Document:

exv4w2

Exhibit 4.2

 
 

 

SERIES 2011-2 INDENTURE SUPPLEMENT

between

FORD CREDIT FLOORPLAN MASTER OWNER TRUST A,

as Issuer

and

THE BANK OF NEW YORK MELLON,

as Indenture Trustee

Dated as of October 1, 2011

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	ARTICLE I USAGE AND DEFINITIONS
	 	 	1	 
	Section 1.1. Usage and Definitions
	 	 	1	 
	Section 1.2. Defined Terms for Other Series
	 	 	15	 
	 
	 	 	 	 
	ARTICLE II CREATION OF SERIES 2011-2 NOTES
	 	 	15	 
	Section 2.1. Principal Terms of Series 2011-2 Notes
	 	 	15	 
	Section 2.2. Additional Issuance; Reopening
	 	 	16	 
	Section 2.3. Payments
	 	 	18	 
	 
	 	 	 	 
	ARTICLE III REPORTS AND SERVICING
	 	 	18	 
	Section 3.1. Reports and Statements to Noteholders of Series 2011-2 Notes
	 	 	18	 
	Section 3.2. Servicing Compensation
	 	 	19	 
	 
	 	 	 	 
	ARTICLE IV
RIGHTS OF NOTEHOLDERS OF SERIES 2011-2 NOTES AND ALLOCATION AND APPLICATION OF COLLECTIONS 
	 	 	19	 
	
Section 4.1. Collections and Allocations
	 	 	19	 
	Section 4.2. Application of Available Funds in Collection Account and
Other Sources
	 	 	22	 
	Section 4.3. Investor Charge-Offs
	 	 	25	 
	Section 4.4. Reallocated Principal Collections
	 	 	26	 
	Section 4.5. Excess Interest Collections
	 	 	26	 
	Section 4.6. Shared Principal Collections
	 	 	26	 
	Section 4.7. Series 2011-2 Accounts
	 	 	26	 
	Section 4.8. Permitted Investments
	 	 	28	 
	Section 4.9. Investment Instructions
	 	 	28	 
	Section 4.10. Notification of LIBOR
	 	 	29	 
	 
	 	 	 	 
	ARTICLE V THE NOTES
	 	 	29	 
	Section 5.1. Retention By Depositors
	 	 	29	 
	Section 5.2. Note Owner Representations
	 	 	29	 
	 
	 	 	 	 
	ARTICLE VI SERIES 2011-2 AMORTIZATION EVENTS
	 	 	29	 
	Section 6.1. Series 2011-2 Amortization Events
	 	 	29	 
	 
	 	 	 	 
	ARTICLE VII SERIES FINAL MATURITY; FINAL PAYMENTS
	 	 	31	 
	Section 7.1. Series Final Maturity
	 	 	31	 
	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS PROVISIONS
	 	 	31	 
	Section 8.1. Ratification of Agreement
	 	 	31	 
	Section 8.2. Counterparts
	 	 	32	 
	Section 8.3. GOVERNING LAW
	 	 	32	 
	 
	 	 	 	 
	Exhibit A Form of Class [A/B/C/D] Note
	 	 	A-1	 
	Exhibit B Form of Monthly Investor Report
	 	 	B-1	 

i

 

     SERIES 2011-2 INDENTURE SUPPLEMENT, dated as of October 1, 2011 (this “Indenture
Supplement”), between FORD CREDIT FLOORPLAN MASTER OWNER TRUST A, a Delaware statutory trust,
as Issuer, and THE BANK OF NEW YORK MELLON, a New York banking corporation, as Indenture Trustee.

BACKGROUND

     Section 2.2 of the Indenture provides, among other things, that the Issuer and the Indenture
Trustee may at any time enter into an Indenture Supplement to authorize the issuance by the Issuer
of Notes in one or more Series.

     The parties to this Indenture Supplement, by executing and delivering this Indenture
Supplement, are providing for the creation and specifying the Principal Terms of the Series 2011-2
Notes.

     The parties agree as follows:

GRANTING CLAUSES

     In addition to the Grant of the Indenture, the Issuer Grants to the Indenture Trustee, as
Indenture Trustee for the benefit of the Series 2011-2 Noteholders, all of the Issuer’s right,
title and interest, whether now owned or hereafter acquired, in, to and under the Series 2011-2
Collateral.

     The foregoing Grant is made in trust to secure (a) the payment of principal of, interest on
and any other amounts owing in respect of the Series 2011-2 Notes as provided in the Indenture and
this Indenture Supplement for the benefit of the Series 2011-2 Noteholders and (b) compliance by
the Issuer with the provisions of the Indenture and this Indenture Supplement, all as provided in
the Series 2011-2 Notes, the Indenture and this Indenture Supplement.

     The Indenture Trustee acknowledges such Grant, accepts the trusts under this Indenture
Supplement in accordance with this Indenture Supplement and agrees to perform the duties in this
Indenture Supplement so that the interests of the Series 2011-2 Noteholders may be adequately
protected.

ARTICLE I

USAGE AND DEFINITIONS

     Section 1.1. Usage and Definitions. Capitalized terms used but not otherwise defined
in this Indenture Supplement are defined in Appendix A to (a) the Fifth Amended and Restated Sale
and Servicing Agreement, dated as of August 1, 2001, as amended and restated as of December 1,
2010, among Ford Credit Floorplan Corporation, as Depositor, the Issuer and Ford Motor Credit
Company LLC, as Servicer, and (b) the Fifth Amended and Restated Sale and Servicing Agreement,
dated as of August 1, 2001, as amended and restated as of December 1, 2010, among Ford Credit
Floorplan LLC, as Depositor, the Issuer and the Servicer. Each Appendix A also contains rules as
to usage applicable to this Indenture Supplement. Each Appendix A is incorporated by reference
into this Indenture Supplement.

 

 

     In addition, the following terms have the following meanings:

     “Accrued Note Interest” means, for a Class and a Payment Date, the sum of the Note
Monthly Interest and the Note Interest Shortfall for such Class.

     “Accumulation Period Factor” means, for any Collection Period, a fraction:

	 	(a)	 	the numerator of which equals the sum of the “Initial Invested Amounts” of all
Series in Principal Sharing Group One; and
	 
	 	(b)	 	the denominator of which equals the sum of (i) the Initial Invested Amount,
plus (ii) the “Initial Invested Amounts” of all Series in Principal Sharing Group One,
other than Series 2011-2, that are not expected to be in their “Revolving Periods” from
such date to the Expected Final Payment Date.

     “Accumulation Period Length” means, for any Determination Date, the number of
Collection Periods such that the sum of the Accumulation Period Factors for such Collection Periods
is equal to or greater than the Required Accumulation Factor Number for such Determination Date.

     “Adjusted Invested Amount” means, as of any date, (a) the Invested Amount, minus (b)
during an Accumulation Period or Amortization Period for Series 2011-2, the amount of any Principal
Collections in the Collection Account allocable to Series 2011-2, minus (c) the amount in
the Series 2011-2 Principal Funding Account (excluding any net investment earnings), each as of
such date.

     “Available Investor Interest Collections” means, for any Payment Date, an amount equal
to the sum of (a) the Investor Interest Collections for the related Collection Period, plus
(b) any net investment earnings on amounts in the Series 2011-2 Accounts for the related Collection
Period, plus (c) the Series 2011-2 Accumulation Period Reserve Draw Amount for such Payment
Date, plus (d) on the termination of the Series 2011-2 Accumulation Period Reserve Account
pursuant to Section 4.7(c)(iii), all remaining amounts in the Series 2011-2 Accumulation Period
Reserve Account (excluding any net investment earnings), plus (e) the Monthly Depositor
Servicing Fee for such Payment Date.

     “Available Investor Principal Collections” means, for any Payment Date, an amount
equal to the excess of (a) the sum of (i) the Investor Principal Collections for the related
Collection Period, plus (ii) any Available Investor Interest Collections, Series 2011-2
Reserve Account Available Amounts, Excess Interest Collections from other Series in Excess Interest
Sharing Group One and Available Depositor Collections that, pursuant to Sections 4.2(a) and (b),
are to be treated as Available Investor Principal Collections for such Payment Date, plus
(iii) the Series 2011-2 Excess Funding Amount, plus (iv) any Shared Principal Collections
for other Series in Principal Sharing Group One (including any amounts in the Excess Funding
Account that are made available to Series 2011-2 pursuant to the Indenture as Shared Principal
Collections), plus (v) upon the termination of the Series 2011-2 Reserve Account pursuant
to Section 4.7(b)(ii), all remaining amounts in the Series 2011-2 Reserve Account (excluding any
net investment earnings and after giving effect to Section 4.2(b)(iii)), over (b) any
Reallocated Principal Collections for such Payment Date.

2

 

     “Available Subordinated Amount” means (a) for the first Determination Date following
the Closing Date, an amount equal to the Required Subordinated Amount for such Determination Date
and (b) for any subsequent Determination Date, an amount equal to the lesser of (i) the Required
Subordinated Amount for such Determination Date and (ii) an amount equal to:

	 	(A)	 	the Available Subordinated Amount for the preceding Determination Date;
minus
	 
	 	(B)	 	the amount of any Available Depositor Principal Collections used to cover
shortfalls on the related Payment Date pursuant to Section 4.2(b)(ii); minus
	 
	 	(C)	 	the amount of the Investor Charge Offs and Reallocated Principal Collections
for the related Payment Date applied to reduce the Available Subordinated Amount
pursuant to Sections 4.3 and 4.4; plus
	 
	 	(D)	 	the amount of any Available Investor Interest Collections paid pursuant to
Section 4.2(a)(xiii) to the Depositor Interest Account for distribution to the holders
of the Depositor Interest; minus
	 
	 	(E)	 	the Incremental Subordinated Amount for the preceding Determination Date;
plus
	 
	 	(F)	 	the Incremental Subordinated Amount for such Determination Date; minus
	 
	 	(G)	 	the Subordinated Percentage of the increase in the Series 2011-2 Excess Funding
Amount since the preceding Payment Date to the succeeding Payment Date; plus
	 
	 	(H)	 	the Subordinated Percentage of the decrease in the Series 2011-2 Excess Funding
Amount since the preceding Payment Date to the succeeding Payment Date; plus
	 
	 	(I)	 	an amount equal to the increase, if any, in the Required Subordinated Amount as
a result of a change in the Subordination Factor since the preceding Determination
Date, minus
	 
	 	(J)	 	an amount equal to the decrease, if any, in the Required Subordinated Amount as
a result of a change in the Subordination Factor since the preceding Determination
Date, plus
	 
	 	(K)	 	any increases in the Available Subordinated Amount elected by the Depositors;
provided, that the cumulative amount of such increases may not exceed 3.5% of
the initial Note Balance of the Series 2011-2 Notes.

     “Back-up Servicing Fee Rate” means 0.009% per annum or such lesser percentage as may
be specified by the Back-up Servicer, if any, in an Officer’s Certificate delivered to the
Indenture Trustee; provided, that if no Back-up Servicing Agreement is in effect on any
date, all references to the Back-up Servicing Fee Rate in this Indenture Supplement will be deemed
to be deleted from this Indenture Supplement and have no further effect.

     “Benefit Plan” means an employee benefit plan or other retirement plan or arrangement
that is subject to Title I of ERISA, Section 4975 of the Code or any Similar Law.

3

 

     “Class” means the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C
Notes and the Class D Notes, as applicable.

     “Class A-1 Notes” means any one of the Series 2011-2 Class A-1 Notes executed by the
Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of
Exhibit A.

     “Class A-2 Notes” means any one of the Series 2011-2 Class A-2 Notes executed by the
Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of
Exhibit A.

     “Class A Notes” means the Class A-1 Notes and the Class A-2 Notes. Unless the context
otherwise requires, the Class A-1 Notes and the Class A-2 Notes will be treated as a single Class
for purposes of allocations, distributions or payments.

     “Class B Invested Amount” means, as of any date, an amount (not less than zero) equal
to (a) the initial Note Balance of the Class B Notes, minus (b) the aggregate amount of any
principal payments made to the Noteholders of the Class B Notes before such date, minus (c)
the cumulative amount of unreimbursed Investor Charge-Offs applied to reduce the Class B Invested
Amount pursuant to Section 4.3 before such date, minus (d) the cumulative amount of
unreimbursed Reallocated Principal Collections applied to reduce the Class B Invested Amount
pursuant to Section 4.4 before such date.

     “Class B Notes” means any one of the Series 2011-2 Class B Notes executed by the
Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of
Exhibit A.

     “Class C Invested Amount” means, as of any date, an amount (not less than zero) equal
to (a) the initial Note Balance of the Class C Notes, minus (b) the aggregate amount of any
principal payments made to the Noteholders of the Class C Notes before such date, minus (c)
the cumulative amount of unreimbursed Investor Charge-Offs applied to reduce the Class C Invested
Amount pursuant to Section 4.3 before such date, minus (d) the cumulative amount of
unreimbursed Reallocated Principal Collections applied to reduce the Class C Invested Amount
pursuant to Section 4.4 before such date.

     “Class C Notes” means any one of the Series 2011-2 Class C Notes executed by the
Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of
Exhibit A.

     “Class D Invested Amount” means, as of any date, an amount (not less than zero) equal
to (a) the initial Note Balance of the Class D Notes, minus (b) the aggregate amount of any
principal payments made to the Noteholders of the Class D Notes before such date, minus (c)
the cumulative amount of unreimbursed Investor Charge-Offs applied to reduce the Class D Invested
Amount pursuant to Section 4.3 before such date, minus (d) the cumulative amount of
unreimbursed Reallocated Principal Collections applied to reduce the Class D Invested Amount
pursuant to Section 4.4 before such date.

4

 

     “Class D Notes” means any one of the Series 2011-2 Class D Notes executed by the
Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of
Exhibit A.

     “Closing Date” means October 12, 2011.

     “Controlled Accumulation Amount” means, for any Payment Date with respect to the
Controlled Accumulation Period, an amount equal to the Initial Invested Amount divided
by six; provided, however, that if the Controlled Accumulation Period
begins after March 1, 2013, the Controlled Accumulation Amount for each Payment Date with respect
to the Controlled Accumulation Period will be equal to (a) the product of (i) the Initial Invested
Amount, times (ii) the Accumulation Period Factor for the last Collection Period of the
Revolving Period, divided by (b) the Required Accumulation Factor Number for the
last Determination Date during the Revolving Period.

     “Controlled Accumulation Period” means, unless an Early Amortization Period has
commenced prior to such period, the period beginning on the first day of the March 2013 Collection
Period or such later date as is determined in accordance with Section 4.2(g) and ending on the
earlier to occur of (a) the day before the start of the Early Amortization Period and (b) the end
of the Collection Period preceding the Payment Date on which the Note Balance of the Series 2011-2
Notes will be paid in full.

     “Controlled Deposit Amount” means, for any Payment Date with respect to the Controlled
Accumulation Period, an amount equal to the sum of (a) the Controlled Accumulation Amount for such
Payment Date and (b) any Deficit Controlled Accumulation Amount for the preceding Payment Date.

     “Dealer Overconcentration” means, for any Determination Date, the excess, if any, of
(a) the aggregate principal amount of Receivables originated in all Accounts of a Dealer or a group
of affiliated Dealers on the last day of the related Collection Period, over (b) 2% (or 5%
in the case of Dealers affiliated with AutoNation, Inc. (or its successors in interest)) of the
Pool Balance on the last day of such Collection Period (or, in either case, a higher percentage so
long as the Rating Agency Condition has been satisfied).

     “Defaulted Amount” means, for any Determination Date, an amount (not less than zero)
equal to (a) the principal amount of all Receivables that became Defaulted Receivables during the
related Collection Period, minus (b) the amount of any such Defaulted Receivables that are
reassigned to the Depositors in accordance with the Sale and Servicing Agreements (except that if
an Insolvency Event occurs with respect to a Depositor, the amount of such Defaulted Receivables
that are reassigned to such Depositor will be zero), minus (c) the amount of any such
Defaulted Receivables that are assigned to the Servicer in accordance with the Sale and Servicing
Agreements (except that if an Insolvency Event occurs with respect to the Servicer, the amount of
such Defaulted Receivables that are assigned to the Servicer will be zero).

     “Deficit Controlled Accumulation Amount” means (a) for the first Payment Date with
respect to the Controlled Accumulation Period, the excess, if any, of the Controlled Accumulation
Amount for such Payment Date, over the amount deposited into the Series 2011-2

5

 

Principal Funding Account on such Payment Date and (b) for each subsequent Payment Date with
respect to the Controlled Accumulation Period, the excess, if any, of the Controlled Deposit Amount
for such Payment Date, over the amount deposited into the Series 2011-2 Principal Funding
Account on such Payment Date.

     “Development Dealer Overconcentration” means, for any Determination Date, the excess,
if any, of (a) the aggregate principal amount of Receivables that are Development Dealer
Receivables on the last day of the related Collection Period, over (b) 4% of the Pool
Balance on the last day of such Collection Period (or, a higher percentage so long as the Rating
Agency Condition has been satisfied).

     “Early Amortization Period” means the period beginning on the day on which an
Amortization Event for Series 2011-2 occurs (or, if the Servicer is not required to make daily
deposits of Collections into the Collection Account pursuant to Section 8.4(b) of the Indenture,
beginning on the first day of the Collection Period in which such Amortization Event occurs) and
ending on the earlier to occur of (a) the end of the Collection Period preceding the Payment Date
on which the Note Balance of the Series 2011-2 Notes will be paid in full and (b) the Series 2011-2
Final Maturity Date.

     “ERISA” means the Employee Retirement Income Security Act of 1974.

     “Excess Interest Collections” means, for any Payment Date, an amount equal to the
excess, if any, of (a) the Available Investor Interest Collections for such Payment Date,
over (b) the amount required to be paid, without duplication, pursuant to Sections
4.2(a)(i) through (xv) on such Payment Date.

     “Expected Final Payment Date” means the September 2013 Payment Date.

     “Fixed Investor Percentage” means, for any Deposit Date or Collection Period (or
portion of any Collection Period occurring after the end of the Revolving Period), the percentage
equivalent (not to exceed 100%) of a fraction (a) the numerator of which is the Invested Amount on
the last day of the Revolving Period and (b) the denominator of which is the greater of (i) the
Adjusted Pool Balance on the last day of the preceding Collection Period and (ii) the sum of the
numerators used to calculate the applicable “Investor Percentages” for allocating Principal
Collections to all Series for such Collection Period; provided, that for any Deposit Date
or Collection Period occurring after the Collection Period on the last day of which the Adjusted
Invested Amount is zero, the Fixed Investor Percentage will be deemed to be zero.

     “Fleet Overconcentration” means, for any Determination Date, the excess, if any, of
(a) the aggregate principal amount of the Receivables that are Fleet Receivables on the last day of
the related Collection Period, over (b) 4% of the Pool Balance on the last day of such
Collection Period (or a higher percentage so long as the Rating Agency Condition has been
satisfied).

     “Floating Investor Percentage” means, for any Deposit Date or Collection Period (or
portion of any Collection Period occurring prior to the end of the Revolving Period), the
percentage equivalent (not to exceed 100%) of a fraction (a) the numerator of which is the Adjusted
Invested Amount on the last day of the preceding Collection Period (or for the first Collection
Period, the initial Note Balance of the Series 2011-2 Notes) and (b) the denominator
of which is the Adjusted Pool Balance on the last day of the preceding Collection Period (or
for the first Collection Period, the Adjusted Pool Balance as of the Series Cutoff Date).

6

 

     “Incremental Subordinated Amount” means, for any Determination Date, the product of:

	 	(a)	 	a fraction, (i) the numerator of which is an amount (not less than zero) equal
to (A) the Adjusted Invested Amount as of the related Payment Date, plus (B)
the product of the initial Note Balance of the Series 2011-2 Notes times the
excess of the Required Pool Percentage over 100%, plus (C) the Required
Subordinated Amount on such Determination Date (without giving effect to the
Incremental Subordinated Amount), minus (D) the Series 2011-2 Excess Funding
Amount as of such Determination Date and (ii) the denominator of which is the Pool
Balance on such Determination Date; times
	 
	 	(b)	 	the Non-Conforming Receivable Amount on such Determination Date.

     “Initial Invested Amount” means, for the Series 2011-2 Notes and for any date,
$1,092,811,000; provided, that the Initial Invested Amount will be reduced by the initial
Note Balance of any Series 2011-2 Notes that are determined to be no longer Outstanding on the day
prior to the start of the Early Amortization Period.

     “Interest Collections Shortfall” means, for any Payment Date, an amount equal to the
excess, if any, of (a) the amount required to be paid, without duplication, pursuant to Sections
4.2(a)(i) through (xv) on such Payment Date, over (b) the Available Investor Interest
Collections for such Payment Date.

     “Interest Period” means, for any Payment Date (a) for each Class of Notes, except the
Class A-2 Notes, the period from the 15th day of the calendar month preceding such Payment Date to
the 15th day of the following calendar month (or from the Closing Date to October 15, 2011 in the
case of the first Payment Date), and (b) for the Class A-2 Notes, the period from the Payment Date
preceding such Payment Date to such Payment Date (or, from the Closing Date to October 17, 2011 in
the case of the first Payment Date).

     “Invested Amount” means, as of any date, an amount equal to (a) the initial Note
Balance of the Series 2011-2 Notes, minus (b) the aggregate amount of any principal
payments made to the Noteholders of the Series 2011-2 Notes before such date, minus (c) the
cumulative amount of unreimbursed Investor Charge-Offs applied to reduce the Invested Amount
pursuant to Section 4.3 before such date, minus (d) the cumulative amount of unreimbursed
Reallocated Principal Collections applied to reduce the Invested Amount pursuant to Section 4.4
before such date.

     “Investor Charge-Off” means, for any Payment Date, the excess, if any, of the amount
of the unfunded Investor Default Amount for such Payment Date over the amount of such
Investor Default Amount applied to reduce the Available Subordinated Amount pursuant to Section 4.3
for such Payment Date.

     “Investor Default Amount” means, for any Payment Date, an amount equal to the product
of (a) the Floating Investor Percentage for the related Collection Period, times (b) the
Defaulted Amount for such Collection Period.

7

 

     “Investor Interest Collections” means, for any Deposit Date or Collection Period, an
amount equal to the product of (a) the Floating Investor Percentage for the related Collection
Period, times (b) the Interest Collections for such Deposit Date or Collection Period, as
applicable.

     “Investor Percentage” means, for any Collection Period (a) for Interest Collections
and Defaulted Amounts at any time and Principal Collections during the Revolving Period, the
Floating Investor Percentage and (b) for Principal Collections during the Controlled Accumulation
Period or the Early Amortization Period, the Fixed Investor Percentage.

     “Investor Principal Collections” means, for any Deposit Date or Collection Period, an
amount equal to the product of (a) the Investor Percentage for the related Collection Period,
times (b) the Principal Collections for such Deposit Date or Collection Period, as
applicable.

     “LIBOR” means, for any Interest Period, the rate determined by the Indenture Trustee
on each LIBOR Determination Date on the basis of the rate for deposits in United States dollars for
a period of one month which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London
time, on such date. If such rate does not appear on the Reuters Screen LIBOR01 Page, the rate for
that LIBOR Determination Date will be determined on the basis of the rates at which deposits in
U.S. dollars are offered by the Reference Banks at approximately 11:00 a.m., London time, on that
day to prime banks in the London interbank market for a period of one month commencing on such date
and in a principal amount of at least U.S.$1,000,000. The Indenture Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that LIBOR Determination Date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the
rate for that LIBOR Determination Date will be the arithmetic mean of the rates quoted by three
major banks in New York City, selected by the Servicer, at approximately 11:00 a.m. (New York City
time) on that day for loans in U.S. dollars to leading European banks for a period of one month
commencing on such date and in a principal amount of at least U.S.$1,000,000; provided,
however, that if the banks selected by the Servicer are not quoting rates, LIBOR for such
date will be the same as LIBOR for the preceding LIBOR Determination Date.

     “LIBOR Determination Date” means, for any Interest Period, the date that is two London
Banking Days prior to the start of such Interest Period.

     “London Banking Day” means any day on which commercial banks are open for general
business (including dealings in foreign exchange and foreign currency deposits) in London.

     “Manufacturer Overconcentration” means, for any Determination Date, the sum of:

	 	(a)	 	the excess, if any, of (i) the aggregate principal amount of Receivables that
relate to a particular Manufacturer (other than Ford or one of its associated
Manufacturers) with a long-term unsecured rating of at least “A-” by Standard & Poor’s
and Fitch (if rated by Fitch), and “A3” by Moody’s (if rated by Moody’s) on the last
day of the related Collection Period, over (ii) 10% of the Pool Balance on
the last day of such Collection Period (or a higher percentage so long as the Rating
Agency Condition has been satisfied); plus

8

 

	 	(b)	 	the excess, if any, of (i) the aggregate principal amount of Receivables that
relate to a particular Manufacturer (other than Ford or one of its associated
Manufacturers) with a long-term unsecured rating of “BBB+” or lower by Standard &
Poor’s or unrated by Standard & Poor’s, or “BBB+” or lower by Fitch (if rated by
Fitch), or “Baa1” or lower by Moody’s (if rated by Moody’s) on the last day of the
related Collection Period, over (ii) 2% of the Pool Balance on the last day of
such Collection Period (or a higher percentage so long as the Rating Agency Condition
has been satisfied).

     “Medium and Heavy Truck Overconcentration” means, for any Determination Date, the
excess, if any, of (a) the aggregate principal amount of Receivables that are Medium and Heavy
Truck Receivables on the last day of the related Collection Period, over (b) 2% of the Pool
Balance on the last day of such Collection Period (or a higher percentage so long as the Rating
Agency Condition has been satisfied).

     “Monthly Back-up Servicing Fee” means, for any Payment Date, an amount equal to
one-twelfth of the product of (a) the Back-up Servicing Fee Rate, times (b) the percentage
equivalent of a fraction, the numerator of which is the Floating Investor Percentage for the
related Collection Period and the denominator of which is the sum of the “Floating Investor
Percentages” for all Series for such Collection Period, times (c) the aggregate principal
amount of Receivables on the last day of the preceding Collection Period. If no Back-up Servicing
Agreement is in effect on any date, all references to the Monthly Back-up Servicing Fee in this
Indenture Supplement will be deemed to be deleted from this Indenture Supplement and have no
further effect.

