RECEIVABLES SALE AGREEMENT DATED AS OF JUNE 27, 2005 among ARCH CHEMICALS, INC., as an Originator, ARCH CHEMICALS SPECIALTY PRODUCTS, INC., as an Originator, ARCH TREATMENT TECHNOLOGIES, INC. as an Originator, ARCH WOOD PROTECTION, INC., as an...
Exhibit
10.1
DATED
AS
OF JUNE 27, 2005
among
ARCH
CHEMICALS, INC.,
as
an
Originator,
ARCH
CHEMICALS SPECIALTY PRODUCTS, INC., as an Originator,
ARCH
TREATMENT TECHNOLOGIES, INC.
as
an
Originator,
ARCH
WOOD
PROTECTION, INC.,
as
an
Originator,
ARCH
PERSONAL CARE PRODUCTS, L.P.,
as
an
Originator,
and
ARCH
CHEMICALS RECEIVABLES CORP.,
as
Buyer
TABLE
OF
CONTENTS
Page
Article
I Amounts and Terms of the Purchase
|
1
|
|
Section
1.1
|
Initial
Contribution of Receivables.
|
1
|
Section
1.2
|
Purchase
of Receivables.
|
2
|
Section
1.3
|
Payment
for the Purchase.
|
3
|
Section
1.4
|
Purchase
Price Credit Adjustments.
|
5
|
Section
1.5
|
Payments
and Computations, Etc.
|
5
|
Section
1.6
|
Transfer
of Records.
|
6
|
Section
1.7
|
Characterization.
|
6
|
Article
II Representations and Warranties
|
7
|
|
Section
2.1
|
Representations
and Warranties of each Originator.
|
7
|
Article
III Conditions of Purchase
|
11
|
|
Section
3.1
|
Conditions
Precedent to Purchase.
|
11
|
Section
3.2
|
Conditions
Precedent to Subsequent Purchases.
|
11
|
Article
IV Covenants
|
12
|
|
Section
4.1
|
Affirmative
Covenants of Originators.
|
12
|
Section
4.2
|
Negative
Covenants of Originators.
|
17
|
Article
V Termination Events
|
19
|
|
Section
5.1
|
Termination
Events.
|
19
|
Section
5.2
|
Remedies.
|
21
|
Article
VI Indemnification
|
21
|
|
Section
6.1
|
Indemnities
by Originators.
|
21
|
Section
6.2
|
Other
Costs and Expenses.
|
24
|
Article
VII Miscellaneous
|
24
|
|
Section
7.1
|
Waivers
and Amendments.
|
24
|
Section
7.2
|
Notices.
|
24
|
Section
7.3
|
Protection
of Ownership Interests of Buyer.
|
24
|
Section
7.4
|
Confidentiality.
|
26
|
Section
7.5
|
Bankruptcy
Petition.
|
27
|
Section
7.6
|
Limitation
of Liability.
|
27
|
Section
7.7
|
CHOICE
OF LAW.
|
27
|
Section
7.8
|
CONSENT
TO JURISDICTION.
|
27
|
Section
7.9
|
WAIVER
OF JURY TRIAL.
|
28
|
Section
7.10
|
Integration;
Binding Effect; Survival of Terms.
|
28
|
Section
7.11
|
Counterparts;
Severability; Section References.
|
29
|
i
Exhibit
Exhibit
I
|
Definitions
|
Exhibit
II
|
Jurisdiction
of Organization; Principal Place of Business; Location(s) of
Records;
Federal Employer Identification Number; Other Names
|
Exhibit
III
|
Lock-Boxes;
Collection Accounts; Collection Banks
|
Exhibit
IV
|
Form
of Compliance Certificate
|
Exhibit
V
|
Copy
of Credit and Collection Policy
|
Exhibit
VI
|
Form
of Subordinated Note
|
Exhibit
VII
|
Form
of Purchase Report
|
Schedules
|
|
Schedule
A
|
List
of Documents to Be Delivered to Buyer on or Prior to the
Purchase
|
Schedule
1.1
|
Initial
Contributed Receivables
|
ii
THIS
RECEIVABLES SALE AGREEMENT, dated as of June 27, 2005, is by and among ARCH
CHEMICALS, INC., a Virginia corporation, ARCH CHEMICALS SPECIALTY PRODUCTS,
INC., a Delaware corporation, ARCH TREATMENT TECHNOLOGIES, INC., a Virginia
corporation, ARCH WOOD PROTECTION, INC., a Delaware corporation, ARCH PERSONAL
CARE PRODUCTS, L.P., a New Jersey limited partnership (each, an “Originator”
and
collectively, the “Originators”),
and
ARCH CHEMICALS RECEIVABLES CORP., a Delaware corporation (“Buyer”).
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit
I
hereto
(or, if not defined in Exhibit
I
hereto,
the meaning assigned to such term in Exhibit I to the Purchase
Agreement).
PRELIMINARY
STATEMENTS
Each
Originator now owns, and from time to time hereafter will own, Receivables.
Such
Originator wishes to sell and assign to Buyer, and Buyer wishes to purchase
from
such Originator, all of such Originator’s right, title and interest in and to
such Receivables, together with the Related Security and Collections with
respect thereto.
Each
Originator and Buyer intend the transactions contemplated hereby to be true
sales of the Receivables from such Originator to Buyer, providing Buyer with
the
full benefits of ownership of the Receivables, and the Originators and Buyer
do
not intend these transactions to be, or for any purpose to be characterized
as,
loans from Buyer to any Originator.
Following
the purchase of Receivables from the Originators, Buyer will sell undivided
interests therein and in the associated Related Security and Collections
pursuant to that certain Receivables Purchase Agreement dated as of June 27,
2005 (as the same may from time to time hereafter be amended, supplemented,
restated or otherwise modified, the “Purchase
Agreement”)
among
Buyer, Arch Chemicals, Inc. (“Arch
Chemicals”),
as
initial Servicer, Three Pillars Funding LLC (“TPF”),
and
SunTrust Capital Markets, Inc. (“STCM”),
as
agent and administrator pursuant to the terms of the Purchase Agreement (in
such
capacity, the “Administrator”).
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
Article
I
Amounts
and Terms of the Purchase
Section
1.1 Initial
Contribution of Receivables.
On
the
date hereof, each Originator does hereby contribute, assign, transfer, set-over
and otherwise convey to Buyer, and Buyer does hereby accept from such
Originator, Receivables originated by such Originator and existing as of the
close of business on the Business Day immediately prior to the date hereof
(the
“Initial
Cutoff Date”)
having
an aggregate Outstanding Balance in the amounts set forth on Schedule
1.1
(the
“Initial
Contributed Receivables”),
together with all Related Security relating thereto and all Collections
thereof.
Section
1.2 Purchase
of Receivables.
(a) Effective
on the date hereof, in consideration for the Purchase Price and upon the terms
and subject to the conditions set forth herein, each Originator does hereby
sell, assign, transfer, set-over and otherwise convey to Buyer, without recourse
(except to the extent expressly provided herein), and Buyer does hereby purchase
from each Originator, all of such Originator’s right, title and interest in and
to all Receivables existing as of the close of business on the Initial Cutoff
Date (other than the Initial Contributed Receivables) and all Receivables
thereafter arising through and including the Termination Date, together, in
each
case, with all Related Security relating thereto and all Collections thereof.
In
accordance with the preceding sentence, on the date hereof Buyer shall acquire
all of each Originators’ right, title and interest in and to all Receivables
existing as of the Initial Cut-Off Date and thereafter arising through and
including the Termination Date, together with all Related Security relating
thereto and all Collections thereof. Buyer shall be obligated to pay the
Purchase Price for the Receivables purchased hereunder in accordance with
Section
1.3.
(b) On
the
Monthly Reporting Date, each Originator shall (or shall require the Servicer
to)
deliver to Buyer a report in substantially the form of Exhibit
VII
hereto
(each such report being herein called a “Purchase
Report”)
with
respect to the Receivables sold by each Originator to Buyer during the
Settlement Period then most recently ended. In addition to, and not in
limitation of, the foregoing, in connection with the payment of the Purchase
Price for any Receivables purchased hereunder, Buyer may request that each
Originator deliver, and each Originator shall deliver, such approvals, opinions,
information or documents as Buyer may reasonably request.
(c) It
is the
intention of the parties hereto that the Purchase of Receivables made hereunder
shall constitute a sale and/or contribution, which sale and/or contribution,
as
the case may be, is absolute and irrevocable and provides Buyer with the full
benefits of ownership of the Receivables. Except for the Purchase Price
Credits owed
pursuant to Section
1.4,
the
sale of Receivables hereunder is made without recourse to any Originator;
provided,
however,
that
(i)
each
Originator shall be liable to Buyer for all representations, warranties,
covenants and indemnities made by such Originator pursuant to the terms of
the
Transaction Documents to which such Originator is a party, and (ii)
such
sale does not constitute and is not intended to result in an assumption by
Buyer
or any assignee thereof of any obligation of any Originator or any other Person
arising in connection with the Receivables, the related Contracts and/or other
Related Security or any other obligations of any Originator. In view of the
intention of the parties hereto that the Purchase of Receivables made hereunder
shall constitute a sale of such Receivables rather than loans secured thereby,
each Originator agrees that it will, on or prior to the date
hereof and in accordance with Section
4.1(e)(ii),
xxxx
its master data processing system and all accounts receivable reports generated
thereby, each Confidential Contract and its records relating to all other
Contracts with a legend reasonably acceptable to Buyer and to the Administrator
(as Buyer’s assignee), evidencing that Buyer has purchased such Receivables as
provided in this Agreement and to note in its financial statements that its
Receivables have been absolutely transferred to Buyer. Upon the request of
Buyer
or the Administrator (as Buyer’s assignee), each Originator will execute and
file such financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be necessary
or appropriate to perfect and maintain the perfection of Buyer’s ownership
interest in the Receivables and the Related
Security and Collections with respect thereto, or as Buyer or the Administrator
(as Buyer’s assignee) may reasonably request; provided,
however,
that
unless and until an Amortization Event or an Unmatured Amortization Event has
occurred, none of the Originators shall be required to take any actions to
establish, maintain or perfect the Buyer’s ownership interest in the Related
Security other than the filing of financing statements under the UCC of all
appropriate jurisdictions.
2
Section
1.3 Payment
for the Purchase.
