party may receive
from any applicable Governmental Authority with respect to any Canadian Pension
Plan pursuant to which, individually or in the aggregate, any Loan Party incurs
or otherwise has or could have any material liability; and (iii) notification
within ten (10) days of (A) any Loan Party becoming aware of any
increases in the liabilities under or benefits provided


 


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by
any existing Canadian Pension Plan or Canadian Benefit Plan having a
cash-funding cost to such Loan Party in excess of $1,000,000 per annum, (B) the
establishment of any new plan which if in existence on the Closing Date would
have been a Canadian Pension Plan or Canadian Benefit Plan, (C) the
commencement of contributions to any plan referred to in clause (B) above
or to any Canadian Pension Plan or Canadian Benefit Plan to which any Loan
Party was not previously contributing or (D) any Loan Party becoming aware
of any increases in costs under any plan referred to in clause (B) above
or under any Canadian Pension Plan for any reason, if the increased costs would
cause the aggregate annual cost of such Canadian Pension Plan or Canadian
Benefit Plan to  exceed $1,000,000 per
annum.


 


7.18.                        Sale-Leasebacks.  Each Loan Party shall not engage in any
sale-leaseback, synthetic lease or similar transaction other than any
sale-leaseback transaction relating to any fixed or capital assets (excluding
the eAGLE Software or any General Intangibles used in connection with the
collection or monitoring of Asset Pools) by a Loan Party pursuant to which the
sale is made for cash consideration in an amount not less than the fair value
of such fixed or capital asset, provided that the aggregate book value
of the assets subject to such sale and leaseback transactions shall not exceed
$2,500,000.


 


7.19.                        Prepayments of
Indebtedness.  Each Loan
Party shall not, directly or indirectly, make any prepayment of Indebtedness or
defease any Indebtedness (in other words, for the avoidance of doubt, only
regularly scheduled payments of principal, interest and rent obligations, as
applicable,  may be made on such Indebtedness
on a non-accelerated basis in accordance with the payment terms of the
agreements or instruments evidencing such Indebtedness as in effect on the
Closing Date or if such indebtedness is incurred subsequent to the Closing
Date, as originally executed),  or any
payment with respect to any Second Lien Debt, except (a) the Obligations, (b) intercompany
Indebtedness reflecting amounts owing to Loan Parties, (c) Refinancings
(as defined in the Intercreditor Agreement) with respect to Second Lien Debt to
the extent permitted under the Intercreditor Agreement and under subsections
7.1(g) and 7.8 of this Agreement, (d) prepayment of the Indebtedness
pursuant to the Cargill Documents as contemplated in the proviso in subsection
7.1.(i), (e) in connection with refinancings permitted pursuant to
subsection 7.1(g), or (f) prepayments with respect to Indebtedness of the
type described in subsection 7.1(e) to the extent required in connection
with a voluntary or involuntary disposition of the asset securing such Indebtedness.


 


7.20.                        Changes to Material
Contracts.  Each Loan
Party shall not, and shall not cause or permit any of its Subsidiaries to,
change or amend the terms of any of the following material contracts: the
Cargill Documents, any documents, agreements or instruments evidencing the
Cargill Liens or the Management Services Agreement; provided, however,
that notwithstanding the foregoing, nothing herein shall prohibit the Loan
Parties or their Subsidiaries from amending the Cargill Documents to allow for
the prepayment in full of the Indebtedness thereunder as contemplated in the
proviso in subsection 7.1(i); provided, further, that the
Management Services Agreement may be amended to modify certain provisions in Section 2
thereof relating to the services provided thereunder, so long as such amendment
does not increase the fees payable to KRG Capital Management, L.P., Sponsor or
any Affiliated Entity thereof.


 


7.21.                        Acquisition of Assets.  From and after the Closing Date, CACV,
CACV-NJ and Holdings shall not acquire or purchase Assets.


 


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7.22.                        Anti-Terrorism Laws.


 


(A)                              General.  No Loan
Party nor any of its Subsidiaries is in material violation of any
Anti-Terrorism Law or engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.


 


(B)                                Executive Order No.  13224.  No
Loan Party nor any of its Subsidiaries or their respective agents acting or
benefiting in any capacity in connection with the Loans or other transactions
hereunder, is any of the following (each a “Blocked Person”):


 


(1)                                  a Person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order No.  13224;


 


(2)                                  a Person owned or controlled by, or acting for
or on behalf of, any Person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order No.  13224;


 


(3)                                  a Person with which any Lender is prohibited
from dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law;


 


(4)                                  a Person that commits, threatens or conspires
to commit or supports “terrorism” as defined in the Executive Order No. 
13224;


 


(5)                                  a Person that is named as a “specially
designated national” on the most current list published by the U.S.  Treasury Department Office of Foreign Asset
Control at its official website or any replacement website or other replacement
official publication of such list, or


 


(6)                                  a Person who is affiliated or associated with
a Person listed above


 


(C)                                No Loan Party nor any of their respective
Subsidiaries or, to the knowledge of any Loan Party, any of their respective
Affiliates or agents acting in any capacity in connection with the Loans or
other transactions hereunder (i) conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, or (ii) deals in, or otherwise engages in
any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order No.  13224.  The Loan Parties shall deliver to Agent and
Lenders any certification or other evidence requested from time to time by
Agent, Canadian Agent or any Lender in its sole discretion, confirming such
Loan Party’s compliance with this Section 7.22.


 


7.23.                        Trading with the Enemy
Act.  No Loan Party shall, nor shall
any Loan Party permit any Subsidiary, Affiliate or agent to, engage in any
business or activity in violation of the Trading with the Enemy Act.


 


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SECTION 8.                                            DEFAULT, RIGHTS AND REMEDIES


 


8.1.                              Event of Default.  “Event of Default” shall mean the
occurrence or existence of any one or more of the following (for each
subsection a different grace or cure period may be specified, if no grace or
cure period is specified, such occurrence or existence constitutes an immediate
Event of Default):


 


(A)                              Payment.  Failure to
make payment of (1) any principal of any Loan or any reimbursement
obligation under a Lender Letter of Credit (with respect to the amount drawn on
such Lender Letter of Credit), in either case when due, or to timely repay
Loans in accordance with the requirement of Section 2.4(B)(1), (2) any
interest or fees described in subsections 2.3(A), (B) and/or (D) on
the Obligations and such default under this clause (2) shall continue
unremedied for a period of three (3) Business Days, or (3) any other
amount due under this Agreement or any of the other Loan Documents (other than
any Interest Rate Agreement) within ten (10) days after request for payment
thereof; or


 


(B)                                Default in Other Agreements.  (1) Failure
of any Loan Party or any of its Subsidiaries to pay when due or within any
applicable grace period any principal or interest on Indebtedness (including
all Second Lien Debt but excluding the Obligations), or (2) breach or
default of any Loan Party or any of its Subsidiaries, with respect to any
Indebtedness (including all Second Lien Debt but excluding the Obligations), if
such failure to pay, breach or default permits the holder then to cause such
Indebtedness having an individual principal amount in excess of $5,000,000 or
having an aggregate principal amount in excess of $7,500,000 to become or be
declared due prior to its stated maturity; or


 


(C)                                Breach of Certain Provisions. 
Failure of any Loan Party to perform or comply with any term or
condition contained in (x) subsections 5(a)(ii)(B), 5(a)(iv), and 5(a)(vii) of
the US Security Agreement, which failure 
continues for more than fifteen (15) days after the date specified for
performance or compliance with such term or condition (other than a breach of
the foregoing subsections solely affecting the validity, perfection and/or
priority of Agent’s security interest in the Collateral, to the extent that
such default does not result in an Event of Default under subsection 8.1(O)), (y) items
1, 2 or 3 of the Reporting Rider or subsection 5(a)(i) of the US Security
Agreement, which failure continues for more than five (5) Business Days
after the date specified for performance or compliance with such term or
condition and (z) subsections 5.4, 5.6, 5.8, 5.11, 5.12, Section 6 or
Section 7 hereof, the Financial Covenants Rider, or subsections
5(a)(ii)(A), 5(a)(iii), 5(j), 5(k) or 5(p) of the US Security
Agreement; or


 


(D)                               Breach of Warranty.  Any
representation, warranty, certification or other statement made by any Loan
Party in any Loan Document (other than any representation, warranty,
certification or other statement contained in any Security Agreement or Pledge
Agreement with respect to the validity, perfection and/or priority of Agent’s
security interest in the Collateral, to the extent that such representation,
warranty, certification or other statement does not result in an Event of
Default under subsection 8.1(O)) or in any statement or certificate at any time
given by such Person in writing pursuant or in connection with any Loan
Document is false in any material respect (without duplication of materiality
qualifiers contained therein) on the date made; or


 


(E)                                 Other Defaults Under Loan Documents.  Any
Loan Party defaults in the performance of or compliance with any term contained
in this Agreement other than those 


 


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otherwise
set forth in this subsection 8.1, or defaults in the performance of or
compliance with any term contained in the other Loan Documents (other than (i) any
Interest Rate Agreement or (ii) in the case of any Security Agreement or
Pledge Agreement, a default with respect to the validity, perfection and/or
priority of Agent’s security interest in the Collateral, to the extent that
such default does not result in an Event of Default under subsection 8.1(O))
and such default is not remedied or waived within thirty (30) days after the
earlier of (1) notice from Agent, or Requisite Lenders, to Borrowing Agent
of such default or (2) actual knowledge of Borrowers or any other Loan
Party of such default; or


 


(F)                                 Change in Control.  A
Change of Control occurs; or


 


(G)                                Involuntary Bankruptcy; Appointment of
Receiver, etc.  (1) A court enters a decree or order for
relief with respect to any Loan Party in an involuntary case under any
Insolvency Law now or hereafter in effect, which decree or order is not stayed
or other similar relief is not granted under any applicable federal, provincial
or state law; or (2) the continuance of any of the following events for
sixty (60) days unless dismissed, bonded or discharged:  (a) an involuntary case is commenced
against any Loan Party under any Insolvency Law now or hereafter in effect; or (b) a
receiver, liquidator, sequestrator, trustee, custodian or other fiduciary
having similar powers over any Loan Party or over all or a substantial part of
their respective property, is appointed; or


 


(H)                               Voluntary Bankruptcy; Appointment of Receiver, etc.  (1) Any
Loan Party commences a voluntary case under any Insolvency Law now or hereafter
in effect, or consents to the entry of an order for relief in an involuntary
case or to the conversion of an involuntary case to a voluntary case under any
such law or consents to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or (2) any
Loan Party makes any assignment for the benefit of creditors; or (3) the
board of directors of any Loan Party adopts any resolution or otherwise
authorizes action to approve any of the actions referred to in this subsection
8.1(H); or


 


(I)                                    Liens.  Any Lien,
levy or assessment is filed or recorded with respect to or otherwise imposed
upon all or any part of the Collateral or the assets of any Loan Party or any
Loan Party’s Subsidiaries by the United States, Canada or any department or
instrumentality thereof or by any state, province, county, municipality or
other Governmental Authority (other than Permitted Encumbrances) and such Lien,
levy or assessment is not stayed, vacated, paid or discharged within ten (10) days;
or


 


(J)                                   Judgment and Attachments.  Any
money judgment, writ or warrant of attachment, or similar process (other than
those described elsewhere in this subsection 8.1) involving (1) an amount
in any individual case in excess of $3,000,000 or (2) an amount in the
aggregate at any time in excess of $5,000,000 (which amounts shall exclude, in
either case, judgments, writs or warrants to the extent adequately covered by
insurance, as to which the appropriate Loan Party has notified the insurance
company and the insurance company has not denied coverage) is entered or filed
against one or more of the Loan Parties or any of their respective assets and
remains undischarged, unvacated, unbonded or unstayed for a period of thirty
(30) days or in any event later than five (5) Business Days prior to the
date of any proposed 


 


93

















 


sale
thereunder by the associated judgment creditor of assets of any Loan Party that
are legally attached or levied upon by such judgment creditor; or


 


(K)                               Dissolution.  Except as
permitted pursuant to subsection 7.7, any order, judgment or decree is entered
against any Loan Party decreeing the dissolution, winding up, liquidation or
split up of such Loan Party and such order remains undischarged or unstayed for
a period in excess of fifteen (15) days, but in any event not later than five (5) days
prior to the date of any proposed dissolution or split up; or


 


(L)                                 Solvency.  US Borrower
and its Subsidiaries cease to be Solvent on a consolidated basis, fail to
generally pay their debts as they become due or admit in writing their present
or prospective inability to generally pay their debts as they become due; or


 


(M)                            Injunction.  Any Loan
Party is enjoined, restrained or in any way prevented by the order of any court
or any Governmental Authority from conducting all or any part of its business
and such order continues for thirty (30) days or more and will reasonably be
expected to result in a Material Adverse Effect; or


 


(N)                               Invalidity of Loan Documents.  Any
of the Loan Documents for any reason, other than a partial or full release in
accordance with the terms thereof, ceases to be in full force and effect or is
declared to be null and void, or any Loan Party denies that it has any further
liability under any Loan Document to which it is party, or gives notice to such
effect; or


 


(O)                               Failure of Security. 
Agent, on behalf of itself and Lenders, does not have or ceases to have
a valid, and to the extent required by the applicable Loan Document, a
perfected first priority security interest in the Collateral, in each case, for
any reason other than the failure of Agent, Canadian Agent or any Lender to take
any action within its control; provided, however, that the
foregoing shall not constitute an Event of Default if such failure relates to
Collateral with a value of less than $2,500,000 and that, when excluded from
the calculation of the Borrowing Base, would not result in a US Over Formula
Advance or a Canadian Over Formula Advance; or


 


(P)                                 Licenses and Permits.  The
loss, suspension or revocation of, or failure to renew, any license or permit
now held or hereafter acquired by any Loan Party, if such loss, suspension,
revocation or failure to renew could reasonably be expected to result in a
Material Adverse Effect; or


 


(Q)                               Forfeiture.  There is
filed against any Loan Party any civil or criminal action, suit or proceeding
under any federal or state racketeering statute (including, without limitation,
the Racketeer Influenced and Corrupt Organization Act of 1970), which action,
suit or proceeding (1) is not dismissed within one hundred twenty (120)
days; and (2) is reasonably likely to result in the confiscation or
forfeiture of any material portion of the Collateral; or


 


(R)                                Second Lien Intercreditor Agreement.  Any
creditor that is bound by the terms of the Intercreditor Agreement shall take
any affirmative action in material contravention thereof ; or


 


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(S)                                 Cargill Intercreditor Agreement.  The
failure of any Loan Party to comply in any material respect with the terms of
the Cargill Intercreditor Agreement or Cargill shall take any affirmative
action in material contravention thereof; or


 


(T)                                Cargill Documents. 
Cargill exercises any rights or remedies upon the occurrence of a
default under the Cargill Documents.


 


8.2.                              Suspension or Termination
of Revolving Loan Commitments.  Upon the occurrence and continuance of any
Event of Default, Agent may, and at the request of Requisite Lenders, Agent
shall, without notice or demand, immediately suspend or terminate all or any
portion of the Lenders’ obligations to make additional Revolving Advances or
issue or cause to be issued Lender Letters of Credit under the Revolving Loan
Commitments.


 


8.3.                              Acceleration and Other
Remedies.


 


(a)                                  Upon the occurrence of
any Event of Default described in subsections 8.1(G) or 8.1(H), all
Revolving Loan Commitments shall be immediately terminated and all of the
Obligations, including the Revolving Loans, shall automatically become
immediately due and payable, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other requirements of any kind,
all of which are hereby expressly waived by each Loan Party, and the Revolving
Loan Commitments shall thereupon terminate.


 


(b)                                 Upon the occurrence and
during the continuance of any other Event of Default, Agent may, and at the
request of Requisite Lenders, Agent shall, by written notice to Borrowing Agent
(a) reduce the aggregate amount of the Revolving Loan Commitments from
time to time, (b) declare all of the Loans and the other Obligations to
be, and the same shall forthwith become, immediately due and payable together
with accrued interest thereon, (c) terminate all of the obligations of
Agent and Lenders to make Advances and issue Lender Letters of Credit, (d) demand
that Borrowers immediately deliver to Agent either (i) cash for the
benefit of the Lenders (and Borrowers shall then immediately so deliver) in an
amount equal to one hundred five percent (105%) of the aggregate outstanding
Letter of Credit Liability or (ii) with the consent of Agent, one or more
Acceptable Standby Letters of Credit for the benefit of the Lenders (and
Borrowers shall then immediately so deliver), (e) cause part or all of the
cash received in Borrowers’ depository accounts to be applied to the
Obligations in accordance with subsection 8.7 until the Revolving Loan has been
paid in full and all Letter of Credit Liability has been cash collateralized in
accordance with subsection 2.4(C) and (f) exercise any other remedies
which may be available under the Loan Documents or Applicable Law.


 


(c)                                  US Borrower hereby grants
to Agent, for the benefit of the Lenders and each Lender with a participation
in any US Lender Letters of Credit then outstanding, a security interest in
such cash collateral referred to in subsection 8.3(b) above to secure all
of the US Letter of Credit Liability. 
Any such cash collateral or, if applicable, the proceeds of any
Acceptable Standby Letter of Credit shall be made available by Agent to Lenders
to reimburse Lenders for payments of drafts drawn under such US Lender Letters
of Credit and any fees, charges and expenses of the Lenders with respect to
such US Lender Letters 


 


95

















 


of
Credit and the unused portion thereof, after all such US Lender Letters of
Credit shall have expired or been fully drawn upon, shall be applied to pay any
other Obligations.  After all Obligations
have been Paid in Full, all Lender Letters of Credit shall have expired or been
fully drawn upon and the Termination Date shall have occurred, the balance, if
any, of such cash collateral or Acceptable Standby Letter of Credit shall be
(subject to any rights of third parties and except as otherwise directed by a
court of competent jurisdiction) returned to US Borrower.  US Borrower shall from time to time execute
and deliver to Agent such further documents and instruments as Agent may
reasonably request with respect to such cash collateral.


 


(d)                                 Canadian Borrower hereby
grants to Agent, for the benefit of the Lenders and each Lender with a
participation in any Canadian Lender Letters of Credit then outstanding, a
security interest in such cash collateral referred to in subsection 8.3(b) above
to secure all of the Canadian Letter of Credit Liability.  Any such cash collateral or if applicable,
the proceeds of any Acceptable Standby Letter of Credit shall be made available
by Agent to Lenders to reimburse Lenders for payments of drafts drawn under
such Canadian Lender Letters of Credit and any fees, charges and expenses of
the Lenders with respect to such Canadian Lender Letters of Credit and the unused
portion thereof, after all such Canadian Lender Letters of Credit shall have
expired or been fully drawn upon, shall be applied to pay any other Obligations
of Canadian Borrower.  After all
Obligations of the Canadian Borrower have been Paid in Full, all such Canadian
Lender Letters of Credit shall have expired or been fully drawn upon and the
Termination Date shall have occurred, the balance, if any, of such cash
collateral or Acceptable Standby Letter of Credit shall be (subject to any
rights of third parties and except as otherwise directed by a court of
competent jurisdiction) returned to Canadian Borrower.  Canadian Borrower shall from time to time
execute and deliver to Agent such further documents and instruments as Agent
may reasonably request with respect to such cash collateral.