     “Monthly Depositor Servicing Fee” means, for any Payment Date, an amount equal to
one-twelfth of the product of (a) the product of (i) the sum of the Servicing Fee Rate and the
Back-up Servicing Fee Rate, times (ii) 100% minus the sum of the “Floating Investor
Percentages” for all Series for the related Collection Period, times (iii) the aggregate
principal amount of Receivables on the last day of the preceding Collection Period, times
(b) the percentage equivalent of a fraction, the numerator of which is the Floating Investor
Percentage for the related Collection Period and the denominator of which is the sum of the
“Floating Investor Percentages” for all Series for such Collection Period.

     “Monthly Investor Report” has the meaning specified in Section 3.1(a).

     “Monthly Principal Amount” means, for each Payment Date, beginning with the Payment
Date in the month following the month in which (a) the Controlled Accumulation Period begins, an
amount equal to the lesser of (i) the Controlled Deposit Amount for such Payment Date, and (ii) the
Adjusted Invested Amount on such Payment Date, or (b) the Early Amortization Period begins, the
Adjusted Invested Amount on such Payment Date.

     “Monthly Principal Payment Rate” means, for any Collection Period, the percentage
equivalent of a fraction (a) the numerator of which is the Principal Collections for such
Collection Period and (b) the denominator of which is the Pool Balance on the first day of
such Collection Period.

9

 

     “Monthly Servicing Fee” means, for any Payment Date, an amount equal to one-twelfth of
the product of (a) the Servicing Fee Rate, times (b) the percentage equivalent of a
fraction, the numerator of which is the Floating Investor Percentage for the related Collection
Period and the denominator of which is the sum of the “Floating Investor Percentages” for all
Series for such Collection Period, times (c) the aggregate principal amount of Receivables
on the last day of the preceding Collection Period, or for the first Collection Period, the
aggregate principal amount of Receivables on the Series Cutoff Date.

     “Non-Conforming Receivable Amount” means, for any Determination Date, the excess, if
any, of:

	 	(a)	 	the sum, without duplication, of (i) the principal amount of Receivables
constituting Ineligible Receivables for such Determination Date, plus (ii) the
aggregate amount of Dealer Overconcentrations, Development Dealer Overconcentrations,
Fleet Overconcentrations, Manufacturer Overconcentrations, Medium and Heavy Truck
Overconcentrations and Used Vehicle Overconcentrations for such Determination Date;
over
	 
	 	(b)	 	the sum, without duplication, of (i) the principal amount of Receivables
constituting Ineligible Receivables that became Defaulted Receivables during the period
from the preceding Determination Date to the current Determination Date, plus
(ii) the aggregate principal amount of Receivables contributing to Dealer
Overconcentrations, Development Dealer Overconcentrations, Fleet Overconcentrations,
Manufacturer Overconcentrations, Medium and Heavy Truck Overconcentrations and Used
Vehicle Overconcentrations that, in each case, became Defaulted Receivables during the
period from the preceding Determination Date (or, in the case of the first
Determination Date, the Series Cutoff Date) to the current Determination Date.

     “Note Interest Rate” means, for each Class, the interest rate per annum specified in
Section 2.1(b).

     “Note Interest Shortfall” means, for a Class and a Payment Date, an amount equal to:

	 	(a)	 	the Note Monthly Interest for the preceding Payment Date for such Class;
plus
	 
	 	(b)	 	any Note Interest Shortfall for such Class for the preceding Payment Date
together with interest on such Note Interest Shortfall, to the extent lawful, at the
Note Interest Rate for such Class for the related Interest Period; minus
	 
	 	(c)	 	the amount of Interest that was paid to the Noteholders of such Class on such
preceding Payment Date.

10

 

     “Note Monthly Interest” means, for a Class and a Payment Date, the aggregate amount of
interest accrued on the Note Balance of such Class at the Note Interest Rate for such Class for the
related Interest Period.

     “Payment Date” means the 15th day of each calendar month, or if not a Business Day,
the next Business Day, commencing in the first full month after the Closing Date.

     “Principal Sharing Group One” means Series 2011-2 and each other Series specified in
the related Indenture Supplement to be included in Principal Sharing Group One.

     “Principal Shortfall” means, for Series 2011-2 and any Payment Date, an amount equal
to (a) for any Payment Date with respect to the Revolving Period, zero, and (b) for any Payment
Date with respect to the Controlled Accumulation Period or Early Amortization Period, the excess,
if any, of the Monthly Principal Amount for such Payment Date, over the amount of Available
Investor Principal Collections for such Payment Date (excluding any Available Investor Principal
Collections attributable to Shared Principal Collections).

     “Rating Agency” means each of Standard & Poor’s, Moody’s and Fitch.

     “Rating Agency Condition” means:

	 	(a)	 	with respect to (i) Standard & Poor’s and any proposed action, and (ii) Moody’s
and any action described in clause (f) of the definition of “Permitted Investments,”
that such Rating Agency has notified the Depositors, the Servicer, and the Indenture
Trustee that the proposed action will not result in a downgrade or withdrawal of its
then-current rating of any Series 2011-2 Notes;
	 
	 	(b)	 	with respect to Moody’s and any proposed action, except as provided in clause
(a)(ii) above, the Issuer has given ten Business Days’ prior notice to such Rating
Agency of the proposed action, and such Rating Agency has not notified the Depositors,
the Servicer and the Indenture Trustee within such period that such action will result
in a downgrade or withdrawal of its then-current rating on any of the Series 2011-2
Notes; provided, that Moody’s may, at its option, notify the Depositors, the
Servicer and the Indenture Trustee that such action will not result in a reduction or
withdrawal of its then-current rating of any of the Series 2011-2 Notes; and
	 
	 	(c)	 	with respect to Fitch and any proposed action, the Issuer has given ten
Business Days’ prior notice to such Rating Agency of the proposed action, and such
Rating Agency has not notified the Depositors, the Servicer and the Indenture Trustee
within such period that such action will result in a downgrade or withdrawal of its
then-current rating on any of the Series 2011-2 Notes.

11

 

     “Reallocated Principal Collections” means, for any Payment Date, the amount of
Investor Principal Collections applied in accordance with Section 4.4 in an amount not to exceed:

	 	(a)	 	for the Class A Notes, the sum of (i) the Available Subordinated Amount
plus (ii) the Class B Invested Amount plus (iii) the Class C Invested
Amount plus (iv) the Class D Invested Amount, in each case, for such Payment
Date;
	 
	 	(b)	 	for the Class B Notes, the sum of (i) the Available Subordinated Amount
plus (ii) the Class C Invested Amount plus (iii) the Class D Invested
Amount, in each case, for such Payment Date;
	 
	 	(c)	 	for the Class C Notes, the sum of (i) the Available Subordinated Amount
plus (ii) the Class D Invested Amount, in each case, for such Payment Date; and
	 
	 	(d)	 	for the Class D Notes, the Available Subordinated Amount for such Payment Date.

     “Reassignment Amount” means, for any Payment Date, the sum of (a) the Note Balance of
the Series 2011-2 Notes on such Payment Date, plus (b) the Accrued Note Interest for each
Class for such Payment Date, in each case, after giving effect to any payments to be made on such
Payment Date.

     “Reference Banks” means four major banks in the London interbank market selected by
the Servicer.

     “Required Accumulation Factor Number” means, for any Determination Date, a fraction,
rounded upwards to the nearest whole number, the numerator of which is one and the denominator of
which is equal to the lowest Monthly Principal Payment Rate, expressed as a decimal, for the twelve
Collection Periods preceding the date of such calculation.

     “Required Pool Percentage” means 100%.

     “Required Subordinated Amount” means, as of any date, the sum of:

	 	(a)	 	the greater of (i) zero and (ii) the product of (A) the Subordinated
Percentage, times (B) the excess of the initial Note Balance of the Series
2011-2 Notes over the Series 2011-2 Excess Funding Amount on such date;
plus
	 
	 	(b)	 	the Incremental Subordinated Amount for such date.

     “Reuters Screen LIBOR01 Page” means the display page currently so designated on the
Reuters Capital Markets service (or such other page as may replace such page in that service for
the purpose of displaying comparable rates or prices).

     “Revolving Period” means the period beginning on the Closing Date and ending on the
earlier of the day preceding the date on which the Controlled Accumulation Period or the Early
Amortization Period starts.

     “Series 2011-2” means the Series of Notes, the Principal Terms of which are specified
in this Indenture Supplement.

12

 

     “Series 2011-2 Accounts” means the Series 2011-2 Principal Funding Account, the Series
2011-2 Reserve Account and the Series 2011-2 Accumulation Period Reserve Account, which will
constitute the “Series Accounts” for Series 2011-2 for purposes of the Indenture.

     “Series 2011-2 Accumulation Period Reserve Account” means the account designated as
such pursuant to Section 4.7(c).

     “Series 2011-2 Accumulation Period Reserve Account Available Amount” means, for each
Payment Date, the lesser of:

	 	(a)	 	the amount in the Series 2011-2 Accumulation Period Reserve Account on such
Payment Date (excluding any net investment earnings and before giving effect to any
deposits or withdrawals made or to be made on such Payment Date); and
	 
	 	(b)	 	the Series 2011-2 Accumulation Period Reserve Account Required Amount.

     “Series 2011-2 Accumulation Period Reserve Account Deposit Amount” means, for each
Payment Date beginning on the Series 2011-2 Accumulation Period Reserve Account Funding Date and
until termination of the Series 2011-2 Accumulation Period Reserve Account pursuant to Section
4.7(c)(iii), the excess of (a) the Series 2011-2 Accumulation Period Reserve Account Required
Amount, over (b) the Series 2011-2 Accumulation Period Reserve Account Available Amount for
such Payment Date.

     “Series 2011-2 Accumulation Period Reserve Account Funding Date” means the Payment
Date occurring in the second Collection Period preceding the scheduled commencement of the
Controlled Accumulation Period (or such earlier or later date as may be directed by the Servicer;
provided that, if the Series 2011-2 Accumulation Period Reserve Account Funding Date occurs
on a later date, the Series 2011-2 Accumulation Period Reserve Account is expected to be fully
funded by the commencement of the Controlled Accumulation Period).

     “Series 2011-2 Accumulation Period Reserve Account Required Amount” means an amount
equal to 0.25% of the initial Note Balance of the Series 2011-2 Notes.

     “Series 2011-2 Accumulation Period Reserve Draw Amount” means, for any Payment Date
relating to the Controlled Accumulation Period or the first Payment Date with respect to the Early
Amortization Period, the lesser of (a) the excess, if any, of (i) an amount equal to one-twelfth of
the product of (A) the amount in the Series 2011-2 Principal Funding Account on the preceding
Payment Date (excluding net investment earnings), times (B) the weighted average (weighted
by the aggregate Note Balance of each Class of Series 2011-2 Notes) of the Note Interest Rate for
each Class of Series 2011-2 Notes for the related Interest Period, over (ii) the portion of
the Available Investor Interest Collections for such Payment Date constituting net investment
earnings from the Series 2011-2 Accounts, and (b) the Series 2011-2 Accumulation Period Reserve
Account Available Amount for such Payment Date.

     “Series 2011-2 Amortization Event” has the meaning specified in Section 6.1.

13

 

     “Series 2011-2 Collateral” means (a) all Collections on the Receivables allocated to
the Series 2011-2 Noteholders, (b) all security entitlements relating to the Series 2011-2 Accounts
and the property deposited in or credited to any of the Series 2011-2 Accounts, (c) all
present future claims, demands, causes in action and choses in action in respect of the foregoing,
and (d) all payments on and proceeds of the foregoing.

     “Series 2011-2 Excess Funding Amount” means, as of any date, the product of (a) the
amount in the Excess Funding Account (excluding any net investment earnings) on such date,
times (b) a fraction (i) the numerator of which is the Adjusted Invested Amount as of such
date and (ii) the denominator of which is the sum of the “Adjusted Invested Amounts” of all Series.

     “Series 2011-2 Final Maturity Date” means the September 2015 Payment Date.

     “Series 2011-2 Notes” has the meaning specified in Section 2.1(a).

     “Series 2011-2 Principal Funding Account” means the account designated as such
pursuant to Section 4.7(a).

     “Series 2011-2 Reserve Account” means the account designated as such pursuant to
Section 4.7(b).

     “Series 2011-2 Reserve Account Available Amount” means, for any Payment Date, the
lesser of (a) the amount in the Series 2011-2 Reserve Account on such date (excluding any net
investment earnings and before giving effect to any deposit or withdrawal on such Payment Date) and
(b) the Series 2011-2 Reserve Account Required Amount for such Payment Date.

     “Series 2011-2 Reserve Account Deposit Amount” means, for any Payment Date, the
excess, if any, of (a) the Series 2011-2 Reserve Account Required Amount for such Payment Date,
over (b) the Series 2011-2 Reserve Account Available Amount for such Payment Date.

     “Series 2011-2 Reserve Account Required Amount” means, for any Payment Date, an amount
equal to the product of (a) the Series 2011-2 Reserve Account Required Percentage, times (b) the
Initial Invested Amount; provided, that the Reserve Account Required Amount for the Closing
Date is $10,928,110.

     “Series 2011-2 Reserve Account Required Percentage” means, (a) for any Payment Date
not described in clauses (b) or (c), 1.0%, (b) for any Payment Date during a Subordination Step-up
Period for which the Depositors have elected to increase the Series 2011-2 Reserve Account Required
Percentage in accordance with Section 4.7(b), 1.0% plus the Step-up Percentage or (c) for
any Payment Date with respect to the Early Amortization Period on which the Depositors have not
elected to increase the Series 2011-2 Reserve Account Required Percentage pursuant to clause (b),
5.0%; provided, that the Depositors may reduce any of these percentages so long as the
Rating Agency Condition is satisfied.

     “Series Cutoff Date” means the close of business on August 31, 2011.

     “Servicing Fee Rate” means 1% per annum.

14

 

     “Shared Principal Collections” means, for Series 2011-2 and any Payment Date, an
amount equal to the excess, if any, of (a) the Available Investor Principal Collections for such
Payment Date (without giving effect to clause (a)(iv) of the definition of “Available Investor
Principal Collections”), over (b) the amount required to be deposited or distributed,
without duplication, pursuant to Sections 4.2(d) and (e) on such Payment Date.

     “Similar Law” means any federal, state, local or non-U.S. law or regulation
substantially similar to the provisions of Title I of ERISA or Section 4975 of the Code.

     “Step-up Percentage” means the excess of the Subordinated Percentage calculated using
a Subordination Factor of 16.00% over the Subordinated Percentage calculated using a
Subordination Factor of 12.00%.

     “Subordinated Percentage” means the percentage equivalent of a fraction (a) the
numerator of which is the Subordination Factor and (b) the denominator of which is the excess of
100%, over the Subordination Factor.

     “Subordination Factor” means, for the Series 2011-2 Notes, (a) for any Determination
Date not described in clause (b), 12.00% or (b) for any Determination Date during a Subordination
Step-up Period, unless the Depositors have elected to increase the Series 2011-2 Reserve Account
Required Percentage in accordance with Section 4.7(b), 16.00%.

     “Subordination Step-up Period” means any period beginning on the Determination Date
for which the average of the Monthly Principal Payment Rates for the three preceding Collection
Periods is less than 25% and ending on the Determination Date for which the average of the Monthly
Principal Payment Rates for the three preceding Collection Periods is equal to or greater than 25%.

     “Used Vehicle Overconcentration” means, for any Determination Date, the excess, if
any, of (a) the aggregate principal amount of Receivables on credit lines that are designated by
the Servicer specifically for purchases of Used Vehicles on the last day of the related Collection
Period, over (b) 20% of the Pool Balance on the last day of such Collection Period (or a
higher percentage so long as the Rating Agency Condition has been satisfied).

     Section 1.2. Defined Terms for Other Series. Capitalized terms in this Indenture
Supplement, when used in quotation marks with a reference to one or more Series, have the
respective meanings specified for each such Series in the related Indenture Supplement.

ARTICLE II

CREATION OF SERIES 2011-2 NOTES

     Section 2.1. Principal Terms of Series 2011-2 Notes. The Principal Terms for the
Series 2011-2 Notes are as follows:

     (a) Creation and Designation. This Indenture Supplement creates a Series of Notes to
be issued by the Issuer on the Closing Date pursuant to the Indenture and this Indenture Supplement
to be known as the “Series 2011-2 Asset Backed Notes” or the “Series 2011-2 Notes.”

15

 

     (b) Note Interest Rate and Initial Note Balance. The Indenture Trustee will, upon
Issuer Order, authenticate and deliver the Series 2011-2 Notes for original issue in the following
Classes, each having the Note Interest Rates and initial Note Balances specified below. The Series
2011-2 Notes will be payable on the Series 2011-2 Final Maturity Date.

	 	 	 	 	 	 	 	 
	         Class	 	Note Interest Rate	 	 	Initial Note Balance	 
	Class A-1 Notes
	 	1.32	% 	 	$	150,000,000	 
	Class A-2 Notes
	 	One-month LIBOR + 0.60	% 	 	$	800,000,000	 
	Class B Notes
	 	1.87	% 	 	$	43,464,000	 
	Class C Notes
	 	2.37	% 	 	$	62,092,000	 
	Class D Notes
	 	2.86	% 	 	$	37,255,000	 

     (c) Sharing Groups. Series 2011-2 will be in Excess Interest Sharing Group One and in
Principal Sharing Group One.

     (d) Form of Notes. Each Class of Series 2011-2 Notes, together with the Indenture
Trustee’s certificate of authentication, will be in substantially the form of Exhibit A with such
variations as are required or permitted by this Indenture Supplement and the Indenture. The Series
2011-2 Notes may have such marks of identification and such legends or endorsements placed on them
as may be determined, consistent with this Indenture Supplement and the Indenture, by the
Responsible Persons executing such Series 2011-2 Notes, as evidenced by their execution of such
Series 2011-2 Notes.

     (e) Book-Entry Series 2011-2 Notes. The Series 2011-2 Notes initially will be issued
as Book-Entry Notes. On or before the Series Issuance Date, Global Notes representing each Class
of Series 2011-2 Notes will be deposited with the Clearing Agency.

     (f) Series Issuance Date. The Series Issuance Date for the Series 2011-2 Notes will
be the Closing Date.

     (g) Denominations. The Series 2011-2 Notes will be issued in fully registered form in
minimum amounts of $100,000 and in integral multiples of $1,000 in excess of such minimum amount
(except that one Note of each Class may be issued in a different amount so long as such amount
exceeds $100,000).

     (h) Indenture. The Series 2011-2 Notes are “Notes” and this Indenture Supplement is
an “Indenture Supplement” for all purposes of the Indenture. If any provision of the Series 2011-2
Notes or this Indenture Supplement conflicts with or is inconsistent with the Indenture, the
provisions of the Series 2011-2 Notes or this Indenture Supplement, as the case may be, control.

     (i) Events of Default. There will be no additional Events of Default with respect to
the Series 2011-2 Notes.

     Section 2.2. Additional Issuance; Reopening.

     The Issuer may from time to time, without notice to, or the consent of, Noteholders of any
Series, create and issue additional Series 2011-2 Notes of the same Class as any Class issued on
the Closing Date. Any such additional Series 2011-2 Notes will form part of and have the

16

 

same Principal Terms as such previously issued Class, except for (i) the initial principal amount of
such Class, the Initial Invested Amount and the initial Note Balance of such Class on the Closing
Date, (ii) the accrual and payment of interest prior to the issuance date of such additional Series
2011-2 Notes, and (iii) the first payment of interest following the issuance of such additional
Series 2011-2 Notes. When issued, such additional Series 2011-2 Notes will be equally and ratably
entitled to the benefits of the Indenture and this Indenture Supplement applicable to those Series
2011-2 Notes of the same Class issued on the Closing Date without preference, priority or
distinction. The obligation of the Indenture Trustee to authenticate and deliver additional Series
2011-2 Notes after the Closing Date and to execute and deliver any amendments to this Indenture
Supplement to facilitate such additional issuance will be subject to the satisfaction of the
following conditions:

     (a) on or before the second Business Day preceding the issuance of such additional Series
2011-2 Notes, the Issuer has given the Indenture Trustee and each Rating Agency notice of such
additional issuance and the date of such additional issuance;

     (b) the Issuer has delivered to the Indenture Trustee any amendments to this Indenture
Supplement required to facilitate such additional issuance, in form reasonably satisfactory to the
Indenture Trustee executed by the Issuer;

     (c) the Rating Agency Condition has been satisfied with respect to such additional issuance;

     (d) each Depositor has delivered to the Indenture Trustee an Officer’s Certificate, dated the
date of such additional issuance, stating that:

     (i) such additional issuance will not have an Adverse Effect or cause an Amortization
Event to occur with respect to any Series; and

     (ii) all conditions precedent under this Section 2.2 to the issuance of such additional
Series 2011-2 Notes have been complied with;

     (e) on or before the additional issuance date for any Class (treating the Class A-1 Notes and
the Class A-2 Notes as a single Class), the Issuer will have issued Notes of each Class that is
junior to such Class such that the proportion of the Note Principal Balance of each such junior
Class to the Note Principal Balance of any more senior Class is equal to or greater than the
proportion that existed on the Closing Date;

     (f) the Depositors have deposited in the Series 2011-2 Reserve Account from the proceeds of
such issuance such amount as is necessary to cause the amount on deposit to equal the Series 2011-2
Reserve Account Required Amount after giving effect to such issuance; and

     (g) the Net Adjusted Pool Balance equals or exceeds the Required Pool Balance after giving
effect to such additional issuance (taking into account any deposit of the proceeds of such
additional Series 2011-2 Notes into the Excess Funding Account).

17

 

     Section 2.3. Payments.

     (a) Each Class of Notes will accrue interest at the applicable Note Interest Rate. Interest
on each Note will be due and payable on each Payment Date as specified in such Note. Interest on
the Notes (other than the Class A-2 Notes) will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Interest on the Class A-2 Notes will be computed on the basis
of actual number of days elapsed and a 360-day year.

     (b) Interest and principal payments on each Class of Notes will be made ratably to the
Noteholders of such Class entitled to such payments. On each Payment Date, distributions to be
made with respect to interest on and principal of the Book-Entry Notes will be paid to the
registered Noteholder by wire transfer in immediately available funds to the account designated by
the nominee of the Clearing Agency (initially, such nominee will be Cede & Co.). Distributions to
be made with respect to interest on and principal of the Definitive Notes will be paid to the
registered Noteholder (i) if such Noteholder has provided to the Note Registrar appropriate
instructions at least five Business Days before such Payment Date and the aggregate original
principal amount of such Noteholder’s Notes is at least $1,000,000, by wire transfer in immediately
available funds to the account of such Noteholder or (ii) by check mailed first class mail, postage
prepaid, to such registered Noteholder’s address as it appears on the Note Register on the related
Record Date. However, the final installment of principal (whether payable by wire transfer or
check) of each Note on a Payment Date or the Series 2011-2 Final Maturity Date will be payable only
upon presentation and surrender of such Note. The Indenture Trustee will notify each registered
Noteholder of the date on which the Issuer expects that the final installment of principal of and
interest on such registered Noteholder’s Notes will be paid not later than five days before such
date. Such notice will be prepared by the Issuer and will specify the place where such Notes may
be presented and surrendered for payment of such installment. All funds paid by wire transfers or
checks that are returned undelivered will be held in accordance with Section 3.3 of the Indenture.

     (c) The principal of each Note will be payable in installments on each Payment Date as
specified in such Note. The entire unpaid Note Balance of each Class of Notes will be due and
payable on the Series 2011-2 Final Maturity Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes will be due and payable on the date on which the Notes are declared
to be immediately due and payable in the manner provided in Section 5.2(a) of the Indenture.

ARTICLE III

REPORTS AND SERVICING

     Section 3.1. Reports and Statements to Noteholders of Series 2011-2 Notes.

     (a) On or before each Determination Date, the Servicer will deliver to the Issuer, the
Indenture Trustee and each Rating Agency a report substantially in the form of Exhibit B or such
other form as the Servicer may determine; provided that any such report contains
substantially the same information as set forth in Exhibit B (a “Monthly Investor Report”).
A Responsible Person of the Servicer will certify the accuracy of the information in the Monthly
Investor Report in accordance with Section 3.6 of the Sale and Servicing Agreements.

18

 

     (b) On each Payment Date, the Indenture Trustee will deliver to each Noteholder of Series
2011-2 Notes a Monthly Investor Report; provided, that, in lieu of the Indenture Trustee’s
delivering such statement, the Indenture Trustee may make such statement available to the
Noteholders of the Series 2011-2 through the Indenture Trustee’s internet website, which initially
is located at http://GCTInvestorreporting.bnymellon.com.

     (c) A copy of each Monthly Investor Report may be obtained by any Noteholder of Series 2011-2
Notes by a request to the Servicer.

     (d) If required by law, on or before January 31 of each calendar year, beginning with the
calendar year following the Closing Date, the Indenture Trustee will furnish or cause to be
furnished to each Person who at any time during the preceding calendar year was a Noteholder of the
Series 2011-2 Notes, a statement prepared by the Servicer containing the information that is
required to be contained in the statements to the Noteholders of the Series 2011-2 Notes, as set
forth in Section 3.1(a), aggregated for the preceding calendar year, together with other
information as is required to be provided by an issuer of indebtedness under the Code;
provided, however, that in lieu of the Indenture Trustee’s delivering such
statement, the Indenture Trustee may make such statement available to the Noteholders of the Series
2011-2 Notes through the Indenture Trustee’s internet website, which initially is located at
http://GCTInvestorreporting.bnymellon.com. Such obligation of the Servicer will be deemed to have
been satisfied to the extent that substantially comparable information is provided by the Indenture
Trustee pursuant to any requirements of the Code as from time to time in effect.