(a) The
Purchase Price for the Purchase of Receivables in existence as of the close
of
business on the Initial Cutoff Date (other than the Initial Contributed
Receivables) shall be payable in full by Buyer to each Originator on the date
hereof, and shall be paid to each Originator in the following
manner:
(i) by
delivery of immediately available funds, to the extent of funds on hand to
Buyer
or made available to Buyer in connection with its subsequent sale of an interest
in such Receivables to TPF under the Purchase Agreement; provided that
a
portion of such funds shall be offset by amounts such Originator has agreed
to
make as capital contributions such that after giving effect thereto, the Buyer’s
Net Worth shall not be less than the Required Capital Amount, and
(ii) the
balance, by delivery of the proceeds of the related subordinated revolving
loan
from such Originator to Buyer (each, a “Subordinated
Loan”
and
collectively, the “Subordinated
Loans”)
in an
amount not to exceed the least of (A)
the
remaining unpaid portion of such Purchase Price, (B)
the
maximum Subordinated Loan that could be borrowed without rendering Buyer’s Net
Worth less than the Required Capital Amount, and (C)
fifteen
percent (15%) of such Purchase Price. Each Originator is hereby authorized
by
Buyer to endorse on the schedule attached to the related Subordinated Note
an
appropriate notation evidencing the date and amount of each advance thereunder,
as well as the date of each payment with respect thereto,
provided that the failure to make such notation shall not affect any obligation
of Buyer thereunder.
The
Purchase Price for each Receivable coming into existence and purchased by the
Buyer after the Initial Cutoff Date shall be due and owing in full by Buyer
to
the related Originator or its designee on the date each such Receivable came
into existence (except that Buyer may, with respect to any such Purchase Price,
offset against such Purchase Price any amounts owed by such Originator to Buyer
hereunder and which have become due but remain unpaid) and shall be paid to
such
Originator in the manner provided in the following paragraphs
(b),
(c)
and
(d).
3
(b) With
respect to any Receivables coming into existence after the Initial Cutoff Date,
on each Settlement Date, Buyer shall pay, to the relevant Originator, the
Purchase Price therefor in accordance with Section
1.3(d)
and in
the following manner:
first,
by
delivery of immediately available funds, to the extent of funds available to
Buyer from its subsequent sale of an interest in the Receivables to TPF under
the Purchase Agreement or other cash on hand; and
second,
either (i)
by
delivery of the proceeds of the related Subordinated Loan, provided that the
making of any such Subordinated Loan shall be subject to the provisions set
forth in Section
1.3(a)(ii)
or
(ii)
unless
such Originator or Buyer has declared the Termination Date to have occurred
pursuant to this Agreement, by accepting a contribution to its capital in an
amount equal to the remaining unpaid balance of such Purchase
Price.
Subject
to the limitations set forth in Section
1.3(a)(ii),
each
Originator irrevocably agrees to advance each related Subordinated Loan
requested by Buyer on or prior to the Termination Date. The Subordinated Loans
shall be evidenced by, and shall be payable in accordance with the terms and
provisions of the related Subordinated Note and shall be payable solely from
funds which Buyer is not required under the Purchase Agreement to set aside
for
the benefit of, or otherwise pay over to, TPF.
(c) From
and
after the Termination Date, no Originator shall be obligated to (but may, at
its
option): (i)
sell
Receivables to Buyer, or (ii)
contribute Receivables to Buyer’s capital pursuant to clause third of
Section
1.3(b)
unless,
in either case, such Originator reasonably determines that the Purchase Price
therefor will be satisfied with funds available to Buyer from sales of interests
in the Receivables pursuant to the Purchase Agreement, Collections, proceeds
of
Subordinated Loans, other cash on hand or otherwise.
(d) Although
the Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and payable in full by Buyer to the related Originator
on the date such Receivable came into existence, settlement of the Purchase
Price between Buyer and
such
Originator shall be effected on a monthly basis on Settlement Dates with respect
to all Receivables coming into existence during the same Calculation Period
and
based on the information contained in the Purchase Report delivered by such
Originator for the Calculation Period then most recently ended. Although
settlement shall be effected on Settlement Dates, increases or decreases in
the
amount owing under the related Subordinated Note made pursuant to Section
1.3
and any
contribution of capital by an Originator to Buyer made
pursuant to Section
1.3(b)
shall be
deemed to have occurred and shall be effective as of the last Business Day
of
the Calculation Period to which such settlement relates.
4
Section
1.4 Purchase
Price Credit Adjustments.
If
on any
day:
(a) the
Outstanding Balance of a Receivable is:
(i) reduced
or cancelled as a result of any defective or rejected goods or services, any
cash discount or any other adjustment or otherwise by any Originator or any
Affiliate thereof, or as a result of any governmental or regulatory action,
or,
(ii) reduced
or canceled as a result of a setoff in respect of any claim by the Obligor
thereof (whether such claim arises out of the same or a related transaction
or
an unrelated transaction), or
(iii) reduced
on account of the obligation of any Originator or any Affiliate thereof to
pay
to the related Obligor any rebate or refund; or
(iv) less
than
the amount included in calculating the Outstanding Balance for purposes of
any
Purchase Report (for any reason other than such Receivable becoming a Defaulted
Receivable or payment in full of the entire Outstanding Balance being made
on
such Receivable); or
(b) any
of
the representations and warranties set forth in Section
2.1(h),
Section
2.1(i),
Section
2.1(j),
Section
2.1(r),
Section
2.1(s),
Section
2.1(t)
are not
true when made or deemed made with respect to any Receivable,
then,
in
such event, Buyer shall be entitled to a credit (each, a “Purchase
Price Credit”)
against the Purchase Price otherwise payable hereunder equal to, in the case
of
clause
(a)
above,
the amount of such reductions relating to such Receivable and, in the case
of
clause
(b)
above,
the Outstanding Balance of such Receivable (calculated before giving effect
to
the applicable reduction or cancellation). If such Purchase Price Credit exceeds
the Original Balance of the Receivables coming into existence on any day, then
the related Originator shall pay the remaining amount of such Purchase Price
Credit in cash immediately, provided that if the Termination Date has not
occurred, such Originator shall be allowed to deduct the remaining amount of
such Purchase Price Credit from any indebtedness owed to it under its
Subordinated Note.
Section
1.5 Payments
and Computations, Etc.
All
amounts to be paid or deposited by Buyer hereunder shall be paid or deposited
in
accordance with the terms hereof on the day when due in immediately available
funds to the account of the related Originator designated from time to time
by
such Originator or as otherwise directed by such Originator. In the event that
any payment owed by any Person hereunder becomes due on a day that is not a
Business Day, then such payment shall be made on the next succeeding Business
Day. If any Person fails to pay any amount hereunder when due, such Person
agrees to pay, on demand, the Default Fee in respect thereof until paid in
full;
provided,
however,
that
such Default Fee shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made
on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
5
Section
1.6 Transfer
of Records.
(a) In
connection with the Purchase of Receivables hereunder, each Originator hereby
sells, transfers, assigns and otherwise conveys to Buyer all of such
Originator’s right and title to and interest in the Records relating to all
Receivables sold or contributed by it hereunder, without the need for any
further documentation in connection with the Purchase (it being understood
and
agreed that any Records that are not freely assignable (whether by express
provision or by virtue of confidentiality provisions) according to their terms
are excluded from such sale, transfer, assignment or conveyance; provided,
that
upon reasonable request of the Buyer (or its assigns), the applicable Originator
will use its reasonable efforts to obtain consent to the assignment from the
relevant counterparty). In connection with such transfer, each Originator hereby
grants to each of Buyer, the Administrator and the Servicer an irrevocable,
non-exclusive license to use, without royalty or payment of any kind, all
software used by such Originator to account for the Receivables,
to the extent necessary to administer the Receivables, whether such software
is
owned by such Originator or is owned by others and used by such Originator
under
license agreements with respect thereto, provided that should the consent of
any
licensor of such software be required for the grant of the license described
herein, to be effective, the applicable Originator hereby agrees that upon
the
reasonable request of Buyer (or Buyer’s assignee), such Originator will use its
reasonable efforts to obtain the consent of such third-party licensor. The
license granted hereby shall be irrevocable until the indefeasible payment
in
full of the Aggregate Unpaids, and shall terminate on the date this Agreement
terminates in accordance with its terms.
(b) Each
Originator (i)
shall
take such action requested by Buyer and/or the Administrator (as Buyer’s
assignee), from time to time hereafter, that may be reasonably necessary or
appropriate to ensure that Buyer and its assigns under the Purchase Agreement
have an enforceable ownership interest in the Records relating to the
Receivables purchased from the Originators hereunder ; provided,
however,
that
the applicable Originator shall not be required to take any actions with respect
to its Records other than those required by Sections
1.6(a)
and
4.1(e)
hereto
unless and until an Unmatured Amortization Event has occurred, and (ii)
shall
use its reasonable efforts to ensure that Buyer, the Administrator and the
Servicer each has an enforceable right (whether by license or sublicense or
otherwise) to use all of the computer software used to account for the
Receivables and/or to recreate such Records.
Section
1.7 Characterization.
If,
notwithstanding the intention of the parties expressed in Section
1.2(c),
any
sale or contribution by any Originator to Buyer of Receivables hereunder shall
be characterized as a secured loan and not a sale or contribution or such sale
or contribution, as the case may be, shall for any reason be ineffective or
unenforceable, then this Agreement shall be deemed to constitute a security
agreement under the UCC and other applicable law. For this purpose and without
being in derogation of the parties’ intention that the sale of Receivables
hereunder shall constitute a true sale thereof, each Originator hereby grants
to
Buyer a security interest in all of such Originator’s right, title and interest,
whether now owned or hereafter acquired, in, to and under all Receivables now
existing and hereafter arising, all Collections and Related Security with
respect thereto, each Lock-Box and Collection Account, all other rights and
payments relating to the Receivables and all proceeds of the foregoing to secure
the prompt and complete payment of a loan deemed to have been made in an amount
equal to the Purchase Price of the Receivables together with all other
obligations of such Originator hereunder, which security interest shall be
prior
to all other Adverse Claims thereto. Buyer and its assigns shall have, in
addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided to a secured creditor under the UCC
and
other applicable law, which rights and remedies shall be
cumulative.