 


8.4.                              Remedies.  If any Event of Default shall have occurred
and be continuing, in addition to and not in limitation of any other rights or
remedies available to Agent and Lenders at law or in equity, Agent may, and Agent
shall upon the request of Requisite Lenders, exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party upon
default under the UCC or the Canadian PPSL, as applicable (whether or not the
UCC or the Canadian PPSL, as applicable applies to the affected Collateral) and
may also (a) require each Loan Party to, and each Loan Party hereby agrees
that it will, at its expense and upon request of Agent forthwith, assemble all
or part of the Collateral as directed by Agent and make it available to Agent
at a place to be designated by Agent which is reasonably convenient to both
parties; (b) withdraw all cash in the Blocked Accounts and apply such
monies in payment of the Obligations in the manner provided in subsection 8.7;
and (c) without notice or demand or legal process, enter upon any premises
of any Loan Party and take possession of the Collateral.  Each Loan Party agrees that, to the extent
notice of sale of the Collateral or any part thereof shall be required by law,
at least ten (10) days notice to Borrowing Agent of the time and place of
any public disposition or the time after which any private disposition (which
notice shall include any other information required by law) is to be made shall
constitute reasonable notification.  At
any disposition of the Collateral (whether public or private), if permitted by
law, Agent, Canadian Agent or any Lender may bid (which bid may be, in whole or
in part, in the form of cancellation of indebtedness) for the purchase, lease,
or licensing of the Collateral or any portion thereof for the account of Agent,
Canadian Agent or such Lender.  Agent
shall not be obligated to make any disposition of 


 


96

















 


Collateral
regardless of notice of disposition having been given.  Each Loan Party shall remain jointly and
severally liable for any deficiency to the extent otherwise provided hereunder.  Agent may adjourn any public or private
disposition from time to time by announcement at the time and place fixed
therefor, and such disposition may, without further notice, be made at the time
and place to which it was so adjourned. 
Agent is not obligated to make any representations or warranties in
connection with any disposition of the Collateral.  To the extent permitted by law, each Loan
Party hereby specifically waives all rights of redemption, stay or appraisal,
which it has or may have under any law now existing or hereafter, enacted.  Agent shall not be required to proceed
against any Collateral but may proceed against any Loan Party directly.


 


8.5.                              Appointment of
Attorney-in-Fact.  Each Loan
Party hereby constitutes and appoints Agent as such Loan Party’s attorney-in-fact
with full authority in the place and stead of such Loan Party and in the name
of such Loan Party, Agent or otherwise, from time to time in Agent’s discretion
while an Event of Default is continuing to take any action and to execute any
instrument that Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including:  (a) to
ask, demand, collect, sue for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral; (b) to enforce the obligations of any Account Debtor or other
Person obligated on the Collateral and enforce the rights of any Loan Party
with respect to such obligations and to any property that secures such
obligations; (c) to file any claims or take any action or institute any
proceedings that Agent may deem necessary or desirable for the collection of or
to preserve the value of any of the Collateral or otherwise to enforce the
rights of Agent and Lenders with respect to any of the Collateral; (d) to
pay or discharge taxes or Liens levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Agent in its sole discretion, and such
payments made by Agent to become Obligations, due and payable immediately
without demand; (e) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, assignments,
verifications and notices in connection with Accounts, Chattel Paper or General
Intangibles and other Documents relating to the Collateral; and (f) generally
to take any action required of any Loan Party under Section 4 or Section 5
of this Agreement, and to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though Agent were the absolute owner thereof for all purposes, and to do, at
Agent’s option and each Loan Party’s joint and several expense, at any time or
from time to time, all acts and things that Agent deems necessary to protect,
preserve or realize upon the Collateral. 
Each Loan Party hereby ratifies and approves all acts of Agent made or
taken pursuant to this subsection 8.5. 
The appointment of Agent as each Loan Party’s attorney-in-fact and Agent’s
rights and powers are coupled with an interest and are irrevocable, so long as
any of the Revolving Loan Commitments hereunder shall be in effect and until
Payment in Full of all Obligations.


 


8.6.                              Limitation on Duty of Agent
and Lenders with Respect to Collateral.  Beyond the safe custody thereof, Agent,
Canadian Agent and each Lender shall have no duty with respect to any
Collateral in its possession (or in the possession of any agent or bailee) or
with respect to any income thereon or the preservation of rights against prior
parties or any other rights pertaining thereto. 
Agent, Canadian Agent and each Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its possession
if the Collateral is accorded treatment substantially equal to that which
Agent, Canadian Agent or such Lender, as 


 


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applicable,
accords its own property.  None of Agent,
Canadian Agent nor any Lender shall be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouse, carrier, forwarding agency,
consignee, broker or other agent or bailee selected by Loan Parties or selected
by Agent, Canadian Agent or any Lender in good faith.


 


8.7.                              Application of Proceeds.


 


(A)                              Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
a Reallocation Event, the Loan Parties irrevocably waive the right to direct
the application of any and all payments at any time or times thereafter
received by Agent from or on behalf of any Loan Party, and Agent shall have the
continuing and exclusive right to apply and to reapply any and all payments
received at any time or times after the occurrence and during the continuance
of a Reallocation Event.  Notwithstanding
anything to the contrary contained in this Agreement (including, without
limitation, subsection 2.1 and subsection 2.4 hereof), all payments (including
the proceeds of any Asset Disposition or other sale of, or other realization
upon, all or any part of the Collateral) received by Agent after and during the
continuation of a Reallocation Event shall be applied as follows (subject to
clause (c) of this subsection 8.7): first, to all costs and
expenses incurred by or owing to Agent, Canadian Agent, any Issuing Lender and
any Lender with respect to this Agreement, the other Loan Documents or the
Collateral on a pro rata basis based upon the US Dollar Equivalent of all such
outstanding amounts as of the date of such payment; second, to accrued
and unpaid interest and fees with respect to the US Revolving Loans and
Canadian Revolving Loans (including any interest which but for the provisions
of any Insolvency Law, would have accrued on such amounts) on a pro rata basis
based upon the US Dollar Equivalent of all such outstanding amounts as of the
date of such payment; third, to the principal amount of the US Revolving
Loans and Canadian Revolving Loans outstanding, to cash collateralize
outstanding Lender Letters of Credit in accordance with subsection 2.4(C), and
to any other Obligations of Borrowers then due and owing to Agent, Canadian
Agent or any Lender (or Affiliate thereof) under an Interest Rate Agreement
including any Person who was Agent, a Lender 
or an Affiliate thereof at the time such Interest Rate Agreement was
entered into (pro rata among all such Obligations based upon the US Dollar
equivalent of the principal amount thereof or the outstanding face amount of
such Lender Letters of Credit, as applicable, and based upon the US Dollar
Equivalent of all such outstanding amounts as of the date of such payment); and
fourth, to any other Obligations of Borrowers owing to Agent, Canadian
Agent or any Lender under Loan Documents. 
Any balance remaining shall be delivered to US Borrower or to whomever
may be lawfully entitled to receive such balance or as a court of competent
jurisdiction may direct.


 


Notwithstanding anything in
this clause (a) to the contrary, to the extent Agent receives proceeds of (x) any
assets of Canadian Borrower, (y) any assets of any other Foreign
Subsidiary (for which it has been determined by Borrowers that a 956 Impact
exists with respect to such Foreign Subsidiary) or (z) voting equity
interest in Canadian Borrower or any other Foreign Subsidiary (for which it has
been determined by Borrowers that a 956 Impact exists with respect to such
Foreign Subsidiary) in excess of 65% of the outstanding voting equity interest
in such Person (the proceeds designated in the foregoing clauses (x), (y) and
(z), the “Canadian Proceeds”), then in each such case such Canadian
Proceeds shall be 


 


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applied in accordance with
items “first” through “fourth” set forth in subsection
8.7(b).  A “956 Impact” will be
deemed to exist to the extent the issuance of a guaranty by, grant of a Lien
by, or pledge of greater than two-thirds of the voting Stock of, a Foreign
Subsidiary, would in the reasonable judgment of Borrowers result in incremental
income tax liability under Section 956 of the IRC, taking into account
actual anticipated repatriation of funds, foreign tax credits and other
relevant factors.


 


(B)                                Notwithstanding anything to the contrary
contained in this Agreement (including, without limitation, subsection 2.1 and
subsection 2.4 hereof), all payments from Canadian Loan Parties and/or Canadian
Proceeds (including the proceeds of any Asset Disposition or other sale of, or
other realization upon, all or any part of the Canadian Collateral) received by
Agent after and during the continuance of a Reallocation Event shall be applied
as follows (subject to clause (c) of this subsection 8.7): first,
to all costs and expenses incurred by or owing to Agent, Canadian Agent, any
Canadian Issuing Lender and any Lender (on account of its Canadian Revolving
Loan Commitment) with respect to this Agreement, the other Loan Documents or
the Canadian Collateral; second, to accrued and unpaid interest and fees
with respect to the Canadian Revolving Loans (including any interest which but
for the provisions of any Insolvency Law, would have accrued on such amounts); third,
to the principal amount of the Canadian Revolving Loans outstanding and to cash
collateralize outstanding Canadian Lender Letters of Credit in accordance with
subsection 2.4(C) (pro rata among all such Obligations (based upon the US
Dollar Equivalent of the principal amount thereof or the US Dollar Equivalent of
the outstanding face amount of such Canadian Lender Letters of Credit, as
applicable); fourth, to payment of any other amounts owing constituting
Canadian Obligations and fifth, with respect to the assets of any
Foreign Subsidiary for which it has been determined by Borrowers that no 956
Impact  exists, to the US Obligations in
accordance with clauses “first” through “fifth” of subsection
8.7(a); provided, that such proceeds of such Foreign Subsidiary shall be
applied first to the principal amount of Loans then outstanding under such
clauses and then to remaining Obligations. 
Any balance remaining shall be delivered to Canadian Borrower or to
whomever may be lawfully entitled to receive such balance or as a court of
competent jurisdiction may direct; provided, that (except as stated in
clause “fifth” above with respect to such referenced Foreign Subsidiary)
such remainder shall not be applied to US Obligations.


 


(C)                                Notwithstanding anything in clauses (a) or
(b) of this subsection 8.7 to the contrary, if at the time of any
realization on Assets after acceleration of the Obligations there exist
Franchisees who have interests in such Assets (i) pursuant to Assets
Available For Purchase Agreements or (ii) in effect prior to the Closing
Date, then the proceeds of such Assets shall be applied as follows:  first, to such Franchisees but only to
the extent of amounts that are then due and owing to such Franchisees in
accordance with the terms of (x) Sections 6, 7 and 8 of such Assets
Available For Purchase Agreements or (y) similar agreements in effect
prior to the Closing Date (so long as the calculation of amounts owing under
such agreements does not result in the Franchisees being entitled to receive a
greater percentage of distributions than would be permitted under Sections 6, 7
and 8 of the Assets Available For Purchase Agreements), respectively; and second
in accordance with items “first” through “fourth” set forth in
subsection 8.7(a).


 


(D)                               If Agent, Canadian Agent or any Lender
receives any payment from or on behalf of any Loan Party in a currency other
than the currency in which an Obligation payable is denominated, Agent,
Canadian Agent and/or such Lender may convert such payment (including 


 


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the
monetary proceeds of realization upon any Collateral and any funds then held in
a cash collateral account) into the currency of the relevant Obligation in
accordance with prevailing exchange rates, as determined by Agent in its
reasonable discretion.  The Obligations
shall be satisfied only to the extent of the amount actually received by Agent
upon such conversion.


 


8.8.                              License of Intellectual
Property.  Each Loan
Party hereby grants to Agent, for the benefit of Agent, Canadian Agent, each
Issuing Lender and Lenders, effective upon the occurrence and during the
continuance of any Event of Default hereunder, the non-exclusive right and
license (exercisable without payment of royalty or other compensation to such
Loan Party) to use all Intellectual Property owned or used by such Loan Party
together with any goodwill associated therewith, all to the extent necessary to
enable Agent to realize on the Collateral and any successor or assign to enjoy
the benefits of the Collateral, in each case, to the fullest extent that it is
permitted to do so under Applicable Law and, with respect to licenses,
contractual obligations.  This right and
license shall inure to the benefit of all successors, assigns and transferees
of Agent and their successors, assigns and transferees, whether by voluntary
conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu
of foreclosure or otherwise.


 


8.9.                              Waivers; Non-Exclusive
Remedies.  No failure
on the part of Agent, Canadian Agent or any Lender to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement or the other Loan Documents shall operate as a waiver thereof; nor
shall any single or partial exercise by Agent, Canadian Agent or any Lender of
any right under this Agreement or any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right.  The rights in this Agreement and the other
Loan Documents are cumulative and shall in no way limit any other remedies
provided by law.


 


8.10.                        Performance by Agent.  If any Loan Party shall fail to perform any
covenant, duty or agreement contained in any of the Loan Documents which
failure constitutes an Event of Default, Agent may perform or attempt to
perform such covenant, duty or agreement on behalf of such Loan Party after the
expiration of any cure or grace periods set forth herein.  In such event, such Loan Party shall, at the
request of Agent, promptly pay any amount reasonably expended by Agent in such
performance or attempted performance to Agent, together with interest thereon
at the highest rate of interest in effect upon the occurrence of an Event of
Default as specified in subsection 2.2(A)(iii) from the date of such
expenditure until paid.  Notwithstanding
the foregoing, it is expressly agreed that Agent shall have no liability or
responsibility for the performance of any obligation of any Loan Party under
this Agreement or any other Loan Document.


 


SECTION 9.                                            AGENT


 


9.1.                              Agent.


 


(A)                              Appointment.  Each Lender
hereby designates and appoints GMAC CF as its Agent under this Agreement and
the other Loan Documents, and each Lender hereby irrevocably authorizes Agent
to execute and deliver the Loan Documents and any subordination, intercreditor
and post-closing agreements, (or any supplements, modifications or amendments
to any such agreements) and to take such action or to refrain from taking such
action, in each case 


 


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on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers as are set forth herein or therein, together with
such other powers as are reasonably incidental thereto.  Each Lender hereby designates and appoints
GMAC CF as its Canadian Agent under this Agreement and the other Loan
Documents, and each Lender hereby irrevocably authorizes Canadian Agent to
execute and deliver the Loan Documents and to take such action or to refrain
from taking such action, in each case on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers as are
set forth herein or therein, together with such other powers as are reasonably
incidental thereto. Agent is authorized and empowered to amend, modify, or
waive any provisions of this Agreement or the other Loan Documents on behalf of
the Lenders subject to the requirement that certain of the Lenders’ consent be
obtained in certain instances as provided in this subsection 9.1 and subsection
9.8.  The provisions of this subsection
9.1 (other than subsection 9.1(G), 9.1(H)(1) and 9.1(H)(2)) are solely for
the benefit of Agent, Canadian Agent, and the Lenders and neither Borrowers nor
any other Loan Party shall have any rights as a third party beneficiary of any
of the provisions hereof.  In performing
its functions and duties under this Agreement and the other Loan Documents,
Agent and Canadian Agent shall each act solely as agent of the Lenders and
neither Agent nor Canadian Agent assumes, and neither Agent nor Canadian Agent
shall be deemed to have assumed, any obligation toward or relationship of
agency or trust with or for Borrowers or any other Loan Party.  Each of Agent and Canadian Agent may perform
any of its duties hereunder, or under the Loan Documents, by or through its
agents or employees.


 


(B)                                Nature of Duties. 
Neither Agent nor Canadian Agent shall have any duties, obligations or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents.  The duties of each of
Agent and Canadian Agent shall be mechanical and administrative in nature.  Neither Agent nor Canadian Agent shall have
by reason of this Agreement a fiduciary, trust or agency relationship with or
in respect of any Lender, Borrower or any other Loan Party.  Nothing in this Agreement or any of the Loan
Documents, express or implied, is intended to or shall be construed to impose
upon Agent or Canadian Agent any obligations in respect of this Agreement or
any of the Loan Documents except as expressly set forth herein or therein.  Each Lender shall make its own independent
investigation of the financial condition and affairs of each Loan Party in
connection with the extension of credit hereunder and shall make its own
appraisal of the creditworthiness of each Loan Party, and neither Agent nor
Canadian Agent shall have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto (other than as expressly required herein), whether coming
into its possession before the Closing Date or at any time or times
thereafter.  If either Agent or Canadian
Agent seeks the consent or approval of any Lenders to the taking or refraining
from taking any action hereunder, then Agent or Canadian Agent, as applicable,
shall send notice thereof to each Lender. 
Agent or Canadian Agent, as applicable, shall promptly notify each
Lender any time that Requisite Lenders have instructed Agent or Canadian Agent
to act or refrain from acting pursuant hereto. 
Notwithstanding anything to the contrary contained in this Agreement, in
the event that Agent and Canadian Agent are neither the same entity nor
affiliated entities, Canadian Agent shall have no rights except as expressly
set forth herein and no obligations other than to discharge its express duties hereunder
or as directed by Agent.


 


(C)                                Rights, Exculpation, Etc. 
Neither Agent nor Canadian Agent, nor any of their respective officers,
directors, employees or agents shall be liable to any Lender for any 


 


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action
taken or omitted by them hereunder or under any of the Loan Documents, or in
connection herewith or therewith, except that each of Agent and Canadian Agent
shall be liable to the extent of its own gross negligence or willful misconduct
as determined by a final non-appealable order by a court of competent
jurisdiction.  Neither Agent nor Canadian
Agent shall be liable for any apportionment or distribution of payments made by
it in good faith and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Lender to whom
payment was due but not made, shall be to recover from other Lenders any
payment in excess of the amount to which they are determined to be entitled
(and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them).  In
no event shall either Agent or Canadian Agent be liable for punitive, special,
consequential, incidental, exemplary or other similar damages.  In performing its functions and duties
hereunder, each of Agent and Canadian Agent shall exercise the same care which
it would in dealing with loans for its own account, but neither Agent nor
Canadian Agent, nor any of their respective agents or representatives shall be
responsible to any Lender for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, or sufficiency of this Agreement or any of the
Loan Documents or the transactions contemplated thereby, or for the financial
condition of any Loan Party.  Neither
Agent nor Canadian Agent shall be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Loan Documents or the financial
condition of any Loan Party, or the existence or possible existence of any
Default or Event of Default.  Agent may
at any time request instructions from the Requisite Lenders or all affected
Lenders with respect to any actions or approvals which by the terms of this
Agreement or of any of the Loan Documents Agent is permitted or required to
take or to grant.  If such instructions
are promptly requested, Agent shall be absolutely entitled to refrain from taking
any action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under any of the Loan Documents until it shall have received such
instructions from Requisite Lenders as shall be prescribed by this
Agreement.  Without limiting the
foregoing, no Lender shall have any right of action whatsoever against Agent as
a result of Agent acting or refraining from acting under this Agreement or any
of the other Loan Documents in accordance with the instructions of Requisite
Lenders; and, notwithstanding the instructions of Requisite Lenders, Agent
shall have no obligation to take any action if it believes, in good faith, that
such action is deemed to be illegal by Agent or exposes Agent to any liability
for which it has not received satisfactory indemnification in accordance with
subsection 9.1(E).


 


(D)                               Reliance.   Neither
Agent nor Canadian Agent shall be under any duty to examine, inquire into, or
pass upon the validity, effectiveness or genuineness of this Agreement, any
other Loan Document, or any instrument, document or communication furnished
pursuant hereto or in connection herewith. 
Each of Agent and Canadian Agent shall be entitled to rely, and shall be
fully protected in relying, upon any written or oral notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, fax, electronic mail, telecopy or
telegram) believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder.  Each of Agent
and Canadian Agent shall be entitled to rely upon the advice of legal counsel,
independent accountants, and other experts selected by each of Agent and
Canadian Agent in its sole discretion.


 


102














 


(E)                                 Indemnification.  Lenders
will reimburse and indemnify each of Agent and Canadian Agent for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including, without limitation, attorneys’
fees and expenses), advances or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against either Agent or
Canadian Agent in its capacity as such in any way relating to or arising out of
this Agreement or any of the Loan Documents or any action taken or omitted by
Agent or Canadian Agent in its capacity as such in under this Agreement or any
of the Loan Documents, in proportion to each Lender’s Pro Rata Share, but only
to the extent that any of the foregoing is not promptly reimbursed by
Borrowers; provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements to the
extent resulting from Agent’s or Canadian Agent’s (as applicable) gross
negligence or willful misconduct as determined by a final non-appealable order
by a court of competent jurisdiction.  If
any indemnity furnished to Agent or Canadian Agent for any purpose shall, in
the opinion of Agent or Canadian Agent (as applicable), be insufficient or
become impaired, Agent or Canadian Agent (as applicable) may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against even if so directed by Requisite Lenders as shall be prescribed by this
Agreement until such additional indemnity is furnished.  The obligations of the Lenders under this
subsection 9.1(E) shall survive the payment in full of the Obligations and
the termination of this Agreement.