     Section 3.2. Servicing Compensation. The share of the Servicing Fee allocable to
Series 2011-2 for any Payment Date is equal to the Monthly Servicing Fee. The portion of the
Servicing Fee that is not allocable to Series 2011-2 will be paid by the holders of the Depositor
Interest or the Noteholders of other Series (pursuant to the related Indenture Supplement) and in
no event will the Issuer, the Indenture Trustee or the Noteholders of the Series 2011-2 Notes be
liable for the share of the Servicing Fee to be paid by the holders of the Depositor Interest or
the Noteholders of any other Series.

ARTICLE IV

RIGHTS OF NOTEHOLDERS OF SERIES 2011-2 NOTES

AND ALLOCATION AND APPLICATION OF COLLECTIONS

     Section 4.1. Collections and Allocations.

     (a) Allocations. Pursuant to Section 8.4(a) of the Indenture, Interest Collections,
Principal Collections and Defaulted Receivables will be allocated between Series 2011-2 and the
Depositor Interest and then applied to Series 2011-2 and the Depositor Interest pursuant to this
Article IV.

     (b) Allocations to Depositor Interest.

     (i) Available Depositor Collections. On each Deposit Date, the Servicer will
make the following deposits and payments from Available Depositor Collections for such
Deposit Date or the related Collection Period, as applicable, in the following order of
priority:

19

 

	 	(A)	 	to the Collection Account, but only to the extent
needed to pay, to the knowledge of the Servicer on such Deposit Date, the
following amounts on the related Payment Date: (I) to cover shortfalls in
payments and deposits required to be made from Available Investor Interest
Collections on the related Payment Date pursuant to Section 4.2(b)(ii), and
to cover similar shortfalls for other Series, and (II) during an Early
Amortization Period, to cover amounts distributable pursuant to Section
4.2(e) on such Payment Date;
	 
	 	(B)	 	to the Excess Funding Account, to the extent that the
Required Depositor Amount for the preceding Calculation Date (and, if such
Calculation Date is a Determination Date, after giving effect to the
allocations, payments, withdrawals and deposits to be made on the Payment
Date following such Determination Date) exceeds the Depositor Amount; and
	 
	 	(C)	 	(1) if the Depositors are the sole holders of the
Depositor Interest, to the Depositors in accordance with their respective
percentage interests in the Depositor Interest or (2), otherwise, to the
Depositor Interest Account for distribution to the holders of the Depositor
Interest in accordance with the Trust Agreement, any remaining amount.

     (ii) Excess Depositor Interest Collections. On each Deposit Date, the Servicer
will make the following deposits and payments from Excess Depositor Interest Collections for
such Deposit Date or the related Collection Period, as applicable, in the following order of
priority:

	 	(A)	 	to the Collection Account, until the amount deposited
pursuant to this clause (A) is equal to the Monthly Depositor Servicing Fee
for all Series for such Collection Period; and
	 
	 	(B)	 	(1) if the Depositors are the sole holders of the
Depositor Interest, to the Depositors in accordance with their respective
percentage interests in the Depositor Interest or (2), otherwise, to the
Depositor Interest Account for distribution to the holders of the Depositor
Interest in accordance with the Trust Agreement, any remaining amount.

     (iii) Excess Depositor Principal Collections. On each Deposit Date, the
Servicer will make the following deposits and payments from Excess Depositor Principal
Collections for such Deposit Date or the related Collection Period, as applicable, in the
following order of priority:

	 	(A)	 	to the Excess Funding Account, to the extent that the
Required Depositor Amount for the preceding Calculation Date (and, if such
Calculation Date is a Determination Date, after giving effect to the
allocations, payments, withdrawals and deposits to be made on the Payment
Date following such Determination Date) exceeds the Depositor Amount;

20

 

	 	(B)	 	to the Collection Account, until the amount deposited
pursuant to this clause (B) is equal to the excess, if any, of the Monthly
Depositor Servicing Fee for all Series for such Collection Period
over the amount deposited into the Collection Account pursuant to
Section 4.1(b)(ii)(A); and
	 
	 	(C)	 	(1) if the Depositors are the sole holders of the
Depositor Interest, to the Depositors in accordance with their respective
percentage interests in the Depositor Interest or (2), otherwise, to the
Depositor Interest Account for distribution to the holders of the Depositor
Interest in accordance with the Trust Agreement, any remaining amount.

     (iv) Available Depositor Collections True-up. On each Determination Date, the
Servicer will deposit into the Collection Account the lesser of (A) the portion, if any, of
the amount described in Section 4.1(b)(i)(A)(I) with respect to the related Collection
Period that has not previously been deposited into the Collection Account pursuant to
Section 4.1(b)(i)(A)(I), and (B) the aggregate amount paid to the Depositors or to the
Depositor Interest Account for distribution to the holders of the Depositor Interest with
respect to the related Collection Period pursuant to Section 4.1(b)(i)(C). Any amount
deposited pursuant to this Section 4.1(b)(iv) will be repaid to the Servicer by the holders
of the Depositor Interest or, if not so repaid, may be withheld by the Servicer from
subsequent distributions to the holders of the Depositor Interest.

     (c) Allocations to Series 2011-2. The Servicer will allocate to the Noteholders of
Series 2011-2 Notes and deposit into the Collection Account for application pursuant to this
Indenture Supplement the following amounts:

     (i) on each Deposit Date, an amount equal to the Investor Interest Collections for such
Deposit Date or the related Collection Period, as applicable, until the amount in the
Collection Account allocated to Series 2011-2 equals the excess of (I) the amounts to be
paid or distributed, to the knowledge of the Servicer on such Deposit Date, on the related
Payment Date pursuant to Section 4.2(a)(i) through (xvi), over (II) the Monthly
Depositor Servicing Fee for the related Collection Period;

     (ii) on each Deposit Date, an amount equal to the Investor Principal Collections for
such Deposit Date or the related Collection Period, as applicable, until the amount in the
Collection Account allocated to Series 2011-2 equals the amounts to be paid or distributed,
to the knowledge of the Servicer on such Deposit Date, on the related Payment Date pursuant
to Section 4.2(b)(iv), (c) or (d), as applicable;

     (iii) on each Determination Date, an amount equal to the lesser of (A) the portion, if
any, of the excess of (I) the amounts to be paid or distributed on the related Payment Date
pursuant to Section 4.2(a)(i) through (xvi), over (II) the Monthly Depositor
Servicing Fee for the related Collection Period that has not previously been deposited

21

 

into the Collection Account pursuant to Section 4.1(c)(i), and (B) the amount of Investor
Interest Collections for the related Collection Period that has not previously been
deposited into the Collection Account pursuant to Section 4.1(c)(i); and

     (iv) on each Determination Date, an amount equal to the lesser of (A) the portion, if
any, of the amounts to be paid or distributed on the related Payment Date pursuant to
Section 4.2(b)(iv), (c) or (d), as applicable, that has not previously been deposited into
the Collection Account pursuant to Section 4.1(c)(ii), and (B) the amount of Investor
Principal Collections for the related Collection Period that has not previously been
deposited into the Collection Account pursuant to Section 4.1(c)(ii).

     Section 4.2. Application of Available Funds in Collection Account and Other Sources.

     (a) As long as the Indenture Trustee has received the Monthly Investor Report by the related
Determination Date, the Indenture Trustee (based on the information in the Monthly Investor Report)
will, on each Payment Date and to the extent of Available Investor Interest Collections in the
Collection Account, make the following applications, payments or deposits in the following order of
priority:

     (i) to the Note Paying Agent for payment to the Noteholders of the Class A Notes, pro
rata, the Accrued Note Interest for the Class A Notes for such Payment Date;

     (ii) to the Note Paying Agent for payment to the Noteholders of the Class B Notes, the
Accrued Note Interest for the Class B Notes for such Payment Date;

     (iii) to the Note Paying Agent for payment to the Noteholders of the Class C Notes, the
Accrued Note Interest for the Class C Notes for such Payment Date;

     (iv) to the Note Paying Agent for payment to the Noteholders of the Class D Notes, the
Accrued Note Interest for the Class D Notes for such Payment Date;

     (v) pro rata, to the payment of all amounts, including indemnities, then due to the
Owner Trustee and the Indenture Trustee for the Series 2011-2 Notes, and any expenses
incurred by the Issuer for the Series 2011-2 Notes in accordance with the Transaction
Documents, in each case, to the extent not paid by the Servicer or the Administrator, up to
a maximum of $150,000 per year;

     (vi) pro rata (A) to the Back-up Servicer, the Monthly Back-up Servicing Fee for such
Payment Date, if any, together with any Monthly Back-up Servicing Fees previously due but
not paid on prior Payment Dates, and (B) if Ford Credit or one of its Affiliates is no
longer the Servicer, to the Servicer, the Monthly Servicing Fee for such Payment Date,
together with any Monthly Servicing Fees previously due but not paid on prior Payment Dates
(unless such amount has been netted against deposits into the Collection Account in
accordance with Section 8.4(c) of the Indenture);

     (vii) to treat as Available Investor Principal Collections for such Payment Date, the
Investor Default Amount for such Payment Date;

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     (viii) to the Series 2011-2 Reserve Account, the Series 2011-2 Reserve Account Deposit
Amount for such Payment Date;

     (ix) to treat as Available Investor Principal Collections for such Payment Date, the
sum of Investor Charge-Offs that have not been previously reimbursed;

     (x) to treat as Available Investor Principal Collections for such Payment Date, the sum
of Reallocated Principal Collections that have not been previously reimbursed;

     (xi) beginning on the Series 2011-2 Accumulation Period Reserve Account Funding Date,
to the Series 2011-2 Accumulation Period Reserve Account, the Series 2011-2 Accumulation
Period Reserve Account Deposit Amount for such Payment Date;

     (xii) if Ford Credit or one of its Affiliates is the Servicer, to the Servicer, the
Monthly Servicing Fee for such Payment Date, together with any Monthly Servicing Fees
previously due but not paid on prior Payment Dates (unless such amount has been netted
against deposits into the Collection Account in accordance with Section 8.4(c) of the
Indenture);

     (xiii) to the Depositor Interest Account for distribution to the holders of the
Depositor Interest in accordance with the Trust Agreement to increase the Available
Subordinated Amount, the excess of the Required Subordinated Amount over the
Available Subordinated Amount (unless such amount has been netted against deposits into the
Collection Account in accordance with Section 8.4(c) of the Indenture);

     (xiv) pro rata, to the payment of all amounts, including indemnities, then due to the
Owner Trustee and the Indenture Trustee for the Series 2011-2 Notes, and any expenses
incurred by the Issuer for the Series 2011-2 Notes in accordance with the Transaction
Documents, in each case, to the extent not paid by the Servicer or the Administrator or
pursuant to clause (v) above;

     (xv) to the Back-up Servicer, any amounts due pursuant to Section 2.3(b) of the Back-up
Servicing Agreement and any Transition Costs due pursuant to Section 2.3(c) of the Back-up
Servicing Agreement in excess of the amount in the Back-up Servicer Reserve Account, in each
case, for the Series 2011-2 Notes;

     (xvi) to treat as Excess Interest Collections available from Series 2011-2, the
Interest Collections Shortfalls for other Series in Excess Interest Sharing Group One; and

     (xvii) to the Depositor Interest Account for distribution to the holders of the
Depositor Interest in accordance with the Trust Agreement, all remaining Available Investor
Interest Collections.

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     (b) If Available Investor Interest Collections for any Payment Date are insufficient to make
the applications, payments and deposits required pursuant to Section 4.2(a), as long as the
Indenture Trustee has received the Monthly Investor Report by the related Determination Date, the
Indenture Trustee (based on the information in the Monthly Investor Report) will, on or before such
Payment Date, apply available funds from the following sources in the following order of priority:

     (i) from Excess Interest Collections available from other Series in Excess Interest
Sharing Group One, to cover shortfalls in the applications, payments and deposits pursuant
to Sections 4.2(a)(i) through (xv) in that order;

     (ii) from Available Depositor Interest Collections and Available Depositor Principal
Collections (with respect to Available Depositor Principal Collections, in an amount not
exceeding the Available Subordinated Amount (before giving effect to Section 4.3) for such
Payment Date), to cover shortfalls in the applications, payments and deposits required
pursuant to Sections 4.2(a)(i) through (ix) in that order; provided that, if the
amount of Available Depositor Collections is insufficient to cover such shortfalls for
Series 2011-2, as well as any similar shortfalls for other Series, then Available Depositor
Collections will be allocated to Series 2011-2 based on the ratio that the Available
Subordinated Amount for Series 2011-2 bears to the aggregate “Available Subordinated
Amounts” for all Series having such shortfalls; provided, further, that if
the amount of Available Depositor Collections exceeds the aggregate amount of such
shortfalls for all Series, then the excess Available Depositor Collections will be applied
to cover any unpaid Adjustment Payments;

     (iii) from the Series 2011-2 Reserve Account Available Amount, to cover shortfalls in
the applications, payments and deposits required pursuant to Sections 4.2(a)(i) through
(vii) in that order; and

     (iv) from the Reallocated Principal Collections for such Payment Date, to cover
shortfalls in the payments required pursuant to Sections 4.2(a)(i) through (iv).

     (c) As long as the Indenture Trustee has received the Monthly Investor Report by the related
Determination Date, the Indenture Trustee (based on information in the Monthly Investor Report)
will, on each Payment Date and to the extent of Available Investor Principal Collections on deposit
in the Collection Account, make the following applications, payments or deposits in the following
order of priority:

     (i) on any Payment Date with respect to the Controlled Accumulation Period or Early
Amortization Period, to the Series 2011-2 Principal Funding Account, the excess, if any, of
the Monthly Principal Amount for such Payment Date over the amount deposited into
the Series 2011-2 Principal Funding Account from the Excess Funding Account pursuant to
Section 4.2(d) on such Payment Date;

     (ii) to other Principal Sharing Series in Principal Sharing Group One, the Shared
Principal Collections for such Payment Date;

     (iii) to the Excess Funding Account, the excess, if any, of the Required Pool Balance
over the Net Adjusted Pool Balance pursuant to Section 8.3(b)(ii) of the Indenture;
and

24

 

     (iv) to the Depositor Interest Account for distribution to the holders of the Depositor
Interest in accordance with the Trust Agreement, all remaining Available Investor Principal
Collections.

     (d) As long as the Indenture Trustee has received the Monthly Investor Report by the related
Determination Date, the Indenture Trustee (based on information in the Monthly Investor Report)
will, on each Payment Date with respect to the Controlled Accumulation Period or an Early
Amortization Period, deposit into the Series 2011-2 Principal Funding Account from the Excess
Funding Account the lesser of (i) the Series 2011-2 Excess Funding Amount, and (ii) the Monthly
Principal Amount for such Payment Date.

     (e) If Available Investor Principal Collections for any Payment Date with respect to an Early
Amortization Period are insufficient to deposit the amount required pursuant to Section 4.2(c)(i),
as long as the Indenture Trustee has received the Monthly Investor Report by the related
Determination Date, the Indenture Trustee (based on the information in the Monthly Investor Report)
will, on such Payment Date, deposit into the Series 2011-2 Principal Funding Account Available
Depositor Interest Collections and Available Depositor Principal Collections (with respect to
Available Depositor Principal Collections, in an amount not to exceed the Available Subordinated
Amount) on such Payment Date in an amount equal to the excess of the Adjusted Invested Amount
over the sum of the amounts deposited into the Series 2011-2 Principal Funding Account from
Available Investor Principal Collections pursuant to Section 4.2(c)(i) and from the Excess Funding
Account pursuant to Section 4.2(d).

     (f) So long as an Early Amortization Period has not begun, on the Expected Final Payment Date,
or on each Payment Date with respect to an Early Amortization Period, as long as the Indenture
Trustee has received the Monthly Investor Report by the related Determination Date, the Indenture
Trustee (based on the information in the Monthly Investor Report) will withdraw an amount up to the
aggregate Note Balance of Series 2011-2 from the Series 2011-2 Principal Funding Account for
payment in the following order of priority: (i) to the Noteholders of Class A Notes until the Note
Balance of the Class A Notes is reduced to zero, (ii) to the Noteholders of Class B Notes until the
Note Balance of the Class B Notes is reduced to zero, (iii) to the Noteholders of the Class C Notes
until the Note Balance of the Class C Notes is reduced to zero and (iv) to the Noteholders of the
Class D Notes until the Note Balance of the Class D Notes is reduced to zero.

     (g) The Controlled Accumulation Period is scheduled to begin on the first day of the March
2013 Collection Period. However, if the Accumulation Period Length is less than six Collection
Periods, the date on which the Controlled Accumulation Period actually begins will be delayed to
the first day of the Collection Period that is the number of Collection Periods before the Expected
Final Payment Date at least equal to the Accumulation Period Length. On or before each
Determination Date beginning with the Determination Date in the February 2013 Collection Period and
ending when the Controlled Accumulation Period begins, the Servicer will determine the
“Accumulation Period Length.”

     Section 4.3. Investor Charge-Offs. On each Determination Date, the Servicer will
calculate the Investor Default Amount, if any, for the related Payment Date. If the Investor
Default Amount for any Payment Date exceeds the sum of the amounts applied to fund such

25

 

Investor
Default Amount pursuant to Section 4.2(a)(vii) (including any amounts applied pursuant to Section
4.2(b)), then such excess will be applied in the following order of priority to reduce (a) the
Available Subordinated Amount for the related Determination Date (after giving effect to any
reductions of the Available Subordinated Amount pursuant to Section 4.2(b)(ii)), (b) the Class D
Invested Amount, (c) the Class C Invested Amount, (d) the Class B Invested Amount, and (e) the
remaining Invested Amount.

     Section 4.4. Reallocated Principal Collections. On each Payment Date, the Reallocated
Principal Collections for such Payment Date will be applied in the following order of priority to
reduce (a) the Available Subordinated Amount (after giving effect to any reductions of the
Available Subordinated Amount pursuant to Section 4.2(b)(ii) and Section 4.3), (b) the Class D
Invested Amount, (c) the Class C Invested Amount, and (d) the Class B Invested Amount.

     Section 4.5. Excess Interest Collections. On each Payment Date, Series 2011-2 will be
allocated an amount equal to the product of (a) the aggregate amount of Excess Interest Collections
for all Excess Interest Sharing Series in Excess Interest Sharing Group One for such Payment Date,
times (b) a fraction, the numerator of which is the Interest Collections Shortfall for
Series 2011-2 for such Payment Date and the denominator of which is the aggregate amount of
Interest Collections Shortfalls for all Excess Interest Sharing Series in Excess Interest Sharing
Group One for such Payment Date.

     Section 4.6. Shared Principal Collections. On each Payment Date, Series 2011-2 will
be allocated an amount equal to the product of (a) the aggregate amount of Shared Principal
Collections with respect to all Principal Sharing Series in Principal Sharing Group One for such
Payment Date, times (b) a fraction, the numerator of which is the Principal Shortfall for
Series 2011-2 for such Payment Date and the denominator of which is the aggregate amount of
Principal Shortfalls for all Principal Sharing Series in Principal Sharing Group One for such
Payment Date.

     Section 4.7. Series 2011-2 Accounts.

     (a) The Servicer will, before the Closing Date, establish and maintain a Qualified Account in
the name “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit
Floorplan Master Owner Trust A in respect of Series 2011-2” that is designated as the “Series
2011-2 Principal Funding Account”, which account will be beneficially owned by the Issuer. The
Series 2011-2 Principal Funding Account will initially be account number 779770.

     (b) The Servicer will, before the Closing Date, establish and maintain a Qualified Account in
the name “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit
Floorplan Master Owner Trust A in respect of Series 2011-2” that is designated as the “Series
2011-2 Reserve Account”, which account will be beneficially owned by the Issuer. The Series 2011-2
Reserve Account will initially be account number 779769.

     (i) The Series 2011-2 Reserve Account will be funded by the Depositors on the Closing
Date in the amount equal to the Series 2011-2 Reserve Account Required Amount for such date
and will be increased and decreased as described in this Indenture Supplement.

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     (ii) On or prior to the first day of any Subordination Step-up Period, the Depositors
may elect to increase the Series 2011-2 Reserve Account Required Percentage for such
Subordination Step-up Period in lieu of increasing the Subordination Factor as contemplated
by the definition thereof, by (i) notifying the Servicer and the Indenture Trustee of such
election and (ii) depositing the amount of the related increase of the Series 2011-2 Reserve
Account Required Amount into the Series 2011-2 Reserve Account; provided, that, if the
Depositors fail to deposit the amount of such increase into the Series 2011-2 Reserve
Account on or prior to the Payment Date of such Subordination Step-up Period, the
Subordination Factor will automatically increase in accordance with the definition thereof.

     (iii) Upon the earlier to occur of (A) the payment in full of the Series 2011-2 Notes,
and (B) the Series 2011-2 Final Maturity Date, any funds remaining in the Series 2011-2
Reserve Account will be treated as Available Investor Principal Collections. The Series
2011-2 Reserve Account will, following such occurrence, be deemed to have terminated for the
purposes of this Indenture Supplement.

     (c) The Servicer will, before the Closing Date, establish and maintain a Qualified Account in
the name “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit
Floorplan Master Owner Trust A in respect of Series 2011-2” that is designated as the “Series
2011-2 Accumulation Period Reserve Account”, which account will be beneficially owned by the
Issuer. The Series 2011-2 Accumulation Period Reserve Account will initially be account number
779771.

     (i) The Series 2011-2 Accumulation Period Reserve Account will be funded by the Issuer,
beginning on the Series 2011-2 Accumulation Period Reserve Account Funding Date, in the
amount equal to the Series 2011-2 Accumulation Reserve Account Required Amount for such date
and will be increased and decreased as described in this Indenture Supplement.

     (ii) On or before each Payment Date with respect to the Controlled Accumulation Period,
the Servicer will calculate the Series 2011-2 Accumulation Period Reserve Draw Amount and
instruct the Indenture Trustee to withdraw such amount from the Series 2011-2 Accumulation
Period Reserve Account on such Payment Date and deposit such amount into the Collection
Account for application as Available Investor Interest Collections.

     (iii) Upon the earliest to occur of (A) the payment in full of the Series 2011-2 Notes,
(B) the first Payment Date relating to an Early Amortization Period, and (C) the Series
2011-2 Final Maturity Date, any funds remaining in the Series 2011-2 Accumulation Period
Reserve Account will be treated as Available Investor Interest Collections. The Series
2011-2 Accumulation Period Reserve Account will, following such occurrence, be deemed to
have terminated for purposes of this Indenture Supplement.

27

 

     (d) Each Series 2011-2 Account will be under the sole dominion and control of the Indenture
Trustee, except that the Servicer may make deposits into and direct the Note Paying Agent or the
Indenture Trustee to make withdrawals from each such Series 2011-2 Account in accordance with this
Indenture Supplement.

     (e) The Series 2011-2 Accounts and all amounts, securities, investments, financial assets and
other property deposited into or credited to such accounts will be held by the Indenture Trustee as
secured party for the benefit of the Secured Parties of Series 2011-2 and, after payment in full of
the Series 2011-2 Notes and all other amounts owing or to be distributed to such Secured Parties
under this Indenture Supplement and the Sale and Servicing Agreements, as agent of the Issuer. All
deposits into and withdrawals from such accounts will be made in accordance with the Transaction
Documents.

     (f) If at any time any of the Series 2011-2 Accounts ceases to be a Qualified Account, the
Servicer will direct the Indenture Trustee to establish a new account to replace such account
within 30 calendar days, which account will be a Qualified Account and from the date of
establishment, such new account will be the Series 2011-2 Principal Funding Account, the Series
2011-2 Reserve Account or the Series 2011-2 Accumulation Period Reserve Account, as applicable, for
the purposes of this Indenture Supplement.

     (g) If on any Payment Date, after giving effect to all withdrawals from and deposits into the
Series 2011-2 Accounts, the amount in any Series 2011-2 Account exceeds the amount required to be
in such Series 2011-2 Account pursuant to this Indenture Supplement or any other Transaction
Document, then the Indenture Trustee will, at the direction of the Servicer, distribute such excess
to the Depositor Interest Account for distribution to the holders of the Depositor Interest in
accordance with the Trust Agreement.

     Section 4.8. Permitted Investments. Funds in the Series 2011-2 Accounts will, at the
direction of the Servicer, be invested by the Indenture Trustee in Permitted Investments selected
by the Servicer. All such Permitted Investments will be held by the Indenture Trustee on behalf of
the Issuer for the benefit of the Noteholders of Series 2011-2 Notes. Funds in the Series 2011-2
Accounts will be invested in Permitted Investments that will mature no later than the following
Payment Date. On each Payment Date, any net investment earnings on funds in such accounts will be
deposited in the Collection Account and treated as Available Investor Interest Collections for such
Payment Date. The Indenture Trustee will bear no responsibility or liability for any losses
resulting from investment or reinvestment of any funds in accordance with this Section 4.8 nor for
the selection of Permitted Investments in accordance with this Indenture Supplement, the Indenture
or the Sale and Servicing Agreements.

     Section 4.9. Investment Instructions. Any investment instructions required to be
given to the Indenture Trustee pursuant to Section 4.8 must be given to the Indenture Trustee no
later than 10:00 a.m. (New York City time) on the date such investment is to be made. Any such
investment instructions may be in the form of standing instructions given to the Indenture Trustee
by the Servicer. If the Indenture Trustee receives such investment instructions later than such
time, the Indenture Trustee may, but is not obligated to, make such investment. If the Indenture
Trustee is unable to make an investment required in any investment instructions received by the
Indenture Trustee after 10:00 a.m. (New York City time) on such day, such

28

 

investment will be made
by the Indenture Trustee on the next Business Day. In no event will the Indenture Trustee be
liable for any investment not made pursuant to investment instructions received after 10:00 a.m.
(New York City time) on the day such investment is requested to be made.

     Section 4.10. Notification of LIBOR. On each LIBOR Determination Date, the Indenture
Trustee will send to the Servicer, the Issuer and the Administrator by facsimile transmission,
notification of LIBOR for the following Interest Period.