6
Article
II
Representations
and Warranties
Section
2.1 Representations
and Warranties of each Originator.
Each
Originator with respect to itself, hereby represents and warrants to Buyer
on
the date hereof, on the date of the Purchase and on each date that any
Receivable comes into existence that:
(a) Existence
and Power.
Such
Originator’s jurisdiction of organization is correctly set forth in Exhibit
II
to this
Agreement and such jurisdiction is its sole jurisdiction of organization. Such
Originator is duly organized under the laws of its jurisdiction of organization
and is a “registered organization” as defined in the UCC in effect in such
jurisdiction. Such Originator is validly existing and in good standing under
the
laws of its jurisdiction of organization, and
no
other state or jurisdiction, and as to which such state or jurisdiction must
maintain a public record showing the organization to have been organized. Such
Originator is qualified to do business and is in good standing as a foreign
entity, and has and holds all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in
each
jurisdiction in which its business is conducted except where the failure to
so
qualify or so hold could not reasonably be expected to have a Material Adverse
Effect.
(b) Power
and Authority; Due Authorization, Execution and Delivery.
The
execution and delivery by such Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, such Originator’s use of the proceeds
of the Purchase made hereunder, are within its organizational powers and
authority and have been duly authorized by all necessary organizational action
on its part. This Agreement and each other Transaction Document to which such
Originator is a party has been duly executed and delivered by such
Originator.
7
(c) No
Conflict.
The
execution and delivery by such Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder do not contravene or violate (i)
its
Organizational Documents, (ii)
any law,
rule or regulation applicable to it, (iii)
any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv)
any
order, writ, judgment, award, injunction or decree binding on or affecting
it or
its property, and do not result in the creation or imposition of any Adverse
Claim on assets of such Originator or its Subsidiaries (except as created
hereunder) except, in any case, where such contravention or violation could
not
reasonably be expected to have a Material Adverse Effect; and no transaction
contemplated hereby requires compliance with any bulk sales act or similar
law.
(d) Governmental
Authorization.
Other
than the filing of the financing statements required hereunder, no authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due execution
and delivery
by such Originator of this Agreement and each other Transaction Document to
which it is a party and the performance of its obligations hereunder and
thereunder.
(e) Actions,
Suits.
There
are no actions, suits or proceedings pending, or to the best of such
Originator’s knowledge, threatened, against it, or any of its properties, in or
before any court, arbitrator or other body, that could reasonably be expected
to
have a Material Adverse Effect. Such Originator is not in default with respect
to any order of any court, arbitrator or governmental body which default could
reasonably be expected to have a Material Adverse Effect.
(f) Binding
Effect.
This
Agreement and each other Transaction Document to which such Originator is a
party constitute the legal, valid and binding obligations of such Originator
enforceable against such Originator in accordance with their respective terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(g) Accuracy
of Information.
All
information (other than any projection or other forward-looking information)
heretofore furnished by such Originator or any of its Affiliates to Buyer (or
its assigns) for purposes of or in connection with this Agreement, any of the
other Transaction Documents or any transaction contemplated hereby or thereby
is, and all such information (other than any projection or other forward-looking
information) hereafter furnished by such Originator or any of its Affiliates
to
Buyer (or its assigns) will be, true and accurate in every material respect
on
the date such information is stated or certified and does not and will not
contain any material misstatement of fact.
(h) Use
of
Proceeds.
No
portion of any Purchase Price payment hereunder will be used by such Originator
(i)
for a
purpose that violates, or would be inconsistent with, any law, rule or
regulation applicable to such Originator or (ii)
to
acquire any security in any transaction which is subject to Section 12, 13
or 14
of the Securities Exchange Act of 1934, as amended other than the repurchase
of
equity securities of Arch Chemicals so long as such repurchase does not violate
Sections 12, 13 or 14 of the Securities Exchange Act of 1934, as
amended.
8
(i) Good
Title.
Immediately prior to the Purchase hereunder and upon the creation of each
Receivable coming into existence after the Initial Cut-Off Date, such Originator
(i)
is the
legal and beneficial owner of the Receivables created by it and (ii)
is the
legal and beneficial owner of the Related Security with respect thereto, free
and clear of any Adverse Claim, except as created by the Transaction Documents.
There have been duly filed all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect such Originator’s ownership interest in each
Receivable, its Collections, “Supporting Obligations” (as defined in Article 9
of the UCC in effect in each relevant jurisdiction), each Originator’s right,
title and interest in, to and under each of the Transaction Documents to which
it is a party, returned goods the sale of which gave rise to any Receivable,
security interests in favor of any Originator that secure payment of such
Receivable and all other items of Related Security in which an interest therein
may be perfected by the filing of a financing statement under Article 9 of
the
UCC and proceeds of the foregoing.
(j) Perfection.
This
Agreement, together with the filing of the financing statements contemplated
hereby, is effective to transfer to Buyer (and Buyer shall acquire from such
Originator) (i)
legal
and equitable title to, with the right to sell and encumber each Receivable
existing and hereafter arising, together with the Collections with respect
thereto, and (ii)
all of
such Originator’s right, title and interest in the Related Security associated
with each Receivable, in each case,
free and clear of any Adverse Claim, except as created by the Transactions
Documents. There have been duly filed all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of
all
appropriate jurisdictions to perfect Buyer’s ownership interest in the
Receivables, its Collections, “Supporting Obligations” (as defined in Article 9
of the UCC in effect in each relevant jurisdiction), each Originator’s right,
title and interest in, to and under each of the Transaction Documents to which
it is a party, returned goods the sale of which gave rise to any Receivable,
security interests in favor of any Originator that secure payment of such
Receivable and all other items of Related Security in which an interest therein
may be perfected by the filing of a financing statement under Article 9 of
the
UCC and proceeds of the foregoing. Such Originator’s jurisdiction of
organization is a jurisdiction whose law generally requires information
concerning the existence of a nonpossessory security interest to be made
generally available in a filing, record or registration system as a condition
or
result of such a security interest’s obtaining priority over the rights of a
lien creditor which respect to collateral.
(k) Places
of Business and Locations of Records.
The
principal places of business and chief executive office of such Originator
and
the offices where it keeps all of its Records are located at the address(es)
listed on Exhibit
II
or such
other locations of which Buyer has been notified in accordance with Section
4.2(a)
in
jurisdictions where all action required by Section
4.2(a)
has been
taken and completed. Such Originator’s Federal Employer Identification Number is
correctly set forth on Exhibit
II.
9
(l) Collections.
The
conditions and requirements set forth in subclause
(i)
of
Section
4.1(i)
have at
all times since June 27, 2005, been satisfied and duly performed. The conditions
and requirements set forth in subclause
(ii)
of
Section
4.1(i)
have
been satisfied from and after the Closing Date. The names and addresses of
all
Collection Banks, together with the account numbers of the Collection Accounts
of such Originator at each Collection Bank and the post office box number of
each Lock-Box, are listed on Exhibit
III.
Such
Originator has not granted any Person, other than Buyer (and its assigns)
dominion and control of any Lock-Box or Collection Account, or the right to
take
dominion and control of any such Lock-Box or Collection Account at a future
time
or upon the occurrence of a future event.
(m) Material
Adverse Effect.
Since
March 31, 2005, no event has occurred that would have a Material Adverse
Effect.
(n) Names.
The
name in which such Originator has executed this Agreement is identical to the
name of such Originator as indicated on the public record of its state of
organization which shows such Originator to have been organized.
In
the
past five (5) years, such Originator has not used any corporate names, trade
names or assumed names other than the name in which it has executed this
Agreement and as listed on Exhibit
II.
(o) Ownership
of Buyer.
Arch
Chemicals owns, directly or indirectly, 100% of the issued and outstanding
equity interests of Buyer, free and clear of any Adverse Claim. Such equity
interests are validly issued, fully paid and nonassessable, and there are no
options, warrants or other rights to acquire securities of Buyer.
(p) Not
a
Holding Company or an Investment Company.
Such
Originator is not a “holding company” or a “subsidiary holding company” of a
“holding company” within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Such Originator is not an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.
(q) Compliance
with Law.
Such
Originator has complied in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably
be
expected to have a Material Adverse Effect. Each Receivable, together with
the
Contract related thereto, does not contravene
any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse
Effect.
(r) Compliance
with Credit and Collection Policy.
Such
Originator has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not
made
any material change to such Credit and Collection Policy, except such material
change as to which Buyer (or its assigns) has been notified in accordance with
Section
4.1(a)(vii).
10
(s) Payments
to Originator.
With
respect to each Receivable transferred to Buyer hereunder, the Purchase Price
received by such Originator constitutes reasonably equivalent value in
consideration therefor and such transfer was not made for or on account of
an
antecedent debt. No transfer by such Originator of any Receivable hereunder
is
or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C. §§ 101 et
seq.),
as
amended.
(t) Enforceability
of Contracts.
Each
Contract with respect to each Receivable is effective to create, and has
created, a legal, valid and binding obligation of the related Obligor to pay
the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(u) Eligible
Receivables.
Each
Receivable reflected in any Purchase Report as an Eligible Receivable was an
Eligible Receivable on the date
of its
acquisition by Buyer hereunder.
(v) Accounting.
The
manner in which such Originator accounts for the transactions contemplated
by
this Agreement does not jeopardize the characterization of the transactions
contemplated herein as being true sales.
(w) Contract
Provisions.
Except
for customary adjustments in the ordinary course of business, no Contract with
respect to any Receivable contains provisions that either (i) permit or provide
for any reduction in the Outstanding Balance of the Receivable created
thereunder and any accrued interest thereon or (ii) could otherwise hinder
the
ability to receive Collections with respect to such Receivable.
Article
III
Conditions
of Purchase
Section
3.1 Conditions
Precedent to Purchase.
The
Purchase under this Agreement is subject to the conditions precedent that
(a)
Buyer
shall have been capitalized with the Initial Contributed Receivables,
(b)
Buyer
shall have received on or before the Closing Date those documents listed on
Schedule
A
and
(c)
all of
the conditions to the initial purchase under the Purchase Agreement shall have
been satisfied or waived in accordance with the terms thereof.
Section
3.2 Conditions
Precedent to Subsequent Purchases.