 


(F)                                 GMAC CF (or any successor Agent) Individually.  With
respect to its Revolving Loan Commitments hereunder, GMAC CF (or any successor
Agent or Canadian Agent) shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. 
The terms “Lenders,” “Requisite Lenders,” and “Supermajority
Lenders,” or any similar terms shall, unless the context clearly otherwise
indicates, include GMAC CF (or any successor Agent or successor Canadian Agent)
in its individual capacity as a Lender or one of such applicable categories of
the Lenders.  GMAC CF (or any successor
Agent or successor Canadian Agent), either directly or through strategic
affiliations, may lend money to, acquire equity or other ownership interests
in, provide advisory services to and generally engage in any kind of banking,
trust or other business with any Loan Party as if it were not acting as Agent
or Canadian Agent (as applicable) pursuant hereto and without any duty to
account therefor to Lenders.  GMAC CF (or
any successor Agent or successor Canadian Agent), either directly or through
strategic affiliations, may accept fees and other consideration from any Loan
Party for services in connection with this Agreement or otherwise without
having to account for the same to Lenders.


 


(G)                                Successor Agent.


 


(1)                                  Resignation or Removal.  Agent
may (or, shall, upon the request of either Borrowing Agent or the Requisite
Lenders in the event that (x) the Lender then acting as Agent (or any
Lender that is an Affiliate of Agent) becomes a Defaulting Lender, or (y) neither
Agent nor any Affiliate of Agent holds any of the Revolving Loan Commitments
hereunder) resign from the performance of all its agency functions and duties
hereunder at any time by giving at least thirty (30) Business Days’ prior
written notice to Borrowing Agent and the Lenders.  Such resignation shall take effect upon the
acceptance by a successor Agent of 


 


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appointment as provided
below. In the event that Agent is also the Canadian Agent, Agent shall also
resign as Canadian Agent simultaneously with its resignation as Agent.


 


(2)                                  Appointment of a Successor.  Upon
any such notice of resignation pursuant to clause (G)(1) above, Requisite
Lenders shall appoint a successor Agent (and a successor Canadian Agent, if
applicable), which, in each case, unless an Event of Default has occurred and
is continuing, shall be subject to Borrowing Agent’s approval.  If a successor Agent (and a successor
Canadian Agent, if applicable) shall not have been so appointed within the
thirty (30) Business Day period referred to in clause (1) above, the
retiring Agent, upon notice to Borrowing Agent, shall then appoint a successor
Agent (and a successor Canadian Agent, if applicable) which, unless an Event of
Default has occurred and is continuing shall be reasonably acceptable to
Borrowing Agent who shall serve as Agent (and as Canadian Agent, if applicable)
until such time, if any, as Requisite Lenders appoint a successor Agent (and a
successor Canadian Agnet, if applicable) as provided above.


 


(3)                                  Successor Agent.  Upon the
acceptance of any appointment as Agent or Canadian Agent under the Loan Documents
by a successor Agent or a successor Canadian Agent, such successor Agent or
such successor Canadian Agent (as applicable) shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent (or the retiring Canadian Agent, as applicable), and the
retiring Agent (or the retiring Canadian Agent, as applicable) shall be
discharged from its duties and obligations under the Loan Documents.  After any retiring Agent’s or retiring
Canadian Agent’s resignation as Agent or Canadian Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent or Canadian Agent (as applicable).


 


(4)                                  Payments Directly to Lenders.  In
the event that Agent or Canadian Agent becomes a Defaulting Lender-Impaired,
then, notwithstanding anything to the contrary herein, (i) Borrowers shall
be permitted to make any payments required hereunder directly to the Lenders
entitled to such payments, in accordance with their Pro Rata Shares, in lieu of
making such payments through Agent or the Canadian Agent, as applicable, (ii) Lenders
shall be permitted to fund Loans directly to Borrowers in lieu of funding such
payments through Agent or the Canadian Agent, as applicable, and (iii) unless
otherwise directed by the Requisite Lenders, funds in the Controlled Accounts
shall cease to be transferred to Agent’s Account or the Canadian Agent’s
Account, as applicable, as described in Section 5.12.


 


(H)                               Collateral Matters.


 


(1)                                  Release of Collateral. 
Lenders hereby irrevocably authorize Agent, and Agent hereby agrees:


 


(A)                              upon the written request of Borrowing Agent, to release any Lien granted
to or held by Agent upon any Collateral (a) upon the termination of the
Revolving Loan Commitments and Payment in Full of the Obligations, (b) constituting
property being sold or disposed of if such sale or disposition is made in
compliance with the provisions of this Agreement, including, without
limitation, any sale or disposition made with the consent of Requisite Lenders
(and Agent may, in its discretion, rely in good faith conclusively on any
certificate of Borrowing Agent with respect to the completion of such sale or
disposition in 


 


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compliance with the provisions of this Agreement,
without further inquiry) (provided that the foregoing release shall not
include the proceeds of such sale or disposition), (c) constituting
property in which any Loan Party owned no interest at the time Agent’s Lien was
granted nor at any time thereafter, or (d) constituting property leased to
any Loan Party under a lease that has expired or is terminated in a transaction
permitted under this Agreement;


 


(B)                                with the consent of Requisite Lenders, during any Fiscal Year, to
release any Lien granted to or held by Agent upon any Collateral having a book
value not greater than ten percent (10%) of the total book value of all
Collateral, as determined by Agent, as of the first day of such Fiscal Year;


 


(C)                                at the request of Borrowing Agent, so long as no Event of Default has
occurred and is continuing, to release or subordinate on terms and conditions
satisfactory to Agent any Lien granted to or held by Agent under any Loan
Document to the holder of any Permitted Encumbrance constituting a purchase
money Lien or Capital Lease on such property if such Permitted Encumbrance
secures Indebtedness permitted by subsection 7.1(e); provided that Agent
shall be obligated to release such Lien if and only if (w) the purchase
money Lien or Capital Lease shall pertain to Equipment being purchased or
leased by the applicable Loan Party at the time of such request to release the
Lien on the Equipment being purchased or leased, (x) the purchase money
Lien or Capital Lease shall not relate to a sale-leaseback other than as
permitted under subsection 7.18, (y) such Lien to be released does not
attach to or encumber the eAGLE Software, and (z) the applicable Loan
Party shall have used commercially reasonable efforts to maintain Agent’s right
to maintain a second priority security interest in the applicable Collateral;
and


 


(D)                               to release any Guarantor from all obligations under the Loan Documents (i) upon
the termination of the Revolving Loan Commitments and the Obligations being
Paid in Full, (ii) in connection with the merger, liquidation, dissolution
or sale of such Guarantor, if the merger, liquidation, dissolution or sale of
such Guarantor is made to a person other than a Loan Party or an Affiliated
Entity of a Loan Party and is made in compliance with the provisions of this
Agreement, including, without limitation, pursuant to a merger, liquidation,
dissolution or sale made with the consent of the Requisite Lenders (and Agent
may, in its discretion, rely in good faith conclusively on any certificate of
Borrowing Agent with respect to the compliance of such merger, liquidation,
dissolution or sale with the provisions of this Agreement, without further
inquiry), or (iii) if all assets of such Guarantor constituting Collateral
are permitted to be released pursuant to this subsection 9.1(H)(1).


 


(2)                                  Confirmation of Authority; Execution of
Releases.  Without in any manner limiting Agent’s
authority to act without any specific or further authorization or consent by
Lenders (as set forth in subsection 9.1(H)(1)), each Lender agrees to confirm
in writing, upon request by Agent or Borrowing Agent, the authority to release
any Collateral or guaranty conferred upon Agent pursuant to the terms of
subsection 9.1(H)(1).  Upon receipt by
Agent of any required confirmation from Requisite Lenders, of its authority to
release any particular item or types of Collateral, and upon at least ten (10) Business
Days’ prior written request by Borrowing Agent (or such shorter period as may
be permitted by Agent in its sole discretion) in connection with a disposition
of the type described in clause (A)(a), clause (A)(b), clause (C), or clause (D) of
subsection 9.1(H)(1), Agent shall (and is hereby irrevocably authorized by
Lenders 


 


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to) execute such documents
as may be necessary to evidence the release of the Liens granted to Agent upon
such Collateral (and, in connection with such release, to deliver to Borrowing
Agent any such Collateral in its or its nominees’ possession, subject to any
obligation of Agent to Second Lien Agent under the Intercreditor Agreement), or
the subordination of any Lien granted to or held by Agent under any Loan
Document, as applicable, and if applicable pursuant to clause (D) of
subsection 9.1(H)(1), to release the applicable Guarantor from all obligations
under the Loan Documents; provided, however, that (x) Agent
shall not be required to execute any such document on terms which, in Agent’s
reasonable opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (y) such release shall not in any manner discharge, affect
or impair the Obligations or any Liens upon (or obligations of any Loan Party,
in respect of), all interests retained by any Loan Party (other than a
Guarantor that is being released), including the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.


 


(3)                                  Absence of Duty.  Agent shall
have no obligation whatsoever to any Lender or any other Person to assure that
the property covered by the Loan Documents exists or is owned by Borrowers or
any other Loan Party or is cared for, protected or insured or has been
encumbered or that the Liens granted to Agent have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent in this Agreement or in any of the Loan Documents, it being understood
and agreed that in respect of the property covered by this Agreement or the
Loan Documents or any act, omission or event related thereto, Agent may act in
any manner it may deem appropriate, in its discretion, given Agent’s own
interest in property covered by this Agreement or the Loan Documents as one of
the Lenders and that Agent shall have no duty or liability whatsoever to any of
the other Lenders, provided, however, that Agent shall exercise
the same care which it would in dealing with loans for its own account.


 


(I)                                    Agency for Perfection. 
Agent, Canadian Agent and each Lender hereby appoint each other Lender
as agent for the purpose of perfecting Agent’s security interest in assets
which, in accordance with the UCC or Canadian PPSL (with respect to Canadian
PPSL Collateral) in any applicable jurisdiction, can be perfected by possession
or control.  Should any Lender (other
than Agent) obtain possession or control of any such assets, such Lender shall
notify Agent thereof, and, promptly upon Agent’s request therefor, shall
deliver such assets to Agent or in accordance with Agent’s instructions or
transfer control to Agent in accordance with Agent’s instructions.  Each Lender agrees that it will not have any
right individually to enforce or seek to enforce any Loan Document or to
realize upon any collateral security for the Loans unless instructed to do so
by Agent in writing, it being understood and agreed that such rights and
remedies may be exercised only by Agent. 
Agent may file such proofs of claim or documents as may be necessary or
advisable in order to have the claims of Agent and the Lenders (including any
claim for the reasonable compensation, expenses, disbursements and advances of
Agent and the Lenders, their respective agents, financial advisors and
counsel), allowed in any judicial proceedings relative to any Loan Party and/or
their Subsidiaries, or any of their respective creditors or property, and shall
be entitled and empowered to collect, receive and distribute any monies,
securities or other property payable or deliverable on any such claims.  Any custodian in any judicial proceedings
relative to any Loan Party and/or their Subsidiaries is hereby authorized 


 


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by
each Lender to make payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to the Lenders, to pay to Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of Agent, its agents, financial advisors and counsel, and any other
amounts due Agent.  Nothing contained in
this Agreement or the other Loan Documents shall be deemed to authorize Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the Loans,
or the rights of any holder thereof, or to authorize Agent to vote in respect
of the claim of any Lender in any such proceeding, except as specifically
permitted herein.


 


(J)                                   Exercise of Remedies.  Each
Lender agrees that it will not have any right individually to enforce or seek
to enforce this Agreement or any Loan Document against any Loan Party or to
realize upon any collateral security for the Obligations, unless instructed to
do so by Agent, it being understood and agreed that such rights and remedies
may be exercised only by Agent.


 


9.2.                              Notice of Default.  Neither Agent nor Canadian Agent shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to Agent or to Canadian Agent (as applicable) for
the account of the Agent, Canadian Agent, Issuing Lenders and Lenders,
unless Agent shall have received written notice from a Lender, Issuing
Lender or Borrowing Agent referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a “notice of default”.  Agent will use reasonable efforts to notify
each Lender of its receipt of any such notice, unless such notice is with
respect to defaults in the payment of principal, interest and fees, in which
case Agent will notify each Lender of any such Default.  Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Requisite Lenders
in accordance with Section 8. 
Unless and until Agent has received any such request, Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interests of the Agent, Canadian Agent, Issuing
Lenders and Lenders.


 


9.3.                              Lender Actions Against
Collateral.  Each
Lender agrees that it will not take any enforcement action, nor institute any
actions or proceedings, with respect to the Loans, against Borrowers or any
Loan Party hereunder or under the other Loan Documents or against any
Collateral (including the exercise of any right of set-off) without the consent
of Agent or Requisite Lenders.  All such
enforcement actions and proceedings shall be (i) taken in concert and (ii) at
the direction of or with the consent of Agent or Requisite Lenders.  Agent is authorized to issue all notices to
be issued by or on behalf of the Lenders with respect to any Second Lien
Debt.  With respect to any action by
Agent to enforce the rights and remedies of Agent, Canadian Agent, Issuing
Lenders and the Lenders under this Agreement and the other Loan Documents, each
Lender hereby consents to the jurisdiction of the court in which such action is
maintained.


 


9.4.                              Agent Reports.  Each Lender may from time to time receive one
or more reports or other information (each, a “Report”) prepared by or
on behalf of Agent (or one or more of Agent’s Affiliates).  With respect to each Report, each Lender
hereby agrees that:


 


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(a)                                  Agent (and Agent’s
Affiliates) shall not have any duties or obligations in connection with or as a
result of a Lender receiving a copy of a Report, which will be provided solely
as a courtesy, without consideration. 
Each Lender will perform its own diligence and will make its own
independent investigation of the operations, financial conditions and affairs
of the Loan Parties and will not rely on any Report or make any claim that it
has done so.  In addition, each Lender
releases, and agrees that it will not assert, any claim against Agent (or one
or more of Agent’s Affiliates) that in any way relates to any Report or arises
out of a Lender having access to any Report or any discussion of its contents,
and each Lender agrees to indemnify and hold harmless Agent (and Agent’s
Affiliates) and their respective officers, directors, employees, agents and
attorneys from all claims, liabilities and expenses relating to a breach by a
Lender or any of its personnel of this subsection 9.4(a) or otherwise
arising out of a Lender’s access to any Report or any discussion of its
contents;


 


(b)                                 Each Report may not be
complete and certain information and findings obtained by Agent (or one or more
of Agent’s Affiliates) regarding the operations and condition of the Loan
Parties may not be reflected in each Report. 
Agent (and Agent’s Affiliates) makes no representations or warranties of
any kind with respect to (i) any existing or proposed financing; (ii) the
accuracy or completeness of the information contained in any Report or in any
other related documentation; (iii) the scope or adequacy of Agent’s (and
Agent’s Affiliates’) due diligence, or the presence or absence of any errors or
omissions contained in any Report or in any other related documentation; and (iv) any
work performed by Agent (or one or more of Agent’s Affiliates) in connection
with or using any Report or any related documentation; and


 


(c)                                  Each Lender agrees to
safeguard each Report and any related documentation with the same care which it
uses with respect to information of its own which it does not desire to
disseminate or publish, and agrees not to reproduce or distribute or provide
copies of or disclose any Report or any other related documentation or any
related discussions to anyone.


 


9.5.                              [Intentionally Omitted.]


 


9.6.                              Quebec Security.  Without limiting any of the foregoing
provisions in favor of Agent, for the purposes of holding any hypothec under a
deed of hypothec granted by any Loan Party pursuant to the laws of the Province
of Quebec to secure debentures, bonds or other titles of indebtedness, Agent is
hereby appointed to act as the Person holding the power of attorney (fondé de
pouvoir) pursuant to article 2692 of the Civil Code of Quebec to act on behalf
of itself and each present and future Canadian Agent, Issuing Lender and
Lender to which any Canadian Obligations are owing.  Each party hereto agrees that,
notwithstanding Section 32 of an Act Respecting the Special Powers of
Legal Persons (Quebec), Agent may, as the Person holding such power of attorney,
acquire and/ or be the pledgee of any such debentures, bonds or other titles of
indebtedness secured by such hypothec. 
Furthermore, Agent is hereby appointed to act as the holder, pledgee and
depositary of any such debentures, bonds or other titles of indebtedness on its
own behalf as agent and for and on behalf and for the benefit of itself and
each present and future Canadian Agent, Issuing Lender and Lender to which
any Canadian Obligations are owing.


 


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9.7.                              Action by Agent.  Agent shall take such action with respect to
any Default or Event of Default as it may determine in its own discretion
pursuant to the terms hereof or as may be requested by Requisite Lenders in
accordance with Section 8.  Unless
and until Agent has received any such request, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to any Default or Event of Default as it shall deem advisable or in the
best interests of itself, Canadian Agent, Issuing Lenders and Lenders.


 


9.8.                              Amendments, Waivers and
Consents.


 


(A)                              Except for actions permitted to be taken by
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Loan Party therefrom, shall in any event be effective unless the same shall
be in writing and signed by Borrowing Agent, and by Requisite Lenders or
Supermajority Lenders, or all affected Lenders, as applicable.  Except for actions permitted to be taken by
Agent or as set forth in clauses (B), (C) and (D) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.


 


(B)                                No amendment, modification, termination or
waiver of or consent with respect to any provision of this Agreement that
increases the percentage advance rates set forth in the definition of the
Borrowing Base, or that makes less restrictive the nondiscretionary criteria
for exclusion from Eligible Asset Pools set forth with respect to the Borrowing
Base shall be effective unless the same shall be in writing and signed by
Agent, Supermajority Lenders and Borrowing Agent.  No amendment, modification, termination or
waiver of or consent with respect to any provision of this Agreement that
waives compliance with the conditions precedent set forth in Section 3 to
the making of any US Revolving Loan or the incurrence of any US Letter of
Credit Liability shall be effective unless the same shall be in writing and
signed by Agent, Requisite Lenders and Borrowing Agent.  Notwithstanding anything contained in this
Agreement to the contrary, (i) no waiver or consent with respect to any
Default or any Event of Default shall be effective for purposes of the
conditions precedent to the making of US Revolving Loans or the incurrence of
US Letter of Credit Liability unless the same shall be in writing and signed by
Agent, Requisite Lenders, and Borrowing Agent, (ii) no amendment,
modification or waiver of subsections 7.3 or 9.1(H)(2) shall be effective
unless in writing and signed by Agent, Requisite Lenders and Borrowing Agent,
and (iii) no amendment, modification or waiver  of subsection 9.1(H) (other than as
addressed in clause (ii) above) shall be effective unless in writing and
signed by Agent and Requisite Lenders.


 


(C)                                No amendment, modification, termination or
waiver of or consent with respect to any provision of this Agreement that
waives compliance with the conditions precedent set forth in Section 3 to
the making of any Canadian Revolving Loan or the incurrence of any Canadian
Letter of Credit Liability shall be effective unless the same shall be in
writing and signed by Agent, Requisite Lenders, and Canadian Borrower.  Notwithstanding anything contained in this
Agreement to the contrary, (i) no waiver or consent with respect to any
Default or any Event of Default shall be effective for purposes of the
conditions precedent to the making of Canadian Revolving Loans or the incurrence
of Canadian Letter of Credit Liability set forth in Section 3 unless the
same shall be in writing and signed by Agent, Requisite Lenders, and Canadian
Borrower.