ARTICLE V

THE NOTES

     Section 5.1. Retention By Depositors. Any Note retained or acquired by the Depositors
at any time on or after the Closing Date may be issued, transferred or exchanged by the Depositors
only upon the delivery to the Indenture Trustee of an Opinion of Counsel dated as of the date of
such issuance, transfer or exchange, as the case may be, to the effect that such issuance, transfer
or exchange will not cause (i) any other security issued by the Issuer to be deemed sold or
exchanged for purposes of Section 1001 of the Code or (ii) the Issuer to be treated as an
association or publicly traded partnership taxable as a corporation for U.S. federal income tax
purposes.

     Section 5.2. Note Owner Representations. Each Series 2011-2 Note Owner, by its
acceptance of a beneficial interest in the Series 2011-2 Notes, is deemed to represent, warrant and
covenant to the Issuer, the Depositors and the Indenture Trustee that:

     (a) either (A) it is not a Benefit Plan and is not acting on behalf of or investing the assets
of a Benefit Plan or (B) its purchase and holding of such beneficial interest therein does not
constitute and will not result in a non-exempt prohibited transaction under Title I of ERISA or
Section 4975 of the Code due to the applicability of a statutory or administrative exemption from
the prohibited transaction rules (or, if the Series 2011-2 Note Owner is subject to any Similar
Law, such purchase and holding does not constitute and will not result in a violation of such
Similar Law); and

     (b) it will treat the Series 2011-2 Notes for U.S. federal, state and local income and
franchise tax purposes as indebtedness secured by the Trust Property.

ARTICLE VI

SERIES 2011-2 AMORTIZATION EVENTS

     Section 6.1. Series 2011-2 Amortization Events. If any of the following events occurs
with respect to the Series 2011-2 Notes:

     (a) failure by either Depositor (i) to make any payment or deposit required to be made under
the related Sale and Servicing Agreement, the Indenture or this Indenture Supplement on or before
the date occurring five Business Days after the date such payment or deposit is required to be made
or (ii) to observe or perform in any material respect any other covenants or agreements of such
Depositor in the related Sale and Servicing Agreement, the Indenture or this Indenture Supplement
that has an Adverse Effect and continues for 60 days after the date on which notice of such
failure, requiring the same to be remedied, has been given to such Depositor by the Indenture
Trustee and continues to have an Adverse Effect for such 60-day period;

29

 

     (b) any representation or warranty made by either Depositor in the related Sale and Servicing
Agreement, the Indenture or this Indenture Supplement, or any information contained in a computer
file or other list required to be delivered by such Depositor pursuant to the related Sale and
Servicing Agreement, proves to have been incorrect in any material respect when made or when
delivered and has an Adverse Effect, which continues to be incorrect in any material respect for 60
days after the date on which notice of such failure, requiring the same to be remedied, has been
given to such Depositor by the Indenture Trustee and continues to have an Adverse Effect for such
60-day period; provided, however, that a Series 2011-2 Amortization Event pursuant
to this clause (b) will be deemed remedied if such Depositor has accepted reassignment of the
related Receivable, or all of such Receivables, if applicable, during such period in accordance
with the related Sale and Servicing Agreement;

     (c) a Servicer Termination Event that has an Adverse Effect;

     (d) the Note Balance of the Series 2011-2 Notes is not paid in full on the Expected Final
Payment Date;

     (e) the average of the Monthly Principal Payment Rates for the three preceding Collection
Periods is less than 21%;

     (f) on any Determination Date, the Available Subordinated Amount for the next Payment Date
will be less than the Required Subordinated Amount after giving effect to any payments to be made
on such Payment Date, and continues unremedied for five Business Days after such Payment Date;
provided that, for the purpose of determining whether a Series 2011-2 Amortization Event
has occurred pursuant to this clause (f), any reduction of the Available Subordinated Amount
resulting from reallocations of the Available Depositor Principal Collections to pay interest on
the Series 2011-2 Notes if LIBOR is equal to or greater than the prime rate upon which interest on
the receivables is calculated on the applicable LIBOR Determination Date will be considered a
Series 2011-2 Amortization Event only if LIBOR remains equal to or greater than such prime rate for
the next 30 consecutive days following such LIBOR Determination Date;

     (g) the amounts in the Excess Funding Account exceed 30% of the sum of the “Adjusted Invested
Amounts” of all Series for three consecutive Collection Periods, after giving effect to any
payments to be made on each related Payment Date; or

     (h) the occurrence of an Event of Default with respect to Series 2011-2 and an acceleration of
the maturity of the Series 2011-2 Notes pursuant to Section 5.2 of the Indenture.

then, in the case of any event described in clauses (a) through (c) above that is continuing, after
any applicable grace period, either the Indenture Trustee or the Noteholders of a majority of the
Note Balance of the Series 2011-2 Notes by notice to the Depositors and the Servicer (and to the
Indenture Trustee if given by the Noteholders of Series 2011-2 Notes) may declare that an
Amortization Event with respect to the Series 2011-2 Notes (a “Series 2011-2 Amortization

30

 

Event”) has occurred as of the date of such notice, and, in the case of any event described in
clauses (d) through (h) above, a Series 2011-2 Amortization Event, will occur without any notice or
other action on the part of the Indenture Trustee or the Series 2011-2 Noteholders immediately upon
the occurrence of such event.

ARTICLE VII

SERIES FINAL MATURITY; FINAL PAYMENTS

     Section 7.1. Series Final Maturity.

     (a) The amount to be paid with respect to Series 2011-2 in connection with a reassignment of
the Sold Receivables pursuant to Section 2.3(c) or 6.1(a) of the Sale and Servicing Agreements will
be the Reassignment Amount for the first Payment Date following the Collection Period in which the
reassignment obligation arises under the Sale and Servicing Agreements. With respect to the
Reassignment Amount deposited into the Collection Account pursuant to Section 2.3(c) or 6.1(a) of
the Sale and Servicing Agreements or the proceeds from any liquidation of Collateral allocable to
Series 2011-2 pursuant to Section 5.6(c) of the Indenture, the Indenture Trustee will, in
accordance with the direction of the Servicer, no later than 11:00 a.m. (New York City time) on the
related Payment Date, make payments or distributions of the following amounts (in the priority set
forth below and, in each case after giving effect to any payments and distributions otherwise to be
made on such date) (i) the Note Balance of the Series 2011-2 Notes on such Payment Date will be
distributed to the Note Paying Agent for payment to the Noteholders of the Series 2011-2 Notes and
(ii) an amount equal to the Accrued Note Interest for such Payment Date, will be distributed to the
Note Paying Agent for payment to the Noteholders of the related Class of Series 2011-2 Notes on
such Payment Date.

     (b) Notwithstanding anything to the contrary in this Indenture Supplement, the Indenture or
the Sale and Servicing Agreements, (i) all amounts distributed to the Note Paying Agent pursuant to
Section 7.1(a) for payment to the Noteholders of the Series 2011-2 Notes will be deemed paid in
full to the Noteholders the Series 2011-2 Notes on the date on which such funds are distributed to
the Note Paying Agent pursuant to this Section 7.1(b) and will be deemed to be a final payment of
the Series 2011-2 Notes and (ii) if the amounts available for final payment to the Noteholders of
the Series 2011-2 Notes and to the Noteholders of any other Series on any Payment Date are less
than the amount required to be so paid, the available amounts will be allocated to each Series
based on the respective amounts required to be paid to each such Series on such Payment Date.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

     Section 8.1. Ratification of Agreement. As supplemented by this Indenture Supplement,
the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by
this Indenture Supplement is to be read, taken and construed as one and the same instrument.

31

 

     Section 8.2. Counterparts. This Indenture Supplement may be executed in any number of
counterparts (and by different parties on separate counterparts), each of which will be an
original, but all of which will constitute one and the same instrument.

     Section 8.3. GOVERNING LAW. THIS INDENTURE SUPPLEMENT AND EACH SERIES 2011-2 NOTE ARE
TO BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ITS CONFLICTS OF LAWS PRINCIPLES.

[Remainder of Page Intentionally Left Blank]

32

 

EXECUTED BY:

	 	 	 	 	 
	 	FORD CREDIT FLOORPLAN MASTER OWNER
     TRUST A, as Issuer

 	 
	 	By:  	U.S. BANK
 	 
	 	 	TRUST NATIONAL ASSOCIATION, not in its individual	 
	 	 	capacity, but solely as Owner Trustee 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE BANK OF NEW YORK MELLON, not in its 
        individual capacity, but solely as Indenture Trustee, 
        Securities Intermediary
and Bank

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page to Series 2011-2 Indenture Supplement]

 

 

Exhibit A

Form of Class [A/B/C/D] Note

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     THE HOLDER OF THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED
THAT EITHER (I) IT IS NOT, AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF, AN EMPLOYEE
BENEFIT PLAN OR OTHER RETIREMENT PLAN OR ARRANGEMENT THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE “CODE”), OR ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW OR REGULATION
SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A “SIMILAR
LAW”), OR (II) ITS ACQUISITION AND HOLDING OF THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN DOES NOT
CONSTITUTE AND WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE BY
REASON OF THE APPLICABILITY OF A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE PROHIBITED
TRANSACTION RULES (OR, IF THE HOLDER IS SUBJECT TO ANY SIMILAR LAW, ITS ACQUISITION AND HOLDING OF
THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN DOES NOT CONSTITUTE AND WILL NOT RESULT IN A VIOLATION
OF SUCH SIMILAR LAW).

A-1

 

	 	 	 
	Registered

	 	$______________1
	No. [A-[__]/B/C/D]-__

	 	CUSIP No. [_____________]
	 

	 	ISIN No. [_____________]

FORD CREDIT FLOORPLAN MASTER OWNER TRUST A

SERIES 2011-2 ASSET BACKED NOTES, CLASS [A-[_]/B/C/D]

     Ford Credit Floorplan Master Owner Trust A (the “Trust” or the “Issuer”), a
Delaware statutory trust governed by the Second Amended and Restated Trust Agreement, dated as of
August 1, 2001, as amended and restated as of December 1, 2010, for value received, promises to pay
to CEDE & CO., or registered assigns, subject to the following provisions, the principal sum of
_____________________ Dollars, or such greater or lesser amount as determined in accordance with
the Indenture and the Indenture Supplement (each as defined on the reverse of this Class
[A-[__]/B/C/D] Note), on the September 2015 Payment Date (the “Series 2011-2 Final Maturity
Date”), except as otherwise provided below or in the Indenture or the Indenture Supplement.
Beginning on November 15, 2011 and on each subsequent Payment Date until the principal amount of
this Class [A-[__]/B/C/D] Note is paid in full, the Issuer will pay interest on the unpaid
principal amount of this Class [A-[__]/B/C/D] Note at an annual rate equal to [the sum of LIBOR
and] [__]% (the “Class [A-[__]/B/C/D] Note Interest Rate”), as determined pursuant to the
Indenture Supplement. Interest on this Class [A-[__]/B/C/D] Note will begin accruing from October
12, 2011 (the “Closing Date”) and will be payable in arrears on each Payment Date, computed
on the basis of a 360-day year [and the actual number of days elapsed] [consisting of twelve 30-day
months]. The principal of this Class [A-[__]/B/C/D] Note will be paid in the manner specified on
the reverse of this Class [A-[__]/B/C/D] Note.

     The principal of and interest on this Class [A-[__]/B/C/D] Note are payable in such currency
of the United States of America as at the time of payment is legal tender for payment of public and
private debts.

     Reference is made to the further provisions of this Class [A-[__]/B/C/D] Note set forth on the
reverse of this Class [A-[__]/B/C/D] Note, which will have the same effect as though fully set
forth on the face of this Class [A-[__]/B/C/D] Note.

     Unless the certificate of authentication on this Class [A-[__]/B/C/D] Note has been executed
by or on behalf of the Indenture Trustee, by manual signature, this Class [A-[__]/B/C/D] Note will
not be entitled to any benefit under the Indenture or the Indenture Supplement referred to on the
reverse of this Class [A-[__]/B/C/D] Note, or be valid for any purpose.

 

			
	1	 	Denominations of $100,000 and integral multiples of $1,000 in excess thereof.

A-2

 

     The Issuer has caused this Class [A-[__]/B/C/D] Note to be duly executed.

	 	 	 	 	 
	 	FORD CREDIT FLOORPLAN MASTER OWNER 
     TRUST A, as Issuer

 	 
	 	By:  	U.S. BANK TRUST NATIONAL ASSOCIATION,
 	 
	 	 	not in its individual capacity, but solely as Owner	 
	 	 	Trustee 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Dated: ________, _____

Indenture Trustee’s Certificate of Authentication

     This is one of the Class [A-[__]/B/C/D] Notes described in the within-mentioned Indenture.

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON,
     not in its individual capacity, but solely as

      Indenture Trustee

 	 
	 	By:  	 	 
	 	 	Responsible Person 	 
	 	 	 	 

A-3

 

	 	 	 	 	 

FORD CREDIT FLOORPLAN MASTER OWNER TRUST A

SERIES 2011-2 ASSET BACKED NOTES, CLASS [A-[__]/B/C/D]

Summary of Terms and Conditions

     This Class [A-[__]/B/C/D] Note is one of a duly authorized issue of Notes of the Issuer,
designated as the Series 2011-2 Asset Backed Notes (the “Notes”), issued under the Second
Amended and Restated Indenture, dated as of August 1, 2001, as amended and restated as of December
1, 2010 (as amended and supplemented, the “Indenture”), between the Issuer and The Bank of
New York Mellon, as indenture trustee (the “Indenture Trustee”), as supplemented by the
Series 2011-2 Indenture Supplement, dated as of October 1, 2011 (the “Indenture Supplement”
and, together with the Indenture, the “Series Agreement”), and representing the right to
receive certain payments from the Issuer. The Notes are subject to all of the terms of the Series
Agreement. All terms used in this Class [A-[__]/B/C/D] Note that are defined in the Series
Agreement have the meanings specified in the Series Agreement. In the event of any conflict or
inconsistency between the Series Agreement and this Class [A-[__]/B/C/D] Note, the Series Agreement
controls.

     The Class [A-[__]] Notes, in an initial aggregate principal amount of $___________, the Class
[A-[__]/B] Notes, in an initial aggregate principal amount of $___________, the Class [B/C/D]
Notes, in an initial aggregate principal amount of $_____________, and the Class [C/D] Notes, in an
initial aggregate principal amount of $_____________ will also be issued under the Series
Agreement. The rights of the holders of the Class A-1 and Class A-2 Notes rank pari passu with
respect to payments of interest and principal. The rights of the holders of the [Class B/Class C
and] Class D Notes to receive payments on the [Class B/Class C and] Class D Notes are subordinate
to the rights of the holders of the Class A-1, Class A-2 [Class B and Class C] Notes to receive
payments as specified in the Series Agreement.

     The Noteholder, by its acceptance of this Class [A-[__]/B/C/D] Note, agrees that it will look
solely to the property of the Issuer allocated to the payment of the Notes for payment under this
Class [A-[__]/B/C/D] Note and under the Series Agreement and that neither the Issuer nor the
Indenture Trustee is liable to the Noteholders for any amount payable under the Notes or the Series
Agreement or, except as provided in the Series Agreement, subject to any liability under the Series
Agreement.

     This Class [A-[__]/B/C/D] Note does not purport to summarize the Series Agreement and
reference is made to the Series Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced by this Class [A-[__]/B/C/D] Note, and the rights,
duties and immunities of the Indenture Trustee.

     The initial Note Balance of this Class [A-[__]/B/C/D] Note is $_____________. The Note
Balance of this Class [A-[__]/B/C/D] Note on any date of determination will be an amount equal to
(a) the initial Note Balance of this Class [A-[__]/B/C/D] Note, minus (b) the aggregate amount of
principal payments made to the Noteholders of this Class [A-[__]/B/C/D] Note on or before such
date.

A-4

 

     The Expected Final Payment Date is the September 2013 Payment Date, but principal with respect
to the Class [A-[__]/B/C/D] Notes may be paid earlier or later under certain circumstances
described in the Series Agreement. Payments of principal of the Notes will be payable in
accordance with the Series Agreement.

     Subject to the terms and conditions of the Series Agreement, the Depositors may, from time to
time, direct the Owner Trustee, on behalf of the Issuer, to issue one or more new Series of notes.

     On each Payment Date, the Note Paying Agent will pay to each Class [A-[__]/B/C/D] Noteholder
of record on the related Record Date (except for the final payment in respect of this Class
[A-[__]/B/C/D] Note) such Class [A-[__]/B/C/D] Noteholder’s pro rata share of the amounts held by
the Note Paying Agent that are allocated and available on such Payment Date to pay interest and
principal on the Class [A-[__]/B/C/D] Notes pursuant to the Indenture Supplement. Except as
provided in the Series Agreement with respect to a final payment, payments to the Noteholders will
be made (a) (i) if such Noteholder has provided the Note Registrar appropriate instructions at
least five Business Days before such Payment Date and the aggregate original principal amount of
such Noteholder’s Class [A-[__]/B/C/D] Notes is at least $1,000,000, by wire transfer in
immediately available funds to the account of such Noteholder or (ii) by check mailed first class,
postage prepaid to each Noteholder (at such Noteholder’s address as it appears in the Note
Register), except that with respect to any Notes registered in the name of the nominee of the
Clearing Agency, such distribution will be made in immediately available funds and (b) without
presentation or surrender of any Note or the making of any notation on such note. Final payment of
this Class [A-[__]/B/C/D] Note will be made only upon presentation and surrender of this Class
[A-[__]/B/C/D] Note at the office or agency specified in the notice of final payment delivered by
the Indenture Trustee to the Noteholders in accordance with the Series Agreement.

     This Class [A-[__]/B/C/D] Note does not represent an obligation of, or an interest in, Ford
Credit Floorplan Corporation or Ford Credit Floorplan LLC (the “Depositors”), Ford Motor
Credit Company LLC, Ford Motor Company or any Affiliate of any of them and is not insured or
guaranteed by any governmental agency or instrumentality.

     Each Noteholder, by accepting a Note, covenants and agrees that it will not at any time
institute against the Issuer or the Depositors, or join in instituting against the Issuer or the
Depositors, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings under any United States federal or state bankruptcy or similar law.

     Except as otherwise provided in the Indenture Supplement, the Class [A-[__]/B/C/D] Notes are
issuable only in minimum denominations of $100,000 and integral multiples of $1,000. The transfer
of this Class [A-[__]/B/C/D] Note will be registered in the Note Register upon surrender of this
Class [A-[__]/B/C/D] Note for registration of transfer at any office or agency maintained by the
Note Registrar accompanied by a written instrument of transfer, in a form satisfactory to the
Indenture Trustee or the Note Registrar, duly executed by the Class [A-[__]/B/C/D] Noteholder or
such Noteholder’s attorney, and duly authorized in writing with such signature guaranteed, and upon
such surrender one or more new Class [A-[__]/B/C/D] Notes in
any authorized denominations of like aggregate principal amount will be issued to the
designated transferee or transferees.

A-5

 

     As provided in the Series Agreement and subject to certain limitations forth in the Series
Agreement, Class [A-[__]/B/C/D] Notes are exchangeable for new Class [A-[__]/B/C/D] Notes in any
authorized denominations and of like aggregate principal amount, upon surrender of such Notes to be
exchanged at the office or agency of the Note Registrar. No service charge may be imposed for any
such exchange but the Issuer or Note Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with such exchange.

     The Issuer, the Depositors, the Indenture Trustee and any agent of the Issuer, the Depositors
or the Indenture Trustee will treat the person in whose name this Class [A-[__]/B/C/D] Note is
registered as the owner of this Class [A-[__]/B/C/D] Note for all purposes, and none of the Issuer,
the Depositors, the Indenture Trustee or any agent of the Issuer, the Depositors or the Indenture
Trustee will be affected by notice to the contrary.

     The holder of this Class [A-[__]/B/C/D] Note, by its acceptance of this Class [A-[__]/B/C/D]
Note, and the owner of a beneficial interest in this Class [A-[__]/B/C/D] Note, by its acceptance
of such beneficial interest, covenant and agree that (a) they will not at any time institute
against the Issuer or the Depositors, or join in instituting against the Issuer or the Depositors,
any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture, the Indenture Supplement or any of the other
related transaction documents and (b) if any Depositor becomes a debtor or debtor in possession in
a case under any applicable United States federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect or otherwise subject to any insolvency, reorganization, liquidation,
rehabilitation or other similar proceedings, any claim that the holders of the Notes of any Series
may have at any time against the Issuer’s assets allocated in accordance with the Indenture to any
Series unrelated to such Notes, and any claim that the holders of such Notes have at any time
against the Depositors that they may seek to enforce against such Issuer’s assets allocated to any
unrelated Series, will be subordinate to the payment in full (including post-petition interest) of
the claims of the holders of any Notes of such unrelated Series and of the holders of any other
notes, bonds, contracts or other obligations relating to such unrelated Series.

     The holder of this Class [A-[__]/B/C/D] Note, by acceptance of this Class [A-[__]/B/C/D] Note,
and each holder of a beneficial interest therein, agree to treat the Class [A-[__]/B/C/D] Notes as
indebtedness of the Issuer for applicable United States federal, state and local income and
franchise tax purposes.

     THIS CLASS [A-[__]/B/C/D] NOTE IS TO BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER ARE TO BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

A-6

 

Assignment

     Social Security or other identifying number of assignee________________________

     FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto

 

 

 

 

(name and address of assignee)

the within note and all rights under such note, and irrevocably constitutes and appoints
___________________________, attorney, to transfer such note on the books kept for registration of
such note, with full power of substitution in the premises.

	 	 	 

	Dated: ___________________

	 	____________________________________1
	 
	 	 
	 

	 	Signature Guaranteed:
	 
	 	 
	 

	 	___________________________________

 

			
	1	 	NOTE: The signature to this assignment must
correspond with the name of the registered owner as it appears on the face of
the within Note in every particular, without alteration, enlargement or any
change whatsoever.

A-7

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

Exhibit B

Form of Monthly Investor Report

B-1

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

	 	 	 
	Contents	 	Pages
	          Trust Summary
	 	1 — 5
	20__-__
	 	6 — 8

Trust Summary

	 	 	 	 	 
	 	 	Trust Total	 
	I. Principal Receivables
	 	 	 	 
	 
	 	 	 	 
	A. Beginning Adjusted Pool Balance
	 	$	 	 
	 
	 	 	 	 
	B. Principal Collections
	 	$	 	 
	C. Principal Adjustments
	 	$	 	 
	D. Principal Reduction — Redesignated Accounts
	 	$	 	 
	E. Defaulted Receivables
	 	$	 	 
	F. New Principal Receivables
	 	$	 	 
	G. Principal Increase — Additional Accounts
	 	$	 	 
	H. Net Deposits / (Withdrawals) to the Excess Funding Account
	 	$	 	 
	 
	 	 	 	 
	Ending Adjusted Pool Balance (A-B-C-D-E+F+G+H)
	 	$	 	 
	 
	 	 	 	 
	Monthly Principal Payment Rate
	 	 	%	 
	 
	 	 	 	 
	 
	 	Trust Total
	 
	 	 	 
	II. Interest Collections
	 	 
	 
	 	 	 	 
	Gross Interest Collections
	 	$	 	 
	Interest Adjustments
	 	$	 	 
	Recoveries
	 	$	 	 
	Interest Earned on Collection Account
	 	$	 	 
	Interest Earned on Excess Funding Account
	 	$	 	 
	Interest Earned on Backup Servicer Reserve Account
	 	$	 	 
	 
	 	 	 	 
	Interest Collections
	 	$	 	 
	 
	 	 	 	 
	Memo: Monthly Yield
	 	 	%	 
	 
	 	 	 	 
	 
	 	Trust Total
	 
	 	 	 
	III. Principal Collections
	 	 
	 
	 	 	 	 
	Principal Collections
	 	$	 	 

1

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

IV. Series

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Beg of Period	 	 	 	 	 	 	End of Period	 	 	 	 	 	 	Payment Date	 
	 	 	Adjusted Invested	 	 	Increase/	 	 	Adjusted Invested	 	 	Increase/	 	 	Adjusted Invested	 
	Series	 	Amount	 	 	(Decrease)	 	 	Amount	 	 	(Decrease)	 	 	Amount	 
	20_-__
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	20_-__
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Depositor Amt.
	 	$	 	 	 	 	 	 	 	$	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	 	 	 	 	 	 	 	$	 	 	 	 	 	 	 	 	 	 

V. Principal and Interest

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Floating Investor	 	 	Investor Principal	 	 	Investor Interest	 
	Series	 	Percentage	 	 	Collections	 	 	Collections	 
	20_-__
	 	 	 	%	 	$	 	 	 	$	 	 
	20_-__
	 	 	 	%	 	$	 	 	 	$	 	 
	Depositor Pct.
	 	 	 	%	 	$	 	 	 	$	 	 
	 
	 	 	 	%	 	$	 	 	 	$	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Memo
	 	 	 	 	 	 	 	 	 	 	 	 
	Excess Depositor Percentage
	 	 	 	 	 	 	 	 	 	 	 	%
	Excess Depositor Collection
	 	 	 	 	 	$	 	 	 	$	 	 
	Depositor Servicing Fee
	 	 	 	 	 	 	 	 	 	$	 	 
	Depositor Backup Servicing Fee
	 	 	 	 	 	 	 	 	 	$	 	 

VI. Redesignated Accounts — Reassigned

	 	 	 	 	 
	 	 	Trust Total	 
	Principal Reduction — Receivables relating to accounts
(including Performance Impaired Accounts) that were
reassigned by the Issuer to the Depositor
	 	$	 	 

VII. Excess Funding Account/Backup Servicer Reserve Account

	 	 	 	 	 

	Beginning Period Balance
	 	$	 	 
	Net Deposits / (Withdrawals)
	 	$	 	 
	Ending Period Balance
	 	$	 	 
	Determination Date balance before giving effect to Payment Date Cahsflows
	 	$	 	 
	Determination Date balance after giving effect to Payment Date Cashflows
	 	$	 	 
	Backup Servicer Reserve Account
	 	$	 	 
	Memo
	 	 	 	 
	Excess Funding Account as a pct. of aggregate Adjusted Invested Amount
	 	 	 	%
	Interest Earned on Excess Funding Account
	 	$	 	 