Each
Purchase after the Initial Cutoff Date shall be subject to the further
conditions precedent that: (a)
the
Facility Termination Date shall not have occurred under the Purchase Agreement;
(b)
Buyer
(or its assigns) shall have received such other approvals, opinions or documents
as it may reasonably request and (c)
on the
date such Receivable came into existence, the following statements shall be
true
(and acceptance of the proceeds of any payment for such Receivable shall be
deemed a representation and warranty by each Originator that such statements
are
then true):
11
(i) the
representations and warranties set forth in Article
II
are true
and correct on and as of the date such Receivable came into existence as though
made on and as of such date, except to the extent such representations and
warranties are expressly limited to an earlier date; and
(ii) no
event
has occurred and is continuing that will constitute a Termination Event or
an
Unmatured Termination Event.
Notwithstanding
the foregoing conditions precedent, upon payment of the Purchase Price for
any
Receivable (whether by payment of cash, through an increase in the amounts
outstanding under the related Subordinated Note, by offset of amounts owed
to
Buyer and/or by offset of capital contributions), title to such Receivable
and
the Related Security and Collections with respect thereto shall vest in Buyer,
whether or not the conditions precedent to Buyer’s obligation to pay for such
Receivable were in fact satisfied. The failure of any Originator to satisfy
any
of the foregoing conditions precedent, however, shall give rise to a right
of
Buyer to rescind the related purchase and direct such Originator to pay to
Buyer
an amount equal to the Purchase Price payment that shall have been made with
respect to any Receivables related thereto.
Article
IV
Covenants
Section
4.1 Affirmative
Covenants of Originators.
Until
the
date on which this Agreement terminates in accordance with its terms, each
Originator, with respect to itself hereby covenants as set forth
below:
(a) Financial
Reporting.
Such
Originator will maintain, for itself and each of its Subsidiaries, a system
of
accounting established and administered in accordance with GAAP, and furnish
to
Buyer (or its assigns):
(i) Annual
Reporting.
Within
90 days after the close of each of its fiscal years, audited, unqualified
consolidated financial statements (which shall include balance sheets,
statements of income and retained earnings and a statement of cash flows) for
Arch Chemicals and its consolidated Subsidiaries for such fiscal year certified
in a manner acceptable to Buyer (or its assigns) by KPMG LLP, independent public
accountants or any other independent public accountants of recognized national
standing.
(ii) Quarterly
Reporting.
Within
45 days after the close of the first three (3) quarterly periods of each of
its
respective fiscal years, balance sheets of Arch Chemicals and its consolidated
Subsidiaries as at the close of each such period and consolidated statements
of
income and a statement of cash flows for Arch Chemicals and its Subsidiaries
for
the period from the beginning of such fiscal year to the end of such quarter,
all certified by its chief financial officer, principal accounting officer,
treasurer or corporate controller.
12
(iii) Compliance
Certificate.
Together with the financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit
IV
signed
by such Originator’s Authorized Officer and dated the date of such annual
financial statement or such quarterly financial statement, as the case may
be.
(iv) Shareholders
Statements and Reports.
Promptly after becoming publicly available to the shareholders of such
Originator, copies of all financial statements, reports and proxy statements
furnished
to
them.
(v) S.E.C.
Filings.
Promptly after becoming publicly available, copies of all registration
statements and annual, quarterly, monthly or other regular reports which such
Originator or any of its Subsidiaries files with the Securities and Exchange
Commission.
(vi) Copies
of Notices.
Promptly upon its receipt of any notice, request for consent, financial
statements, certification, report or other communication under or in connection
with any Transaction Document from any Person other than Buyer, the
Administrator or TPF, copies of the same if such notice, request, consent,
financial statements, certification, report or other communication can
reasonably be expected to have an adverse effect on the Receivables, the Related
Security or the Buyer’s (or its assigns) rights therein.
(vii) Change
in Credit and Collection Policy.
At
least thirty (30) days prior to the effectiveness of any material change in
or
material amendment to the Credit and Collection Policy, a copy of the Credit
and
Collection Policy then in effect and a notice (A)
indicating such proposed change or amendment, and (B)
if such
proposed change or amendment would be reasonably likely to adversely affect
the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables, requesting Buyer’s (and the Administrator’s, as Buyer’s
assignee) consent thereto.
(viii) Other
Information.
Promptly, from time to time, such other information, documents, records or
reports relating to (i) the financial condition or operations of such Originator
as Buyer (or its assigns) may from time to time reasonably request in order
to
protect the interests of Buyer (and its assigns) under or as contemplated by
this Agreement
or (ii)
the Receivables as the Buyer (or its assigns) may reasonably
request.
Information
required to be delivered pursuant to paragraphs
(i),
(ii),
(iv)
and
(v)
of this
Section
4.1(a)
shall be
deemed to have been delivered by the date indicated therein, provided
that
such information has been filed with the Securities and Exchange Commission
by
such date; provided
further
that the Originator shall deliver paper copies of the statements, reports,
financial statements and other information referred to in paragraph
(i),
(ii),
(iv)
and
(v)
of this
Section
4.1(a)
to the
Buyer promptly upon request following such filing.
13
(b) Notices.
Such
Originator will notify Buyer (or its assigns) in writing of any of the following
promptly upon learning of the occurrence thereof, describing the same and,
if
applicable, the steps being taken with respect thereto:
(i) Termination
Events or Unmatured Termination Events.
The
occurrence of each Termination Event and each Unmatured Termination Event,
by a
statement of an Authorized Officer of such Originator.
(ii) Judgment
and Proceedings.
(A)
The
entry of any judgment or decree against such Originator or any of its
Subsidiaries if the amount of such judgment or decree then outstanding against
such Originator and its Subsidiaries exceeds $5,000,000 after deducting
(1)
the
amount with respect to which such Originator or any such Subsidiary is insured
and with respect to which the insurer has not disclaimed responsibility in
writing, and (2)
the
amount for which such Originator or any such Subsidiary is otherwise indemnified
if the terms of such indemnification are satisfactory to Buyer (or its assigns),
and (B)
the
institution of any litigation, arbitration proceeding or governmental proceeding
against such Originator which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(iii) Material
Adverse Effect.
The
occurrence of any event or condition that has had, or could reasonably be
expected to have, a Material Adverse Effect.
(iv) Defaults
Under Other Agreements.
The
occurrence of a default that could lead to an event of default or an event
of
default under any other financing arrangement in a principal amount greater
than
or equal to $5,000,000 pursuant to which such Originator is a debtor or an
obligor.
(c) Compliance
with Laws and Preservation of Existence.
Such
Originator will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably
be
expected to have a Material Adverse Effect. Such Originator will preserve and
maintain its legal existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign entity in each jurisdiction where its business is
conducted, except where the failure to so qualify or remain in good standing
could not reasonably be expected to have a Material Adverse Effect.
Notwithstanding the preceding sentence, it is expressly understood and agreed
that any Originator may merge or consolidate with, or transfer all or
substantially all of its assets to, any other Originator , so long as Buyer
(or
its assigns) shall have received such approvals, opinions or documents as it
may
reasonably request.
14
(d) Audits.
In
addition to information that may be required pursuant to Section
4.1(a)(viii),
each
Originator will furnish to Buyer (or its assigns) from time to time such
information with respect to it and the Receivables as Buyer (or its assigns)
may
reasonably request. Each Originator will, from time to time during regular
business hours as requested by Buyer (or its assigns), upon reasonable notice
and at the sole cost of such Originator, permit Buyer (or its assigns) or their
respective agents or representatives (i)
to
examine and make copies of and abstracts from all Records in the possession
or
under the control of such Originator relating to the Receivables and the Related
Security, including, without limitation, the related Contracts (other than
any
Confidential Contract (except for any Confidential Contract as to which the
related Obligor has consented to such disclosure or which may be disclosed
to
others who are subject to a confidentiality agreement) as to which the
disclosure thereof cannot be satisfied by the execution and delivery of a
confidentiality agreement), and (ii)
to visit
the offices and properties of such Originator for the purpose of examining
such
materials described in clause
(i)
above,
and to discuss matters relating to such Originator’s financial condition or the
Receivables and the Related Security or such Originator’s performance under any
of the Transaction Documents or such Originator’s performance under the
Contracts and, in each case, with any of the officers or employees of Originator
having knowledge of such matters (each of the foregoing examinations and visits,
a “Review”);
provided,
however,
that so
long as no Termination Event has occurred and is continuing, (A)
such
Originator shall only be responsible for the costs and expenses of one (1)
Review in any one calendar year, and (B)
the
Buyer (or its assigns) will not request more than four (4) Reviews in any one
calendar year.
(e) Keeping
and Marking of Records and Books.
(i) Such
Originator will, maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof), and
keep
and maintain all documents, books, records and other information, in each such
case as reasonably necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the immediate
identification of each new Receivable and all Collections of and adjustments
to
each existing Receivable). Such Originator will give Buyer (or its assigns)
notice of any material change in the administrative and operating procedures
referred to in the previous sentence.
(ii) Such
Originator will on or prior to the date hereof, xxxx its master data processing
system and all accounts receivable reports generated thereby, each Confidential
Contract and its records relating to all other Contracts with a legend,
reasonably acceptable to Buyer (or its assigns), describing Buyer’s ownership
interests in the Receivables and further describing the Receivable Interests
of
the Administrator (on behalf of TPF and its assigns) under the Purchase
Agreement.
(f) Compliance
with Contracts and Credit and Collection Policy.
Such
Originator will timely and fully (i)
perform
and comply in all material respects with all provisions, covenants and other
promises required to be observed by it under the Contracts related to the
Receivables, in each case to the same extent as though such Contracts had not
been transferred to the Buyer, but only to the extent there would not be an
adverse effect upon the Receivables, and (ii)
comply
in all material respects with the Credit and Collection Policy in regard to
each
Receivable and the related Contract.
15
(g) Ownership.
Such
Originator will take all necessary action to establish and maintain, irrevocably
in Buyer, (A)
legal
and equitable title to the Receivables and the Collections and (B)
all of
such Originator’s right, title and interest
in the Related Security associated with the Receivables, in each case, free
and
clear of any Adverse Claims other than Adverse Claims in favor of Buyer (and
its
assigns) (including, without limitation, the filing of all financing statements
or other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Buyer’s interest in
such Receivables, Related Security and Collections and such other action to
perfect, protect or more fully evidence the interest of Buyer as Buyer (or
its
assigns) may reasonably request); provided,
however,
that
unless and until an Amortization Event or an Unmatured Amortization Event has
occurred, none of the Originators shall be required to take any actions to
establish, maintain or perfect the Buyer’s ownership interest in the Related
Security other than the filing of financing statements under the UCC of all
appropriate jurisdictions.