 


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(D)                               No amendment, modification, termination,
waiver or consent shall, unless in writing and signed by Agent, Borrowing Agent
and each Lender directly affected thereby: 
(i) except as permitted pursuant to Section 2.16, increase the
principal amount, or postpone or extend the scheduled date of expiration, of
any Lender’s Revolving Loan Commitments (which action shall be deemed only to
affect those Lenders whose Revolving Loan Commitments are increased or the
scheduled date of expiration of whose Revolving Loan Commitments are postponed
or extended) and may be approved by Requisite Lenders, including those Lenders
whose Revolving Loan Commitments are increased or the scheduled date of
expiration of whose Revolving Loan Commitments are postponed or extended; (ii) reduce
the principal of, rate of interest on (other than any determination or waiver
to charge or not charge interest at the Default Rate) or fees payable with
respect to any Loan or Letter of Credit Liability of any affected Lender; (iii) extend
any scheduled payment date or final maturity date of the principal amount of
any Loan or the date for reimbursement of any drawing under a Lender Letter of
Credit of any affected Lender or postpone or extend the scheduled date of
expiration of any Lender Letter of Credit beyond the date set forth in the last
sentence of subsections 2.1(F)(3) and 2.1(G)(3); (iv) waive, forgive,
defer, extend or postpone any payment of interest (other than default interest
as described in clause (ii) above) or fees as to any affected Lender
(which action shall be deemed only to affect those Lenders to whom such
payments are made); (v) other than as permitted by the terms of subsection
9.1(H)(1) hereof, release any Guaranty (which action shall be deemed to
directly affect all Lenders);  (vi) except
in connection with a transaction permitted by subsection 7.3(A) or as
otherwise permitted in subsection 9.1(H), release Collateral or amend
subsection 9.1(H)(1) (which actions shall be deemed to directly affect all
Lenders); (vii) change the percentage of the Revolving Loan Commitments or
of the aggregate unpaid principal amount of the Loans that shall be required
for Lenders or any of them to take any action hereunder (which action shall be
deemed to directly affect all Lenders);  (viii) amend,
modify or waive subsection 2.4(B)(1) or subsection 8.7 and (ix) amend,
modify or waive clauses (A), (B), (C) or (D) of this subsection 9.8
or the definitions of the terms “Requisite Lenders,” or “Supermajority
Lenders” insofar as such definitions affect the substance of this subsection
9.8 or the term “Pro Rata Share” or amend the definition of “Reallocation
Event” (which actions shall be deemed to directly affect all Lenders).  No amendment, modification, termination or
waiver affecting the rights or duties of Agent, Canadian Agent or Issuing
Lenders under this Section 9 or under any other Loan Document shall in any
event be effective unless in writing and signed by Agent, Canadian Agent, or
Issuing Lenders, as applicable, and provided, further, that no
amendment, modification, termination, waiver or consent of any provision
relating to the Swingline Loan shall be effective unless in writing and signed
by Swingline Lender, as the case may be, in addition to Lenders required to
take such action.  No approval of any
Lender shall be required for Agent to enter into any amendment, modification,
termination or waiver to take additional Collateral pursuant to any Loan
Document or to modify any Control Agreement entered into pursuant to the
requirements hereof so long as the applicable requirements hereof continue to
be satisfied. No amendment, modification, termination or waiver of any
provision of any Note (other than provisions of the other Loan Documents that
are incorporated by reference therein) shall be effective without the written concurrence
of the holder of that Note.  No notice to
or demand on any Loan Party in any case shall entitle such Loan Party or any
other Loan Party to any other or further notice or demand in similar or other
circumstances.  Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 9.8 shall be binding upon each Lender or 


 


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future
Lender and, if signed by a Loan Party, on such Loan Party and upon each holder
of the Notes at the time outstanding and each future holder of the Notes.


 


(E)                                 Specific Purpose or Intent.  Each
amendment, modification, termination, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given.


 


(F)                                 Failure to Give Consent; Replacement of
Non-Consenting and Defaulting Lender.  In the
event Agent requests the consent of a Lender and does not receive a written
consent or denial thereof within ten (10) Business Days after such Lender’s
receipt of such request, then such Lender will be deemed to have denied the
giving of such consent.  If, in
connection with any proposed amendment, modification, termination or waiver of
any of the provisions of this Agreement requiring (a) the consent or approval
of all Lenders under this subsection 9.8, the consent of Requisite Lenders is
obtained but the consent of one or more other Lenders whose consent is required
is not obtained or (b) the consent or approval of Supermajority Lenders
under this subsection 9.8, the consent of Requisite Lenders is obtained but the
consent of Supermajority Lenders is not obtained, then Borrowers shall have the
right, so long as all such non-consenting Lenders are either replaced or
prepaid as described in subsection 2.11, to either (1) replace the
non-consenting Lenders with one or more Replacement Lenders pursuant to
subsection 2.11(A) (except that, in any case where Agent is the
non-consenting Lender, Agent approval rights described in subsection 2.11 shall
not be applicable), as if such Lender were an Affected Lender thereunder, but
only so long as each such Replacement Lender consents to the proposed
amendment, modification, termination or waiver, or (2) prepay in full the
Obligations of the non-consenting Lenders and terminate the non-consenting
Lenders’ Revolving Loan Commitments pursuant to subsection 2.11(B), as if such
Lender were an Affected Lender thereunder. 
In the case of a Defaulting Lender, at Borrowing Agent’s request, (i) a
Person reasonably acceptable to Agent (such acceptance required only so long as
Agent is not the Defaulting Lender or an Affiliate of a Defaulting Lender)
shall have,  or (ii) with Agent’s
consent in Agent’s sole discretion, Agent shall have, the right (but no
obligation) to purchase from any Defaulting Lender, and each Defaulting Lender
agrees that it shall, at Agent’s  request
sell and assign to such other Person or Agent, as applicable, all of the Loans
and Revolving Loan Commitments of that Defaulting Lender for an amount equal to
the principal balance of all Loans held by such Defaulting Lender and all
accrued interest and Fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment and
Acceptance Agreement.


 


(G)                                Certain Amendments. 
Notwithstanding anything in this subsection 9.8, (a) Agent and Loan
Parties, without the consent of either Requisite Lenders or all Lenders, may
execute amendments to this Agreement and the Loan Documents, which consist
solely of the making of typographical corrections, (b) the provisions of
this subsection 9.8 shall not apply to any Interest Rate Agreement and (c) in
connection with any US Borrower Revolver Increase pursuant to subsection 2.16,
Agent may, with the consent of Borrowing Agent, enter into such amendments to
this Agreement and the other Loan Documents as may be necessary or appropriate,
in the opinion of Agent, to effectuate the provisions of subsection 2.16.


 


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9.9.                              Assignments and
Participations in Loans.


 


(A)                              Assignments.  Any
assignment by a Lender shall:  (i) require
the consent of Agent and any US Letter of Credit Issuing Lenders with respect
to US Loans and US Revolving Loan Commitments and Canadian Agent and Canadian
Letter of Credit Issuing Lender with respect to Canadian Revolving Loans and
Canadian Revolving Loan Commitments (in each case which consent shall not be
unreasonably withheld or delayed with respect to an Eligible Assignee and which
consent, in the case of the consent of the Agent or Canadian Agent, is not
required by an assignment between Lenders or from a Lender to an Affiliate of a
Lender or from a Lender in accordance with clause (a) of the definition of
Eligible Assignee) and the execution of an Assignment and Acceptance Agreement
and otherwise in form and substance reasonably satisfactory to, and
acknowledged by Agent and any US Letter of Credit Issuer with respect to US
Loans and US Revolving Loan Commitments and Canadian Agent and any Canadian
Letter of Credit Issuer with respect to Canadian Revolving Loans and Canadian
Revolving Loan Commitments); provided, however, that in the case
of an assignment pursuant to subsection 2.11 or 9.8(F), the Assignment and
Acceptance Agreement shall not be required to be executed by the assignor; (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent and Borrowers that it is purchasing the applicable Loans to be assigned
to it for its own account, for investment purposes and not with a view to the
distribution thereof, provided that all parties acknowledge that
assignment to the assignee Lender for the purpose of securitization does not
constitute a view to the distribution thereof; (iii) except with respect
to any assignment by a Lender to an Affiliate of such Lender, after giving
effect to any such partial assignment, the assignee Lender shall have Revolving
Loan Commitments in an amount at least equal to $5,000,000 in the case of a US
Revolving Loan Commitment, and the assigning Lender shall have retained
Revolving Loan Commitments in an amount at least equal to $5,000,000 in the
case of a US Revolving Loan Commitment; (iv) require a payment to Agent of
an assignment fee of $3,500 (except in the case of an assignment pursuant to
subsection 2.11 or 9.8(F)); (v) so long as no Event of Default has
occurred and is continuing, require the consent of Borrowing Agent in respect
of any assignment of US Revolving Loans and US Revolving Loan Commitments or
Canadian Revolving Loans and Canadian Revolving Loan Commitments (which consent
is not required for an assignment between Lenders or from a Lender to an
Affiliate of a Lender or from a Lender in accordance with clause (a) of
the definition of Eligible  Assignee),
which shall not be unreasonably withheld, delayed or conditioned; (vi) in
the case of any assignment, involve an assignment of the same Pro Rata Share of
such Lender’s US Revolving Loan Commitment and such Lender’s Canadian Revolving
Loan Commitment to the same assignee; (vii) in the case of any assignment
by a Lender that is an Issuing Lender or Swingline Lender, involve an
assignment of the commitments associated therewith; and (vii) if the
assignee shall not be a Lender, it shall deliver to Agent any Tax forms
required by subsection 2.9. 
Notwithstanding the above, Agent may in its sole and absolute discretion
(with the consent of the Issuing Lenders) permit any assignment by a Lender to
a Person or Persons that are not Eligible Assignees, subject to Borrowing Agent’s
consent rights as set forth above, provided, that Agent shall not permit
any assignment by a Lender to any Person that is an Affiliated Entity of any
Loan Party without the approval of the Requisite Lenders. In the case of an
assignment by a Lender that has become effective under this subsection 9.9, (i) the
assignee shall have, to the extent of such assignment, the same rights,
benefits and obligations as all other Lenders hereunder and (ii) the
assigning Lender shall be relieved of its obligations hereunder with respect to
its Revolving Loan Commitments or assigned portion thereof and the Loans,
Letter of Credit Liability and other interests assigned by it from and after
the effective date of such assignment. 
Borrowers hereby 


 


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acknowledge
and agree that any assignment in accordance with the requirements hereof shall
give rise to a direct obligation of Borrowers to the assignee and that the
assignee shall be considered to be a “Lender.”  In all instances, each Lender’s liability to
make Loans hereunder shall be several and not joint and shall be limited to
such Lender’s Pro Rata Share of the applicable Revolving Loan Commitment.  In the event Agent, Canadian Agent or any
Lender assigns or otherwise transfers all or any part of the Obligations, any
Agent or any such Lender shall so notify Borrowers and Borrowers shall, upon
the request of Agent or such Lender, execute new Notes in exchange for the
Notes, if any, being assigned and the assigning Lender shall return to Borrower
any prior Note held by it. 
Notwithstanding the foregoing provisions of this subsection 9.9(A), (a) any
Lender may at any time pledge the Obligations held by it and such Lender’s
rights under this Agreement and the other Loan Documents to a Federal Reserve
Bank or to such Lender’s financing source, provided, that no Lender
shall be relieved of any of its obligations hereunder as a result of any such
pledge and in no event shall such pledgee be considered to be a Lender or be
entitled to require the pledging Lender to take or omit to take any action
hereunder, (b) any Lender that is an investment fund may assign the
Obligations held by it and such Lender’s rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor or pledge such Obligations and rights to a trustee for the benefit of
its investors and (c) any Lender may assign the Obligations to an
Affiliate of such Lender or to a Person that is a Lender prior to the date of
such assignment.  Notwithstanding any
other provision of this Agreement to the contrary, neither the Lenders nor any
of their successors or assigns shall assign or transfer any interest herein
without obtaining a representation from such successor or assign that any such
assignment or transfer would not result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the IRC with respect to
the Plans.  Notwithstanding any provision
to the contrary, any Lender (an “Assigning Lender”) may assign to one or
more special purpose funding vehicles that is a wholly owned subsidiary of, and
controlled by, such Assigning Lender (each, an “SPV”) all or any portion
of its funded Loans (without the corresponding Revolving Loan Commitment),
without the consent of any Person or the payment of a fee, by execution of a
written assignment agreement in a form agreed to by such Assigning Lender and
such SPV, and may grant any such SPV the option, in such SPV’s sole discretion,
to provide Borrowers all or any part of any Loans that such Assigning Lender
would otherwise be obligated to make pursuant to this Agreement.  Such SPVs shall have all the rights (other
than voting rights prior to the Termination Date) which a Lender making or holding
such Loans would have under this Agreement, but no obligations; provided
however, any such SPV shall be subject to subsection 11.18.  In the case of such an assignment to an SPV,
the Assigning Lender shall remain liable for all its original obligations under
this Agreement, including its Revolving Loan Commitments.  Notwithstanding such assignment, Agent and
Borrowers may deliver notices to the Assigning Lender (as agent for the SPV)
and not separately to the SPV unless Agent and Borrowers are requested in
writing by the SPV (or its agent) to deliver such notices separately to it.


 


(B)                                Participations.  Each Lender
may sell participations in all or any part of any Loans or Revolving Loan
Commitments made by it to another Person; provided, (1) such Lender’s
obligations under this Agreement shall remain unchanged, (2) such Lender
shall remain solely responsible to the other parties hereto for the performance
of its obligations in respect of the Loans or Revolving Loan Commitments, (3) Borrowers,
Agent, Canadian Agent the Issuing Lenders and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. 
All amounts payable 


 


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by
Loan Parties hereunder shall be determined as if that Lender had not sold such
participation.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver directly affecting (1) any reduction in
the principal amount or an interest rate on any Loan in which such holder
participates; (2) any extension of the Termination Date or the date fixed
for any payment of interest or principal payable with respect to any Loan in
which such holder participates; and (3) any release of substantially all
of the Collateral.  Each Loan Party
hereby acknowledges and agrees that the participant under each participation
shall for purposes of subsections 2.8, 2.9, 2.10, 9.10 and 11.2 be considered to
be a “Lender”; provided, however, that such Participant
shall not be entitled to receive any greater payment under such subsections
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the
participation to such Participant is made with Borrowing Agent’s prior written
consent.


 


(C)                                No Relief of Obligations; Cooperation; Ability
to Make LIBOR Loans.  Except as otherwise provided in subsection
9.9(A) no Lender shall, as between Borrowers and that Lender, be relieved
of any of its obligations hereunder as a result of any sale, assignment,
transfer or negotiation of, or granting of participation in, all or any part of
the Loans or other Obligations owed to such Lender.  Each Lender may furnish any information
concerning Loan Parties and their Subsidiaries in the possession of that Lender
from time to time to Eligible Assignees and participants (including prospective
assignees and participants) that agree in writing to be bound by the
confidentiality provisions hereof.  Each
Loan Party agrees that it will use its commercially reasonable efforts to
assist and cooperate with Agent, Canadian Agent and any Lender in any manner
reasonably requested by Agent, Canadian Agent or such Lender to effect the sale
of a participation or an assignment described above. Notwithstanding anything
contained in this Agreement to the contrary, so long as the Requisite Lenders
shall remain capable of making LIBOR Loans, no Person shall become a Lender
hereunder unless such Person shall also be capable of making LIBOR Loans and
Canadian Loans (whether Canadian BA Loans or otherwise) .


 


(D)                               Security Interests; Assignment to Affiliates. 
Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time following written notice to Agent (1) pledge the
Obligations held by it or create a security interest in all or any portion of
its rights under this Agreement or the other Loan Documents in favor of any
Person; provided, however (a) no such pledge or grant of
security interest to any Person shall release such Lender from its obligations
hereunder or under any other Loan Document and (b) the acquisition of
title to such Lender’s Obligations pursuant to any foreclosure or other exercise
of remedies by such Person shall be subject to the provisions of this Agreement
and the other Loan Documents in all respects including, without limitation, any
consent required by this subsection 9.9; and (2) subject to complying with
the provisions of subsection 9.9(A), assign all or any portion of its funded
loans to an Eligible Assignee which is a Subsidiary of such Lender or its
parent company, to one or more other Lenders, or to a Related Fund.  For purposes of this paragraph, a “Related
Fund” shall mean, with respect to any Lender, a fund or other investment
vehicle that invests in commercial loans and is managed by such Lender or by
the same investment advisor that manages such Lender or by an Affiliate of such
investment advisor.


 


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(E)           Recording of Assignments.  Agent
shall maintain at its office in New York, New York a copy of each Assignment
and Acceptance Agreement delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the commitments of, and principal
amount of the Loans owing to each Lender pursuant to the terms hereof from time
to time (the “Register”).  The
entries in the Register shall be presumptive evidence of the amounts due and
owing to Lender in the absence of manifest error.  Loan Parties, Agent, Canadian Agent, each
Issuing Lender and each Lender may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement.  The Register
shall be available for inspection by Borrowing Agent, Canadian Agent, any
Issuing Lender and any Lender, at any reasonable time upon reasonable prior
notice.


 


9.10.        Set Off and Sharing of Payments.  In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
during the continuance of any Event of Default, each Lender is hereby
authorized by Borrowers at any time or from time to time, with reasonably
prompt subsequent notice to Borrowers (any prior or contemporaneous notice
being hereby expressly waived) to set off and to appropriate and to apply any
and all (i) (A) balances held by any Lender at any of its offices for
the account of Canadian Borrower or any other Canadian Loan Party (regardless
of whether such balances are then due to Canadian Borrower, or any other
Canadian Loan Party), and (B) other property at any time held or owing by
any Lender to or for the credit or for the account of Canadian Borrower, or any
other Canadian Loan Party, and (ii) (A) balances held by such
Lender  at any of its offices for the
account of US Borrower or any US Loan Party (regardless of whether such
balances are then due to US Borrower or any other US Loan Party), and (B) other
property at any time held or owing by such Lender to or for the credit or for
the account of US Borrower or any other US Loan Party, against and on account
of any of the Obligations (or, in the case of clause (i), against and on
account of the Canadian Obligations); except that no Lender shall exercise any
such right without the prior written consent of Agent.  Notwithstanding anything herein to the
contrary, the failure to give notice of any set off and application made by
such Lender to applicable Borrower(s) shall not affect the validity of
such set off and application.  Any Lender
exercising a right to set off shall purchase for cash (and the other Lenders
shall sell) interests in each of such other Lender’s Pro Rata Share of the
Obligations as would be necessary to cause all Lenders to share the amount so
set off with each other Lender entitled to share in the amount so set off in
accordance with their respective Pro Rata Shares.  Borrowers agree, to the fullest extent
permitted by law, that any Lender may exercise its right to set off with
respect to amounts in excess of its Pro Rata Share of the Obligations and upon
doing so shall deliver such amount so set off to Agent for the benefit of all
Lenders entitled to share in the amount so set off in accordance with their Pro
Rata Shares.


 


9.11.        Disbursement of Funds.  Agent may, on behalf of the Lenders, disburse
funds to US Borrower for US Revolving Loans requested after the Closing
Date.  Each Lender shall reimburse Agent
on demand for all funds disbursed on its behalf by Agent, or subject to
subsection 9.1(G)(4), if Agent so requests, each Lender will remit to Agent its
Pro Rata Share of any US Revolving Loan before Agent disburses same to US
Borrower.  If Agent elects to require
that each Lender make funds available to Agent prior to a disbursement by Agent
to US Borrower, Agent shall advise each Lender by telephone, telecopy or fax of
the amount of such Lender’s Pro Rata Share of the US Revolving Loan requested
by Borrowing Agent no later than 1:00 p.m. (New York City time) on the
Funding Date applicable thereto, and each such Lender 


 


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shall
pay Agent such Lender’s Pro Rata Share of such requested US Revolving Loan, in
same day funds, by wire transfer to Agent’s account on such Funding Date.  If any Lender fails to pay the amount of its
Pro Rata Share within one (1) Business Day after Agent’s demand, Agent
shall promptly notify Borrowing Agent, and US Borrower shall immediately repay
such amount to Agent.  Any repayment
required pursuant to this subsection 9.11 shall be without premium or
penalty.  Nothing in this subsection 9.11
or elsewhere in this Agreement or the other US Revolving Loan Documents,
including the provisions of subsection 9.9, shall be deemed to require Agent to
advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that
Agent or US Borrower may have against any Lender as a result of any default by
such Lender hereunder.


 


9.12.        Settlements, Payments and Information.


 


(A)          Revolving Advances and Payments; Fee Payments.