2

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

VIII. Non-Conforming Receivables

	 	 	 	 	 
	 	 	Trust Total	 
	Ineligible Receivables
	 	 	 	 
	Dealer Overconcentration
	 	 	 	 
	Manufacturer Overconcentration (>6% of pool balance) a\
	 	 	 	 
	Manufacturer Overconcentration (2% to 6% of pool balance) b\
	 	 	 	 
	Used Vehicle Overconcentration c\
	 	 	 	 
	Medium and Heavy Truck Overconcentration
	 	 	 	 
	Development Dealer Overconcentration
	 	 	 	 
	Fleet Overconcentration
	 	 	 	 
	Non-Conformting Receivable Amount
	 	 	 	 
	 
	 	 	 	 
	Memo
	 	 	 	 
	 
	 	 	 	 
	Principal Receivables relating to Vehicles on Used Lines
	 	$	 	 
	Principal Receivables relating to Vehicles on Used Lines as a pct. of Pool Bal.
	 	 	%	 
	Principal Receivables relating to AutoNation
	 	$	 	 
	Principal Receivables relating to AutoNation as a pct. of Pool Bal.
	 	 	%	 
	Principal Receivables relating to Development Dealers
	 	$	 	 
	Principal Receivables relating to Development Dealers as a pct. of Pool Bal.
	 	 	%	 
	Principal Receivables relating to Fleet
	 	$	 	 
	Principal Receivables relating to Fleet as a pct. of Pool Bal.
	 	 	%	 
	Principal Receivables relating to New and Used Medium Heavy Truck Lines
	 	$	 	 
	Principal Receivables relating to New and Used Medium Heavy Truck Lines as a pct. of Pool Bal.
	 	 	%	 
	Principal Receivables relating to Program Vehicles d\
	 	$	 	 
	Principal Receivables relating to Program Vehicles as a pct. of Pool Bal.
	 	 	%	 

 

			
	a\	 	Non-Conforming Receivables Amount for Series with a 6% Manufacturer Overconcentration
Threshold (Series 20_-__ , 20_-__)
	 
	b\	 	Non-Conforming Receivables Amount for Series with a 2% Manufacturer Overconcentration
Threshold (Series 20_-__, 20_-__)
	 
	c\	 	Includes receivables related to vehicles on Used Lines and Program Lines
	 
	d\	 	Primarily off-lease vehicles purchased by a dealer at a Ford Credit approved auction.
Program lines are separate from Used Lines

3

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

IX. Subordination and Depositor Amount as of Determination Date

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Subordinated Pct.	 	 	Incremental	 	 	Required	 
	 	 	 	 	 	 	times (Adj. Invested	 	 	Subordinated	 	 	Subordinated	 
	 	 	Subordinated	 	 	Amount minus EFA)	 	 	Amount	 	 	Amount	 
	Series	 	Pct.	 	 	(A)	 	 	(B)	 	 	(B)	 
	20-__-__
	 	 	 	%	 	$	 	 	 	$	 	 	 	$	 	 
	20__-__
	 	 	 	%	 	$	 	 	 	$	 	 	 	$	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Required Pool Pct.	 	 	 	 	 	 	 	 
	 	 	Required	 	 	minus 100% times	 	 	Required Depositor	 	 	 	 	 
	 	 	Subordinated	 	 	Initial Invested	 	 	Amount as of	 	 	 	 	 
	 	 	Amount	 	 	Amount	 	 	Determination Date	 	 	 	 	 
	 	 	(C)	 	 	(D)	 	 	(C+D)	 	 	 	 	 
	Series
	 	$	 	 	 	$	 	 	 	$	 	 	 	 	 	 
	20__-__
	 	$	 	 	 	$	 	 	 	$	 	 	 	 	 	 
	20__-__
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Required Depositor Amount
	 	 	 	 	 	 	 	 	 	$	 	 	 	 	 	 
	Depositor Amount
	 	 	 	 	 	 	 	 	 	$	 	 	 	 	 	 
	 
	Memo: Determination Date
Pool Balance
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	 	 

X. Redesignation Notice

     Notice is hereby given, pursuant to Section 2.7(b)(i) of the Fifth Amended and Restated
Sale and Servicing Agreement dated as of December 1, 2010, that the redesignation of certain
Account and the reassignment of the Receivables and Related Security arising in connection with
such Accounts occurred on the Redesignation Date of __/__/20__, and a Redesignated Account Schedule
has been delivered to the Owner Trustee and the Indenture Trustee in accordance with the Sale and
Servicing Agreements.

	 	 	 	 	 
	 	 	 	 	Redesignated Accounts
	Depositor	 	Trust	 	Yes	 	No
	Ford Credit Floorplan Corporation

	 	Ford Credit Floorplan Master Owner Trust A	 	 
	Ford Credit Floorplan LLC

	 	Ford Credit Floorplan Master Owner Trust A	 	 

1

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

XI. Early Amortization Declarations

Yes                No

1. Breach of covenants or agreements made in the SSA, Indent. Or Supp. And uncured for 60 days

2. Failure to make any req. pmt. or deposit under SSA, Indent. or Supp. and uncured for 5 bus. days

3. Breach of any rep. or warranty made in the SSA, Indent. or Supp. and uncured for 60 days

4. Bankruptcy, insolvency or receivership of Ford Credit, FCFMOTA or Ford

5. FCFMOTA is an investment company within the meaning of the ICA of 1940

6. Failure of FCF Corp or FCF LLC to convey Receiv. pursuant to the SSA and uncured for 10 days

7. Available Sub. Amt. is less than the Required Sub. Amt. and uncured for 5 days

8. Servicer default or an event of default with respect to the outstanding notes has occurred

9. Average monthly payment rate for the past three periods is less than 21%

10. Excess Funding Acct. Bal. exceeds 30% of Outstanding Series Adj. Inv. Amts. for 3 periods

Memo

Additional statistical information regarding Ford Credit’s U.S. Dealer Floorplan portfolio and the
Trust’s portfolio for the most recently available quarter can be found on Ford Credit’s website at
http://fordcredit.com/institutionalinvestments/jindex.html.

2

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

Series 20
— Summary

I. 20__—— Origination Information

	 	 	 

	Date of Origination:

	 	_____________, 20__
	Expected Final Maturity Date:

	 	_____________, 20__
	Final Maturity Date:

	 	_____________, 20__

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Beginning of Period	 	 	 	 	 	 	End of Period	 	 	 	 	 	 	Payment Date	 
	 	 	Adjusted Invested	 	 	Increase /	 	 	Adjusted	 	 	Increase /	 	 	Adjusted	 
	 	 	Amount	 	 	(Decrease)	 	 	Invested Amount	 	 	(Decrease)	 	 	Invested Amount	 
	Class __
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Class __
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 
	Class __
	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 	 	$	 	 

II. Series Allocations

	 	 	 	 	 

	Current Floating Investor Percentage
	 	%	 	 
	Investor Principal Collections
	 	$	 	 
	Principal Default Amounts
	 	$	 	 
	Investor Interest Collections
	 	$	 	 

III. Collections

	 	 	 	 	 

	Interest
	 	 	 	 
	Investor Interest Collections
	 	$	 	 
	Reserve Fund Investment Proceeds
	 	$	 	 
	Accumulation Period Reserve Account Release
	 	$	 	 
	Accumulation Period Reserve Account Investment Proceeds
	 	$	 	 
	Principal Funding Account Investment Proceeds
	 	$	 	 
	Excess Depositor Interest Allocation
	 	$	 	 
	 
	 	 	 	 
	Available Investor Interest Collections
	 	$	 	 
	Shared Interest Collections from Excess Interest Sharing Group One
	 	$	 	 
	Available Subordination Draw
	 	$	 	 
	Reserve Fund Draw
	 	$	 	 
	Reallocated Principal Allocations
	 	$	 	 
	 
	 	 	 	 
	Total Interest Collections
	 	$	 	 
	 
	 	 	 	 
	Principal
	 	 	 	 
	Investor Principal Collections
	 	$	 	 
	Investor Default Amount, Investor Charge-Off and Reallocated Principal Collections
	 	$	 	 
	Shared Principal Collections from Principal Sharing Group One (Withdrawal from EFA)
	 	$	 	 
	Reserve Fund Draw
	 	$	 	 
	 
	 	 	 	 
	Available Investor Principal Collections
	 	$	 	 

3

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

IV. Interest Calculations

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Class __ Notes	 	 	Class __ Notes	 	 	Class __ Notes	 
	Original Principal Outstanding
	 	$	 	 	 	$	 	 	 	$	 	 
	LIBOR
	 	 	 	%	 	 	 	%	 	 	 	%
	Spread
	 	 	 	%	 	 	 	%	 	 	 	%
	Note Interest Rate
	 	 	 	%	 	 	 	%	 	 	 	%
	Days in Interest Period
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Monthly Interest
	 	$	 	 	 	$	 	 	 	$	 	 

V. Available Investor Interest Collections Distribution Payments by Priority

	 	 	 	 	 

	Total Interest Amount
	 	$	 	 
	 
	 	 	 	 
	(1) Accrued Note Interest — Class __ Notes
	 	$	 	 
	(2) Accrued Note Interest — Class __ Notes
	 	$	 	 
	(3) Accrued Note Interest — Class __ Notes
	 	$	 	 
	(4) Unpaid Fees and Disbursements to Owner/Indenture Trustee up to a max of $150,000.00 per year
	 	$	 	 
	(5) Current and past due Back-up Servicing Fee or Servicing Fee if Ford Credit is no longer Servicer
	 	$	 	 
	(6) Investor Default Amount, to be added to Principal Collections
	 	$	 	 
	(7) Replenish Reserve Fund
	 	$	 	 
	(8) Investor Chargeoffs not previously reimbursed, to be added to Principal Collections
	 	$	 	 
	(9) Reallocated Principal Collections not previously reimbursed, to be added to Principal Collections
	 	$	 	 
	(10) Fund Accumulation Period Reserve Account
	 	$	 	 
	(11) Servicing Fees due Ford Credit
	 	$	 	 
	(12) Required Subordination Shortfall to be sent to holders of Depositor Interest
	 	$	 	 
	(13) Unpaid Fees and Disbursements to Owner/Indenture Trustee pursuant to clause (ii)
	 	$	 	 
	(14) Other Amounts due to Back-up Servicer or Successor Servicer
	 	$	 	 
	(15) Shared with other series in Excess Interest Sharing Group One
	 	$	 	 
	(16) Remainder released to holders of Depositor Interest
	 	$	 	 

VI. Available Investor Principal Collections Distribution Payments by Priority

	 	 	 	 	 

	Available Investor Principal Collections
	 	$	 	 
	Deposit to Principal Funding Account
	 	$	 	 
	Shared with other series in Principal Sharing Group One
	 	$	 	 
	Remainder released to holders of Depositor Interest
	 	$	 	 

VII. Subordination and Participation

	 	 	 	 	 

	Subordination Percentage
	 	 	 	%
	Incremental Subordinated Amount
	 	$	 	 
	Required Subordinated Amount
	 	$	 	 
	Required Pool Pct. minus 100% times Initial Invested Amount
	 	$	 	 
	Required Depositor Amount Series 20__—__
	 	$	 	 

4

 

Ford Credit Floorplan Master Owner Trust A

Monthly Servicing Report

	 	 	 

	Collection Period

	 	__/__/20__-__/__/20__
	Payment Date

	 	__/__/20__

VIII. Distribution to Holders of Notes

(per $1,000 denomination note)

	 	 	 	 	 

	Total Amount Allocable to Principal Class __
	 	$	 	 
	Total Amount Allocable to Interest Class __
	 	$	 	 
	Total Amount Distributed to Class __
	 	$	 	 
	 
	 	 	 	 
	Total Amount Allocable to Principal Class __
	 	$	 	 
	Total Amount Allocable to Interest Class __
	 	$	 	 
	Total Amount Distributed to Class __
	 	$	 	 
	 
	 	 	 	 
	Total Amount Allocable to Principal Class __
	 	$	 	 
	Total Amount Allocable to Interest Class __
	 	$	 	 
	Total Amount Distributed to Class __
	 	$	 	 

IX. Reserve Fund

	 	 	 	 	 

	Beginning of Collection Period Balance
	 	$	 	 
	Reserve Fund Draw
	 	$	 	 
	Increases/(Decreases)
	 	$	 	 
	End of Collection Period Balance
	 	$	 	 
	Increases/(Decreases)
	 	$	 	 
	Payment Date Balance
	 	$	 	 

X. Memo Items

	 	 	 	 	 

	Excess Funding Amount Series 20__—__
	 	$	 	 
	Accumulation Period Reserve Account Balance
	 	$	 	 
	Controlled Accumulation Amount — This Period
	 	$	 	 
	Controlled Accumulation Amount — Cumulative
	 	$	 	 

5ex4-1.htm

Exhibit 4.1

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

 

DATED AS OF OCTOBER 7, 2011

 

BETWEEN

 

NORTH AMERICAN ENERGY PARTNERS INC.

 

AND

 

CIBC MELLON TRUST COMPANY

 

AS RIGHTS AGENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

 

SHAREHOLDER RIGHTS PLAN AGREEMENT dated as of October 7, 2011, between North American Energy Partners Inc. (the “Corporation”), a corporation existing under the laws of Canada, and CIBC Mellon Trust Company, a company existing under the laws of Canada (the “Rights Agent”);

 

WHEREAS:

 

	
  

	
(a)

	
the Board of Directors of the Corporation, in the exercise of its fiduciary duties, has determined that it is advisable and in the best interests of the Corporation to adopt a shareholder rights plan (the “Rights Plan”) to ensure, to the extent possible, that all shareholders of the Corporation are treated fairly in connection with any take-over bid for the Corporation;

 

	
  

	
(b)

	
in order to implement the adoption of the Rights Plan, effective October 7, 2011 the Board of Directors authorized:

 

	
  

	
(i)

	
the issuance of one Right effective the Record Time in respect of each Common Share outstanding at the Record Time; and

 

	
  

	
(ii)

	
the issuance of one Right in respect of each Common Share issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time;

 

	
  

	
(c)

	
each Right entitles the holder thereof, after the Separation Time, to purchase securities of the Corporation pursuant to the terms and subject to the conditions set forth in this Agreement;

 

	
  

	
(d)

	
the Corporation has appointed the Rights Agent to act on behalf of the Corporation and the holders of Rights, and the Rights Agent has agreed to act on behalf of the Corporation in connection with the issuance, transfer, exchange and replacement of Rights Certificates, the exercise of Rights and other matters referred to in this Agreement; and

 

 

  

  

  

 

 

	
  

	
(e)

	
capitalized terms used above without definition have the meanings given to such terms in Article 1 of this Agreement;

 

NOW THEREFORE, in consideration of the premises and the respective agreements set forth herein, the Corporation and the Rights Agent agree as follows:

 

ARTICLE 1

INTERPRETATION

 

	
1.1

	
Certain Definitions

 

For purposes of this Agreement, the following terms have the meanings indicated;

 

	
  

	
(a)

	
“Acquiring Person” means any Person who is the Beneficial Owner of 20% or more of the outstanding Voting Shares; provided, however, that the term “Acquiring Person” shall not include:

 

	
  

	
(i)

	
the Corporation or any Subsidiary of the Corporation;

 

	
  

	
(ii)

	
any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of one or any combination of:

 

	
  

	
(A)

	
a Voting Share Reduction,

 

	
  

	
(B)

	
a Permitted Bid Acquisition,

 

	
  

	
(C)

	
an Exempt Acquisition,

 

	
  

	
(D)

	
a Convertible Security Acquisition, or

 

	
  

	
(E)

	
a Pro Rata Acquisition;

 

	
  

	 	

provided, however, that if a Person becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares by reason of one or any combination of (A), (B), (C), (D) or (E) above and thereafter becomes the Beneficial Owner of additional Voting Shares in an amount greater than 1% of the outstanding Voting Shares (other than pursuant to one or any combination of (A), (B), (C), (D) or (E) above), then as of the date such Person becomes the Beneficial Owner of such additional Voting Shares, such Person shall become an “Acquiring Person”;

 

 

  

-2-

  

 

 

	
  

	
(iii)

	
for a period of 10 days after the Disqualification Date (as defined below), any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of such Person becoming disqualified from relying on Clause (e)(iii)(B) of the definition of “Beneficial Owner” solely because such Person makes or proposes to make a Take-over Bid, either alone or by acting jointly or in concert with any other Person (for the purposes of this definition, “Disqualification Date” means the first date of public announcement that any Person is making or has announced an intention to make a Takeover Bid, either alone, through such Person’s Affiliates or Associates or by acting jointly or in concert with any other Person, and includes, without limitation, a report filed pursuant to Section 102.1 of the Securities Act);

 

	
  

	
(iv)

	
an underwriter or member of a banking or selling group that becomes the Beneficial Owner of Voting Shares in connection with a distribution of securities of the Corporation, which includes, without limitation, a distribution of securities pursuant to a prospectus or by way of private placement; or

 

	
  

	
(v)

	
a Person (a “Grandfathered Person”) who is the Beneficial Owner of 20% or more of the outstanding Voting Shares determined as at the close of business on October 7, 2011, provided, however, that this exception shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that (i) such Grandfathered Person shall, after the close of business on October 7, 2011, become the Beneficial Owner of any additional Voting Shares in an amount greater than 1% to the outstanding Voting Shares, other than through one or any combination of a Permitted Bid Acquisition, an Exempt Acquisition, a Voting Share Reduction, a Pro Rata Acquisition or a Convertible Security Acquisition or (ii) such Grandfathered Person shall, after the close of  business on October 7, 2011, cease to be the Beneficial Owner of 20% or more of the outstanding Voting Shares.

 

 

  

-3-

  

 

 

	
  

	
(b)

	
“Affiliate”, when used to indicate a relationship with a Person, means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person.

 

	
  

	
(c)

	
“Agreement” means this shareholder rights plan agreement, as the same may be amended or supplemented from time to time; “hereof”, “herein”, “hereto” and similar expressions mean and refer to this Agreement as a whole and not to any particular part of this Agreement.

 

	
  

	
(d)

	
“Associate”, when used to indicate a relationship with a specified Person, means (i) a spouse of that Person, (ii) any Person of the same or opposite sex with whom that Person is living in a conjugal relationship outside marriage, (iii) a child of that Person or (iv) a relative of that Person or of a Person mentioned in items (i), (ii) or (iii) of this definition if that relative has the same residence as that Person.

 

	
  

	
(e)

	
A Person shall be deemed the “Beneficial Owner” of, to have “Beneficial Ownership” of, and to “Beneficially Own”:

 

	
  

	
(i)

	
any securities as to which such Person or any of such Person’s Affiliates or Associates is the owner at law or in equity;

 

	
  

	
(ii)

	
any securities as to which such Person or any of such Person’s Affiliates or Associates has the right to become the owner at law or in equity (whether such right is exercisable immediately or within a period of 60 days thereafter and whether or not on condition or the happening of any contingency) pursuant to any agreement, arrangement, pledge or understanding, whether or not in writing (other than (A) customary agreements with and between underwriters and/or banking group members and/or selling group members in connection with a distribution of securities of the Corporation and (B) pledges of securities in the ordinary course of business), or upon the exercise of any conversion right, exchange right, share purchase right (other than the Rights), warrant or option; and

 

 

  

-4-

  

 

 

	
  

	
(iii)

	
securities which are Beneficially Owned within the meaning of Clauses 1.1(e)(i) or (ii) by any other Person with whom such Person is acting jointly or in concert;

 

	
 

	
provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to have “Beneficial Ownership” of, or to “Beneficially Own”, any security because:

 

	
  

	
(A)

	
the holder of such security has agreed pursuant to a Permitted Lock-up Agreement to deposit or tender such security to a Take-over Bid made by such Person, made by any of such Person’s Affiliates or Associates or made by any other Person acting jointly or in concert with such Person, or such security has been deposited or tendered pursuant to any Take-over Bid made by such Person, made by any of such Person’s Affiliates or Associates or made by any other Person acting jointly or in concert with such Person, until such deposited or tendered security has been taken up or paid for, whichever shall first occur;

 

	
  

	
(B)

	
such Person, any of such Person’s Affiliates or Associates or any other Person acting jointly or in concert with such Person holds such security provided that:

 

	
  

	
(1)

	
the ordinary business of any such Person (the “Investment Manager”) includes the management of mutual funds or other investment funds for others (which others, for greater certainty, may include or be limited to one or more employee benefit plans or pension plans) and the Investment Manager holds such security in the ordinary course of such business in the performance of such Investment Manager’s duties for the account of any other Person (a “Client”), including nondiscretionary accounts held on behalf of a Client by a broker or dealer registered under applicable law,

 

 

  

-5-

  

 

 

	
  

	
(2)

	
such Person (the “Trust Company”) is licensed to carry on the business of a trust company under applicable laws and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons (each an “Estate Account”) or in relation to other accounts (each an “Other Account”) and holds such security in the ordinary course of such duties for the estate of any such deceased or incompetent Person or for such other accounts,

 

	
  

	
(3)

	
such Person is established by statute for purposes that include, and the ordinary business or activity of such Person (the “Statutory Body”) includes, the management of investment funds for employee benefit plans, pension plans, insurance plans or various public bodies, and the Statutory Body holds such security in the ordinary course of and for the purposes of its activities as such,

 

	
  

	
(4)

	
such Person is a Crown agent or agency (a “Crown Agent”), or

 

	
  

	
(5)

	
such Person (the “Administrator”) is the administrator or trustee of one or more pension funds or plans (a “Plan”) or is a Plan registered under the laws of Canada or any province thereof or the laws of the United States of America or any State thereof, and the Administrator holds such security in the ordinary course of and for the purposes of its activities as such;

 

	
  

	 	

provided, in any of the above cases, that the Investment Manager, the Trust Company, the Statutory Body, the Crown Agent, the Administrator or the Plan, as the case may be, (i) is not then making a Take-over Bid or has not then announced an intention to make a Takeover Bid, other than an Offer to Acquire Voting Shares or other securities by means of a distribution by the Corporation or by means of ordinary market transactions (including prearranged trades) executed through the facilities of a stock exchange or organized over-the-counter market, in each case, alone or by acting jointly or in concert with any other Person and (ii) has not filed (x) an Early Warning Report pursuant Section 102.1 of the Securities Act, (y) a Schedule 13D under the United States Securities Exchange Act of 1934, as then in effect, or (z) any other similar filing, in each case with respect to such security;

 

 

 

 

-6-

 

 

 

 

	
  

	
(C)

	
such Person is (1) a Client of the same Investment Manager as another Person on whose account the Investment Manager holds such security, (2) an Estate Account or an Other Account of the same Trust Company as another Person on whose account the Trust Company holds such security or (3) a Plan with the same Administrator as another Plan on whose account the Administrator holds such security;

 

	
  

	
(D)

	
such Person is the registered holder of securities solely as the result of carrying on the business of or acting as a nominee of a securities depositary;

 

	
  

	
(E)

	
such Person is (1) a Client of an Investment Manager and such security is owned at law or in equity by the Investment Manager, (2) an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company or (3) a Plan and such security is owned at law or in equity by the Administrator of the Plan; or

 

	
  

	
(F)

	
such security having been deposited or tendered pursuant to a Take-over Bid made by such Person or any of such Person’s Affiliates or Associates or any other Person referred to in Clause (iii) of this definition until the earlier of such deposited or tendered security being accepted unconditionally for payment or exchange or being taken up and paid for.

 

  

-7-

  

 

	
  

	
(f)

	
“Board of Directors” means the board of directors of the Corporation.

 

	
  

	
(g)

	
“Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in the City of Calgary, Alberta, are authorized or obligated by law to close.

 

	
  

	
(h)

	
“Canadian Dollar Equivalent” of any amount, which is expressed in United States dollars means, on any date, the Canadian dollar equivalent of such amount determined by multiplying such amount by the U.S. – Canadian Exchange Rate in effect on such date.

 

	
  

	
(i)

	
“Canadian – U.S. Exchange Rate” means, on any date, the inverse of the U.S. – Canadian Exchange Rate in effect on such date.

 

	
  

	
(j)

	
“Close of Business” on any given date means the time on such date (or, if such date is not a Business Day, the time on the next succeeding Business Day) at which the principal transfer office in the City of Calgary, Alberta of the transfer agent for the Common Shares (or, after the Separation Time, the principal transfer office in Calgary, Alberta of the Rights Agent) is closed to the public.

 

	
  

	
(k)

	
“Common Shares” means voting common shares in the capital of the Corporation, as such shares may be subdivided, consolidated, reclassified or otherwise changed from time to time.

 

	
  

	
(l)

	
“Competing Permitted Bid” means a Take-over Bid that:

 

	
  

	
(i)

	
is made after a Permitted Bid or another Competing Permitted Bid has been made and prior to the expiry of that Permitted Bid or Competing Permitted Bid (in this definition, the “Prior Bid”);

 

	
  

	
(ii)

	
satisfies all the provisions of the definition of a Permitted Bid, other than the requirement set out in Clause (ii) and (iv) of the definition of Permitted Bid; and

 

 

  

-8-

  

 

 

	
  

	
(iii)

	
contains, and the take-up and payment for securities tendered or deposited thereunder are subject to, irrevocable and unqualified conditions that:

 

	
  

	
(A)

	
no Voting Shares shall be taken up or paid for pursuant to such Take-over Bid (x) prior to the Close of Business on a date that is not earlier than the later of the last day on which the Take-over Bid must be open for acceptance after the date of such Take-over Bid under applicable Canadian provincial securities legislation and the earliest date on which Voting Shares may be taken up or paid for under any Prior Bid, and (y) then only if, at the time that such Voting Shares are first taken up or paid for, more than 50% of the then outstanding Voting Shares held by Independent Shareholders have been deposited or tendered pursuant to such Take-over Bid and not withdrawn provided that if the Takeover Bid is for less than all of the outstanding Voting Shares, no Voting Shares will be taken up or paid for pursuant to the Take-over Bid prior to the end of the 10 Business Day period referenced in 1.1(l)(iii)(B); and

 

	
  

	
(B)

	
in the event that the requirement set forth in Subclause (iii)(A)(y) of this definition is satisfied, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of Common Shares for not less than ten Business Days from the date of such public announcement;

 

	
  

	 	
provided always that a Competing Permitted Bid will cease to be a Competing Permitted Bid at any time when such bid ceases to meet any of the provisions of this definition and provided that, at such time, any acquisition of Voting Shares made pursuant to such Competing Permitted Bid, including any acquisitions of Voting Shares theretofore made, will cease to be a Permitted Bid Acquisition.