(h) TPF’s
Reliance.
Such
Originator acknowledges that the Administrator and TPF are entering into the
transactions contemplated by the Purchase Agreement in reliance upon Buyer’s
identity as a legal entity that is separate from such Originator and any
Affiliates thereof. Therefore, from and after the date of execution and delivery
of this Agreement, such Originator will take all reasonable steps including,
without limitation, all steps that Buyer or any assignee of Buyer may from
time
to time reasonably request to maintain Buyer’s identity as a separate legal
entity and to make it manifest to third parties that Buyer is an entity with
assets and liabilities distinct from those of such Originator and any Affiliates
thereof and not just a division of such Originator or any such Affiliate.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, such Originator (i)
will not
hold itself out to third parties as liable for the debts of Buyer nor purport
to
own the Receivables and other assets acquired by Buyer, (ii)
will
take all other actions necessary on its part to ensure that Buyer is at all
times in compliance with the “separateness covenants” set forth in Section
7.1(i) of the Purchase Agreement and (iii)
will
cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between such Originator and
Buyer on an arm’s-length basis and in a manner consistent with the procedures
set forth in U.S. Treasury Regulations §§1.1502-33(d) and 1.1552-1.
(i) Collections.
Such
Originator will cause (i)
all
proceeds from all Lock-Boxes to be directly deposited by a Collection Bank
into
a Collection Account and (ii)
each
Lock-Box and Collection Account to be subject at all times to a Collection
Account Agreement that is in full force and effect. In the event any payments
relating to Receivables are remitted directly to such Originator or any
Affiliate of such Originator, such Originator will remit (or will cause all
such
payments to be remitted) directly to a Collection Bank and deposited into a
Collection Account within two (2) Business Days following receipt thereof and,
at all times prior to such remittance, such Originator will itself hold or,
if
applicable, will cause such payments to be held in trust for the exclusive
benefit of Buyer and its assigns. Such Originator will transfer exclusive
ownership, dominion and control of each Lock-Box and Collection Account to
Buyer
and, will not grant the right to take dominion and control of any Lock-Box
or
Collection Account at a future time or upon the occurrence of a future event
to
any Person, except to Buyer (or its assigns) as contemplated by this Agreement
and the Purchase Agreement.
16
(j) Taxes.
Such
Originator will file all tax returns and reports required by law to be filed
by
it and promptly pay all taxes and governmental charges at any time owing, except
any such taxes which are not yet delinquent or are being diligently contested
in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books. Such Originator
will pay when due any taxes payable in connection with the Receivables,
exclusive of taxes on or measured by income or gross receipts of Buyer and
its
assigns.
Section
4.2 Negative
Covenants of Originators.
Until
the
date on which this Agreement terminates in accordance with its terms, each
Originator, with respect to itself, hereby covenants that:
(a) Change
in
Name, Jurisdiction of Organization.
Such
Originator will not change (i)
its name
as it appears in official filings in the jurisdiction of its organization,
(ii)
its
status as a “registered organization” (within the meaning of Article 9 of any
applicable enactment of the UCC) in such jurisdiction, (iii)
its
organizational identification number, if any, issued by its jurisdiction of
organization, or (iv)
its
jurisdiction of organization unless it shall have: (A)
given
Buyer (or its assigns) at least thirty (30) days’ prior written notice thereof
and (B)
delivered to Buyer (or its assigns) all financing statements, instruments and
other documents requested by Buyer (or its assigns) in connection with such
change or relocation.
(b) Change
in Payment Instructions to Obligors.
Such
Originator will not add or terminate any bank as a Collection Bank, or make
any
change in the instructions to Obligors regarding payments to be made to any
Lock-Box or Collection Account, unless Buyer (or its assigns) shall have
received, at least ten (10) days before the proposed effective date therefor,
(i)
written
notice of such addition, termination or change and (ii)
with
respect to the addition of a Collection Bank
or a
Collection Account or Lock-Box, an executed Collection Account Agreement with
respect to the new Collection Account or Lock-Box; provided,
however,
that
such Originator may make changes in instructions to Obligors regarding payments
if such new instructions require such Obligor to make payments to another
existing Collection Account.
(c) Modifications
to Contracts and Credit and Collection Policy.
Such
Originator will not make any material change or material amendment to the Credit
and Collection Policy unless, at least 30 days prior to such material change
or
material amendment, it has delivered to the Buyer (or its assigns) a copy of
the
Credit and Collection Policy then in effect and notice (i)
indicating such proposed change or amendment, and (ii)
if such
proposed change would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables, requesting Buyer’s (and the Administrator’s, as Buyer’s
assignee) consent thereto. Except as otherwise permitted in its capacity as
Servicer pursuant to the Purchase Agreement, Originator will not extend, amend
or otherwise modify the terms of any Receivable or Contract related thereto
other than in accordance with the Credit and Collection Policy.
17
(d) Sales,
Liens.
Such
Originator will not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, or create or suffer to exist
any Adverse Claim upon (including, without limitation, the filing of any
financing statement) or with respect to, any Receivable, Related Security or
Collections, or upon or with respect to any Contract under which any Receivable
arises, or any Lock-Box or Collection Account, or assign any right to receive
income with respect thereto (other than, in each case, (i) the creation of
the
interests therein in favor of Buyer (and its assigns) provided for herein or
in
any other Transaction Document and (ii) in connection with any transaction
permitted by Section
4.1(c)),
and
such Originator will defend the right, title and interest of Buyer in, to and
under any of the foregoing property, against all claims of third parties
claiming through or under such Originator. Such Originator shall not create
or
suffer to exist any mortgage, pledge, security interest, encumbrance, lien,
charge or other similar arrangement on any of its inventory the sale of which
gives rise to any Receivable.
(e) Accounting
for Purchase.
Such
Originator will not, and will not permit any Affiliate to, account for the
transactions contemplated hereby in any manner other than the sale or capital
contributions of the Receivables and the Related Security by such Originator
to
Buyer or in any other respect account for or treat the transactions contemplated
hereby in any manner other than as a sale or contribution of the Receivables
and
the Related Security by such Originator to Buyer except (i)
to the
extent that such transactions are not recognized on account of consolidated
financial reporting in accordance with generally accepted accounting principles
and (ii)
in
accordance with applicable tax principles, each Purchase and contribution is
ignored for tax reporting purposes.
(f) Contract
Provisions.
Except
for customary adjustments in the ordinary course of business, such Originator
will not permit any Contract with respect to any Receivable to contain
provisions that either (i)
permit
or provide for any reduction in the Outstanding Balance of the Receivable
created thereunder and any accrued interest thereon or (ii)
could
otherwise hinder the ability to receive Collections with respect to such
Receivable.
18
Article
V
Termination
Events
Section
5.1 Termination
Events.
The
occurrence of any one or more of the following events shall constitute a
Termination Event:
(a) Any
Originator shall fail (i)
to make
any payment or deposit required hereunder when due and such failure shall
continue for three (3) consecutive Business Days, or (ii) to perform or observe
any term, covenant or agreement hereunder (other than as referred to in
clause
(i)
of this
paragraph
(a))
or any
other Transaction Document to which it is a party and such failure shall
continue for ten (10) consecutive Business Days.
(b) (i)
Any
representation or warranty made by any of the Originators in this Agreement
or
the Receivables Purchase Agreement shall prove to have been incorrect in any
respect when made or deemed made, (ii) any information contained in any Monthly
Report shall prove to have been incorrect in any respect when made, or (iii)
any
representation, warranty, certification or statement (other than relating to
projections or other forward-looking information) made by any of the Originators
in any other Transaction Document or in any other document delivered pursuant
hereto or thereto (other than in a Monthly Report) shall prove to have been
incorrect in any material respect when made or deemed made; provided
that no
such event shall constitute a Termination Event unless such event is unremedied
for a period of ten (10) Business Days after the earlier to occur of (i) written
notice thereof shall have been given by the Buyer (or its assigns) to the
applicable Originator or (ii) an Authorized Officer of such Originator shall
have actual knowledge thereof or should have had knowledge thereof if such
Authorized Officer had exercised reasonable care in the performance of his
or
her duties; provided,
further
that no
grace period shall apply to Sections 2.1(f), 2.1(i), 2.1(j), 2.1(n),
2.1(p)
and 2.1(u); and provided
further no
such
event shall constitute a Termination Event if the Seller have timely paid to
the
Administrator the Purchase Price Credit required to be paid as a result of
such
event in accordance with Section 1.4.
(c) Failure
of any Originator to pay any Indebtedness when due in excess of $5,000,000
(after giving effect to any applicable grace periods); or the default by any
Originator in the performance of any term, provision or condition contained
in
any agreement under which any such Indebtedness was created or is governed,
the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of any Originator shall be declared to be
due
and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the date of maturity thereof.
(d) an
Event
of Bankruptcy shall occur with respect to any Originator or any of its
Subsidiaries.
19
(e) A
Change
of Control shall occur.
(f) One
or
more final judgments of a court of competent jurisdiction for the payment of
money in an amount in excess of $5,000,000, individually or in the aggregate,
shall be entered against any Originator or any of its Subsidiaries on claims
not
covered by insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect
for
sixty (60) consecutive days without a stay of execution.
(g) This
Agreement shall terminate in whole or in part (except in accordance with its
terms), or shall cease to be effective or to be the legally valid, binding
and
enforceable obligation of any Originator, or any Originator shall directly
or
indirectly contest in any manner such effectiveness,
validity, binding nature or enforceability, or Buyer (or its assigns) shall
cease to have a valid and perfected first priority security interest in the
Receivables, its Collections, “Supporting Obligations” (as defined in Article 9
of the UCC in effect in each relevant jurisdiction), each Originator’s right,
title and interest in, to and under each of the Transaction Documents to which
it is a party, returned goods the sale of which gave rise to any Receivable,
security interests in favor of any Originator that secure payment of such
Receivable and all other items of Related Security in which an interest therein
may be perfected by the filing of financing statements under Article 9 of the
UCC and proceeds of the foregoing, or any Person shall contest the Buyer’s
perfected first priority ownership interest in that portion of the Related
Security in which perfection cannot be accomplished under Article 9 of the
relevant UCC, or the Buyer (or its assigns) shall incur any loss resulting
from
any Originator’s failure to perfect Buyer’s ownership interest in that portion
of the Related Security in which perfection cannot be accomplished under Article
9 of the relevant UCC.