 


(1)           Fluctuation of US Revolving Loan Balance.  The
US Revolving Loan balance may fluctuate from day to day through Agent’s
disbursement of funds to, and receipt of funds from, Borrowers.  In order to minimize the frequency of
transfers of funds between Agent and Lenders, notwithstanding terms to the
contrary set forth in Section 2 and subsection 9.11, US Revolving Advances
that are Base Rate Loans and repayments thereof, except as set forth in
subsection 2.1(D), will be settled according to the procedures described in
this subsection 9.12.  Notwithstanding
these procedures, each Lender’s obligation to fund its portion of any advances
made by Agent to Borrowers will commence on the date such advances are made by
Agent.  Such payments will be made by
such Lender without set-off, counterclaim or reduction of any kind.


 


(2)           Each Lender shall make the amount of such
Lender’s Pro Rata Share of such US Revolving Advance available to Agent in same
day funds by wire transfer to Agent’s Account not later than 2:00 p.m.
(New York City time) on the requested Funding Date in the case of a Base Rate
Loan and not later than 10:00 a.m. (New York City time) on the requested
Funding Date in the case of a LIBOR Loan. 
After receipt of such wire transfers (or, in Agent’s sole discretion,
before receipt of such wire transfers), subject to the terms hereof, Agent
shall make the requested US Revolving Advance to US Borrower as designated by
Borrowing Agent in the Notice of Borrowing. 
All payments by each Lender shall be made without setoff, counterclaim
or deduction of any kind.


 


(3)           Settlement Dates.  Once
each week for the portion of the US Revolving Loan that is a Base Rate Loan, or
more frequently (including daily), if Agent so elects (each such day being a “Settlement
Date”), Agent will advise each Lender by telephone, fax or telecopy of the
amount of each such Lender’s Pro Rata Share of the US Revolving Loan that is a
Base Rate Loan.  In the event payments
are necessary to adjust the amount of any such Lender’s required Pro Rata Share
of the balance of the US Revolving Loan that is a Base Rate Loan to such Lender’s
actual Pro Rata Share of the balance of the US Revolving Loan that is a Base
Rate Loan as of any Settlement Date, the party from which such payment is due
will pay the other, in same day funds, by wire transfer to the other’s account
not later than 3:00 p.m. (New York City) time on the Business Day
following the Settlement Date.  Upon the
occurrence of an event 


 


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described in subsection 8.1(G) or
(H), the date of such occurrence shall be deemed a Settlement Date. In
addition, each US Borrower Increase Date shall be deemed a Settlement Date.


 


(4)           Settlement Definitions.  For
purposes of this subsection 9.12(A), the following terms and conditions will
have the meanings indicated:


 


(a)           “Daily Loan Balance” means an amount
calculated as of the end of each calendar day by subtracting (i) the
cumulative principal amount paid by Agent to a Lender on a US Loan that is a
Base Rate Loan from the Closing Date through and including such calendar day,
from (ii) the cumulative principal amount on a US Loan that is a Base Rate
Loan advanced by such Lender to Agent on that Loan from the Closing Date
through and including such calendar day.


 


(b)           “Daily Interest Rate” means an amount
calculated by dividing the interest rate payable to a Lender on a Loan that is
a Base Rate Loan (as set forth in subsection 2.2) as of each calendar day by
three hundred sixty (360).


 


(c)           “Daily Interest Amount” means an amount
calculated by multiplying the Daily Loan Balance of a Loan that is a Base Rate
Loan by the associated Daily Interest Rate on that US Loan that is a Base Rate
Loan.


 


(d)           “Interest Ratio” means a number calculated
by dividing the total amount of the interest on a US Loan that is a Base Rate
Loan received by Agent with respect to the immediately preceding  month by the total amount of interest on that
US Loan due from Borrower during the immediately preceding month.


 


(5)           Settlement Payments.  On
the first Business Day of each month (“Interest Settlement Date”), Agent
will advise each Lender by telephone, fax or telecopy of the amount of such
Lender’s share of interest and fees on each of the US Loans as of the end of
the last day of the immediately preceding month.  Provided that such Lender has made all
payments required to be made by it under this Agreement, Agent will pay to such
Lender, by wire transfer to such Lender’s account (as specified by such Lender
on the signature page of this Agreement or the applicable Assignment and
Acceptance Agreement, as amended by such Lender from time to time after the
date hereof or in the applicable Assignment and Acceptance Agreement) not later
than 3:00 p.m. New York City time on the next Business Day following the
Interest Settlement Date, such Lender’s share of interest and fees on each of
the US Loans.  Such Lender’s share of
interest on each US Loan that is a Base Rate Loan will be calculated for that
US Loan by adding together the Daily Interest Amounts for each calendar day of
the prior month for that US Loan that is a Base Rate Loan and multiplying the
total thereof by the Interest Ratio for that US Loan that is a Base Rate Loan.  Such Lender’s share of the Unused Line Fee
described in subsection 2.3(A) shall be an amount equal to (a)(i) such
Lender’s average Revolving Loan Commitment during such month (calculated as a
US Dollar Equivalent), less (ii) the sum of (x) such Lender’s average
daily balance of the Revolving Loans (calculated as a US Dollar Equivalent),
plus (y) such Lender’s Pro Rata Share of the average daily aggregate
amount of US Dollar Equivalent of the Letter of Credit Reserve, in each case
for the preceding month, multiplied by (b) the percentage required by
subsection 2.3(A).  Such Lender’s share
of all other fees paid to Agent for the benefit of the Lenders hereunder shall
be paid and calculated based on 


 


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such Lender’s Revolving Loan
Commitment with respect to the Loans on which such fees are associated.  To the extent Agent does not receive the
total amount of any fee owing by Borrowers under this Agreement, each amount
payable by Agent to a Lender under this subsection 9.12(A)(5) with respect
to such fee shall be reduced on a pro rata basis.  Any funds disbursed or received by Agent
pursuant to this Agreement, including, without limitation, under subsections
9.11, 9.12(A)(1), and 9.13, prior to the Settlement Date for such disbursement
or payment shall be deemed advances or remittances by GMAC CF, in its capacity
as a Lender, for purposes of calculating interest and fees pursuant to this
subsection 9.12(A)(5).


 


(B)           Canadian Revolving Loans.  Each
Lender’s obligations with respect to its US Revolving Loan Commitment shall be
determined only after taking into account and giving effect to any Canadian
Revolving Loans funded by it and any Canadian Lender Letters of Credit for
which it is responsible.


 


(C)           Return of Payments.


 


(1)           Recovery after Non-Receipt of Expected Payment.  If
Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from
Borrowers and such related payment is not received by Agent, then Agent will be
entitled to recover such amount from such Lender on demand without set-off,
counterclaim or deduction of any kind together with interest thereon, for each
day from and including the date such amount is made available by Agent to such
Lender to but excluding the date of repayment to Agent at the greater of the
Federal Funds Effective Rate and a rate determined by Agent in accordance with
banking industry rules on interbank compensation.


 


(2)           Recovery of Returned Payment.  If
Agent determines at any time that any amount received by Agent under this
Agreement must be returned to any Borrower or paid to any other Person pursuant
to any requirement of law, court order or otherwise, then, notwithstanding any
other term or condition of this Agreement, Agent will not be required to
distribute any portion thereof to any Lender. 
In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest
at such rate, if any, as Agent is required to pay to any Borrower or such other
Person, without set-off, counterclaim or deduction of any kind.


 


9.13.        Discretionary Advances.  Notwithstanding anything contained herein to
the contrary, Agent may, in its sole discretion, for a period of not more than
thirty (30) consecutive days make US Revolving Advances (an “Agent
Overadvance”) in an aggregate amount in excess of the limitations set forth
in the Borrowing Base, which aggregate amount shall not be greater than five
percent (5%) of the US Revolving Loan Commitments (provided, however,
that the aggregate amount of the Agent Overadvances taken together with the US
Dollar Equivalent of the Letter of Credit Reserve, Swingline Loans and
Revolving Loans then outstanding shall not at any time exceed the aggregate US
Revolving Loan Commitments) for the purpose of preserving or protecting the
Collateral or for incurring any costs associated with collection or enforcing
rights or remedies against the Collateral, or incurred in any action to enforce
this Agreement or any other Loan Document.


 


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Upon Agent’s making of any Revolving Advances under
this subsection 9.13, each of the Lenders shall be deemed to have irrevocably,
unconditionally and immediately purchased from Agent a participation in such US
Revolving Advances in an amount equal to such Lender’s Pro Rata Share of the US
Revolving Loan Commitment multiplied by the total amount of such US Revolving
Loans outstanding under this subsection 9.13. 
Each Lender shall effect such purchase by making available the amount of
such Lender’s participation in such US Revolving Loans in Dollars in
immediately available funds to Agent’s Account. 
In the event any Lender fails to make available to Agent when due the
amount of such Lender’s participation in such US Revolving Loans, Agent shall
be entitled to recover such amount on demand from such Lender together with
interest at the Federal Funds Effective Rate. 
Each such purchase by a Lender shall be made without recourse to Agent,
without representation or warranty of any kind, and shall be effected and
evidenced pursuant to documents reasonably acceptable to Agent.  The obligations of the Lenders under this
subsection 9.13 shall be absolute, irrevocable and unconditional, shall be made
under all circumstances and shall not be affected, reduced or impaired for any
reason whatsoever.


 


9.14.        Swingline Lender.  Swingline Lender may resign as Swingline
Lender upon thirty (30) days’ prior written notice to Borrowing Agent and
Lenders, upon the appointment of (and acceptance of such appointment by) a
Lender selected by Agent.


 


9.15.        Removal of Issuing Lender.  Any Issuing Lender may be removed at any time
by the Borrowing Agent or Agent (with the consent of the Borrowing Agent (such
consent not to be unreasonably withheld or delayed), but which may be withheld
in the Borrowing Agent’s discretion if such removal would result in the
incurrence of any additional obligations by any Borrower) by notice to such
Issuing Lender, the Lenders and the Borrowing Agent or Agent (as
applicable).  Prior to the removal of any
retiring Issuing Lender becoming effective hereunder, (x) a replacement
Issuing Lender reasonably satisfactory to the Agent and Borrowing Agent shall
have been appointed as described in the second succeeding sentence, (y) an
Acceptable Letter of Credit shall have been issued for the benefit of such
retiring Issuing Lender or (z) cash collateral in an amount equal to one
hundred five percent (105%) of the outstanding face amount of all Lender
Letters of Credit issued by such Issuing Lender shall have been deposited with
Agent (for the benefit of such retiring Issuing Lender).  At the time of the removal of any Issuing
Lender, such Issuing Lender shall have no further obligation to issue any
Lender Letters of Credit hereunder.  If a
successor Issuing Lender is appointed, such successor shall succeed to and
become vested with all the interests, rights and obligations of the retiring
Issuing Lender and the retiring Issuing Lender will be discharged from its
obligations under this Agreement and the acceptance of any appointment as
Issuing Lender hereunder by a successor Issuing Lender shall be evidenced by an
agreement entered into by such successor, the retiring Issuing Lender, the
Agent and the applicable Borrower, whereby the retiring Issuing Lender’s
obligations with respect to all Lender Letters of Credit issued by it are
assumed by (or otherwise guaranteed) by the successor Issuing Lender in a manner
reasonably acceptable to the retiring Issuing Lender, the successor Issuing
Lender, the Agent and the applicable Borrower. 
After the removal of a Issuing Lender hereunder, such Issuing Lender
shall continue to have the benefit of subsection 2.1(H)(4) of this
Agreement.


 


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SECTION 10.         GUARANTY


 


10.1.        Unconditional Guaranty.  (a) Each US Guarantor hereby
unconditionally guarantees, as a primary obligor and not merely as a surety,
jointly and severally (except with respect to CACV, which shall only guarantee
on a several basis) with each other US Guarantor when and as due, whether at
maturity, by acceleration, by notice of prepayment or otherwise, the due and
punctual performance of all Obligations except that CACV shall only guarantee
the US Obligations.  Without limiting the
generality of the foregoing, each US Guarantor’s liability shall extend to all
amounts that constitute part of the Obligations, or the US Obligations in the
case of CACV, and would be owed by Borrowers to Agent, Canadian Agent, the
Issuing Lenders or the Lenders under any Loan Document but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any Loan Party.  Each payment made by any US Guarantor
pursuant to this Guaranty shall be made in lawful money of the United States in
immediately available funds, (a) without set-off or counterclaim and (b) free
and clear of and without deduction or withholding for or on account of any
present and future charges and any conditions or restrictions resulting in
charges and all penalties, interest and other payments on or in respect thereof
(except for Excluded Taxes) (“Tax” or “Taxes”) unless US
Guarantor is compelled by law to make payment subject to such Taxes.


 


(b)           Each
Canadian Guarantor hereby unconditionally guarantees, as a primary obligor and
not merely as a surety, jointly and severally with each other Canadian
Guarantor when and as due, whether at maturity, by acceleration, by notice of
prepayment or otherwise, the due and punctual performance of all Canadian
Obligations of Canadian Borrower and each Canadian Guarantor.  Without limiting the generality of the foregoing,
each Canadian Guarantor’s liability shall extend to all amounts that constitute
part of the Canadian Obligations and would be owed by Canadian Borrower to
Agent, Canadian Agent, any Canadian Letter of Credit Issuer or any Lender under
any Loan Document but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving any Loan Party.  Each payment
made by any Canadian Guarantor pursuant to this Guaranty shall be made in lawful
money of Canada in immediately available funds, (a) without set-off or
counterclaim and (b) free and clear of and without deduction or
withholding for or on account of any present and future Taxes unless Canadian
Guarantor is compelled by law to make payment subject to such Taxes.


 


10.2.        Taxes.  All material Taxes in respect of the
provisions of this Section 10 or any amounts payable or paid pursuant to
the terms of this Section 10 shall be paid by Guarantor when due and in
any event prior to the date on which penalties attach thereto, except to the
extent such Taxes are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, provided that no Liens
have been filed with respect to such Taxes. 
Each Guarantor will indemnify Agent, Canadian Agent, the Issuing Lenders
and each of the Lenders against and in respect of all such Taxes, regardless of
materiality or contestation by such Guarantor. 
Without limiting the generality of the foregoing, if any Taxes or amounts
in respect thereof must be deducted or withheld from any amounts payable or
paid by any Guarantor hereunder, such Guarantor shall pay such additional
amounts as may be necessary to ensure that Agent, Canadian Agent, the Issuing
Lenders and each of the Lenders receives a net amount equal to the full amount
which it would have received had payment (including any additional amounts
payable under this subsection 10.2) not been made subject to such Taxes.  Within thirty (30) days of each payment by
any Guarantor hereunder of Taxes or in respect of 


 


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Taxes,
such Guarantor shall deliver to Agent satisfactory evidence (including
originals, or certified copies, of all relevant receipts) that such Taxes have
been duly remitted to the appropriate authority or authorities.


 


10.3.        Waivers of Notice, Demand, etc.  Each Guarantor hereby absolutely,
unconditionally and irrevocably waives (a) promptness, diligence, notice
of acceptance, notice of presentment of payment and any other notice hereunder,
(b) demand of payment, protest, notice of dishonor or nonpayment, notice
of the present and future amount of the Obligations and any other notice with
respect to the Obligations, (c) any requirement that Agent, Canadian
Agent, any Issuing Lender or any Lender protect, secure, perfect or insure any
security interest or Lien or any property subject thereto or exhaust any right
or take any action against any other Loan Party, or any Person or any
Collateral, (d) any other action, event or precondition to the enforcement
hereof or the performance by each such Guarantor of the Obligations, and (e) any
defense arising by any lack of capacity or authority or any other defense of
any Loan Party or any notice, demand or defense by reason of cessation from any
cause of Obligations other than payment and performance in full of the
Obligations by the Loan Parties and any defense that any other guarantee or
security was or was to be obtained by Agent.


 


10.4.        No Invalidity, Irregularity, etc.  No invalidity, irregularity, voidableness,
voidness or unenforceability of this Agreement or any Loan Document or any
other agreement or instrument relating thereto, or of all or any part of the
Obligations or of any collateral security therefor shall affect, impair or be a
defense hereunder.


 


10.5.        Independent Liability.  The Guaranty hereunder is one of payment and
performance, not collection, and the obligations of each Guarantor hereunder
are independent of the Obligations of the other Loan Parties, and a separate
action or actions may be brought and prosecuted against any Guarantor to
enforce the terms and conditions of this subsection 10.5, irrespective of
whether any action is brought against any other Loan Party or other Persons or
whether any other Loan Party or other Persons are joined in any such action or
actions.  Each Guarantor waives any right
to require that any resort be had by Agent, Canadian Agent, any Issuing Lender
or any Lender to any security held for payment of the Obligations or to any
balance of any deposit account or credit on the books of Agent, Canadian Agent,
any Issuing Lender or any Lender in favor of any Loan Party or any other
Person.  No election to proceed in one
form of action or proceedings, or against any Person, or on any Obligations,
shall constitute a waiver of Agent’s right to proceed in any other form of
action or proceeding or against any other Person unless Agent has expressed any
such waiver in writing.  Without limiting
the generality of the foregoing, no action or proceeding by Agent against any Loan
Party under any document evidencing or securing indebtedness of any Loan Party
to Agent shall diminish the liability of any Guarantor hereunder, except to the
extent Agent receives actual payment on account of Obligations by such action
or proceeding, notwithstanding the effect of any such election, action or
proceeding upon the right of subrogation of any Guarantor in respect of any
Loan Party.


 


10.6.        Indemnity.  (a)  As an original and independent
obligation under this Guaranty, each US Guarantor shall (a) indemnify
Agent, Canadian Agent, each Issuing Lender and each of the Lenders and keep
Agent, Canadian Agent, each Issuing Lender and each of the Lenders indemnified
against all costs, losses, expenses and liabilities of whatever kind resulting
from the 


 


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failure
by any party to make due and punctual payment of any of the Obligations or
resulting from any of the Obligations being or becoming void, voidable,
unenforceable or ineffective against Borrowers (including, but without
limitation, all legal and other costs, Charges and expenses incurred by Agent,
Canadian Agent, each Issuing Lender and each of the Lenders, or any of them in
connection with preserving or enforcing, or attempting to preserve or enforce,
its rights under this Guaranty), except to the extent that any of the same
results from the gross negligence or willful misconduct by Agent, Canadian
Agent, any Issuing Lender or any Lender; and (b) pay on demand the amount
of such costs, losses, expenses and liabilities whether or not Agent, Canadian
Agent, any Issuing Lender or any of the Lenders have attempted to enforce any
rights against Borrowers or any other Person or otherwise.


 


(b)  As an
original and independent obligation under this Guaranty, each Canadian
Guarantor shall (a) indemnify Agent, Canadian Agent, each Canadian Letter
of Credit Issuer and each of the Lenders and keep Agent, Canadian Agent, each
Canadian Letter of Credit Issuer and each of the Lenders indemnified against
all costs, losses, expenses and liabilities of whatever kind resulting from the
failure by any party to make due and punctual payment of any of the Canadian
Obligations or resulting from any of the Canadian Obligations being or becoming
void, voidable, unenforceable or ineffective against Borrowers (including, but
without limitation, all legal and other costs, Charges and expenses incurred by
Agent, Canadian Agent, each Canadian Letter of Credit Issuer and each of the
Lenders, or any of them in connection with preserving or enforcing, or
attempting to preserve or enforce, its rights under this Guaranty), except to
the extent that any of the same results from the gross negligence or willful
misconduct by Agent, Canadian Agent, any Canadian Letter of Credit Issuer or
any Lender; and (b) pay on demand the amount of such costs, losses,
expenses and liabilities whether or not Agent, Canadian Agent, any Canadian
Letter of Credit Issuer or any of the Lenders have attempted to enforce any
rights against Canadian Borrower or any other Person or otherwise.