 

	
  

	
(m)

	
A Person is “controlled” by another Person if:

 

 

  

-9-

  

 

 

	
  

	
(i)

	
in the case of a corporation:

 

	
  

	
(A)

	
securities entitled to vote in the election of directors carrying more than 50 per cent of the votes for the election of directors are held, directly or indirectly, by or for the benefit of the other Person; or

 

	
  

	
(B)

	
the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such corporation; or

 

	
  

	
(ii)

	
in the case of a Person that is not a corporation, more than 50% of the voting or equity interests of such entity are held, directly or indirectly, by or on behalf of the Person or Persons;

 

	
 

	
and “controls”, “controlling” and “under common control with” shall be interpreted accordingly.

 

	
  

	
(n)

	
“Convertible Securities” means, at any time, any securities issued by the Corporation from time to time (other than the Rights) carrying any purchase, exercise, conversion or exchange right pursuant to which the holder thereof may acquire Voting Shares or other securities which are convertible into, exercisable into or exchangeable for Voting Shares (in each case, whether such right is exercisable immediately or after a specified period and whether or not on condition or the happening of any contingency).

 

	
  

	
(o)

	
“Convertible Security Acquisition” means the acquisition by a Person of Voting Shares upon the exercise of Convertible Securities received by such Person pursuant to a Permitted Bid Acquisition, Exempt Acquisition or a Pro Rata Acquisition.

 

	
  

	
(p)

	
“Co-Rights Agents” has the meaning ascribed thereto in Subsection 4.1(a).

 

	
  

	
(q)

	
“Corporations Act” means the Canada Business Corporations Act, as amended, and the regulations made thereunder, and any comparable or successor laws or regulations thereto.

 

 

  

-10-

  

 

 

	
  

	
(r)

	
“Disposition Date” has the meaning ascribed thereto in Subsection 5.2(c).

 

	
  

	
(s)

	
“Election to Exercise” has the meaning ascribed thereto in Clause 2.2(d)(ii).

 

	
  

	
(t)

	
“Exempt Acquisition” means a Voting Share acquisition or a Convertible Securities Acquisition (i) in respect of which the Board of Directors has waived the application of Section 3.1 pursuant to the provisions of Section 5.2, (ii) pursuant to a distribution of Voting Shares or Convertible Securities (and the conversion or exchange of such Convertible Securities) made by the Corporation pursuant to a prospectus or private placement provided that the Person does not acquire a greater percentage of the securities offered in the distribution than the percentage of Voting Shares owned by that Person immediately prior to the distribution, (iii) pursuant to an amalgamation, arrangement or other statutory procedure requiring Shareholder Approval, (iv) pursuant to a distribution of Voting Shares or Convertible Securities (and the exercise of such Convertible Securities) pursuant to any equity incentive stock plan of the Corporation where the eligible participants include directors, employees (including officers) and consultants of the Corporation, (v) pursuant to such other written agreements in respect of a Voting Share acquisition from treasury entered into by the Corporation after the date hereof, provided that the Person does not acquire a greater percentage of the securities offered in that distribution than the percentage of Voting Shares owned by that Person immediately prior to such distribution, or (vi) pursuant to the exercise of Rights.

 

	
  

	
(u)

	
“Exercise Price” means, as of any date from and after the Separation Time, the price at which a holder may purchase the securities issuable upon exercise of one whole Right which, subject to adjustment in accordance with the terms hereof, shall be an amount equal to five times the Market Price per Common Share determined as at the Separation Time.

 

	
  

	
(v)

	
“Expansion Factor” has the meaning ascribed thereto in Clause 2.3(a)(x).

 

 

  

-11-

  

 

 

	
  

	
(w)

	
“Expiration Time” means the close of business on that date that is the earliest of (i) the Termination Time, and (ii) the date of termination of this Agreement pursuant to Section 5.17 or, if this Agreement is confirmed pursuant to Section 5.17, the date of termination of this Agreement pursuant to Section 5.18 or, if this Agreement is reconfirmed pursuant to Section 5.18 at the third and sixth annual meetings of shareholders following the meeting at which this Agreement is confirmed pursuant to Section 5.17, upon the conclusion of the Corporation’s annual meeting of shareholders in 2020.

 

	
  

	
(x)

	
“Flip-in Event” means a transaction in or pursuant to which any Person becomes an Acquiring Person.

 

	
  

	
(y)

	
“Grandfathered Person” has the meaning ascribed thereto in Section 1.1(a)(v).

 

	
  

	
(z)

	
“Holder” has the meaning ascribed thereto in Section 2.8.

 

	
  

	
(aa)

	
“Independent Shareholders” shall mean holders of Voting Shares, other than:

 

	
  

	
(i)

	
any Acquiring Person;

 

	
  

	
(ii)

	
any Offeror;

 

	
  

	
(iii)

	
any Affiliate or Associate of any Acquiring Person or Offeror;

 

	
  

	
(iv)

	
any Person acting jointly or in concert with any Acquiring Person or Offeror; and

 

	
  

	
(v)

	
any employee benefit plan, deferred profit sharing plan, stock participation plan and any other similar plan or trust for the benefit of employees of the Corporation unless the beneficiaries of the plan or trust direct the manner in which the Voting Shares are to be voted or direct whether the Voting Shares are to be tendered to a Take-over Bid.

 

 

  

-12-

  

 

 

	
  

	
(bb)

	
“Market Price” per security of any securities on any date of determination shall mean the average of the daily closing prices per share of such securities (determined as described below) on each of the 20 consecutive Trading Days through and including the Trading Day immediately preceding such date; provided, however, that if an event of a type analogous to any of the events described in Section 2.3 shall have caused the closing prices used to determine the Market Price on any Trading Days not to be fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day, each such closing price so used shall be appropriately adjusted in a manner analogous to the adjustment provided for in Section 2.3 or as the Board of Directors shall otherwise determine in order to make it fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day. The closing price per security of any securities on any date shall be:

 

	
  

	
(i)

	
the closing board lot sale price or, in case no such sale takes place on such date, the average of the closing bid and asked prices for each of such securities as reported by the principal exchange (being either a  Canadian stock exchange or a national United States securities exchange) on which such securities are listed or admitted to trading (as determined by the Board of Directors);

 

	
  

	
(ii)

	
if for any reason none of such prices is available on such day or the securities are not listed or admitted to trading on a Canadian stock exchange or a national United States securities exchange, the last sale price or, in case no sale takes place on such date, the average of the high bid and low asked prices for each of such securities in the over-the-counter market, as quoted by any reporting system then in use (as determined by the Board of Directors); or

 

	
  

	
(iii)

	
if for any reason none of such prices is available on such day or the securities are not listed or admitted to trading on a Canadian stock exchange or a national United States securities exchange or quoted by any such reporting system, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the securities selected by the Board of Directors;

 

 

  

-13-

  

 

 

	
  

	 	
provided, however, that if for any reason none of such prices is available on such day, the closing price per share of such securities on such date means the fair value per share of such securities on such date as determined by a nationally or internationally recognized firm of investment dealers or investment bankers selected by the Board of Directors and provided further that if an event of a type analogous to any of the events described in Section 2.3 hereof shall have caused any price used to determine the Market Price on any Trading Day not to be fully comparable with the price as so determined on the Trading Day immediately preceding such date of determination, each such price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in order to make it fully comparable with the price on the Trading Day immediately preceding such date of determination. The Market Price shall be expressed in Canadian dollars and, if initially determined in respect of any day forming part of the 20 consecutive Trading Day period in question in United States dollars, such amount shall be translated into Canadian dollars on such date at the Canadian Dollar Equivalent thereof.

 

	
  

	
(cc)

	
“Nominee” has the meaning ascribed thereto in Subsection 2.2(c).

 

	
  

	
(dd)

	
“Offer to Acquire” includes:

 

	
  

	
(i)

	
an offer to purchase or a solicitation of an offer to sell Voting Shares or Convertible Securities; and

 

	
  

	
(ii)

	
an acceptance of an offer to sell Voting Shares or Convertible Securities, whether or not such offer to sell has been solicited;

 

	
  

	 	
or any combination thereof, and the Person accepting an offer to sell shall be deemed to be making an Offer to Acquire to the Person that made the offer to sell.

 

 

  

-14-

  

 

 

	
  

	
(ee)

	
“Offeror” means a Person who has announced a current intention to make or who is making a Take-over Bid, but only to the extent such announced intention or Take-over Bid has not been withdrawn or terminated or has not expired;

 

	
  

	
(ff)

	
“Offeror’s Securities” means Voting Shares Beneficially Owned by an Offeror on the date of the Offer to Acquire.

 

	
  

	
(gg)

	
“Permitted Bid” means a Take-over Bid made by an Offeror by way of take-over bid circular which also complies with the following provisions:

 

	
  

	
(i)

	
the Take-over Bid is made to all holders of Voting Shares, other than the Offeror;

 

	
  

	
(ii)

	
the Take-over Bid contains, and the take-up and payment for securities tendered or deposited is subject to, an irrevocable and unqualified provision that no Voting Shares will be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date which is not less than 60 days following the date of the Take-over Bid and only if at such date more than 50% of the Voting Shares held by Independent Shareholders shall have been deposited or tendered pursuant to the Take-over Bid and not withdrawn provided that if the Take-over Bid is for less than all of the outstanding Voting Shares, no Voting Shares will be taken up or paid for pursuant to the Take-over Bid prior to the end of the 10 Business Day period referenced in 1.1(gg)(iv);

 

	
  

	
(iii)

	
unless the Take-over Bid is withdrawn, the Take-over Bid contains an irrevocable and unqualified provision that Voting Shares may be deposited pursuant to such Take-over Bid at any time during the period of time described in Clause 1.1(gg)(ii) and that any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn until taken up and paid for; and

 

	
  

	
(iv)

	
the Take-over Bid contains an irrevocable and unqualified provision that in the event the deposit condition set forth in Clause 1.1(gg)(ii) is satisfied, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of Voting Shares for not less than 10 Business Days from the date of such public announcement;

 

 

  

-15-

  

 

 

	
  

	 	
provided always that a Permitted Bid will cease to be a Permitted Bid at any time when such bid ceases to meet any of the provisions of this definition and provided that, at such time, any acquisition of Voting Shares made pursuant to such Permitted Bid, including any acquisition of Voting Shares theretofore made, will cease to be a Permitted Bid Acquisition.

 

	
  

	
(hh)

	
“Permitted Bid Acquisition” means an acquisition of Voting Shares made pursuant to a Permitted Bid or a Competing Permitted Bid.

 

	
  

	
(ii)

	
“Permitted Lock-up Agreement” means an agreement between a Person and one or more holders of Voting Shares or Convertible Securities (each a “Locked-up Person”) (the terms of which are publicly disclosed and a copy of which is made available to the public (including the Corporation) not later than the date the Lock-up Bid (as defined below) is publicly announced or, if the Lock-up Bid has been made prior to the date on which such agreement is entered into, forthwith, and in any event not later than the date of such agreement), pursuant to which each such Locked-up Person agrees to deposit or tender Voting Shares or Convertible Securities (or both) to a Take-over Bid (the “Lock-up Bid”) made or to be made by the Person or any of such Person’s Affiliates or Associates or any other Person referred to in Clause (iii) of the definition of Beneficial Owner; provided that:

 

	
  

	
(i)

	
the agreement:

 

	
  

	
(A)

	
permits the Locked-up Person to terminate its obligation to deposit or tender, and permits the Locked-up Person to withdraw if already deposited or tendered, the Voting Shares or Convertible Securities (or both) from the Lock-up Bid in order to tender or deposit such securities to another Take-over Bid or to support another transaction that represents a price or value of consideration for each Voting Share or Convertible Security that exceeds the price or value of consideration represented or proposed to be represented by the Lock-up Bid; or

 

 

  

-16-

  

 

 

	
  

	
(B)

	
(1)

	
permits the Locked-up Person to terminate its obligation to deposit or tender, and permits the Locked-up Person to withdraw if already deposited or tendered, the Voting Shares or Convertible Securities (or both) from the Lock-up Bid in order to tender or deposit the Voting Shares or Convertible Securities to another Take-over Bid, or to support another transaction that provides for a price or value of consideration for each Voting Share or Convertible Security that exceeds by as much as or more than a specified amount (the “Specified Amount”) the price or value of consideration for each Voting Share or Convertible Security contained in or proposed to be contained in, and is made for at least the same number of Voting Shares or Convertible Securities as, the Lock-up Bid; and

 

	
  

	
(2)

	
does not by its terms provide for a Specified Amount that is greater than 7% over the price or value of consideration for each Voting Share or Convertible Security contained in or proposed to be contained in the Lockup Bid;

 

	
  

	 	
and, for greater clarity, the agreement may contain a right of first refusal or permit a period of delay to give such Person an opportunity to at least match a higher price or value of consideration in another Take-over Bid and may provide for any other similar limitation on a Locked-up Person’s right to withdraw Voting Shares or Convertible Securities (or both) from the agreement, as long as the Locked-Up Person can accept another bid or tender to another transaction; and

 

 

  

-17-

  

 

 

	
  

	
(ii)

	
no “break-up” fees, “top-up” fees, penalties, expenses or other amounts that exceed in the aggregate the greater of:

 

	
  

	
(A)

	
the cash equivalent of 21⁄2% of the price or value payable under the Lock-up Bid to a Locked-up Person; and

 

	
  

	
(B)

	
50% of the amount by which the price or value payable under another Take-over Bid or transaction to a Locked-up Person exceeds the price or value of the consideration that such Locked-up Person would have received under the Lockup Bid,

 

	
  

	 	
is payable by a Locked-up Person pursuant to the agreement in the event a Locked-up Person fails to deposit or tender Voting Shares or Convertible Securities (or both) to the Lock-up Bid, withdraws Voting Shares or Convertible Securities (or both) previously tendered thereto or supports another transaction.

 

	
  

	
(jj)

	
“Person” includes any individual, firm, partnership, association, trust, body corporate, corporation, unincorporated organization, syndicate, governmental entity or other entity.

 

	
  

	
(kk)

	
“Pro Rata Acquisition” means an acquisition by a Person of Voting Shares or Convertible Securities pursuant to:

 

	
  

	
(i)

	
a stock dividend, stock split or other event in respect of securities of the Corporation of one or more particular classes or series pursuant to which such Person becomes the Beneficial Owner of Voting Shares or Convertible Securities on the same pro rata basis as all other holders of securities of the particular class, classes or series;

 

 

  

-18-

  

 

 

	
  

	
(ii)

	
the acquisition or the exercise by the Person of only those rights to purchase Voting Shares distributed to that Person in the course of a distribution to all holders of securities of the Corporation of one or more particular classes or series pursuant to a rights offering (other than the Rights) or pursuant to a prospectus provided that the Person does not thereby acquire a greater percentage of such Voting Shares, or securities convertible into or exchangeable for Voting Shares, so offered than the Person’s percentage of Voting Shares owned immediately prior to such acquisition; or

 

	
  

	
(iii)

	
a distribution of Voting Shares, or securities convertible into or exchangeable for Voting Shares (and the conversion or exchange of such convertible or exchangeable securities), made pursuant to a prospectus or by way of a private placement, provided that the Person does not thereby acquire a greater percentage of such Voting Shares, or securities convertible into or exchangeable for Voting Shares, so offered than the Person’s percentage of Voting Shares Beneficially Owned immediately prior to such acquisition.

 

	
  

	
(ll)

	
“Record Time” means the close of business on October 21, 2011.

 

	
  

	
(mm)

	
“Redemption Price” has the meaning ascribed thereto in Subsection 5.1(a).

 

	
  

	
(nn)

	
“Right” means a right to purchase a Common Share upon the terms and subject to the conditions set forth in this Agreement.

 

	
  

	
(oo)

	
“Rights Certificate” means the certificates representing the Rights after the Separation Time, which shall be substantially in the form attached hereto as Attachment I.

 

	
  

	
(pp)

	
“Rights Register” has the meaning ascribed thereto in Subsection 2.6(a).

 

 

  

-19-

  

 

 

	
  

	
(qq)

	
“Securities Act” means the Securities Act (Ontario), as amended from time to time, and the regulations thereunder, and any comparable or successor laws or regulations thereto.

 

	
  

	
(rr)

	
“Separation Time” shall mean the close of business on the tenth Trading Day after the earlier of:

 

	
  

	
(i)

	
the Stock Acquisition Date;

 

	
  

	
(ii)

	
the date of the commencement of or first public announcement of the intent of any Person (other than the Corporation or any Subsidiary of the Corporation) to commence a Take-over Bid (other than a Permitted Bid or a Competing Permitted Bid); and

 

	
  

	
(iii)

	
the date upon which a Permitted Bid or Competing Permitted Bid ceases to be such;

 

	
  

	 	
or, in the case of clauses (ii) and (iii) of this definition, such later date as may be determined by the Board of Directors; provided that if any such Take-over Bid expires, is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid shall be deemed, for the purposes of this provision, never to have been made.

 

	
  

	
(ss)

	
“Shareholder Approval” means approval by a majority of the votes cast by the holders of Voting Shares at a meeting called and held in accordance with applicable laws and the articles and by-laws of the Corporation or a written resolution approved by holders of a majority of the outstanding Voting Shares excluding, in all cases, Voting Shares held by Persons who are not Independent Shareholders.

 

	
  

	
(tt)

	
“Stock Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 102.1 of the Securities Act or Section 13(d) of the United States Securities Exchange Act of 1934, as then in effect) by the Corporation or an Acquiring Person that an Acquiring Person has become such.

 

 

  

-20-

  

 

 

	
  

	
(uu)

	
A corporation shall be deemed to be a “Subsidiary” of another corporation if:

 

	
  

	
(i)

	
it is controlled by:

 

	
  

	
(A)

	
that other;

 

	
  

	
(B)

	
that other and one or more corporations each of which is controlled by that other; or

 

	
  

	
(C)

	
two or more corporations each of which is controlled by that other; or

 

	
  

	
(ii)

	
it is a Subsidiary of a corporation that is that other’s Subsidiary.

 

	
  

	
(vv)

	
“Take-over Bid” means an Offer to Acquire, where the Voting Shares subject to the Offer to Acquire, together with (i) the Voting Shares into which securities subject to the Offer to Acquire are convertible and (ii) the Offeror’s Securities, constitute in the aggregate 20% or more of the outstanding Voting Shares at the date of the Offer to Acquire.

 

	
  

	
(ww)

	
“Termination Time” shall mean the time at which the right to exercise Rights shall terminate pursuant to Section 5.1(d) hereof.

 

	
  

	
(xx)

	
“Trading Day”, when used with respect to any securities, means a day on which the principal securities exchange (as determined by the Board of Directors) on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any securities exchange, a Business Day.

 

 

  

-21-

  

 

 

	
  

	
(yy)

	
“U.S. – Canadian Exchange Rate” means, on any date:

 

	
  

	
(i)

	
if on such date the Bank of Canada sets an average noon spot rate of exchange for the conversion of one United States dollar into Canadian dollars, such rate; and

 

	
  

	
(ii)

	
in any other case, the rate for such date for the conversion of one United States dollar into Canadian dollars calculated in such manner as may be determined by the Board of Directors from time to time acting in good faith.

 

	
  

	
(zz)

	
“U.S. Dollar Equivalent” of any amount, which is expressed in Canadian dollars means, on any date, the United States dollar equivalent of such amount determined by multiplying such amount by the Canadian – U.S. Exchange Rate in effect on such date.

 

	
  

	
(aaa)

	
“Voting Share Reduction” means an acquisition or redemption by the Corporation of Voting Shares or any other transaction which, by reducing the number of Voting Shares outstanding, increases the proportionate number of Voting Shares Beneficially Owned by any person to 20% or more of the Voting Shares then outstanding.

 

	
  

	
(bbb)

	
“Voting Shares” shall mean the Common Shares of the Corporation and any other shares in the capital of the Corporation entitled to vote generally in the election of all directors.

 

	
1.2

	
Currency

 

All sums of money, which are referred to in this Agreement are expressed in lawful money of Canada, unless otherwise specified.

 

	
1.3

	
Headings

 

The division of this Agreement into Articles, Sections, Subsections, Clauses, Paragraphs, Subparagraphs or other portions hereof and the insertion of headings, subheadings and a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

 

 

  

-22-

  

 

 

	
1.4

	
Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares

 

For purposes of this Agreement, the percentage of Voting Shares Beneficially Owned by any Person, shall be and be deemed to be the product (expressed as a percentage) determined by the formula:

 

	
  

	
100 x A/B

	
 

 

	
  

	
where:

	
 

 

	
  

	
A =

	
the number of votes for the election of all directors generally attaching to the Voting Shares Beneficially Owned by such Person; and

 

	
  

	
B =

	
the number of votes for the election of all directors generally attaching to all outstanding Voting Shares.

 

For the purposes of the foregoing formula, where any Person is deemed to Beneficially Own unissued Voting Shares, such Voting Shares shall be deemed to be outstanding for the purpose of calculating the percentage of Voting Shares Beneficially Owned by such Person in both the numerator and the denominator, but no other unissued Voting Shares which may be acquired shall, for the purposes of that calculation, be deemed to be outstanding.

 

	
1.5

	
Acting Jointly or in Concert

 

For the purposes of this Agreement, a Person is acting jointly or in concert with another Person only if the second Person, as a result of any agreement, arrangement, or understanding, whether formal or informal, with the first Person or any Associate or Affiliate thereof, acquires or offers to acquire Voting Shares (other than (A) customary agreements with and between underwriters and/or banking group members and/or selling group members with respect to a distribution of securities by way of prospectus or private placement; or (B) pledges of securities in the ordinary course of business).

 

 

  

-23-

  

 

 

ARTICLE 2

THE RIGHTS

 

	
2.1

	
Issuance and Evidence of Holdings of Rights

 

One Right in respect of each Common Share outstanding at the Record Time and each Common Share which may be issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time shall be issued in accordance with the terms hereof. Notwithstanding the foregoing, one Right in respect of each Common Share issued after the Record Time upon the exercise of rights pursuant to Convertible Securities outstanding at the Record Time may be issued after the Separation Time but prior to the Expiration Time.

 

Certificates representing Common Shares which are issued after the date of this Agreement but prior to the earlier of the Separation Time and the Expiration Time shall also evidence one Right for each Common Share represented thereby and shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

 

	
 

	
“Until the Separation Time (as defined in the Shareholder Rights Agreement referred to below), this certificate also evidences and entitles to holder hereof to certain Rights described in a Shareholder Rights Plan Agreement dated as of October 7, 2011 (the “Shareholder Rights Agreement”) between North American Energy Partners Inc. (the “Corporation”) and CIBC Mellon Trust Company (the “Rights Agent”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Corporation.  Under certain circumstances set out in the Shareholder Rights Agreement, the rights may expire, may be amended or redeemed, may become null and void or may be evidenced by separate certificates and no longer evidenced by this certificate. The Corporation will mail or arrange for the mailing of a copy of the Shareholder Rights Agreement to the holder of this certificate without charge as soon as practicable, after the receipt of a written request therefor.”

 

 

  

-24-

  

 

 

Certificates representing Common Shares that are issued and outstanding at the Record Time shall evidence one Right for each Common Share represented thereby, notwithstanding the absence of the foregoing legend, until the close of business on the earlier of the Separation Time and the Expiration Time.

 

Registered holders of Common Shares who have not received a share certificate and are entitled to do so on the earlier of the Separation Time and the Expiration Time shall be entitled to Rights as if such certificates had been issued and such Rights shall for all purposes hereof be evidenced by the corresponding entries on the Corporation’s securities register for common shares.

 

	
2.2

	
Exercise of Rights; Detachment of Rights

 

	
  

	
(a)

	
Subject to adjustment as herein set forth and subject to Section 3.1(1) hereof, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (which Exercise Price and number of Common Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by the Corporation or any of its Subsidiaries shall be void.

 

	
  

	
(b)

	
Until the Separation Time:

 

	
  

	
(i)

	
the Rights shall not be exercisable and no Right may be exercised; and

 

	
  

	
(ii)

	
each Right will be evidenced by the certificate for the associated Common Share registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share.

 

	
  

	
(c)

	
From and after the Separation Time and prior to the Expiration Time:

 

	
  

	
(i)

	
the Rights shall be exercisable; and

 

	
  

	
(ii)

	
the registration and transfer of Rights shall be separate from and independent of the Common Shares.

 

 

  

-25-

  

 

 

	
 

	

Promptly following the Separation Time, the Corporation will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)) at such holder’s address as shown by the records of the Corporation (the Corporation hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

 

	
  

	
(x)

	
a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or with any rule or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage; and

 

	
  

	
(y)

	
a disclosure statement describing the Rights,

 

	
 

	

provided that a Nominee shall be sent the materials provided for in (x) and (y) in respect of all Common Shares held of record by it which are not Beneficially Owned by an Acquiring Person.

 

	
  

	
(d)

	
Rights may be exercised, in whole or in part, on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent:

 

	
  

	
(i)

	
the Rights Certificate evidencing such Rights;

 

	
  

	
(ii)

	
an election to exercise such Rights (an “Election to Exercise”) substantially in the form attached to the Rights Certificate appropriately completed and executed by the holder or his executors or administrators or other personal representatives or his or their legal attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Rights Agent; and

 

 

  

-26-

  

 

 

	
  

	
(iii)

	
payment by certified cheque, banker’s draft or money order payable to the order of the Rights Agent, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being exercised.