(h) The
Internal Revenue Service shall file notice of a lien pursuant to Section 6323
of
the Tax Code with regard to any of the Receivables or the Related Security
or
the PBGC shall file notice of a lien pursuant to Section 4068 of ERISA with
regard to any of the Receivables or the Related Security and any such lien
shall
not have been released within the earlier to occur of (i)
seven
(7) days after the date of such filing and (ii) the
day
on which the Buyer (or any of its assigns) becomes aware of such
filing.
(i) Any
Plan
of any Originator or any of its ERISA Affiliates:
(i) shall
fail to be funded in accordance with the minimum funding standard required
by
applicable law, the terms of such Plan, Section 412 of the Tax Code or Section
302 of ERISA for any plan year or a waiver of such standard is sought or granted
with respect to such Plan under applicable law, the terms of such Plan or
Section 412 of the Tax Code or Section 303 of ERISA; or
(ii) is
being,
or has been, terminated or the subject of termination proceedings under
applicable law or the terms of such Plan; or
20
(iii) shall
require any Originator or any of its ERISA Affiliates to provide security under
applicable law, the terms of such Plan, Section 401 or 412 of the Tax Code
or
Section 306 or 307 of ERISA; or
(iv) results
in a liability to any Originator or any of its ERISA Affiliates under applicable
law, the terms of such Plan, or Title IV ERISA,
and
there
shall result from any such failure, waiver, termination or other event a
liability to the PBGC or a Plan that would have a Material Adverse
Effect.
(j) Any
other
event shall occur which has, or could be reasonably expected to have a Material
Adverse Effect.
Section
5.2 Remedies.
Upon
the
occurrence and during the continuation of a Termination Event, Buyer may take
any of the following actions: (a)
declare
the Termination Date to have occurred, whereupon the Termination Date shall
forthwith occur, without demand, protest or further notice of any kind, all
of
which are hereby expressly waived by each Originator; provided,
however,
that
upon the occurrence of a Termination Event described in Section
5.1(d),
or of
an actual or deemed entry of an order for relief with respect to any Originator
under the Federal Bankruptcy Code, the Termination Date shall automatically
occur, without demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Originator and (b)
to the
fullest extent permitted by applicable law, declare that the Default Fee shall
accrue with respect to any amounts then due and owing by each Originator to
Buyer. The aforementioned rights and remedies shall be without limitation and
shall be in addition to all other rights and remedies of Buyer and its assigns
otherwise available under any other provision of this Agreement, by operation
of
law, at equity or otherwise, all of which are hereby expressly preserved,
including, without limitation, all rights and remedies provided under the UCC,
all of which rights shall be cumulative.
Article
VI
Indemnification
Section
6.1 Indemnities
by Originators.
Without
limiting any other rights that Buyer may have hereunder or under applicable
law,
each Originator hereby agrees to indemnify (and pay upon demand to) Buyer and
its assigns, officers, directors, agents and employees (each an “Indemnified
Party”)
from
and against any and all damages, losses, claims, taxes, liabilities, costs,
expenses and for all other amounts payable, including reasonable attorneys’ fees
and disbursements (all of the foregoing being collectively referred to as
“Indemnified
Amounts”)
awarded against or incurred by any of them arising out of or as a result of
this
Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables, excluding, however:
(a) Indemnified
Amounts to the extent a final judgment of a court of competent jurisdiction
holds that such Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking
indemnification;
21
(b) Indemnified
Amounts to the extent the same includes losses in respect of Receivables that
are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; or
(c) taxes
imposed by the United States, the Indemnified Party’s jurisdiction of
organization (or in the case of an individual, primary resident) or any other
jurisdiction in which such Indemnified Party has established a taxable nexus
other than in connection with the transaction contemplated hereby, on or
measured by the overall net income of such Indemnified Party to the extent
that
the computation of such taxes is consistent with the characterization for income
tax purposes of the acquisition by TPF of Receivable Interests under the
Purchase Agreement as a loan or loans by TPF to Buyer secured by, among other
things, the Receivables, the Related Security and the Collections;
provided,
however,
that
nothing contained in this sentence shall limit the liability of any Originator
or limit the recourse of Buyer to any Originator for amounts otherwise
specifically provided to be paid by such Originator under the terms of this
Agreement. Without limiting the generality of the foregoing indemnification,
but
subject in each case to clauses (a),
(b)
and
(c)
above,
an Originator shall indemnify Buyer for Indemnified Amounts relating to or
resulting from:
(i) any
representation or warranty made by such Originator (or any officers of such
Originator) under or in connection with any Purchase Report, this Agreement,
any
other Transaction Document or any other information or report delivered by
such
Originator pursuant hereto or thereto for which Buyer has not received a
Purchase Price Credit that shall have been false or incorrect when made or
deemed made;
(ii) the
failure by such Originator, to comply with any applicable law, rule or
regulation with respect to any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein with any such
applicable law, rule or regulation or any failure of such Originator to keep
or
perform any of its obligations, express or implied, with respect to any
Contract;
(iii) any
failure of such Originator to perform its duties, covenants or other obligations
in accordance with the provisions of this Agreement or any other Transaction
Document;
(iv) any
products liability, personal injury or damage, suit or other similar claim
arising out of or in connection with merchandise, insurance or services that
are
the subject of any Contract or any Receivable;
(v) any
dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of the Obligor to the payment of any Receivable (including, without
limitation, a defense based on such Receivable or the related Contract not
being
a legal, valid and binding obligation of such Obligor enforceable against it
in
accordance with its terms), or any other claim resulting from the sale of the
merchandise or service related to such Receivable or the furnishing or failure
to furnish such merchandise or services;
22
(vi) the
commingling of Collections of Receivables at any time with other
funds;
(vii) any
investigation, litigation or proceeding related to or arising from this
Agreement or any other Transaction Document, the transactions contemplated
hereby, the use of the proceeds of the Purchase hereunder, the ownership of
the
Receivables or any other investigation, litigation or proceeding relating to
such Originator in which any Indemnified Party becomes involved as a result
of
any of the transactions contemplated hereby;
(viii) any
inability to litigate any claim against any Obligor in respect of any Receivable
as a result of such Obligor being immune from civil and commercial law and
suit
on the grounds of sovereignty or otherwise from any legal action, suit or
proceeding;
(ix) any
Termination Event described in Section
5.1(d);
(x) any
failure to vest and maintain vested in Buyer, or to transfer to Buyer, legal
and
equitable title to, and ownership of, the Receivables and the Collections,
and
all of such Originator’s right, title and interest in the Related Security
associated with the Receivables, in each case, free and clear of any Adverse
Claim except for Adverse Claims in favor of the Buyer and its
assigns;
(xi) the
failure to have filed, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction
or
other applicable laws with respect to any Receivable, the Related Security
and
Collections with respect thereto, and the proceeds of any thereof, whether
at
the time of the Purchase or at any subsequent time;
(xii) any
action or omission by such Originator which reduces or impairs the rights of
Buyer (or its assigns) with respect to any Receivable or the value of any such
Receivable;
(xiii) any
attempt by any Person to void the Purchase hereunder under statutory provisions
or common law or equitable action; and
(xiv) the
failure of any Receivable reflected as an Eligible Receivable on any Purchase
Report to be an Eligible Receivable at the time acquired by Buyer.
23
Section
6.2 Other
Costs and Expenses.
Each
Originator shall pay to Buyer promptly on demand all reasonable costs and
out-of-pocket expenses in connection with the preparation, execution, delivery
and administration of this Agreement, the transactions contemplated hereby
and
the other documents to be delivered hereunder. Each Originator shall pay to
Buyer promptly on demand any and all reasonable costs and expenses of Buyer,
if
any, including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and
in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following a Termination
Event.
Article
VII
Miscellaneous
Section
7.1 Waivers
and Amendments.
(a) No
failure or delay on the part of Buyer (or its assigns) in exercising any power,
right or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or remedy preclude
any other further exercise thereof or the exercise of any other power, right
or
remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No
provision of this Agreement may be amended, supplemented, modified or waived
except in writing signed by each Originator and Buyer and, to the extent
required under the Purchase Agreement, the Administrator and the Liquidity
Banks
or the Required Liquidity Banks.
Any
material amendment, supplement, modification of waiver will required
satisfaction of the Rating Agency Condition.
Section
7.2 Notices.
All
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing)
and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (a)
if given
by telecopy, upon the receipt thereof, (b)
if given
by mail, ten (10) Business Days after the time such communication is deposited
in the mail with first class postage prepaid or (c)
if given
by any other means, when received at the address specified in this Section
7.2.
Section
7.3 Protection
of Ownership Interests of Buyer.
(a) Each
Originator agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may be necessary or desirable, or that Buyer (or its assigns) may request,
to
perfect, protect or more fully evidence the interest of Buyer hereunder and
the
Receivable Interests, or to enable Buyer (or its assigns) to exercise and
enforce their rights and remedies hereunder; provided,
however,
that
unless and until an Amortization Event or an Unmatured Amortization Event has
occurred, none of the Originators shall be required to take any actions to
establish, maintain or perfect the Buyer’s ownership interest in the Related
Security other than the filing of financing statements under the UCC of all
appropriate jurisdictions. During the occurrence and continuance of an Unmatured
Amortization or an Amortization Event, Buyer (or its assigns) may, at the
related Originator’s sole cost and expense, direct such Originator to notify the
Obligors of Receivables of the ownership interests of Buyer under this
Agreement. During the occurrence and continuance of an Unmatured Amortization
or
an Amortization Event, Buyer (or its assigns) may direct any Originator (and
if
any Originator fails to do so) Buyer (or its assigns) may direct
that payments
of all amounts due or that become due under any or all Receivables be made
directly to an account specified by the Buyer or its designee which may be
an
account of the Buyer (or its assigns).
24
(b) If
any
Originator fails to perform any of its obligations hereunder, Buyer (and
Administrator, as Buyer’s assignee) may (but shall not be required to) upon
notice to such Originator perform, or cause performance of, such obligations,
and Buyer’s (or such assigns’) costs and expenses incurred in connection
therewith shall be payable by such Originator as provided in Section
6.2.