 


10.7.        Liability Absolute.  The liability of each Guarantor hereunder
shall be absolute, unlimited and unconditional and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any reason,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any claim, defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any other Obligation or
otherwise.  Without limiting the
generality of the foregoing, to the extent permitted by Applicable Law, the
obligations of each Guarantor shall not be discharged or impaired, released,
limited or otherwise affected by:


 


(i)            any change in the manner, place or terms of
payment or performance, and/or any change or extension of the time of payment
or performance of, release, renewal or alteration of, or any new agreements
relating to any Obligation, any security therefor, or any liability incurred
directly or indirectly in respect thereof, or any rescission of, or amendment,
waiver or other modification of, or any consent to departure from, this
Agreement or any Loan Document, including any increase in the Obligations resulting
from the extension of additional credit to Borrowers or otherwise;


 


(ii)           any sale, exchange, release, surrender, loss,
abandonment, realization upon any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, all or any of the Obligations,
and/or any offset there against, or failure to 


 


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perfect, or continue the
perfection of, any Lien in any such property, or delay in the perfection of any
such Lien, or any amendment or waiver of or consent to departure from any other
guaranty for all or any of the Obligations;


 


(iii)          the failure of Agent, Canadian Agent, any
Issuing Lender or any Lender to assert any claim or demand or to enforce any
right or remedy against any Borrower or any other Loan Party or any other
Person under the provisions of this Agreement or any Loan Document or any other
document or instrument executed and delivered in connection herewith or
therewith;


 


(iv)          any settlement or compromise of any Obligation,
any security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and any
subordination of the payment of all or any part thereof to the payment of any
obligation (whether due or not) of any Loan Party to creditors of any Loan
Party other than any other Loan Party;


 


(v)           any manner of application of Collateral, or
proceeds thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Obligations or any
other assets of any Loan Party; and


 


(vi)          any other agreements or circumstance
(including any statute of limitations) of any nature whatsoever that may or
might in any manner or to any extent vary the risk of any Guarantor, or that
might otherwise at law or in equity constitute a defense available to, or a
discharge of, the Guaranty hereunder and/or the obligations of any Guarantor,
or a defense to, or discharge of, any Loan Party or any other Person or party
hereto or the Obligations or otherwise with respect to the Advances, Lender
Letters of Credit or other financial accommodations to any Borrower pursuant to
this Agreement and/or the Loan Documents.


 


10.8.        Action by Agent Without Notice.  Agent shall have the right to take any action
set forth in subsection 8.4 without notice to or the consent of any Guarantor
and each Guarantor expressly waives any right to notice of, consent to,
knowledge of and participation in any agreements relating to any of the above
or any other present or future event relating to Obligations whether under this
Agreement or otherwise or any right to challenge or question any of the above
and waives any defenses of such Guarantor which might arise as a result of such
actions.


 


10.9.        Application of Proceeds.  Agent may at any time and from time to time
(whether prior to or after the revocation or termination of this Agreement)
without the consent of, or notice to, any Guarantor, and without incurring
responsibility to any Guarantor or impairing or releasing the Obligations,
apply any sums by whomsoever paid or howsoever realized to any Obligations
regardless of what Obligations remain unpaid.


 


10.10.      Continuing Effectiveness.


 


(A)          Reinstatement.  The
Guaranty provisions herein contained shall continue to be effective or be
reinstated, as the case may be, if claim is ever made upon Agent, Canadian
Agent, any Issuing Lender or any Lender for repayment or recovery of any amount
or amounts received by such Person in payment or on account of any of the
Obligations and such Person


 


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repays
all or part of said amount for any reason whatsoever, including, without
limitation, by reason of any judgment, decree or order of any court or
administrative body having jurisdiction over such Person or the respective
property of each, or any settlement or compromise of any claim effected by such
Person with any such claimant (including any Loan Party); and in such event
each Guarantor hereby agrees that any such judgment, decree, order, settlement
or compromise or other circumstances shall be binding upon such Guarantor,
notwithstanding any revocation hereof or the cancellation of any note or other
instrument evidencing any Obligation, and each Guarantor shall be and remain
liable to Agent, Canadian Agent, the Issuing Lenders and/or the Lenders for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by such Person(s).


 


(B)           No Marshalling.  None of
Agent, Canadian Agent, any Issuing Lender or any Lender shall be required to
marshal any assets in favor of any Guarantor, or against or in payment of
Obligations.


 


(C)           Priority of Claims.  No
Guarantor shall be entitled to claim against any present or future security
held by Agent, for the benefit of Canadian Agent, any Issuing Lender or any
Lender, from any Person for Obligations in priority to or equally with any
claim of Agent, Canadian Agent, any Issuing Lender or any Lender, or assert any
claim for any liability of any Loan Party to any Guarantor in priority to or
equally with claims of Agent, Canadian Agent, any Issuing Lender or any Lender
for Obligations, and no Guarantor shall be entitled to compete with Agent,
Canadian Agent, any Issuing Lender or any Lender with respect to, or to advance
any equal or prior claim to any security held by Agent for the benefit of
Canadian Agent, any Issuing Lender or any Lender for Obligations.


 


(D)          Invalidated Payments.  If any Loan
Party makes any payment to Agent, Canadian Agent, any Issuing Lender or any
Lender, which payment is wholly or partly subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid to any Person
under any federal or provincial statute or at common law or under equitable
principles, then to the extent of such payment, the Obligation intended to be
paid shall be revived and continued in full force and effect as if the payment
had not been made, and the resulting revived Obligation shall continue to be
guaranteed, uninterrupted, by each Guarantor hereunder.


 


(E)           Assignment and Waiver.  All present
and future monies payable by any Loan Party to any US Guarantor, whether
arising out of a right of subrogation or otherwise, are assigned to Agent for
its benefit and for the ratable benefit of the Canadian Agent, the Issuing
Lenders and the Lenders as security for such US Guarantor’s liability to Agent,
Canadian Agent, the Issuing Lenders and the Lenders hereunder and, except (so
long as no Default or Event of Default has occurred and is continuing) for
monies payable by any Loan Party to any US Guarantor in the ordinary course of
business, each US Guarantor waives any right to demand any and all present and
future monies payable by any Loan Party to such US Guarantor, whether arising
out of a right of subrogation or otherwise. 
Except to the extent prohibited otherwise by this Agreement, all monies
received by any US Guarantor from any Loan Party shall be held by such US
Guarantor as agent and trustee for Agent. 
This assignment and waiver shall only terminate when the Obligations are
Paid in Full and this Agreement is irrevocably terminated.  All present and future monies payable by any
Canadian Loan Party to any Canadian Guarantor, whether arising out of a right
of subrogation or otherwise, are assigned to Agent for its benefit 


 


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and
for the ratable benefit of the Canadian Agent, the Canadian Letter of Credit
Issuer and the Lenders as security for such Canadian Guarantor’s liability to
Agent, Canadian Agent, the Canadian Letter of Credit Issuer and the Lenders
hereunder and, except (so long as no Default or Event of Default has occurred
and is continuing) for monies payable by any Canadian Loan Party to any
Canadian Guarantor in the ordinary course of business, each Canadian Guarantor
waives any right to demand any and all present and future monies payable by any
Canadian Loan Party to such Canadian Guarantor, whether arising out of a right
of subrogation or otherwise.  Except to
the extent prohibited otherwise by this Agreement, all monies received by any
Canadian Guarantor from any Canadian Loan Party shall be deemed to be held
separate and apart and in trust by such Canadian Guarantor as agent and trustee
for Agent.  This assignment and waiver
shall only terminate when the Obligations are Paid in Full and this Agreement
is irrevocably terminated.


 


(F)           Payments to Guarantors.  Each
Loan Party acknowledges this assignment and waiver and, except as otherwise set
forth herein, agrees to make no payments, except (so long as no Default or
Event of Default has occurred and is continuing) in the ordinary course of
business consistent with past practices, to any Guarantor without the prior
written consent of Agent.  Each Loan
Party agrees to give full effect to the provisions hereof.


 


10.11.      Enforcement.  Upon the occurrence and during the
continuance of any Event of Default, Agent may and upon written request of the
Requisite Lenders shall, without notice to or demand upon any Loan Party or any
other Person, declare any obligations of such Guarantor hereunder immediately
due and payable, and shall be entitled to enforce the obligations of each
Guarantor.  Upon such declaration by
Agent, Canadian Agent, the Issuing Lenders and the Lenders are hereby
authorized at any time and from time to time to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Agent, Canadian Agent, the
Issuing Lenders or the Lenders to or for the credit or the account of any
Guarantor against any and all of the obligations of each Guarantor now or
hereafter existing hereunder, whether or not Agent, Canadian Agent, the Issuing
Lenders or the Lenders shall have made any demand hereunder against any other
Loan Party and although such obligations may be contingent and unmatured.  The rights of Agent, Canadian Agent, the
Issuing Lenders and the Lenders hereunder are in addition to other rights and
remedies (including other rights of set-off) which Agent, Canadian Agent, the
Issuing Lenders and Lenders may have. 
Upon such declaration by Agent, with respect to any claims (other than
those claims referred to in the immediately preceding paragraph) of any
Guarantor against any Loan Party (the “Claims”), Agent shall have the
full right on the part of Agent in its own name or in the name of such
Guarantor to collect and enforce such Claims by legal action, proof of debt in
bankruptcy or other liquidation proceedings, vote in any proceeding for the
arrangement of debts at any time proposed, or otherwise, Agent and each of its
officers being hereby irrevocably constituted attorneys-in-fact for each
Guarantor for the purpose of such enforcement and for the purpose of endorsing
in the name of each Guarantor any instrument for the payment of money.  Each Guarantor will receive as trustee for
Agent and will pay to Agent forthwith upon receipt thereof any amounts which
such Guarantor may receive from any Loan Party on account of the Claims.  Each Guarantor agrees that at no time
hereafter will any of the Claims be represented by any notes, other negotiable
instruments or writings, except and in such event they shall either be made
payable to Agent, or if payable to any Guarantor, shall forthwith be endorsed
by such Guarantor to Agent.  Each
Guarantor agrees that no payment on account of 


 


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the
Claims or any security interest therein shall be created, received, accepted or
retained during the continuance of any Event of Default nor shall any financing
statement be filed with respect thereto by any Guarantor.


 


10.12.      Statute of Limitations.  To the extent permitted by Applicable Law,
any acknowledgment or new promise, whether by payment of principal or interest
or otherwise and whether by any Loan Party or others with respect to any of the
Obligations shall, if the statute of limitations in favor of any Guarantor
against Agent, Canadian Agent, the Issuing Lenders or the Lenders shall have
commenced to run, toll the running of such statute of limitations and, if the period
of such statute of limitations shall have expired, prevent the operation of
such statute of limitations.


 


10.13.      Interest.  All amounts due, owing and unpaid from time
to time by any Guarantor hereunder shall bear interest at the interest rate per
annum then chargeable with respect to Base Rate Loans constituting Revolving
Advances (without duplication of interest on the underlying Obligation).


 


10.14.      Currency Conversion.  Without limiting any other rights in this
Agreement, if for the purposes of obtaining judgment in any court in any
jurisdiction with respect to this Guaranty or any other Loan Document it
becomes necessary to convert into the currency of such jurisdiction (herein
called the “Judgment Currency”) any amount due hereunder in any currency
other than the Judgment Currency, then conversion shall be made at the rate of
exchange prevailing on the Business Day before the day on which judgment is
given.  For this purpose, “rate of
exchange” means the rate at which Agent would, on the relevant date at or
about 12:00 noon (New York City time), be prepared to sell a similar amount of
such currency in New York, New York against the Judgment Currency.  In the event that there is a change in the
rate of exchange prevailing between the Business Day before the day on which
the judgment is given and the date of payment of the amount due, Guarantor
will, on the date of payment, pay such additional amounts (if any) as may be
necessary to ensure that the amount paid on such date is the amount in the
Judgment Currency which when converted at the rate of exchange prevailing on
the date of payment is the amount then due under this Guaranty or any other
Loan Document in such other currency. 
Any additional amount due from Guarantor under this subsection 10.14 will
be due as a separate debt and shall not be affected by judgment being obtained
for any other sums due under or in respect of this Agreement or any of the
other Loan Documents.


 


10.15.      Acknowledgement.  Each Guarantor acknowledges receipt of a copy
of each of this Agreement and the other Loan Documents.  Each Guarantor has made an independent
investigation of the Loan Parties and of the financial condition of the Loan
Parties.  None of Agent, Canadian Agent,
any Issuing Lender nor any Lender has made and none of Agent, Canadian Agent,
any Issuing Lender nor any Lender does make any representations or warranties
as to the income, expense, operation, finances or any other matter or thing
affecting any Loan Party nor has Agent, Canadian Agent, any Issuing Lender or
any Lender made any representations or warranties as to the amount or nature of
the Obligations of any Loan Party to which this Section 10 applies as
specifically herein set forth, nor has Agent, Canadian Agent, any Issuing
Lender or any Lender or any officer, agent or employee of Agent, Canadian
Agent, any Issuing Lender or any Lender or any representative thereof, made any
other oral representations, agreements or commitments of any kind or nature,
and each Guarantor hereby expressly 


 


126

















 


acknowledges
that no such representations or warranties have been made and such Guarantor
expressly disclaims reliance on any such representations or warranties.


 


10.16.      Continuing Effectiveness.  The provisions of this Section 10 shall
remain in effect until the indefeasible payment in full in cash of all
Obligations and irrevocable termination of this Agreement.  Payments received from Guarantors pursuant to
this Section 10 shall be applied in accordance with subsection 8.7 of this
Agreement.


 


SECTION 11.             MISCELLANEOUS


 


11.1.        Expenses and Attorneys’ Fees.  Whether or not the transactions contemplated
hereby shall be consummated, Borrowers agree to promptly pay all fees, costs
and expenses incurred in connection with any matters contemplated by or arising
out of this Agreement or the other Loan Documents including the following,
subject to any applicable limitations set forth below, and all such fees, costs
and expenses shall be part of the Obligations, secured by the Collateral and
added by Agent to the outstanding principal amount of the US Revolving Advances
or, if Agent elects to bill Borrowers for such fees, costs, expenses and
attorneys’ fees, payable within ten (10) Business Days of receipt by
Borrowing Agent of a detailed invoice therefor: (a) reasonable, documented
out-of-pocket fees, costs and expenses incurred by Agent (including reasonable
attorneys’ fees and expenses, fees of environmental consultants, accountants
and other professionals retained by Agent) incurred in connection with the
examination, review, due diligence investigation, documentation and closing of
the financing arrangements evidenced by the Loan Documents; (b) reasonable,
documented out-of-pocket fees, costs and expenses incurred by Agent (including
reasonable attorneys’ fees and expenses, and fees of environmental consultants,
accountants and other professionals retained by Agent) incurred in connection
with the review, negotiation, preparation, documentation, execution,
syndication and administration of the Loan Documents, the Loans, and any
amendments, waivers, consents, forbearances and other modifications relating
thereto or any subordination or intercreditor agreements; (c) reasonable,
documented out-of-pocket fees, costs and expenses (including reasonable
attorneys’ fees) incurred by Agent in creating, perfecting and maintaining
perfection of Liens in favor of Agent, on behalf of Agent and Lenders; (d) reasonable,
documented out-of-pocket fees, costs and expenses incurred by Agent in connection
with forwarding to Borrowers the proceeds of Loans including Agent’s or any
Lenders’ standard wire transfer fee; (e) fees, costs, expenses and bank
charges, including bank charges for returned checks, incurred by Agent in
establishing, maintaining and handling lock box accounts, blocked accounts or
other accounts for collection of the Collateral; (f) fees, costs and
expenses of Agent, Canadian Agent, any Issuing Lender or any Lender and costs
of settlement incurred in collecting upon or enforcing rights against the
Collateral or incurred in any action to enforce this Agreement or the other
Loan Documents or to collect any payments due from each Borrower or any other
Loan Party under this Agreement or any other Loan Document or incurred in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement, whether in the nature of a “workout” or
in connection with any insolvency or bankruptcy proceedings or otherwise, in
each case pursuant to this clause (f), following the occurrence and during the
continuance of an Event of Default.


 


11.2.        Indemnity.  US Borrower agrees to indemnify, pay, and
hold Agent, Canadian Agent, each Issuing Lender and each Lender and their
respective Affiliates, officers, directors, 


 


127

















 


employees,
agents, and attorneys and their respective successors and assigns (“US
Indemnitees”) and Canadian Borrower agrees to indemnify, pay, and hold
Agent, Canadian Agent, each Canadian Letter of Credit Issuer and Lenders and
their respective Affiliates, officers, directors, employees, agents, and
attorneys and their respective successors and assigns (“Canadian Indemnitees”,
and together with the US Indemnitees, the “Indemnitees”), in each case,
harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs and expenses
(including all reasonable fees and expenses of counsel to such Indemnitees) of
any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Indemnitee as a result of such Indemnitees being a party to this
Agreement or the transactions consummated pursuant to this Agreement or
otherwise relating to any of the Loan Documents or Related Transactions,
including, without limitation, as a result of unpaid broker or finder fees in
connection with the Related Transactions; provided, that (i) US
Borrower shall have no obligation to a US Indemnitee hereunder and (ii) Canadian
Borrower shall have no obligation to a Canadian Indemnitee hereunder, in each
case, with respect to liabilities to the extent resulting from the gross
negligence or willful misconduct of that Indemnitee as determined by a court of
competent jurisdiction.  If and to the
extent that the foregoing undertaking may be unenforceable for any reason,
Borrowers agree to make the maximum contribution to the payment and
satisfaction thereof which is permissible under Applicable Law.


 


11.3.        Notices.  Unless otherwise specifically provided herein,
all notices shall be in writing addressed to the respective party as set forth
below and may be personally served, faxed, telecopied or sent by  electronic mail, overnight courier service or
United States mail and shall be deemed to have been given: (a) if
delivered in person, when delivered; (b) if delivered by fax, telecopy or
electronic mail, on the date of transmission if transmitted on a Business Day
before 4:00 p.m. New York City time or, if not, on the next succeeding
Business Day; (c) if delivered by overnight courier, two (2) days
after delivery to such courier properly addressed; or (d) if by U.S. Mail,
four (4) Business Days after depositing in the United States mail, with
postage prepaid and properly addressed.


 


If to any Loan Party:                            SQUARETWO FINANCIAL CORPORATION


4340 S. Monaco, Second Floor


Denver, CO 80237


Attn: L. Heath Sampson and Thomas Good


Fax/Telecopy No.: (303) 713-2509


E-mail: hsampson@squaretwofinancial.com and


tgood@squaretwofinancial.com


 


With a copy to:                                                                                                             KRG Capital Partners, L.L.C.


1515 Arapahoe Street, Tower One, Suite 1500


Denver, CO 80202


Attn: Mark King and Chris Bock


Fax/Telecopy No.: (303) 390-5015


E-mail: mking@krgcapital.com and


cbock@krgcapital.com


 


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With a copy to:                                                                                                             Hogan & Hartson LLP


1200 17th Street


Denver, CO 80202-5840


Attn:  George
Hagerty


Fax/Telecopy No.: (303) 899-7333


E-mail: gahagerty@hhlaw.com


 


If to Agent


or to GMAC CF:                                                                                                         GMAC COMMERCIAL FINANCE LLC.


1290 Avenue of the Americas, 3rd Floor


New York, New York 10104


Attn:       SFD
Portfolio Manager


Fax/Telecopy No.: (212) 884-7692


E-mail: TMaiale@gmaccf.com


 


With copies to:                                                                                                              GMAC COMMERCIAL FINANCE LLC.


1290 Avenue of the Americas


New York, New York 10104


Attn: Legal Services/SFD


Fax/Telecopy No.: (212) 884-7693 and


 


Hahn & Hessen LLP


488 Madison Avenue


New York, New York 10022


Attn: Leonard Lee Podair


Fax/Telecopy No.: (212) 478-7400


E-mail: lpodair@hahnhessen.com


 


If to Canadian Agent:                                                                             GMAC COMMERCIAL FINANCE LLC.


1290 Avenue of the Americas, 3rd Floor


New York, New York 10104


Attn:       SFD
Portfolio Manager


Fax/Telecopy No.: (212) 884-7692


E-mail: TMaiale@gmaccf.com


 


If to any Lender: Its address indicated on the
signature page hereto, in an Assignment and Acceptance Agreement or in a
notice to Agent and Borrowing Agent or to such other address as the party
addressed shall have previously designated by written notice to the serving
party, given in accordance with this subsection 11.3.