 

	
  

	
(e)

	
Upon receipt of a Rights Certificate, together with a duly completed Election to Exercise executed in accordance with Clause 2.2(d)(ii), which does not indicate that such Right is null and void as provided by Subsection 3.1(b), and payment as set forth in Clause 2.2(d)(iii), the Rights Agent (unless otherwise instructed by the Corporation in the event that the Corporation is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon promptly:

 

	
  

	
(i)

	
requisition from the transfer agent for the Common Shares certificates representing the number of such Common Shares to be purchased (the Corporation hereby irrevocably agreeing to authorize its transfer agent to comply with all such requisitions);

 

	
  

	
(ii)

	
when appropriate, requisition from the Corporation the amount of cash to be paid in lieu of issuing fractional Common Shares;

 

	
  

	
(iii)

	
after receipt of the certificates referred to in Clause 2.2(e)(i), deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder;

 

 

  

-27-

  

 

 

	
  

	
(iv)

	
after receipt of the certificates referred to in Clause 2.2(e)(i), deliver any cash referred to in Clause 2.2(e)(ii) to or to the order of the registered holder of such Rights Certificate; and

 

	
  

	
(v)

	
tender to the Corporation all payments received on exercise of the Rights.

 

	
  

	
(f)

	
In case the holder of any Rights exercises less than all the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.6(a)) will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns.

 

	
  

	
(g)

	
The Corporation covenants and agrees that it will:

 

	
  

	
(i)

	
take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Common Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered and fully paid and non-assessable.

 

	
  

	
(ii)

	
take all such actions as may be necessary and within its power to comply with the requirements of the Corporations Act, the Securities Act and the securities laws or comparable legislation of each of the provinces of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights;

 

	
  

	
(iii)

	
use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the stock exchanges on which such Common Shares were traded immediately prior to the Stock Acquisition Date;

 

	
  

	
(iv)

	
cause to be reserved and kept available out of the authorized and unissued Common Shares, the number of Common Shares that, as provided in this Agreement, will from time to time be sufficient to permit the exercise in full of all outstanding Rights;

 

 

  

-28-

  

 

 

	
  

	
(v)

	
pay when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Corporation to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, or certificates for Common Shares to be issued upon exercise of any Rights, provided that the Corporation shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised; and

 

	
  

	
(vi)

	
after the Separation Time, except as permitted by the provisions hereof, not take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

 

	
2.3

	
Adjustments to Exercise Price; Number of Rights

 

The Exercise Price, the number and kind of securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 2.3.

 

	
  

	
(a)

	
In the event the Corporation at any time after the Separation Time and prior to the Expiration Time:

 

	
  

	
(i)

	
declares or pays a dividend on Common Shares payable in Common Shares (or capital stock or other securities exchangeable for or convertible into or giving a right to acquire Common Shares or other capital stock) other than pursuant to any optional stock dividend program, dividend reinvestment plan or a dividend payable in Voting Shares in lieu of a regular periodic cash dividend;

 

 

  

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(ii)

	
subdivides or changes the then outstanding Common Shares into a greater number of Common Shares;

 

	
  

	
(iii)

	
consolidates or changes the then outstanding Common Shares into a smaller number of Common Shares; or

 

	
  

	
(iv)

	
otherwise issues any Common Shares (or other securities exchangeable for or convertible into or giving a right to acquire Common Shares) in respect of, in lieu of or in exchange for existing Common Shares in a reclassification, amalgamation, merger, statutory arrangement, or consolidation,

 

	
  

	 	
the Exercise Price, the number of Rights outstanding and the securities purchasable upon exercise of the Rights shall be adjusted as of the record or effective date as follows:

 

	
  

	
(x)

	
the Exercise Price in effect after such adjustment will be equal to the Exercise Price in effect immediately prior to such adjustment divided by the number of Common Shares (the “Expansion Factor”) that a holder of one Common Share immediately prior to such dividend, subdivision, change, consolidation or issuance would hold thereafter as a result thereof (assuming the exercise of any such exchange, conversion or acquisition rights); and

 

	
  

	
(y)

	
each Right held prior to such adjustment shall become that number of Rights equal to the Expansion Factor;

 

	
  

	
 

	
and the adjusted number of Rights will be deemed to be allocated among the Common Shares with respect to which the original Rights were associated (if they remain outstanding) and the shares issued in respect of such dividend, subdivision, change, consolidation or issuance, so that each such Common Share will have exactly one Right associated with it.

 

 

  

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To the extent that any such exchange, conversion or acquisition rights are not exercised prior to the expiration thereof, the Exercise Price shall be readjusted to the Exercise Price which would be in effect, based on the number of Common Shares actually issued on the exercise of such rights.

 

	
  

	
 

	
In the event the Corporation at any time after the Record Time and prior to the Separation Time issues any Common Shares (or other securities exchangeable for or convertible into or giving a right to acquire Common Shares), each such Common Share shall automatically have one new Right associated with it, which Right shall be evidenced by the certificate representing such associated Common Share.

 

	
  

	
(b)

	
If, after the Record Time and prior to the Separation Time, the Corporation shall issue any shares of capital stock other than Common Shares (or other securities exchangeable for or convertible into or giving a right to acquire shares of any such capital stock) in a transaction of a type described in Clause 2.3(a)(i) or (iv), the shares of such capital stock shall be treated herein as nearly equivalent to Common Shares to the extent practicable and appropriate under the circumstances, as determined by the Board of Directors, and the shares purchasable upon exercise of Rights shall be adjusted as necessary such that the shares purchasable upon exercise of each Right after such adjustment will be the shares that a holder of the shares purchasable upon exercise of one Right immediately prior to such issuance would hold thereafter as a result of such issuance. Notwithstanding Section 5.5, the Corporation and the Rights Agent are authorized and agree to amend this Agreement in order to give effect to the foregoing.

 

 

  

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(c)

	
In the event that at any time after the Record Time and prior to the Expiration Time there shall occur:

 

	
  

	
(i)

	
a reclassification or redesignation of the Common Shares or any change of the Common Shares into other shares (other than as the result of an event described in Subsection 2.3(a));

 

	
  

	
(ii)

	
a consolidation, merger or amalgamation of the Corporation with or into another body corporate (other than a consolidation, merger or amalgamation which does not result in a reclassification of the Common Shares or a change of the Common Shares into other shares); or

 

	
  

	
(iii)

	
the transfer of all or substantially all of the assets of the Corporation to any other Person;

 

	
  

	
 

	
a holder of a Right shall thereafter be entitled to receive and shall accept upon exercise of such Right, in lieu of the number of Common Shares to which such holder was entitled to acquire upon such exercise, the kind and amount of shares and/or other securities or property which such holder would have been entitled to receive as a result of such occurrence if, on the effective date thereof, such holder had been the holder of the number of Common Shares to which such holder was then entitled upon exercise of such Right. The Corporation shall take all necessary steps so that holders of Rights shall thereafter be entitled to acquire such shares and/or other securities or property, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this Section 2.3.

 

	
  

	
(d)

	
Notwithstanding anything herein to the contrary, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent in the Exercise Price; provided, however, that any adjustments which by reason of this Subsection 2.3(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 2.3 shall be made to the nearest cent or to the nearest ten-thousandth of a share. Any adjustment required by this Section 2.3 shall be made no later than the earlier of:

 

 

  

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(i)

	
three years from the date of the transaction which gives rise to such adjustment; and

 

	
  

	
(ii)

	
the Expiration Time.

 

	
  

	
(e)

	
Irrespective of any adjustment or change in the Exercise Price or the number of Common Shares issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Exercise Price per Common Share and the number of Common Shares which were expressed in the initial Rights Certificates issued hereunder.

 

	
  

	
(f)

	
In any case in which this Section 2.3 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Corporation may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of Common Shares and other securities of the Corporation, if any, issuable upon such exercise over and above the number of Common Shares and other securities of the Corporation, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Corporation shall deliver to such holder an appropriate instrument evidencing such holder’s right to receive such additional shares (fractional or otherwise) or other securities upon the occurrence of the event requiring such adjustment.

 

	
  

	
(g)

	
Notwithstanding anything contained in this Section 2.3 to the contrary, the Corporation shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this Section 2.3, as and to the extent that in their good faith judgment the Board of Directors shall determine to be advisable, in order that any:

 

 

  

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(i)

	
consolidation or subdivision of Common Shares;

 

	
  

	
(ii)

	
issuance (wholly or in part for cash) of Common Shares or securities that by their terms are convertible into or exchangeable for Common Shares;

 

	
  

	
(iii)

	
stock dividends; or

 

	
  

	
(iv)

	
issuance of rights, options or warrants, hereafter made by the Corporation to holders of its Common Shares,

 

	
  

	
 

	
shall not be taxable to such shareholders.

 

	
  

	
(h)

	
Whenever an adjustment to the Exercise Price or a change in the securities purchasable upon exercise of the Rights is made pursuant to this Section 2.3, the Corporation shall promptly and in any event, where such change or adjustment occurs prior to the Separation Time, not later than the Separation Time:

 

	
  

	
(i)

	
file with the Rights Agent and with each transfer agent for the Common Shares a certificate specifying the particulars of such adjustment or change; and

 

	
  

	
(ii)

	
cause notice of the particulars of such adjustment or change to be given to the holders of the Rights.

 

	
  

	
 

	
Failure to file such certificate or to cause such notice to be given as aforesaid, or any defect therein, shall not affect the validity of such adjustment or change.

 

	
  

	
(i)

	
The Corporation covenants and agrees that, after the Separation Time, it will not, except as permitted by the provisions hereof, take (or permit any Subsidiary of the Corporation to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

 

	
2.4

	
Date on Which Exercise Is Effective

 

Each Person in whose name any certificate for Common Shares or other securities, if applicable, is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Common Shares or other securities, if applicable, represented thereon, and such certificate shall be dated the date upon which the Rights Certificate evidencing such Rights was duly surrendered in accordance with Subsection 2.2(d) (together with a duly completed Election to Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer taxes and other governmental charges payable by the exercising holder hereunder) was made; provided, however, that if the date of such surrender and payment is a date upon which the Common Share transfer books of the Corporation are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Common Share transfer books of the Corporation are open.

 

 

  

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2.5

	
Execution, Authentication, Delivery and Dating of Rights Certificates

 

	
  

	
(a)

	
The Rights Certificates shall be executed on behalf of the Corporation by its Chief Executive Officer, Chief Financial Officer or any director under the corporate seal of the Corporation reproduced thereon. The signature of any of these individuals on the Rights Certificates may be manual or facsimile. Rights Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Corporation shall bind the Corporation, notwithstanding that such individuals or any of them have ceased to hold such offices either before or after the countersignature and delivery of such Rights Certificates.

 

	
  

	
(b)

	
Promptly after the Corporation learns of the Separation Time, the Corporation will notify the Rights Agent of such Separation Time and will deliver Rights Certificates executed by the Corporation to the Rights Agent for countersignature and disclosure statements describing the Rights, and the Rights Agent shall manually countersign (in a manner satisfactory to the Corporation) and send such Rights Certificates to the holders of the Rights pursuant to Subsection 2.2(c) hereof. No Rights Certificate shall be valid for any purpose until countersigned by the Rights Agent as aforesaid.

 

	
  

	
(c)

	
Each Rights Certificate shall be dated the date of countersignature thereof.

 

 

  

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2.6

	
Registration, Transfer and Exchange

 

	
  

	
(a)

	
After the Separation Time, the Corporation will cause to be kept a register (the “Rights Register”) in which, subject to such reasonable regulations as it may prescribe, the Corporation will provide for the registration and transfer of Rights. The Rights Agent is hereby appointed registrar for the Rights (the “Rights Registrar”) for the purpose of maintaining the Rights Register for the Corporation and registering Rights and transfers of Rights as herein provided and the Rights Agent hereby accepts such appointment. In the event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have the right to examine the Rights Register at all reasonable times.

 

	
  

	
 

	
After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate, and subject to the provisions of Subsection 2.6(c), the Corporation shall execute, and the Rights Agent shall manually countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered.

 

	
  

	
(b)

	
All Rights issued upon any registration of transfer or exchange of Rights Certificates shall be the valid obligations of the Corporation, and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of transfer or exchange.

 

	
  

	
(c)

	
Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Corporation or the Rights Agent, as the case may be, duly executed by the holder thereof or such holder’s attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate under this Section 2.6, the Corporation or the Rights Agent may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Rights Agent) connected therewith.

 

 

  

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2.7

	
Mutilated, Destroyed, Lost and Stolen Rights Certificates

 

	
  

	
(a)

	
If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, the Corporation shall execute and the Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so surrendered.

 

	
  

	
(b)

	
If there shall be delivered to the Corporation and the Rights Agent prior to the Expiration Time:

 

	
  

	
(i)

	
evidence to their reasonable satisfaction of the destruction, loss or theft of any Rights Certificate; and

 

	
  

	
(ii)

	
such security or indemnity as may be reasonably required by each of them in their sole discretion to save each of them and any of their agents harmless;

 

	
  

	
 

	
then, in the absence of notice to the Corporation or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Corporation shall execute and upon the Corporation’s request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or stolen.

 

	
  

	
(c)

	
As a condition to the issuance of any new Rights Certificate under this Section 2.7, the Corporation or the Rights Agent may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Rights Agent) connected therewith.

 

 

  

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(d)

	
Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence an original additional contractual obligation of the Corporation, whether or not the destroyed, lost or stolen Rights Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Agreement equally and proportionately with any and all other Rights, duly issued hereunder.

 

	
2.8

	
Persons Deemed Owners of Rights

 

The Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and treat the Person, in whose name a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby for all purposes whatsoever. In this Agreement, unless the context otherwise requires, the term “holder” of any Right means the registered holder of such Right (or, prior to the Separation Time, the associated Common Share).

 

	
2.9

	
Delivery and Cancellation of Certificates

 

All Rights Certificates surrendered upon exercise or for redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Rights Agent, be delivered to the Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent. The Corporation may at any time deliver to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which the Corporation may have acquired in any manner whatsoever, and all Rights Certificates so delivered shall be promptly cancelled by the Rights Agent. No Rights Certificate shall be countersigned in lieu of or in exchange for any Rights Certificates cancelled as provided in this Section 2.9, except as expressly permitted by this Agreement. The Rights Agent shall, subject to applicable laws, destroy all cancelled Rights Certificates and deliver a certificate of destruction to the Corporation on request.

 

 

  

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2.10

	
Agreement of Rights Holders

 

Every holder of Rights, by accepting the same, consents and agrees with the Corporation and the Rights Agent and with every other holder of Rights that:

 

	
  

	
(a)

	
such holder of Rights shall be bound by and subject to the provisions of this Agreement, as amended from time to time in accordance with the terms hereof, in respect of all Rights held;

 

	
  

	
(b)

	
prior to the Separation Time, each Right will be transferable only together with, and will be transferred by a transfer of, the associated Common Share certificate representing such Right;

 

	
  

	
(c)

	
after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as provided herein;

 

	
  

	
(d)

	
prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) for registration of transfer, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and treat the Person in whose name the Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on such Rights Certificate or the associated Common Share certificate made by anyone other than the Corporation or the Rights Agent) for all purposes whatsoever, and neither the Corporation nor the Rights Agent shall be affected by any notice to the contrary;

 

	
  

	
(e)

	
such holder of Rights has waived his right to receive any fractional Rights or any fractional shares or other securities upon exercise of a Right (except as provided herein);

 

 

  

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(f)

	
subject to the provisions of Section 5.5, without the approval of any holder of Rights or Voting Shares and upon the sole authority of the Board of Directors, this Agreement may be supplemented or amended from time to time to cure any ambiguity or to correct or supplement any provision contained herein which may be inconsistent with the intent of this Agreement or is otherwise defective, as provided here; and

 

	
  

	
(g)

	
notwithstanding anything in this Agreement to the contrary, neither the Corporation nor the Rights Agent shall have any liability to any holder of a Right or any other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation.

 

	
2.11

	
Rights Certificate Holder Not Deemed a Shareholder

 

No holder, as such, of any Rights or Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose whatsoever the holder of any Common Share or any other share or security of the Corporation which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed or deemed or confer upon the holder of any Right or Rights Certificate, as such, any right, title, benefit or privilege of a holder of Common Shares or any other shares or securities of the Corporation or any right to vote at any meeting of shareholders of the Corporation whether for the election of directors or otherwise or upon any matter submitted to holders of Common Shares or any other shares of the Corporation at any meeting thereof, or to give or withhold consent to any action of the Corporation, or to receive notice of any meeting or other action affecting any holder of Common Shares or any other shares of the Corporation except as expressly provided herein, or to receive dividends, distributions or subscription rights, or otherwise, until the Right or Rights evidenced by Rights Certificates shall have been duly exercised in accordance with the terms and provisions hereof.

 

 

  

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ARTICLE 3

ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

 

	
3.1

	
Flip-in Event

 

	
  

	
(a)

	
Subject to Subsection 3.1(b) and Sections 5.1 and 5.2, in the event that prior to the Expiration Time a Flip-in Event shall occur, the Corporation shall take such action as shall be necessary to ensure and provide, within 10 Business Days thereafter or such longer period as may be required to satisfy the requirements of applicable securities laws or comparable legislation so that, except as provided below, each Right shall thereafter constitute the right to purchase from the Corporation, upon exercise thereof in accordance with the terms hereof, that number of Common Shares having an aggregate Market Price on the date of consummation or occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 in the event that after such occurrence, an event of a type analogous to any of the events described in Section 2.3 shall have occurred).

 

	
  

	
(b)

	
Notwithstanding anything in this Agreement to the contrary, upon the occurrence of any Flip-in Event, any Rights that are or were Beneficially Owned on or after the earlier of the Separation Time or the Stock Acquisition Date by:

 

	
  

	
(i)

	
an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of an Acquiring Person); or

 

	
  

	
(ii)

	
a transferee of Rights, directly or indirectly, from an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of an Acquiring Person), where such transferee becomes a transferee concurrently with or subsequent to the Acquiring Person becoming such in a transfer that the Board of Directors has determined is part of a plan, understanding or scheme of an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of an Acquiring Person), that has the purpose or effect of avoiding this Clause 3.1(b),

 

 

  

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shall become null and void without any further action, and any holder of such Rights (including transferees) shall thereafter have no right to exercise such Rights under any provision of this Agreement and further shall thereafter not have any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise.

 

	
  

	
(c)

	
Any Rights Certificate that represents Rights Beneficially Owned by a Person described in either Clause 3.1(b)(i) or (ii) or transferred to any nominee of any such Person, and any Rights Certificate issued upon the transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain the following legend:

 

	
  

	
 

	
“The Rights represented by this Rights Certificate were issued to a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person or a Person who was acting jointly or in concert with an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Shareholder Rights Plan Agreement). This Rights Certificate and the Rights represented hereby are void or shall become void in the circumstances specified in Subsection 3.1(b) of the Shareholder Rights Plan Agreement.”

 

	
  

	
 

	
provided, however, that the Rights Agent shall not be under any responsibility to ascertain the existence of facts that would require the imposition of such legend but shall impose such legend only if instructed to do so by the Corporation in writing or if a holder fails to certify upon transfer or exchange in the space provided on the Rights Certificate that such holder is not a Person described in such legend.

 

 

  

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ARTICLE 4

THE RIGHTS AGENT

 

	
4.1

	
General

 

	
  

	
(a)

	
The Corporation hereby appoints the Rights Agent to act as agent for the Corporation and the holders of the Rights in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Corporation may from time to time appoint such co-Rights Agents (the “Co-Rights Agents”) as it may deem necessary or desirable. In the event the Corporation appoints one or more Co-Rights Agents, the respective duties of the Rights Agent and Co-Rights Agents shall be as the Corporation may determine, subject to the reasonable consent of the Rights Agent. The Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses (including fees and disbursements of counsel) and other disbursements reasonably incurred in the execution and administration of this Agreement and the exercise and performance of its duties hereunder, with the prior approval of the Corporation. The Corporation will fully indemnify and hold the Rights Agent, its officers, directors, employees and agents harmless from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liabilities arising directly or indirectly out of its agency relationship to the Corporation as set forth in this Agreement (which right to indemnification will survive the termination of this Agreement or the resignation or removal of the Rights Agent) except for any liability arising out of the negligence or intentional misconduct by the Rights Agent. In the absence of negligence or intentional misconduct on its part, the Rights Agent shall not be liable for any action taken, suffered, omitted by it or for any error of judgement made by it in good faith in the performance of its duties under this Agreement. In no event will the Rights Agent be liable for special, indirect, consequential or punitive loss or damages of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the possibility of such damages.

 

	
  

	
(b)

	
The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any certificate for Common Shares, Rights Certificate, certificate for other securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons.

 

 

  

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(c)

	
The Corporation shall inform the Rights Agent in a reasonably timely manner of events which may materially affect the administration of this Agreement by the Rights Agent and, at any time upon request shall provide to the Rights Agent an incumbency certificate certifying the then current officers of the Corporation.

 

	
4.2

	
Merger, Amalgamation or Consolidation or Change of Name of Rights Agent

 

	
  

	
(a)

	
Any corporation into which the Rights Agent may be merged or amalgamated or with which it may be consolidated, or any corporation resulting from any merger, amalgamation, statutory arrangement or consolidation to which the Rights Agent or any successor Rights Agent is a party, or any corporation succeeding to the shareholder or stockholder services business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 4.4 hereof. In case, at the time such successor Rights Agent succeeds to the agency created by this Agreement, any of the Rights Certificates have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights have not been countersigned, any successor Rights Agent may countersign such Rights Certificates in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this Agreement.

 

	
  

	
(b)

	
In case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

 

 

  

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4.3

	
Duties of Rights Agent

 

The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, all of which the Corporation and the holders of certificates for Common Shares and the holders of Rights Certificates, by their acceptance thereof, shall be bound:

 

	
  

	
(a)

	
the Rights Agent may retain and consult with legal counsel (who may be legal counsel for the Corporation) and the opinion of such counsel will be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion; the Rights Agent may also, with the prior approval of the Corporation, consult with such other experts as the Rights Agent shall consider necessary or appropriate to properly carry out the duties and obligations imposed under this Agreement;

 

	
  

	
(b)

	
whenever in the performance of its duties under this Agreement, the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Corporation prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by a Person believed by the Rights Agent to be the Chief Executive Officer, Chief Financial Officer or any director of the Corporation and delivered to the Rights Agent, and such certificate will be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate;

 

 

  

-45-

  

 

 

	
  

	
(c)

	
the Rights Agent will be liable hereunder for its own negligence, bad faith or intentional misconduct;

 

	
  

	
(d)

	
the Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the certificates for Common Shares or the Rights Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and will be deemed to have been made by the Corporation only;

 

	
  

	
(e)

	
the Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any certificate for a Common Share or Rights Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Corporation of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Subsection 3.1(b) hereof) or any adjustment required under the provisions of Section 2.3 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated by Section 2.3 describing any such adjustment); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorization of any Common Shares to be issued pursuant to this Agreement or any Rights or as to whether any Common Shares will, when issued, be duly and validly authorized, executed, issued and delivered and fully paid and non-assessable;

 

 

  

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(f)

	
the Corporation agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement;

 

	
  

	
(g)

	
the Rights Agent is hereby authorized and directed to accept instructions in writing with respect to the performance of its duties hereunder from any individual believed by the Rights Agent to be the Chief Executive Officer, Chief Financial Officer or any director of the Corporation, and to apply to such individuals for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such individual;

 

	
  

	
(h)

	
the Rights Agent and any shareholder, director, officer or employee of the Rights Agent may buy, sell or deal in Common Shares, Rights or other securities of the Corporation or become pecuniarily interested in any transaction in which the Corporation may be interested, or contract with or lend money to the Corporation or otherwise act as fully and freely as though it were not Rights Agent under this Agreement;

 

	
  

	
(i)

	
nothing herein shall preclude the Rights Agent from acting in any other capacity for the Corporation or for any other legal entity; and

 

	
  

	
(j)

	
the Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Corporation resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.

 

 

  

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4.4

	
Change of Rights Agent

 

The Rights Agent may resign and be discharged from its duties under this Agreement upon 60 days’ notice (or such lesser notice as is acceptable to the Corporation) in writing mailed to the Corporation and to each transfer agent of Common Shares by registered or certified mail. The Corporation may remove the Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent and to each transfer agent of the Common Shares by registered or certified mail. If the Rights Agent should resign or be removed or otherwise become incapable of acting, the Corporation will appoint a successor to the Rights Agent. If the Corporation fails to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent, then by prior written notice to the Corporation the resigning Rights Agent at the Corporation’s expense or the holder of any Rights (which holder shall, with such notice, submit such holder’s Rights Certificate, if any, for inspection by the Corporation), may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Corporation or by such a court, shall be a corporation incorporated under the laws of Canada or a province thereof authorized to carry on the business of a trust company in the province of Ontario. After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall, following payment of all outstanding fees and expenses owed to it under this Agreement, deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Corporation will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares and mail a notice thereof in writing to the holders of the Rights in accordance with Section 5.11. Failure to give any notice provided for in this Section 4.4, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of any successor Rights Agent, as the case may be.

 

 

  

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4.5

	
Compliance with Anti-Money Laundering Legislation

 

The Rights Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Rights Agent reasonably determines that such an act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline. Further, should the Rights Agent reasonably determine at any time that its acting under this Agreement has resulted in it being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on 10 days’ prior written notice to the Corporation, provided: (i) that the Rights Agent’s written notice shall describe the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the Rights Agent’s satisfaction within such 10 day period, then such resignation shall not be effective.

 

ARTICLE 5

MISCELLANEOUS

 

	
5.1

	
Redemption of Rights

 

	
  

	
(a)

	
Until the occurrence of a Flip-in Event, as to which the application of Section 3.1 has not been waived pursuant to Section 5.2, the Board of Directors,

 

	
  

	
(i)

	
may, at any time prior to Separation Time, subject to receipt of Shareholder Approval, or

 

	
  

	
(ii)

	
may, at any time after the Separation Time, subject to receipt of the consent of holders of Rights given in accordance with Section 5.5,

 

	
  

	
 

	
elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right, appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3, if an event of the type analogous to any of the events described in Section 2.3 shall have occurred (such redemption price being herein referred to as the “Redemption Price”).

 

 

  

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(b)

	
If a Person acquires, pursuant to a Permitted Bid or a Competing Permitted Bid or pursuant to an Exempt Acquisition occurring under Subsection 5.2(b) hereof, outstanding Voting Shares, the Board of Directors of the Corporation shall, immediately upon such acquisition and without further formality, be deemed to have elected to redeem the Rights at the Redemption Price.