Each
Originator irrevocably authorizes Buyer (and Administrator, as Buyer’s assignee)
at any time and from time to time in the sole discretion of Buyer (or such
assignee), and appoints Buyer (and such assignee) as its attorney(ies)-in-fact,
to act on behalf of such Originator (i)
to
execute (if required) on behalf of such Originator as debtor or seller and
to
file financing statements necessary or desirable in Buyer’s (or such assignee’s)
sole discretion to perfect and to maintain the perfection and priority of the
ownership interest of Buyer in the Receivables and associated Related Security
and Collections and (ii)
to file
a carbon, photographic or other reproduction of this Agreement or any financing
statement with respect to the Receivables as a financing statement in such
offices as Buyer (or Administrator, as Buyer’s assignee) in its sole discretion
deems necessary or desirable to perfect and to maintain the perfection and
priority of Buyer’s ownership interest in the Receivables. This appointment is
coupled with an interest and is irrevocable. (A)
Each
Originator hereby authorizes Buyer (and Administrator, as Buyer’s assignee) to
file financing statements and other filing or recording documents with respect
to the Receivables and Related Security (including any amendments thereto,
or
continuation or termination statements thereof), without further authorization
of such Originator, in such form and in such offices as Buyer (or such assignee)
reasonably determines appropriate to perfect or maintain the perfection of
the
ownership or security interests of Buyer (and Administrator, as Buyer’s
assignee) hereunder, (B)
each
Originator acknowledges and agrees that it is not authorized to, and will not,
file financing statements or other filing or recording documents with respect
to
the Receivables or Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the express prior
written approval by the Administrator (as Buyer’s assignee), consenting to the
form and substance of such filing or recording document, and (C)
each
Originator approves, authorizes and ratifies any filings or recordings made
by
or on behalf of the Administrator (as Buyer’s assignee) in connection with the
perfection of the ownership or security interests in favor of Buyer or the
Administrator (as Buyer’s assignee).
25
Section
7.4 Confidentiality.
(a) Each
Originator shall maintain and shall cause each of its employees and officers
to
maintain the confidentiality of the Fee Letter and any confidential or
proprietary information with respect to TPF and TPF’s business obtained by it or
them in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that such Originator and its officers
and employees may disclose such information to such Originator’s directors,
external accountants and attorneys and in accordance with any applicable law,
rule, regulation, direction, request or order of any judicial, administrative
or
regulatory authority or proceedings (whether or not having the force or effect
of law).
(b) Anything
herein to the contrary notwithstanding, each Originator hereby consents to
the
disclosure of any nonpublic information with respect to it (i)
to
Buyer, the Administrator, SunTrust Bank or TPF by each other, (ii)
by
Buyer, the Administrator, SunTrust Bank or TPF to any prospective or actual
assignee or participant of any of them and (iii)
by the
Administrator to any rating agency, Commercial Paper dealer or provider of
a
surety, guaranty or credit or liquidity enhancement to TPF or any entity
organized for the purpose of purchasing, or making loans secured by, financial
assets for which STCM or one of its affiliates acts as the administrator and/or
agent and to any officers, directors, employees, outside accountants and
attorneys of any of the foregoing, provided
each
such Person is informed of the confidential nature of such information. In
addition, TPF, SunTrust Bank and the Administrator may disclose any such
nonpublic information in accordance with any law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).
(c) Buyer
shall maintain and shall cause each of its employees and officers to maintain
the confidentiality of any confidential or proprietary information with respect
to each Originator, the Obligors and their respective businesses obtained
by it
in
connection with the due diligence evaluations, structuring, negotiating and
execution of the Transaction Documents, and the consummation of the transactions
contemplated herein and any other activities of Buyer arising from or related
to
the transactions contemplated herein provided,
however,
that
each of Buyer and its employees and officers shall be permitted to disclose
such
confidential or proprietary information: (i)
to the
Administrator, TPF and SunTrust Bank, (ii)
to any
prospective or actual assignee or participant who executes a confidentiality
agreement for the benefit of any Originator and Buyer on terms comparable to
those required of Buyer hereunder with respect to such disclosed information,
(iii)
to any
rating agency, provider of a surety, guaranty or credit or liquidity enhancement
to TPF, (iv)
to any
officers, directors, employees, outside accountants and attorneys of any of
the
foregoing, and (v)
to the
extent required pursuant to any applicable law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or
proceedings with competent jurisdiction (whether or not having the force or
effect of law) so long as such required disclosure is made under seal to the
extent permitted by applicable law or by rule of court or other applicable
body;
provided
each
such Person is informed of the confidential nature of such
information.
26
Section
7.5 Bankruptcy
Petition.
(a) Each
of
the Originators and Buyer hereby covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding senior
indebtedness of TPF, it will not institute against, or join any other Person
in
instituting against, TPF any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States.
(b) Each
of
the Originators covenants and agrees that, prior to the date that is one year
and one day after the payment in full of all outstanding obligations of Buyer
under the Purchase Agreement, it will not institute against, or join any other
Person in instituting against, Buyer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United
States.
Section
7.6 Limitation
of Liability.
Except
with respect to any claim arising out of the willful misconduct or gross
negligence of TPF, the Administrator or any Liquidity Bank, no claim may be
made
by any Originator or any other Person against TPF, the Administrator or any
Liquidity Bank or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement,
or
any act, omission or event occurring in connection therewith; and each
Originator hereby waives, releases, and agrees not to xxx upon any claim for
any
such damages, whether or not accrued and whether or not known or suspected
to
exist in its favor.
Section
7.7 CHOICE
OF LAW.
THIS
AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
(AND NOT THE LAW OF CONFLICTS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW) OF THE STATE OF NEW YORK.
Section
7.8 CONSENT
TO JURISDICTION.
EACH
PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY
UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK
IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT AND EACH PARTY HERETO
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR ITS
ASSIGNS) TO BRING PROCEEDINGS AGAINST ANY ORIGINATOR IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY ORIGINATOR AGAINST BUYER (OR ITS
ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR
ANY
DOCUMENT EXECUTED BY ANY ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT
ONLY IN A COURT IN NEW YORK, NEW YORK.
27
Section
7.9 WAIVER
OF JURY TRIAL.
EACH
PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT, ANY DOCUMENT EXECUTED BY ANY ORIGINATOR PURSUANT TO THIS AGREEMENT
OR
THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section
7.10 Integration;
Binding Effect; Survival of Terms.
(a) This
Agreement and each other Transaction Document contain the final and complete
integration of all prior expressions by the parties hereto with respect to
the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.
(b) This
Agreement shall be binding upon and inure to the benefit of each Originator,
Buyer and their respective successors and permitted assigns (including any
trustee in bankruptcy). No Originator may assign any of its rights and
obligations hereunder or any interest herein without the prior written consent
of Buyer. Buyer may assign at any time its rights and obligations hereunder
and
interests herein to any other Person without the consent of any Originator.
Without limiting the foregoing, each Originator acknowledges that Buyer,
pursuant to the Purchase Agreement, may assign to the Administrator, for the
benefit of TPF and its assigns, its rights, remedies, powers and privileges
hereunder and that the Administrator may further assign such rights, remedies,
powers and privileges to the extent permitted in the Purchase Agreement. Each
Originator agrees that the Administrator, as the assignee of Buyer, shall,
subject to the terms of the Purchase Agreement, have the right to enforce this
Agreement and to exercise directly all of Buyer’s rights and remedies under this
Agreement (including, without limitation, the right to give or withhold any
consents or approvals of Buyer to be given or withheld hereunder) and each
Originator agrees to cooperate fully with the Administrator in the exercise
of
such rights and remedies. This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms and
shall remain in full force and effect until terminated in accordance with its
terms; provided,
however,
that
the rights and remedies with respect to (i)
any breach
of
any representation and warranty made by any Originator pursuant to Article
II;
(ii)
the
indemnification and payment provisions of Article
VI;
and
(iii) Section
7.5
shall be
continuing and shall survive any termination of this Agreement.
28
Section
7.11 Counterparts;
Severability; Section References.
This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one
and
the same Agreement. Delivery of an executed counterpart of a signature page
by
facsimile or other means of electronic transmission shall be effective as
delivery of a manually executed counterpart of this Agreement. Any provisions
of
this Agreement which are prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or
render unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to “Article,”“Section,”“Schedule” or
“Exhibit” shall mean articles and sections of, and schedules and exhibits to,
this Agreement.
[remainder
of page intentionally left blank]
29
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date
hereof.
ARCH CHEMICALS, INC. | ||
|
|
|
By: | /s/ W. Xxxx Xxxx | |
Name: W. Xxxx Xxxx |
||
Title: Treasurer | ||
Address:
US
Mail:
000
Xxxxxxx 0
X.X.
Xxx 0000
Xxxxxxx,
XX 00000-0000
Hand
Delivery:
000
Xxxxxxx 0
Xxxxxxx,
XX 00000
Attention:
Corporate Secretary
Phone:
(000) 000-0000
Fax:
(000) 000-0000
|
[additional
signatures to follow]
30
ARCH CHEMICALS SPECIALTY PRODUCTS, INC. | ||
|
|
|
By: | /s/ W. Xxxx Xxxx | |
Name: W. Xxxx Xxxx |
||
Title: Treasurer | ||
Address:
US
Mail:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
X.X.
Xxx 0000
Xxxxxxx,
XX 00000-0000
Hand
Delivery:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
Xxxxxxx,
XX 00000
Attention:
Corporate Secretary
Phone:
(000) 000-0000
|
ARCH TREATMENT TECHNOLOGIES, INC. | ||
|
|
|
By: | /s/ W. Xxxx Xxxx | |
Name: W. Xxxx Xxxx |
||
Title: Vice President and Treasurer | ||
Address:
US
Mail:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
X.X.
Xxx 0000
Xxxxxxx,
XX 00000-0000
Hand
Delivery:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
Xxxxxxx,
XX 00000
Attention:
Corporate Secretary
Phone:
(000) 000-0000
Fax:
(000) 000-0000
|
[additional
signatures to follow]
31
ARCH WOOD PROTECTION, INC. | ||
|
|
|
By: | /s/ W. Xxxx Xxxx | |
Name: W. Xxxx Xxxx |
||
Title: Treasurer | ||
Address:
US
Mail:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
X.X.