 


11.4.        Survival of Representations and Warranties and
Certain Agreements.  All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement and the making of the Loans
hereunder.  Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Loan
Parties, Agent, and Lenders set forth in subsections 9.1(E), 11.1, 11.2, 11.6,
11.11, 11.14, and 11.15 shall survive the payment of the Loans and the
termination of this Agreement.


 


129

















 


11.5.        Indulgence Not Waiver.  No failure or delay on the part of Agent,
Canadian Agent, any Issuing Lender, any Lender or any holder of any Note in the
exercise of any power, right or privilege hereunder or under any Note shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege.


 


11.6.        Marshaling; Payments Set Aside.  None of Agent, Canadian Agent, any Issuing
Lender nor any Lender shall be under any obligation to marshal any assets in
favor of any Loan Party or any other party or against or in payment of any or
all of the Obligations.  To the extent
that any Loan Party makes a payment or payments to Agent and/or Canadian Agent,
any Issuing Lender or any Lender or Agent and/or Canadian Agent, any Issuing
Lender or any Lender enforces its security interests or exercises its rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state, provincial,
territorial or federal law, common law or equitable cause, then to the extent
of such recovery, the Obligations or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.


 


11.7.        Entire Agreement.  This Agreement and the other Loan Documents
embody the entire agreement among the parties hereto and supersede all prior
commitments, agreements, representations, and understandings, whether written
or oral, relating to the subject matter hereof, and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto.


 


11.8.        Severability.  The invalidity, illegality or
unenforceability in any jurisdiction of any provision in or obligation under
this Agreement or the other Loan Documents shall not affect or impair the
validity, legality or enforceability of the remaining provisions or obligations
under this Agreement, or the other Loan Documents.


 


11.9.        Lenders’ Obligations Several; Independent Nature of
Lenders’ Rights.  The
obligation of each Lender hereunder is several and not joint and none of Agent,
Canadian Agent, any Issuing Lender nor any Lender shall be responsible for the
obligation or Revolving Loan Commitments of any other Lender hereunder.  In the event that any Lender at any time
should fail to make a Loan as herein provided, the Lenders, or any of them, at
their sole option, may make the Loan that was to have been made by the Lender
so failing to make such Loan.  Nothing
contained in any Loan Document and no action taken by Agent, Canadian Agent,
any Issuing Lender or any Lender pursuant hereto or thereto shall be deemed to
constitute Agent, Canadian Agent, Issuing Lenders and Lenders to be a
partnership, an association, a joint venture or any other kind of entity.  The amounts payable at any time hereunder to
each Lender shall be a separate and independent debt, and, provided Agent fails
or refuses to exercise any remedies against any Loan Party after receiving the
direction of the Requisite Lenders, each Lender shall be entitled to protect
and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.


 


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11.10.      Headings.  Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.


 


11.11.      APPLICABLE LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES (BUT INCLUDING AND GIVING EFFECT TO SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW), EXCEPT TO THE EXTENT ANY SUCH OTHER LOAN
DOCUMENT EXPRESSLY SELECTS THE LAW OF ANOTHER JURISDICTION AS GOVERNING LAW
THEREOF, IN WHICH CASE THE LAW OF SUCH OTHER JURISDICTION SHALL GOVERN.


 


11.12.      Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided, however, no Borrower may assign its rights or
obligations hereunder without the written consent of all; Lenders.


 


11.13.      No Fiduciary Relationship; No Duty; Limitation of
Liabilities.


 


(A)          No Fiduciary Relationship.  No
provision in this Agreement or in any of the other Loan Documents and no course
of dealing between the parties shall be deemed to create any fiduciary duty by
Agent, Canadian Agent, any Issuing Lender or any Lender to any Loan Party.


 


(B)           No Duty.  All
attorneys, accountants, appraisers, and other professional Persons and
consultants retained by Agent, Canadian Agent, any Issuing Lender or any Lender
shall have the right to act exclusively in the interest of Agent, Canadian
Agent, such Issuing Lender or such Lender and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or
nature whatsoever to any Loan Party or any Loan Party’s shareholders or any
other Person.


 


(C)           Limitation of Liabilities.  None
of Agent, Canadian Agent, any Issuing Lender nor any Lender, nor any affiliate,
officer, director, shareholder, employee, attorney, or agent of Agent, Canadian
Agent, any Issuing Lender or any Lender shall have any liability with respect
to, and each Loan Party hereby waives, releases, and agrees not to sue any of
them upon, any claim for any special, indirect, incidental, or consequential
damages suffered or incurred by such Loan Party in connection with, arising out
of, or in any way related to, this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.  Each Loan
Party hereby waives, releases, and agrees not to sue Agent, Canadian Agent, any
Issuing Lender or any Lender or any of Agent’s, Canadian Agent’s, any Issuing
Lender’s or any Lender’s affiliates, officers, directors, employees, attorneys,
or Agent for punitive damages in respect of any claim in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or
any of the transactions contemplated hereby.


 


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11.14.      CONSENT TO JURISDICTION.  EACH LOAN PARTY HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW
YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT’S
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.  EACH LOAN PARTY EXPRESSLY SUBMITS AND
CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS.  BORROWER HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON BORROWING AGENT BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWING AGENT, AT THE ADDRESS
SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS
AFTER THE SAME HAS BEEN POSTED.  IN ANY
LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS OF EACH LOAN PARTY OR OF ITS AFFILIATES SHALL BE DEEMED TO
BE EMPLOYEES OR MANAGING AGENTS OF EACH LOAN PARTY FOR PURPOSES OF ALL
APPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE
FOR TESTIMONY (WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE).  EACH LOAN PARTY AGREES THAT AGENT’S, CANADIAN
AGENT’S, ANY ISSUING LENDER’S OR ANY LENDER’S COUNSEL IN ANY SUCH DISPUTE
RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER
CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF THEM MAY BE
USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION.  EACH LOAN PARTY IN ANY EVENT WILL USE ALL
COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION
PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED BY AGENT, CANADIAN AGENT,
ANY ISSUING LENDER OR ANY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE,
ELECTRONIC OR OTHER FORM) OR OTHER THINGS UNDER ITS CONTROL AND RELATING TO THE
DISPUTE.


 


11.15.      WAIVER OF JURY TRIAL.  EACH LOAN PARTY, AGENT, CANADIAN AGENT, EACH
ISSUING LENDER AND EACH LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS. 
EACH LOAN PARTY, AGENT, CANADIAN AGENT, EACH ISSUING LENDER AND EACH
LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE
WAIVER IN THEIR RELATED FUTURE DEALINGS. 
EACH LOAN PARTY, AGENT, CANADIAN AGENT, EACH ISSUING LENDER AND EACH
LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING
THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS.


 


132

















 


11.16.      Construction.  Each Loan Party, Agent, Canadian Agent, each
Issuing Lender and each Lender each acknowledge that it has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review
this Agreement and the other Loan Documents with its legal counsel.  This Agreement and the other Loan Documents
shall be construed as if jointly drafted by each Loan Party, Agent, Canadian Agent,
each Issuing Lender and each Lender.


 


11.17.      Counterparts; Effectiveness.  This Agreement and any amendments, waivers,
consents, or supplements may be executed via telecopier or facsimile or other
electronic method of transmission in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute one and the same instrument.  This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.


 


11.18.      Confidentiality.  Agent, Canadian Agent, each Issuing Lender
and each Lender agree to keep confidential any non-public information delivered
in connection with the negotiation, execution and delivery of this Agreement or
otherwise  pursuant to the Loan Documents
and not to disclose such information to Persons other than to: (a) its
respective affiliates, officers, directors and employees; or its potential
assignees or participants on a need to know basis; (b) its potential
assignees or participants so long as such potential assignee or participant is
not a direct competitor of any Loan Party or an Affiliate of such a competitor;
provided that any such potential assignee or participant shall have
agreed in writing to receive such information hereunder subject to the terms of
this subsection 11.18; (c) subject to an agreement containing provisions
substantially the same as those of this subsection 11.18, to any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to any Loan Party and its obligations; or (d) Persons
employed by or engaged by Agent, Canadian Agent, an Issuing Lender, a Lender or
a Lender’s assignees or participants on a need to know basis, including,
without limitation, attorneys, auditors, professional consultants, rating
agencies and portfolio management services. 
The confidentiality provisions contained in this subsection shall not
apply to disclosures (a) required to be made by Agent, Canadian Agent, any
Issuing Lender or any Lender to any regulatory or governmental agency or
pursuant to legal process, (b) consisting of general portfolio information
that does not identify any Loan Party or (c) to the extent reasonably
required in connection with the exercise of any remedies hereunder or under any
other Loan Document or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder.  The obligations of Agent,
Canadian Agent, Issuing Lenders and Lenders under this subsection 11.18
shall supersede and replace the obligations of Agent, Canadian Agent, Issuing
Lenders and Lenders under any confidentiality agreement in respect of this
financing executed and delivered by Agent, Canadian Agent, any Issuing Lender
or any Lender prior to the date hereof. 
In no event shall Agent, Canadian Agent, any Issuing Lender or any
Lender be obligated or required to return any materials furnished by any Loan
Party; provided, however, each potential assignee or participant
shall be required to agree that if it does not become an assignee (or
participant) it shall return all materials furnished to it by the Loan Parties
in connection herewith.


 


11.19.      Publication.  Except as otherwise consented to by Borrowing
Agent at any time, none of Agent, Canadian Agent, any Issuing Lender nor any
Lender shall publish the name of any Loan Party in any public disclosure,
advertising material or promotional material, including a tombstone or similar
advertising material, relating to the financing transactions contemplated 


 


133

















 


by
this Agreement without Borrowing Agent’s prior written consent.  Agent, Canadian Agent, Issuing Lenders
and Lenders reserve the right to provide industry trade organizations
information necessary and customary for inclusion in league table measurements;
provided, however, that such disclosure shall be permitted only
to the extent that such information (i) is being sent to a select group of
Persons in non-public information materials and is not being mass distributed
and (ii) is limited to disclosure of the aggregate amount of the credit
facilities described herein (including the Canadian subfacility) and the names
of Borrowers.


 


11.20.      Subordination of Intercompany Debt.


 


(A)          Each Loan Party hereby agrees that any intercompany
Indebtedness or other intercompany payables or receivables, or intercompany
advances directly or indirectly made by or owed to such Loan Party by any other
Loan Party (collectively, “Intercompany Debt”), of whatever nature at
any time outstanding shall be subordinate and subject in right of payment to
the prior payment in full in cash of the Obligations.  Each Loan Party hereby agrees that it will
not, while any Event of Default is continuing, accept any payment, including by
offset, on any Intercompany Debt until the Termination Date, in each case,
except with the prior written consent of Agent.


 


(B)           In the event that any payment on any Intercompany
Debt shall be received by a Loan Party other than as permitted by this
subsection 11.20 before the Termination Date, such Loan Party shall
receive such payments and hold the same in trust for, segregate the same from
its own assets and shall immediately pay over to, Agent for the benefit of
Agent, Canadian Agent, Issuing Lenders and Lenders all such sums to the
extent necessary so that Agent, Canadian Agent, Issuing Lenders and the
Lenders shall have been Paid in Full, all Obligations.


 


(C)           Upon any payment or distribution of any assets of
any Loan Party of any kind or character, whether in cash, property or
securities by set-off, recoupment or otherwise, to creditors in any liquidation
or other winding-up of such Loan Party or in the event of any proceeding under
applicable Insolvency Law, Agent, Canadian Agent, Issuing Lenders and
Lenders shall first be entitled to receive payment in full in cash, in
accordance with the terms of the Obligations and of this Agreement, of all
amounts payable under or in respect of such Obligations, before any payment or
distribution is made on, or in respect of, any Intercompany Debt, in any such
proceeding, any distribution or payment, to which Agent, Canadian Agent, any
Issuing Lender or any Lender would be entitled except for the provisions hereof
shall be paid by such Loan Party, or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution
directly to Agent (for the benefit of Agent, Canadian Agent, Issuing
Lenders and Lenders) to the extent necessary to pay all such Obligations in
full in cash, after giving effect to any concurrent payment or distribution to
Agent, Canadian Agent, Issuing Lenders and Lenders (or to Agent for the
benefit of Agent, Canadian Agent, Issuing Lenders and Lenders).


 


11.21.      Cargill Intercreditor Agreement.  This Agreement and Agent’s, Canadian Agent’s, Issuing
Lenders’ and Lenders’ rights with respect to certain Asset Pools (as defined in
the Cargill Documents) existing as of the Closing Date are subject to the terms
of the Cargill Intercreditor Agreement.


 


134














 


11.22.      Intentionally Omitted.


 


11.23.      Judgment Currency.


 


(A)          If for the purposes of obtaining or enforcing
judgment against any Loan Party in any court it is necessary to convert a sum
due hereunder or under the Notes in any currency (the “Original Currency”)
into another currency (the “Other Currency”) the parties hereto agree,
to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures Agent could purchase the Original Currency with the Other Currency
at 11:00 a.m. (New York City time or Toronto time, as applicable), on the
second Business Day preceding that on which final judgment is given.


 


(B)           The obligation of Loan Parties in respect of any sum
due in the Original Currency from it to any Lender, any Issuing Lender,
Canadian Agent or Agent hereunder or under the Notes held by such Lender shall,
notwithstanding any judgment in any Other Currency, be discharged only to the
extent that on the Business Day following receipt by such Lender, Issuing
Lender, Canadian Agent or Agent (as the case may be) of any sum adjudged to be
so due in such Other Currency such Lender, Issuing Lender, Canadian Agent
or Agent (as the case may be) may in accordance with normal banking procedures
purchase the Original Currency with such Other Currency; if the amount of the
Original Currency so purchased is less than the sum originally due to such
Lender, Issuing Lender, Canadian Agent or Agent (as the case may be) in
the Original Currency, such Loan Parties agree, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender, Issuing
Lender, Canadian Agent or Agent (as the case may be) against such loss, and if
the amount of  the Original Currency so purchased exceeds the sum
originally due to any Lender, Issuing Lender, Canadian Agent or Agent (as
the case may be) in the Original Currency, such Lender, Issuing Lender,
Canadian Agent or Agent (as the case may be) agrees to remit to such Loan
Parties such excess.


 


SECTION 12.             BORROWING AGENCY.


 


12.1.        Borrowing Agency Provisions.


 


(A)          Each Borrower hereby irrevocably designates
Borrowing Agent to be its attorney and agent and in such capacity to borrow,
sign and endorse notes, and execute and deliver all instruments, documents,
writings and further assurances now or hereafter required hereunder, on behalf
of such Borrower or Borrowers, and hereby authorizes Agent to pay over or
credit all loan proceeds hereunder in accordance with the request of Borrowing
Agent.


 


(B)           The handling of this credit facility as a
co-borrowing facility with a Borrowing Agent in the manner set forth in this
Agreement is solely as an accommodation to Borrowers and at their request.  None of Agent, Canadian Agent, any Issuing
Lender or any Lender shall incur liability to Borrowers as a result
thereof.  To induce Agent, Canadian Agent, Issuing
Lenders and the Lenders to do so and in consideration thereof, each Borrower
hereby indemnifies Agent, Canadian Agent each Issuing Lender and each Lender and
holds Agent, Canadian Agent, each Issuing Lender and each Lender harmless from
and against any and all liabilities, expenses, losses, damages and claims of
damage or injury asserted against Agent, Canadian Agent, any Issuing Lender or
any Lender by any Person arising from or incurred by 


 


135

















 


reason
of the handling of the financing arrangements of Borrowers as provided herein,
reliance by Agent, Canadian Agent, any Issuing Lender or any Lender on any
request or instruction from Borrowing Agent or any other action taken by Agent,
Canadian Agent, any Issuing Lender or any Lender hereunder except due to
willful misconduct or gross (not mere) negligence by the indemnified party.


 


(C)           In the event US Borrower is deemed to be a guarantor
or surety of any other Borrower, then, to the extent such US Borrower is deemed
to be a guarantor or surety, such Borrower hereby (a) agrees that its
guaranty obligation hereunder is a continuing guaranty of payment and performance
and not of collection and that its obligations shall not be discharged until
Payment in Full of the Obligations has occurred; and (b) waives any and
all suretyship defenses, including, without limitation, with respect to: (1) the
genuineness, validity, regularity, enforceability or any future amendment of,
or change in, this Agreement, any other Loan Document or any other agreement,
document or instrument to which any Borrower is or may become a party; (2) the
absence of any action to enforce this Agreement or any other Loan Document or
the waiver or consent by Agent, Canadian Agent, any Issuing Lender or any
Lender with respect to any of the provisions hereof or  thereof; (3) the existence, value or
condition of, or failure to perfect its Lien against, any security for the
Obligations or any action, or the absence of any action, by Agent, Canadian
Agent, any Issuing Lender or any Lender in respect thereof (including the
release of any such security); (4) the insolvency of any Borrower; (5) any
change in the commitment, advance rates, Maximum Revolving Loan Amount, or any
related provision; (6) the advance, repayment (including complete
repayment) and readvance of Advances from time to time; (7) any extension
or change in the time, manner, place and other terms and provisions of payment
or performance of any of the Obligations; (8) any waiver, modification,
renewal, amendment or restatement of this Agreement or any other Loan Document
(except as and to the extent expressly modified by such action); (9) any
acceptance by Agent, Canadian Agent, any Issuing Lender or any Lender of any
partial or late payment or payment during any default; (10) any surrender,
repossession, foreclosure, sale, leases or other realization, dealing,
liquidation, setoff or disposition respecting any Collateral in accordance with
this Agreement any other Loan Document or Applicable Law; (11) any
investigation, analysis or evaluation by Agent, Canadian Agent, any Issuing
Lender or any Lender or their respective designees respecting any Borrower or
any other Person; or (12) any other action or circumstances that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor.


 


(D)          US Borrower shall be regarded, and shall be in the
same position, as principal debtor with respect to the Obligations.


 


(E)           Notwithstanding any other provision contained in
this Agreement or any other Loan Document, if a “secured creditor” (as
that term is defined under the Bankruptcy and Insolvency Act (Canada)) is
determined by a court of competent jurisdiction not to include a Person to whom
obligations are owed on a joint or joint and several basis, then each Canadian
Loan Party’s Obligations, to the extent such Obligations are secured, only
shall be several obligations and not joint or joint and several obligations.


 


12.2.        Waiver of Subrogation.  Each Loan Party expressly waives any and all
rights of subrogation, reimbursement, indemnity, exoneration, contribution of
any other claim which such Loan Party may now or hereafter have against the
other Loan Parties or any other Person directly 


 


136

















 


or
contingently liable for the Obligations hereunder, or against or with respect
to the other Loan Parties’ property (including, without limitation, any
property which is Collateral for the Obligations), arising from the existence
or performance of this Agreement, until termination of this Agreement and
Payment in Full of the Obligations.


 


[SIGNATURE
PAGES TO FOLLOW]


 


137

















 


Witness the due execution hereof by the respective
duly authorized officers of the undersigned as of the date first written above.