 

	
  

	
(c)

	
Where a Take-over Bid that is not a Permitted Bid or Competing Permitted Bid expires, is withdrawn or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all of the outstanding Rights at the Redemption Price.

 

	
  

	
(d)

	
If the Board of Directors elects to or is deemed to have elected to redeem the Rights (i) the right to exercise the Rights will thereupon, without further action and without notice, terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price, and (ii) subject to Subsection 5.1(f), no further Rights shall thereafter be issued.

 

	
  

	
(e)

	
Within 10 Business Days of the Board of Directors electing or having been deemed to have elected to redeem the Rights, the Corporation shall give notice of redemption to the holders of the then outstanding Rights by mailing such notice to each such holder at his last address as it appears upon the Rights Register of the Rights Agent, or, prior to the Separation Time, on the share register maintained by the Corporation’s transfer agent or transfer agents. Each such notice of redemption shall state the method by which the payment of the Redemption Price shall be made.

 

	
  

	
(f)

	
Upon the Rights being redeemed pursuant to Subsection 5.1(c), all the provisions of this Agreement shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder of record of Common Shares as of the Separation Time had not been mailed to each such holder and for all purposes of this Agreement, the Separation Time shall be deemed not to have occurred.

 

 

  

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5.2

	
Waiver of Flip-In Events

 

	
  

	
(a)

	
The Board of Directors, may, at any time prior to the occurrence of a Flip-in Event that would occur by reason of an acquisition of Voting Shares or Convertible Securities otherwise than pursuant to a Take-over Bid made by means of a take-over bid circular to all holders of Voting Shares or otherwise than in the circumstances set forth in Subsection 5.2(c) and subject to receipt of Shareholder Approval, waive the application of Section 3.1 to such Flip-in Event by written notice delivered to the Rights Agent.

 

	
  

	
(b)

	
The Board of Directors may, at any time prior to the occurrence of a Flip-in Event that would occur as a result of a Take-over Bid made by way of a take-over bid circular sent to all holders of Voting Shares, waive the application of Section 3.1 to such Flip-in Event by written notice delivered to the Rights Agent provided, however, that if the Board of Directors waives the application of Section 3.1 to such a Flip-in Event, the Board of Directors shall be deemed to have waived the application of Section 3.1 to any other Flip-in Event occurring by reason of any Takeover Bid that is made by means of a take-over bid circular to all holders of Voting Shares prior to the expiry of any Take-over Bid in respect of which a waiver is, or is deemed to have been, granted under this Subsection 5.2(b).

 

	
  

	
(c)

	
The Board of Directors may waive the application of Section 3.1 in respect of the occurrence of any Flip-in Event if the Board of Directors has determined that a Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that it would become, an Acquiring Person under this Agreement and, in the event that such a waiver is granted by the Board of Directors, such Stock Acquisition Date shall be deemed not to have occurred. Any such waiver pursuant to this Subsection 5.2(c) must be on the condition that such Person, within 14 days after the foregoing determination by the Board of Directors or such earlier or later date as the Board of Directors may determine (the “Disposition Date”), has reduced its Beneficial Ownership of Voting Shares such that the Person is no longer an Acquiring Person. If the Person remains an Acquiring Person at the close of business on the Disposition Date, the Disposition Date shall be deemed to be the date of occurrence of a further Stock Acquisition Date and Section 3.1 shall apply thereto.

 

 

  

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5.3

	
Expiration

 

No Person shall have any rights whatsoever pursuant to this Agreement or in respect of any Right after the Expiration Time, except the Rights Agent as specified in Subsection 4.1(a) of this Agreement.

 

	
5.4

	
Issuance of New Rights Certificates

 

Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board of Directors to reflect any adjustment or change in the number or kind or class of securities purchasable upon exercise of Rights made in accordance with the provisions of this Agreement.

 

	
5.5

	
Supplements and Amendments

 

	
  

	
(a)

	
The Corporation may, at any time without the approval of any holders of Rights or Shareholder Approval, make amendments to this Agreement to correct any clerical or typographical error or which are required to maintain the validity of this Agreement as a result of any change in any applicable legislation or regulations or rules thereunder. The Corporation may, prior to the date of the shareholders’ meeting referred to in Section 5.17, supplement, amend, vary, rescind or delete any of the provisions of this Agreement without the approval of any holders of Rights or Voting Shares where the Board of Directors acting in good faith deems such action necessary or desirable.  Notwithstanding anything in this Section 5.5 to the contrary, no such supplement or amendment shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent to such supplement or amendment.

 

 

  

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(b)

	
Subject to Subsection 5.5(a), the Corporation may, with the prior consent of the holders of Voting Shares obtained as set forth below, at any time prior to the Separation Time, supplement, amend, vary, rescind or delete any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally). Such consent shall be deemed to have been given if the action requiring such approval is authorized by the affirmative vote of a majority of the votes cast by Independent Shareholders present or represented at and entitled to be voted at a meeting of the holders of Voting Shares duly called and held in compliance with applicable laws and the articles of the Corporation.

 

	
  

	
(c)

	
The Corporation may, with the prior consent of the holders of Rights, at any time on or after the Separation Time, amend supplement, amend, vary, rescind or delete any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally), provided that no such amendment, variation or deletion shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent thereto. Such consent shall be deemed to have been given if such amendment, variation or deletion is authorized by the affirmative votes of the holders of Rights present or represented at and entitled to be voted at a meeting of the holders and representing more than 50% of the votes cast in respect thereof.

 

	
  

	
(d)

	
Any approval of the holders of Rights shall be deemed to have been given if the action requiring such approval is authorized by the affirmative votes of the holders of Rights present or represented at and entitled to be voted at a meeting of the holders of Rights and representing a majority of the votes cast in respect thereof. For the purposes hereof, each outstanding Right (other than Rights which are void pursuant to the provisions hereof) shall be entitled to one vote, and the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be, which are provided in the Corporation’s articles and the Corporations Act with respect to meetings of shareholders of the Corporation.

 

 

  

-53-

  

 

 

	
  

	
(e)

	
Any amendments made by the Corporation to this Agreement pursuant to Subsection 5.5(a) which are required to maintain the validity of this Agreement as a result of any change in any applicable legislation or regulation thereunder shall:

 

	
  

	
(i)

	
if made before the Separation Time, be submitted to the shareholders of the Corporation at the next meeting of shareholders and the shareholders may, by the majority referred to in Subsection 5.5(b), confirm or reject such amendment; or

 

	
  

	
(ii)

	
if made after the Separation Time, be submitted to the holders of Rights at a meeting to be called for on a date not later than immediately following the next meeting of shareholders of the Corporation and the holders of Rights may, by resolution passed by the majority referred to in Subsection 5.5(d), confirm or reject such amendment.

 

	
  

	
(f)

	
The Corporation shall give notice in writing to the Rights Agent pursuant to Section 5.11 of any supplement, amendment, deletion, variation or rescission to this Agreement within five Business Days of the date of any such supplement, amendment, deletion, variation or rescission, provided that failure to give such notice, or any defect therein, shall not affect the validity of any such supplement, amendment, deletion, variation or rescission.

 

Any such amendment shall, unless the Board of Directors otherwise stipulates, be effective from the date of the resolution of the Board of Directors adopting such amendment, until it is confirmed or rejected or until it ceases to be effective (as described in the next sentence) and, where such amendment is confirmed, it continues in effect in the form so confirmed. If such amendment is rejected by the shareholders or the holders of Rights or is not submitted to the shareholders or holders of Rights as required, then such amendment shall cease to be effective from and after the termination of the meeting at which it was rejected or to which it should have been but was not submitted or from and after the date of the meeting of holders of Rights that should have been but was not held, and no subsequent resolution of the Board of Directors to amend this Agreement to substantially the same effect shall be effective until confirmed by the shareholders or holders of Rights, as the case may be.

 

 

  

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5.6

	
Fractional Rights and Fractional Shares

 

	
  

	
(a)

	
The Corporation shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights. After the Separation Time, in lieu of issuing fractional Rights, the Corporation shall pay to the holders of record of the Rights Certificates (provided the Rights represented by such Rights Certificates are not void pursuant to the provisions of Subsection 3.1(b), at the time such fractional Rights would otherwise be issuable), an amount in cash equal to the fraction of the Market Price of one whole Right that the fraction of a Right that would otherwise be issuable is of one whole Right.

 

	
  

	
(b)

	
The Corporation shall not be required to issue fractions of Common Shares upon exercise of Rights or to distribute certificates which evidence fractional Common Shares. In lieu of issuing fractional Common Shares, the Corporation shall pay to the registered holders of Rights Certificates, at the time such Rights are exercised as herein provided, an amount in cash equal to the fraction of the Market Price of one Common Share that the fraction of a Common Share that would otherwise be issuable upon the exercise of such Right is of one whole Common Share at the date of such exercise.

 

	
  

	
(c)

	
The Rights Agent shall have no obligation to make any payments in lieu of issuing fractions of Rights or Common Shares pursuant to paragraphs (a) or (b), respectively, unless and until the Corporation shall have provided to the Rights Agent the amount of cash to be paid in lieu of issuing such fractional Rights or Common Shares, as the case may be.

 

	
5.7

	
Rights of Action

 

Subject to the terms of this Agreement, all rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent, are vested in the respective holders of the Rights. Any holder of Rights, without the consent of the Rights Agent or of the holder of any other Rights, may, on such holder’s own behalf and for such holder’s own benefit and the benefit of other holders of Rights, enforce, and may institute and maintain any suit, action or proceeding against the Corporation to enforce such holder’s right to exercise such holder’s Rights, or Rights to which such holder is entitled, in the manner provided in such holder’s Rights and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

 

 

  

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5.8

	
Regulatory Approvals

 

Any obligation of the Corporation or action or event contemplated by this Agreement shall be subject to the receipt of any requisite approval or consent from any governmental or regulatory authority. Without limiting the generality of the foregoing, any issuance of or delivery of debt or equity securities (other than non-convertible debt securities) of the Corporation upon the exercise of Rights and any amendment or supplement to this Agreement shall be subject to the prior written consent of the Toronto Stock Exchange and any other exchange upon which the Common Shares may be listed.

 

	
5.9

	
Declaration as to Non-Canadian Holders

 

If in the opinion of the Board of Directors (who may rely upon the advice of counsel) any action or event contemplated by this Agreement would require compliance by the Corporation with the securities laws or comparable legislation of a jurisdiction outside Canada, the Board of Directors acting in good faith shall take such actions as it may deem appropriate to ensure such compliance. In no event shall the Corporation or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of Rights to Persons who are citizens, residents or nationals of any jurisdiction other than Canada, in which such issue or delivery would be unlawful without registration of the relevant Persons or securities for such purposes. If it would be necessary in any jurisdiction other than Canada to register any of the Rights or securities issuable on exercise of Rights prior to such issue or delivery, the Corporation will use its best efforts to establish procedures whereby shareholders entitled to such Rights, or holders of Rights entitled to securities upon the exercise of Rights, will have the ability to trade or exercise such Rights, or and be issued such securities, without the need to register those securities in the jurisdiction in which they reside, through the establishment of a trustee to hold and sell such securities in Canada, or such other mechanism as the Board of Directors believes is appropriate.

 

 

  

-56-

  

 

 

	
5.10

	
Privacy Legislation

 

The parties acknowledge that federal and/or provincial legislation that addresses the protection of individual’s personal information (collectively, “Privacy Laws”) applies to obligations and activities under this Agreement. Despite any other provision of this Agreement, neither party will take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Corporation will, prior to transferring or causing to be transferred personal information to the Rights Agent, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or will have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws. The Rights Agent will use commercially reasonable efforts to ensure that its services hereunder comply with Privacy Laws.

 

	
5.11

	
Notices

 

	
  

	
(a)

	
Notices or demands authorized or required by this Agreement to be given or made by the Rights Agent or by the holder of any Rights to or on the Corporation shall be sufficiently given or made if delivered, sent by first class mail, postage prepaid, or sent by facsimile or other form of recorded electronic communication, charges prepaid and confirmed in writing, as follows:

 

	
  

	
 

	

North American Energy Partners Inc.

Zone 3, Acheson Industrial Area

2-53016 Highway 60

Acheson, Alberta

T7X 5A7

 

	 	
Attention:

	
Corporate Secretary

	 	
Facsimile No.:

	
(780) 960-7103

 

 

  

-57-

  

 

 

	 	
with a copy to:

	 
	 	 	 
	 	
Borden Ladner Gervais LLP   

40 King Street West

Scotia Plaza

Suite 4100

Toronto, Ontario

M5H 3Y4

	 

 

	 	
Attention:

	

Frank Callaghan

	 	
Facsimile No.:

	

(416) 361-2784

 

	
  

	
 

	
Notices or demands authorized or required by this Agreement to be given or made by the Corporation or by the holder of any Rights to or on the Rights Agent shall be sufficiently given or made if delivered, sent by first class mail, postage prepaid, or sent by facsimile or other form of recorded electronic communication, charges prepaid and confirmed in writing, as follows:

 

	 	
CIBC Mellon Trust Company        

600 The Dome Tower

333 – 7th Avenue SW

Calgary, AB

T2P 2Z1

	 

 

	 	
Attention:

	

Manager

	 	
Facsimile No.:

	

(403) 264-2100

 

	
  

	
(b)

	
Notices or demands authorized or required by this Agreement to be given or made by the Corporation or the Rights Agent to or on the holder of any Rights shall be sufficiently given or made if delivered or sent by first class mail, postage prepaid, addressed to such holder at the address of such holder as it appears upon the register of the Rights Agent or, prior to the Separation Time, on the register of the Corporation for the Common Shares. Any notice which is mailed or sent in the manner herein provided shall be deemed given, whether or not the holder receives the notice.

 

 

  

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(c)

	
Any notice given or made in accordance with this Section 5.11 shall be deemed to have been given and to have been received on the day of delivery, if so delivered, on the third Business Day (excluding each day during which there exists any general interruption of postal service due to strike, lockout or other cause) following the mailing thereof, if so mailed, and on the day of telegraphing, telecopying or sending of the same by other means of recorded electronic communication (provided such sending is during the normal business hours of the addressee on a Business Day and if not, on the first Business Day thereafter).

 

	
  

	
(d)

	
Each of the Corporation and the Rights Agent may from time to time change its address for notice under Subsection 5.11(a) by notice to the other given in the manner aforesaid.

 

	
5.12

	
Costs of Enforcement

 

The Corporation agrees that if the Corporation fails to fulfil any of its obligations pursuant to this Agreement, then the Corporation will reimburse the holder of any Rights for the costs and expenses (including legal fees) reasonably incurred by such holder to enforce his rights pursuant to any Rights or this Agreement.

 

	
5.13

	
Successors

 

All the covenants and provisions of this Agreement by or for the benefit of the Corporation or the Rights Agent shall bind and enure to the benefit of their respective successors and assigns hereunder.

 

 

  

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5.14

	
Benefits of this Agreement

 

Nothing in this Agreement shall be construed to give to any Person other than the Corporation, the Rights Agent and the holders of the Rights any legal or equitable right, remedy or claim under this Agreement; further, this Agreement shall be for the sole and exclusive benefit of the Corporation, the Rights Agent and the holders of the Rights.

 

	
5.15

	
Governing Law

 

This Agreement and each Right issued hereunder shall be deemed to be a contract made under the laws of the province of Ontario and for all purposes shall be governed by and construed in accordance with the laws of such province applicable to contracts to be made and performed entirely within such province.

 

	
5.16

	
Severability

 

If any term or provision hereof or the application thereof to any circumstance shall, in any jurisdiction and to any extent, be invalid or unenforceable, such term or provision shall be ineffective only as to such jurisdiction and to the extent of such invalidity or unenforceability in such jurisdiction without invalidating or rendering unenforceable or ineffective the remaining terms and provisions hereof in such jurisdiction or the application of such term or provision in any other jurisdiction or to circumstances other than those as to which it is specifically held invalid or unenforceable.

 

	
5.17

	
Effective Date

 

This Agreement is effective and in full force and effect in accordance with its terms from and after, October 7, 2011. If this Agreement is not approved by resolution passed by a majority of greater than 50% of the votes cast by (i) holders of Voting Shares, and (ii) holders of Voting Shares other than Grandfathered Persons, in each case present in person or voting by proxy at a meeting of those shareholders of the Corporation who vote in respect of such confirmation at a meeting to be held not later than six months from October 7, 2011, then this Agreement and all outstanding Rights shall terminate and be void and of no further force and effect on and from the date that is the earlier of (a) the date of termination of the meeting called to consider the confirmation of the Agreement, and (b) the close of business on the date of termination of such meeting.

 

 

  

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No person shall have any rights pursuant to this Agreement or in respect of any Rights after the Expiration Time, except the Rights Agent as specified in Subsection 4.1(a).

 

	
5.18

	
Reconfirmation

 

Notwithstanding the confirmation of this Agreement pursuant to Section 5.17, this Agreement must be reconfirmed by a resolution passed by a majority of the votes cast by the Independent Shareholders in each case present in person or voting by proxy at a meeting of those shareholders of the Corporation who vote in respect of such reconfirmation at every third annual meeting following the meeting at which this Agreement is confirmed pursuant to Section 5.17. If the Agreement is not so reconfirmed or is not presented for reconfirmation at such annual meeting, the Agreement and all outstanding Rights shall terminate and be void and of no further force and effect on and from the date of termination of the annual meeting; provided that termination shall not occur if a Flip-in Event has occurred (other than a Flip-in Event which has been waived pursuant to Subsection 5.2), prior to the date upon which this Agreement would otherwise terminate pursuant to this Section 5.18.

 

	
5.19

	
Determinations and Actions by the Board of Directors

 

All actions, calculations and determinations (including all omissions with respect to the foregoing) which are done or made by the Board of Directors, in good faith, shall not subject the Board of Directors or any director of the Corporation to any liability whatsoever to the holders of the Rights.

 

	
5.20

	
Time of the Essence

 

Time shall be of the essence in this Agreement.

 

 

  

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5.21

	
Execution in Counterparts

 

This Agreement may be executed by facsimile and in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

 

 

	
NORTH AMERICAN ENERGY PARTNERS INC.

	  	  	  
	
By:

	  	  
	  	
Name

	  
	  	
Title:

	  
	  	  	  
	  	  	  
	
 

CIBC MELLON TRUST COMPANY

	  	  	  
	
By:

	  	  
	  	
Name

	  
	  	
Title:

	  
	  	  	  
	  	  	  
	
By:

	  	  
	  	
Name

	  
	  	
Title:

	  
	  	  	  
	  	  	  

 

 

 

  

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ATTACHMENT I

 

NORTH AMERICAN ENERGY PARTNERS INC.

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

 

FORM OF RIGHTS CERTIFICATE

 

	
Certificate No.

	  	  	
Rights

	  
	  	  

THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES OR TRANSFEREES OF AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, MAY BECOME VOID.

 

Rights Certificate

 

This certifies that, or registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Shareholder Rights Plan Agreement, dated as of October 7, 2011, as the same may be amended or supplemented from time to time (the “Shareholder Rights Agreement”), between North American Energy Partners Inc., a corporation existing under the laws of Canada (the “Corporation”) and CIBC Mellon Trust Company, a company existing under the laws of Canada (the “Rights Agent”) (which term shall include any successor Rights Agent under the Shareholder Rights Agreement), to purchase from the Corporation at any time after the Separation Time (as such term is defined in the Shareholder Rights Agreement) and prior to the Expiration Time (as such term is defined in the Shareholder Rights Agreement), one fully paid common share of the Corporation (a “Common Share”) at the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate with the Form of Election to Exercise (in the form provided hereinafter) duly executed and submitted to the Rights Agent at its principal office in the City of Calgary. The Exercise Price shall be an amount expressed in Canadian dollars equal to five times the Market Price (as such term is defined in the Shareholder Rights Agreement) per Common Share at the Separation Time, subject to adjustment in certain events as provided in the Shareholder Rights Agreement.

 

 

  

  

  

 

 

This Rights Certificate is subject to all of the terms and provisions of the Shareholder Rights  Agreement, which terms and provisions are incorporated herein by reference and made a part hereof and to which Shareholder Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Rights Agent, the Corporation and the holders of the Rights Certificates. Copies of the Shareholder Rights Agreement are on file at the registered office of the Corporation.

 

This Rights Certificate, with or without other Rights Certificates, upon surrender at any of the offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

 

Subject to the provisions of the Shareholder Rights Agreement, the Rights evidenced by this Rights Certificate may be, and under certain circumstances are required to be, redeemed by the Corporation at a redemption price set out in the Shareholder Rights Agreement.

 

No fractional Common Shares will be issued upon the exercise of any Rights evidenced hereby, but in lieu thereof a cash payment will be made, as provided in the Shareholder Rights Agreement.

 

No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of Common Shares or of any other securities which may at any time be issuable upon the exercise hereof; nor shall anything contained in the Shareholder Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in the Shareholder Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by this Rights Certificate shall have been exercised as provided in the Shareholder Rights Agreement.

 

 

  

-2-

  

 

 

This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

 

WITNESS the facsimile signature of the proper officers of the Corporation and its corporate seal.

 

	
Date:

	  
	  	  

 

	
NORTH AMERICAN ENERGY PARTNERS INC.

	 	 
	
By:

	  
	  	
Authorized Signature

	  	  
	
Countersigned:

	  	  
	
CIBC MELLON TRUST COMPANY

	  	  
	
By:

	  
	  	
Authorized Signature

 

 

  

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FORM OF ELECTION TO EXERCISE

 

(To be exercised by the registered holder if such holder desires to exercise the Rights represented by this Certificate.)

 

	
TO:

	  

 

The undersigned hereby irrevocably elects to exercise ____________________________________ whole Rights represented by the attached Rights Certificate to purchase the Common Shares or other securities, if applicable, issuable upon the exercise of such Rights and requests that certificates for such securities be issued in the name of:

 

	
 

 

	
(Name)

	
 

 

	
(Address)

	
 

 

	
(City and Province)

	
 

 

	
(Social Insurance Number or other taxpayer identification number)

	 
	
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:

	
 

 

	
(Name)

	
 

 

	
(Address)

	
 

 

	
(City and Province)

	
 

 

	
(Social Insurance Number or other taxpayer identification number)

 

 

	
Dated:

	 	  	
Signature:

	  
	 	 
	
Signature Guaranteed:

 

	
(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.)

 

 

The signature(s) on this form must also be guaranteed by one of the following methods:

 

In Canada and the US: a Medallion Guarantee obtained from a member of an acceptable Medallion Guarantee Program (STAMP,SEMP or MSP). Many banks, credit unions and broker dealers are members of a Medallion Guarantee Program. The guarantor must affix a stamp in the space above bearing the actual words “Medallion Guaranteed”.

 

In Canada: a Signature Guarantee obtained from a major Canadian Schedule I bank that is not a member of a Medallion Guarantee Program. The guarantor must affix a stamp in the space above bearing the actual words “Signature Guaranteed”.

 

Outside Canada and the US: holders must obtain a guarantee from a local financial institution that has a corresponding affiliate in Canada or the US that is a member of an acceptable Medallion Guarantee Program. The corresponding affiliate must over guarantee the guarantee provided by the local financial institution. 

 

 

  

  

  

 

 

CERTIFICATE

 

(To be completed if true.)

 

The undersigned party exercising Rights hereunder hereby represents, for the benefit of all holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or a Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate thereof. Capitalized terms shall have the meaning ascribed thereto in the Shareholder Rights Agreement.

 

 

 

	
 

 

	Signature
	
 

 

	(please print name of signatory)

 

 

 

 

 

  

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NOTICE

 

In the event the certification set forth above in the Form of Election to Exercise is not completed upon exercise of the Right(s) evidenced hereby, the Corporation will deem the Beneficial Owner of the Right(s) evidenced by this Rights Certificate to be an Acquiring Person (as defined in the Rights Agreement) and, accordingly, such Rights shall be null and void and not transferable or exercisable.

 

	
 

 

	
(To be attached to each Rights Certificate.)

 

 

 

 

 

 

 

 

 

 

  

  

  

 

 

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such holder desires to transfer the Rights represented by this Certificate.)

 

FOR VALUE RECEIVED __________________________ hereby sells, assigns and transfers unto

 

	
 

 

	
(Please print name and address of transferee.)

 

 

the Rights represented by this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ___________________________, as attorney, to transfer the within Rights on the books of the Corporation, with full power of substitution.

 

	
Dated:

	 	  	
Signature:

	  
	 	 
	
Signature Guaranteed:

 

	
(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.)

 

The signature(s) on this form must also be guaranteed by one of the following methods:

 

In Canada and the US: a Medallion Guarantee obtained from a member of an acceptable Medallion Guarantee Program (STAMP,SEMP or MSP). Many banks, credit unions and broker dealers are members of a Medallion Guarantee Program. The guarantor must affix a stamp in the space above bearing the actual words “Medallion Guaranteed”.

 

In Canada: a Signature Guarantee obtained from a major Canadian Schedule I bank that is not a member of a Medallion Guarantee Program. The guarantor must affix a stamp in the space above bearing the actual words “Signature Guaranteed”.

 

Outside Canada and the US: holders must obtain a guarantee from a local financial institution that has a corresponding affiliate in Canada or the US that is a member of an acceptable Medallion Guarantee Program. The corresponding affiliate must over guarantee the guarantee provided by the local financial institution. 

 

 

 

  

  

  

 

 

 

CERTIFICATE

 

(To be completed if true.)

 

The undersigned party transferring Rights hereunder hereby represents, for the benefit of all holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or by any Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate thereof. Capitalized terms shall have the meaning ascribed thereto in the Shareholder Rights Agreement.

 

 

	
 

 

	Signature
	
 

 

	(please print name of signatory)

 

(To be attached to each Rights Certificate.)

 

 

 

 

 

  

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NOTICE

 

In the event the certification set forth above in the Form of Assignment is not completed, the Corporation will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person (as defined in the Rights Agreement) and, accordingly, such Rights shall be null and void and not transferable or exercisable.

 

 

 

 

 

 

 

 

 

 

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