 


	
   

  	
   

  	
  SQUARETWO FINANCIAL CORPORATION, as US Borrower and as a US Guarantor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name:

  	
  Paul A. Larkins

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CACH, LLC

  
	
   

  	
   

  	
  CACH OF NJ, LLC

  
	
   

  	
   

  	
  COLLECT AMERICA OF CANADA LLC

  
	
   

  	
   

  	
  CACV OF COLORADO, LLC

  
	
   

  	
   

  	
  CACV OF NEW JERSEY, LLC

  
	
   

  	
   

  	
  HEALTHCARE FUNDING SOLUTIONS, LLC

  
	
   

  	
   

  	
  ORSA, LLC

  
	
   

  	
   

  	
  CANDEO, LLC

  
	
   

  	
   

  	
  AUTUS, LLC,
  each as a US Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name:

  	
  Paul A. Larkins

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REFINANCE AMERICA, LTD., as a US Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas G. Good

  
	
   

  	
   

  	
  Name:

  	
  Thomas G. Good

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  METROPOLITAN LEGAL ADMINISTRATION SERVICES INC., as a Canadian Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Christopher Walker

  
	
   

  	
   

  	
  Name:

  	
  Christopher Walker

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  



 

















 


	
   

  	
   

  	
  PREFERRED CREDIT RESOURCES  LIMITED, as Canadian Borrower and as
  a Canadian Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chris Walker

  
	
   

  	
   

  	
  Name:

  	
  Christopher Walker

  
	
   

  	
   

  	
  Title: 

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CA HOLDING, INC., as a US Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name: 

  	
  Paul A. Larkins

  
	
   

  	
   

  	
  Title: 

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCL FINANCIAL INC.,
  as a Canadian Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Chris Walker

  
	
   

  	
   

  	
  Name: 

  	
  Christopher Walker

  
	
   

  	
   

  	
  Title: 

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SQUARE TWO FINANCIAL CANADA CORPORATION, as a Canadian Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Chris Walker

  
	
   

  	
   

  	
  Name: 

  	
  Christopher Walker

  
	
   

  	
   

  	
  Title: 

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SQUARETWO FINANCIAL COMMERCIAL FUNDING
  CORPORATION, as a US Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Thomas G. Good

  
	
   

  	
   

  	
  Name: 

  	
  Thomas G. Good

  
	
   

  	
   

  	
  Title: 

  	
  Secretary

  



 

















 


	
   

  	
   

  	
  GMAC COMMERCIAL FINANCE LLC,

  
	
   

  	
   

  	
  as Agent and as Canadian Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Thomas Maiale

  
	
   

  	
   

  	
  Name: 

  	
  Thomas Maiale

  
	
   

  	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GMAC COMMERCIAL FINANCE LLC,

  
	
   

  	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Thomas Maiale

  
	
   

  	
   

  	
  Name: 

  	
  Thomas Maiale

  
	
   

  	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  US Revolving Loan Commitment: $35,000,000.00

  
	
   

  	
   

  	
  Canadian Revolving Loan Commitment: Cdn
  $4,666,666.67

  
	
   

  	
   

  	
  Pro Rata Share: 23.3333%

  



 

















 


	
   

  	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Laura Warner

  
	
   

  	
   

  	
  Name: 

  	
  Laura Warner

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Medina Sales De Andrade

  
	
   

  	
   

  	
  Name: 

  	
  Medina Sales De Andrade

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  US Revolving Loan Commitment: $15,000,000.00

  
	
   

  	
   

  	
  Canadian Revolving Loan Commitment: Cdn
  $2,000,000.00

  
	
   

  	
   

  	
  Pro Rata Share: 10.0000%

  



 

















 


	
   

  	
   

  	
  BANK OF MONTREAL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Catherine Grycz

  
	
   

  	
   

  	
  Name: 

  	
  Catherine Grycz

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  US Revolving Loan Commitment: $15,000,000.00

  
	
   

  	
   

  	
  Canadian Revolving Loan Commitment: Cdn
  $2,000,000.00

  
	
   

  	
   

  	
  Pro Rata Share: 10.0000%

  



 

















 


	
   

  	
   

  	
  ING CAPITAL LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ John Lanier

  
	
   

  	
   

  	
  Name: 

  	
  John Lanier

  
	
   

  	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  US Revolving Loan Commitment: $25,000,000.00

  
	
   

  	
   

  	
  Canadian Revolving Loan Commitment: Cdn
  $3,333,333.33

  
	
   

  	
   

  	
  Pro Rata Share: 16.6667%

  



 

















 


	
   

  	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Julie K. Van Hook

  
	
   

  	
   

  	
  Name: 

  	
  Julie K. Van Hook

  
	
   

  	
   

  	
  Title: 

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  US Revolving Loan Commitment: $30,000,000.00

  
	
   

  	
   

  	
  Canadian Revolving Loan Commitment: Cdn
  $4,000,000.00

  
	
   

  	
   

  	
  Pro Rata Share: 20.0000%

  



 

















 


	
   

  	
   

  	
  FIFTH THIRD BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Gregory J. Vollmer

  
	
   

  	
   

  	
  Name: 

  	
  Gregory J. Vollmer

  
	
   

  	
   

  	
  Title: 

  	
  Assistant Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  US Revolving Loan Commitment: $30,000,000.00

  
	
   

  	
   

  	
  Canadian Revolving Loan Commitment: Cdn
  $4,000,000.00

  
	
   

  	
   

  	
  Pro Rata Share: 20.0000%

  



 














 


Rider A


 


REPORTING RIDER


 


This Reporting Rider is attached and made a part of
that certain Loan Agreement, dated as of April 7, 2010 and entered into
among SQUARETWO FINANCIAL CORPORATION, a Delaware corporation (“US Borrower”),
PREFERRED CREDIT RESOURCES LIMITED, an Ontario corporation (“Canadian
Borrower”) (US Borrower and Canadian Borrower are collectively referred to
as the “Borrowers” and individually as a “Borrower”), the other
persons designated as “Loan Parties”, the financial institutions who are
or hereafter become parties thereto (collectively, the “Lenders” and
individually, a “Lender”), GMAC COMMERCIAL FINANCE LLC, a Delaware
limited liability company (in its individual capacity, “GMAC CF”), as
administrative and collateral agent (in such capacity, “Agent”), and as
funding and disbursement agent with respect to the Canadian Revolving Loans (in
such capacity, “Canadian Agent”).


 


1.             Annual Financial Statements.  (a) As soon as available and in any
event within one hundred twenty (120) days after the end of each Fiscal Year of
US Borrower, Borrowing Agent shall deliver to Agent (1) the consolidated
balance sheets of US Borrower and its Subsidiaries, as at the end of such year,
and the related consolidated statements of income, stockholders’ equity and
cash flow for such Fiscal Year, (2) a schedule of the outstanding
Indebtedness for borrowed money of Holdings, Borrowers and their Subsidiaries
describing in reasonable detail each such debt issue or loan outstanding and
the principal amount and amount of accrued and unpaid interest with respect to
each such debt issue or loan, (3) a report with respect to the
consolidated Financial Statements from a firm of certified public accountants
selected by Borrowers and reasonably acceptable to Agent, which report shall be
prepared in accordance with Statement of Auditing Standards No. 58 (the “Statement”)
“Reports on Audited Financial Statements” and such report shall be “Unqualified”
(as such term is defined in such Statement) and (4) a schedule reflecting
proceeds collected on owned Asset Pools which shall be included as footnote in
such audited Financial Statements.


 


(b)  If any of the following are prepared and
only to the extent Borrowing Agent determines to prepare such item in its sole
discretion, as soon as available, Loan Parties shall deliver to Agent, to the
extent prepared, (1) the consolidated and consolidating balance sheets of
Holdings and its Subsidiaries, as at the end of such year, and the related
consolidated and consolidating statements of income, stockholders’ equity and
cash flow for such Fiscal Year, (2) a report with respect to the
consolidated Financial Statements from a firm of Certified Public Accountants
selected by Borrowers.


 


2.             Monthly Financial Statements.  As soon as available and in any event within
thirty (30) days after the end of each Fiscal Month, Borrowing Agent shall
deliver to Agent (1) the consolidated balance sheets of US Borrower and
its Subsidiaries, as at the end of such month, and the related consolidated
statements of income and cash flow for such Fiscal Month and for the period
from the beginning of the then current Fiscal Year of US Borrower to the end of
such Fiscal Month, (2) a report setting forth in comparative form the
corresponding figures solely to the extent such figures are used to calculate
Adjusted EBITDA for the corresponding periods of the previous Fiscal Year and
the corresponding figures solely to the extent such figures are used 


 


Rider A - 1

















 


to calculate Adjusted EBITDA
from the most recent Projections for the current Fiscal Year delivered pursuant
to item 11 of this Reporting Rider, (4) a schedule of the outstanding
Indebtedness for borrowed money of Holdings, Borrowers and their Subsidiaries
describing in reasonable detail each such debt issue or loan outstanding and
the principal amount and amount of accrued and unpaid interest with respect to
each such debt issue or loan and (5) a monthly reconciliation showing a
calculation as if all such proceeds on Asset Pools were recorded in accordance
with the calculation of proceeds that would determine revenue recognition under
GAAP in accordance with modified cost recovery or level yield accounting.


 


3.             Borrowing Base Certificate.  As soon as available and in any event within
thirty (30) days after the end of each Fiscal Month (or more frequently if
required by Agent after the occurrence and during the continuance of a Default,
provided that updated Adjusted EBITDA information shall be updated only
monthly), Borrowing Agent shall deliver to Agent a Borrowing Base Certificate
(which shall be calculated as of the last day of such Fiscal Month).


 


4.             Events of Default, Etc.  Promptly upon any Executive Officer obtaining
knowledge of any of the following events or conditions, Borrowing Agent shall
deliver to Agent copies of all notices given or received by Borrowers or
Holdings or any of their Subsidiaries with respect to any such event or
condition and a certificate of Borrowing Agent’s chief executive officer specifying
the nature and period of existence of such event or condition and what action
Holdings, Borrowers or any of their Subsidiaries has taken, is taking and
proposes to take with respect thereto: (1) any condition or event that
constitutes, or which could reasonably be expected to result in the occurrence
of, an Event of Default or Default; (2) any notice that any Person has
given to Borrowers or any of their Subsidiaries or any other action taken with
respect to a claimed default or event or condition of the type referred to in
subsection 8.1(B) (including, without limitation, any notice with respect
to noncompliance with any term or condition related to the Second Lien Debt or
other material Indebtedness); (3) the occurrence of any default, breach,
termination or amendment of any consent, license or permit issued by any
Governmental Authority to any Loan Party which default, breach, termination or
amendment would, in each case, be reasonably likely to have a Material Adverse
Effect; or (4) any other event or condition that could reasonably be
expected to result in any Material Adverse Effect.


 


5.             SEC Filings and Press Releases.  Promptly upon their becoming available,
Borrowing Agent shall deliver to Agent copies of (1) all Financial
Statements, reports, notices and proxy statements, material reports and
material notices sent or made available by Holdings, Borrowers or any of their
Subsidiaries to their Stockholders (as Stockholders and not in any other
capacity), (2) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by Holdings, Borrowers or any of
their Subsidiaries with any securities exchange or with the Commission or the
Ontario Securities Commission, any Governmental Authority or any private
regulatory authority, and (3) all press releases and other statements made
available by Holdings, Borrowers or any of their respective Subsidiaries to the
public concerning developments in the business of any such Person.


 


6.             Notice of Corporate and other Changes.  Borrowing Agent shall (1) together with
each delivery of the Financial Statements pursuant to item 2 above for the last
month of each Fiscal Quarter, notify Agent in writing of all jurisdictions in
which a Loan Party becomes qualified after the Closing Date to transact
business, (2) together with delivery of the monthly 


 


Rider A - 2

















 


Financial Statements under
item 2 above notify Agent in writing of any amendment to their articles or
certificate of incorporation, articles or memoranda of association, by laws,
partnership agreement or other organizational documents, and (3) promptly,
and in any event no later than the date required pursuant to subsection 5.3(B),
notify Agent in writing of any Subsidiary created or acquired by any Loan Party
or any of its Subsidiaries after the Closing Date, such notice, in each case,
to identify the applicable jurisdictions and capital structures of such
Subsidiaries, as applicable.  The foregoing
notice requirement shall not be construed to constitute consent by any of the
Lenders to any transaction referred to above which is not permitted by the
terms of this Agreement.


 


7.             Cargill Documents.  Borrowing Agent shall promptly provide to
Agent copies of all notices received under the Cargill Documents and, upon the
reasonable request of Agent, copies of all reports delivered to Cargill under
the Cargill Documents (to the extent not duplicative of reports received by
Agent under this Agreement).


 


8.             Compliance Certificate.  Together with each delivery of Financial
Statements pursuant to item 2 above for the last month of each Fiscal Quarter,
Borrowing Agent shall deliver to Agent a fully and properly completed
Compliance Certificate (in substantially the same form as Exhibit C
(the “Compliance Certificate”) signed by Borrowing Agent’s chief
executive officer or chief financial officer.


 


9.             Taxes.  Borrowing Agent shall provide prompt written
notice to Agent of (i) the execution or filing with the IRS, the Canada
Revenue Agency or any other Governmental Authority of any agreement or other
document extending, or having the effect of extending, the period for
assessment or collection of any Taxes or other Charges by any Loan Party or any
of its Subsidiaries and (ii) any 
agreement by any Loan Party or any Loan Party’s Subsidiaries or request
directed to any Loan Party or any Loan Party’s Subsidiaries to make any
adjustment under IRC Section 481(a), by reason of a change in accounting
method or otherwise, which could reasonably be expected to have a Material
Adverse Effect.  Together with delivery
of the monthly Financial Statements under item 2 above, Borrowing Agent shall
notify Agent in the event that any of Loan Parties’ or any of their
Subsidiaries’ tax returns become the subject of an audit.


 


10.           Litigation.  Promptly upon any Executive Officer obtaining
knowledge of (1) the institution of any action, charge, claim, demand,
suit, proceeding, petition, governmental investigation, tax audit or
arbitration now pending or, to the knowledge of such Loan Party after due
inquiry, threatened against or affecting any Loan Party or any Loan Party’s
Subsidiaries or any property of any Loan Party or any Loan Party’s Subsidiaries
not previously disclosed by Borrowers to Agent or (2) any material
development in any action, suit, proceeding, governmental investigation or
arbitration at any time pending against or affecting any Loan Party or any
property of any Loan Party which, in each case, would reasonably be expected to
have a Material Adverse Effect, Borrowing Agent shall promptly give notice
thereof to Agent and provide such other information as may be reasonably
available to it to enable Agent and its counsel to evaluate such matter.


 


Rider A - 3

















 


11.           Projections.  No later than thirty (30) days after the
beginning of each Fiscal Year of Borrowers, Borrowing Agent shall deliver to
Agent consolidated Projections of US Borrower and its Subsidiaries for such
Fiscal Year month by month.


 


12.           Variances From Operating Budget.  Borrowing Agent shall furnish to Agent,
concurrently with the delivery of the Financial Statements referred to in Item
2 of this Reporting Rider and each monthly report referred to in item 2 of this
Reporting Rider, a written report summarizing all material variances from the
Projections submitted by Loan Parties pursuant to Item 11 hereof and a
discussion and analysis by management with respect to such variances, but only
with respect to those items used to calculate Adjusted EBITDA.


 


13.           ERISA Notices and Requests.  Loan Parties shall promptly furnish Agent
with written notice in the event that (i) any Loan Party or any ERISA
Affiliate knows or has reason to know that an ERISA Event has occurred which
would reasonably be expected to have a Material Adverse Effect, together with a
written statement describing such ERISA Event and the action, if any, which
such Loan Party or ERISA Affiliate has taken, is taking, or proposes to take
with respect thereto and, when known, any action taken or threatened by the
IRS, US Department of Labor or PBGC with respect thereto, (ii) any Loan
Party or any ERISA Affiliate knows or has reason to know that a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the IRC) has
occurred, which would reasonably be expected to have a Material Adverse Effect,
together with a written statement describing such transaction and the action
which such Loan Party or any ERISA Affiliate has taken, is taking or proposes
to take with respect thereto, (iii) a funding waiver request has been
filed with respect to any Title IV Plan together with all communications
received by any Loan Party or any ERISA Affiliate with respect to such request,
(iv) the establishment of any new Title IV Plan or the commencement of
contributions to any Title IV Plan to which any Loan Party or, to the extent
such establishment or commencement of contributions would reasonably be
expected to have a Material Adverse Effect, any ERISA Affiliate was not
previously contributing shall occur, (v) any Loan Party or any ERISA
Affiliate shall receive from the PBGC a notice of intention to terminate a Plan
or to have a trustee appointed to administer a Plan, together with copies of
each such notice, (vi) any Loan Party shall receive any unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section 401(a) of
the IRC, together with copies of each such letter; (vii) any Loan Party
or, to the extent such withdrawal liability would reasonably be expected to
have a Material Adverse Effect, any ERISA Affiliate shall receive a notice
regarding the imposition of withdrawal liability, together with copies of each
such notice; (viii) any Loan Party shall fail to make a required
installment or any other required payment under Section 412 of the IRC on
or before the due date for such installment or payment; (ix) to the extent
reasonably expected to have a Material Adverse Effect, any Loan Party or any
ERISA Affiliate knows that (a) a Multiemployer Plan has been terminated, (b) the
administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (c) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan.


 


14.           Insurance.  If any Loan Party elects to change insurance
carriers, policies or coverage amounts, and such change shall impact the Loan
Parties’ compliance with subsection 5.8, Borrowing Agent shall notify Agent
and, to the extent required to continue to be effective or upon the purchase of
any new policy, provide endorsements required by this Agreement.


 


Rider A - 4

















 


15.           Asset Pools.  Upon the occurrence and during the
continuance of an Event of Default, at the request of Agent, Loan Parties shall
promptly provide Agent with information regarding the face value of all Assets,
the ownership of such Assets, and the Loan Party, Franchisee or other Person
which will attempt to collect such Assets, the locations of its books, records
and other documents relating to such Assets, and such other reports in
connection with the Assets as Agent may reasonably request, all in such form
and detail as Agent may request.


 


16.           Additional Documents.  Execute and deliver to Agent, upon request,
such documents and agreements as Agent may, from time to time, reasonably
request to carry out the purposes, terms or conditions of this Agreement.


 


17.           Reporting on Business Days.
Whenever any notice, report or disclosure to be provided pursuant to this
Reporting Rider, the Agreement or any other Loan Document shall be stated to be
due on a day that is not a Business Day, such notice, report or disclosure may
be provided on the next succeeding Business Day.


 


Rider A - 5

















 


Rider B


 


FINANCIAL COVENANTS RIDER


 


This Financial Covenants Rider is attached and made a
part of that certain Loan Agreement, dated as of April 7, 2010 and entered
into among SQUARETWO FINANCIAL CORPORATION, a Delaware corporation (“US
Borrower”), PREFERRED CREDIT RESOURCES LIMITED, an Ontario corporation (“Canadian
Borrower”) (US Borrower and Canadian Borrower are collectively referred to
as the “Borrowers” and individually as a “Borrower”), the other
persons designated as “Loan Parties”, the financial institutions who are
or hereafter become parties thereto (collectively, the “Lenders” and
individually, a “Lender”), GMAC COMMERCIAL FINANCE LLC, a Delaware
limited liability company (in its individual capacity, “GMAC CF”), as
administrative and collateral agent (in such capacity, “Agent”), and as
funding and disbursement agent with respect to the Canadian Revolving Loans (in
such capacity, “Canadian Agent”).


 


A.            Minimum Adjusted EBITDA.  Commencing with the Fiscal Quarter ending June 30,
2010, US Borrower and its Subsidiaries on a consolidated basis shall have
Adjusted EBITDA of not less than the amounts set forth below for the applicable
Fiscal Quarter set forth below ending on the last day of each such Fiscal
Quarter, tested on a rolling four Fiscal Quarter basis.


 


	
  Period

  	
   

  	
  Adjusted EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  155,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  165,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  170,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  170,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  180,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  190,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  195,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2012 and
  each  Fiscal Quarter ending thereafter

  	
   

  	
  $

  	
  200,000,000

  	
   

  



 


B.            Capital Expenditure Limits.  Holdings and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures in excess of $8,000,000
(the “Capex Limit”) for any Fiscal Year; provided, however,
that commencing with the Fiscal Year ending December 31, 2011, the Capex
Limit will be increased in any period by the positive amount equal to the
lesser of (i) 50% of the Capex Limit for the immediately prior period, and
(ii) the amount (if any), equal to the difference obtained by taking the
Capex Limit minus the actual amount of any Capital Expenditures expended during
such prior period (the “Carry Over Amount”), and for purposes of 


 


Rider B - 1

















 


measuring compliance herewith, the Carry Over Amount
shall be deemed to be the last amount spent on Capital Expenditures in that
succeeding period.


 


C.            Maximum Lease Obligations.  Holdings and its Subsidiaries on a
consolidated basis shall not incur aggregate rent expenses under operating
leases of more than $3,000,000 in any Fiscal Year.


 


Rider B - 2