Xxx 0000
Xxxxxxx,
XX 00000-0000
Hand
Delivery:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
Xxxxxxx,
XX 00000
Attention:
Corporate Secretary
Phone:
(000) 000-0000
Fax:
(000) 000-0000
|
ARCH PERSONAL CARE PRODUCTS, L.P. | ||
|
|
|
By: | Arch PCI, Inc., as general partner | |
By: | /s/ W. Xxxx Xxxx | |
Name: W. Xxxx Xxxx |
||
Title: Vice President and Treasurer | ||
Address:
US
Mail:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
X.X.
Xxx 0000
Xxxxxxx,
XX 00000-0000
Hand
Delivery:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
Xxxxxxx,
XX 00000
Attention:
Corporate Secretary
Phone:
(000) 000-0000
Fax:
(000) 000-0000
|
[additional
signatures to follow]
32
ARCH CHEMICALS RECEIVABLES CORP. | ||
|
|
|
By: | /s/ W. Xxxx Xxxx | |
Name: W. Xxxx Xxxx |
||
Title: Vice President and Treasurer | ||
Address:
US
Mail:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
X.X.
Xxx 0000
Xxxxxxx,
XX 00000-0000
Hand
Delivery:
c/o
Arch Chemicals, Inc.
000
Xxxxxxx 0
Xxxxxxx,
XX 00000
Attention:
Corporate Secretary
Phone: (000)
000-0000
Fax: (000)
000-0000
|
[end
of
signatures]
33
Exhibit
I
Definitions
This
is
Exhibit I to the Agreement (as hereinafter defined). As used in the Agreement
and the Exhibits and Schedules thereto, capitalized terms have the meanings
set
forth in this Exhibit I (such meanings to be equally applicable to the singular
and plural forms thereof). If a capitalized term is used in the Agreement,
or
any Exhibit or Schedule thereto, and is not otherwise defined therein or in
this
Exhibit I, such term shall have the meaning assigned thereto in Exhibit I to
the
Purchase Agreement (hereinafter defined).
Administrator:
As
defined in the Preliminary Statements to the Agreement.
Agreement:
The
Receivables Sale Agreement, dated as of June 27, 2005, between each Originator
and Buyer, as the same may be amended, restated or otherwise
modified.
Buyer:
As
defined in the preamble to the Agreement.
Calculation
Period:
Each
calendar month or portion thereof which elapses during the term of the
Agreement. The first Calculation Period shall commence on the date of the
Purchases hereunder and the final Calculation Period shall terminate on the
Termination Date.
Credit
and Collection Policy:
Each
Originator’s credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof and summarized in Exhibit V, as
modified from time to time in accordance with the Agreement.
Default
Fee:
A per
annum rate of interest equal to the sum of (i)
the
Prime Rate, plus (ii)
2% per
annum.
Discount
Factor:
A
percentage calculated to provide Buyer with a reasonable return on its
investment in the Receivables after taking account of (i)
the time
value of money based upon the anticipated dates of collection of the Receivables
and the cost to Buyer of financing its investment in the Receivables during
such
period and (ii)
the risk
of nonpayment by the Obligors. Originator and Buyer may agree from time to
time
to change the Discount Factor based on changes in one or more of the items
affecting the calculation thereof, provided that any change to the Discount
Factor shall take effect as of the commencement of a Calculation Period, shall
apply only prospectively and shall not affect the Purchase Price payment made
prior to the Calculation Period during which Originator and Buyer agree to
make
such change.
Initial
Contributed Receivables:
As
defined in Section
1.1.
Initial
Cutoff Date:
As
defined in Section
1.1.
Material
Adverse Effect:
A
material adverse effect on (i)
the
financial condition or operations of Arch Chemicals and its Subsidiaries taken
as a whole, (ii)
the
ability of any Originator to perform its obligations under the Agreement or
any
other Transaction Document, (iii)
the
legality, validity or enforceability of the Agreement or any other Transaction
Document, (iv)
any
Originator’s, Buyer’s, the Administrator’s or TPF’s interest in the Receivables
generally or in any significant portion of the Receivables, the Related Security
or Collections with respect thereto, or (v)
the
collectibility of the Receivables generally or of any material portion of the
Receivables.
34
Net
Worth:
As of
the last Business Day of each Calculation Period preceding any date of
determination, the excess, if any, of (i)
the sum
of (A) the aggregate Outstanding Balance of the Receivables at such time and
(B)
the aggregate cash and cash equivalents held, over (ii)
the sum
of (1)
the
Aggregate Invested Amount outstanding at such time, plus (2)
the
aggregate outstanding principal balance of the Subordinated Loans (including
any
Subordinated Loan proposed to be made on the date of
determination).
Organizational
Documents:
For any
Person, the documents for its formation and organization, which, for example,
(i)
for a
corporation are its corporate charter and bylaws, (ii)
for a
partnership are its certificate of partnership (if applicable) and partnership
agreement, (iii)
for a
limited liability company are its certificate of formation or organization
and
its operating agreement, regulations or the like and (iv)
for a
trust is the trust agreement, declaration of trust, indenture or bylaws under
which it is created.
Original
Balance:
With
respect to any Receivable coming into existence after the Initial Cutoff Date,
the Outstanding Balance of such Receivable on the date it was
created.
Originator:
As
defined in the preamble to the Agreement.
Purchase:
The
purchase pursuant to Section
1.2(a)
of the
Agreement by Buyer from any Originator of the Receivables and the Related
Security and Collections related thereto, together with all related rights
in
connection therewith.
Purchase
Agreement:
The
meaning set forth in the Preliminary Statements to the Agreement.
Purchase
Price:
With
respect to the Purchase, the aggregate price to be paid by Buyer to any
Originator for such Purchase in accordance with Section
1.3
of the
Agreement for the Receivables, Collections and Related Security being sold
to
Buyer, which price shall equal on any date (i)
the
product of (A)
the
Outstanding Balance of such Receivables on such date, multiplied by (B)
one
minus the Discount Factor in effect on such date, minus (ii)
any
Purchase Price Credits to be credited against the Purchase Price otherwise
payable in accordance with Section
1.4
of the
Agreement.
Purchase
Price Credit:
As
defined in Section
1.4
of the
Agreement.
Purchase
Report:
As
defined in Section
1.2(b)
of the
Agreement.
Receivable:
All
indebtedness and other obligations owed by any Obligor in the United States
or
Canada to any Originator (at the times it arises, and before giving effect
to
any transfer or conveyance under the Agreement) or Buyer (after giving effect
to
the transfers under the Agreement) or in which any Originator or Buyer has
a
security interest or other interest, including, without limitation, any
indebtedness, obligation or interest constituting an account, chattel paper,
instrument or general intangible, arising in connection with the sale of goods
or the rendering of services by any Originator and further includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided,
further, that any indebtedness, rights or obligations referred to in the
immediately preceding sentence shall be a Receivable regardless or whether
the
account debtor or the related Originator treats such indebtedness, rights or
obligations as a separate payment obligation; it being understood that any
Receivable for which the Buyer has received a Purchase Price Credit pursuant
to
Section
1.4(b)
in an
amount equal to the full Outstanding Balance thereof shall not constitute a
Receivable hereunder.
35
Related
Security:
With
respect to any Receivable:
(i) all
of
the related Originator’s interest in the inventory and goods (including returned
or repossessed inventory or goods), if any, the sale, financing or lease of
which by such Originator gave rise to such Receivable, and all insurance
contracts with respect thereto,
(ii) all
other
security interests or liens and property subject thereto from time to time,
if
any, purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all financing
statements and security agreements describing any collateral securing such
Receivable,
(iii) all
guaranties, letters of credit, insurance and other agreements or arrangements
of
whatever character from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise,
(iv) all
service contracts and other contracts and agreements associated with such
Receivable,
(v) all
Records related to such Receivable,
(vi) all
of
such Originator’s right, title and interest in each Lock-Box and each Collection
Account, and
(vii) all
proceeds of any of the foregoing;
provided,
however, that “Related Security” shall not include any Restricted Contract to
the extent the assignment or transfer of, or the creation, attachment,
perfection or enforcement of a security interest in, such Restricted Contract
is
not authorized by Section 9-406(d) of the UCC as in effect in each relevant
jurisdiction.
36
Reportable
Event:
Any of
the events set forth in Section 4043(c) of ERISA or the regulations thereunder,
other than any such event for which the 30-day notice requirement under ERISA
has been waived in regulations issued by the PBGC.
Required
Capital Amount:
As of
any date of determination, an amount equal to the greater of (i)
3% of
the Purchase Limit under the Purchase Agreement, and (ii)
the
product of (A)
1.5
times the product of the Default Ratio times the Loss Horizon Ratio, each as
determined from the most
recent Monthly Report received from the Servicer under the Purchase Agreement,
and (B)
the
Outstanding Balance of all Receivables as of such date, as determined from
the
most recent Monthly Report received from the Servicer under the Purchase
Agreement.
Restricted
Contract:
Any
Contract that contains an enforceable provision affirmatively restricting the
assignment of the related Originator’s rights under such Contract to another
Person where such provision does not include any exception that could permit
such an assignment to Buyer (other than obtaining the consent of another Person
(other than the Originator) if required by such Contract) or the breach of
which
provision would result in the termination of such Contract.
Subordinated
Loan:
As
defined in Section
1.3(a)
of the
Agreement.
Subordinated
Note:
A
promissory note in substantially the form of Exhibit
VI
hereto
as more fully described in Section
1.3
of the
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
Tax
Code:
The
Internal Revenue Code of 1986, as the same may be amended from time to
time.
Termination
Date:
The
earliest to occur of (i)
the
Facility Termination Date (as defined in the Purchase Agreement), (ii)
the
Business Day immediately prior to the occurrence of a Termination Event set
forth in Section
5.1(d),
(iii)
the
Business Day specified in a written notice from Buyer to any Originator
following the occurrence of any other Termination Event, and (iv)
the date
which is 10 Business Days after Buyer’s receipt of written notice from the
Originators that they wish to terminate the facility evidenced by this
Agreement.
Termination
Event:
As
defined in Section
5.1
of the
Agreement.
Unmatured
Termination Event:
An
event which, with the passage of time or the giving of notice, or both, would
constitute a Termination Event.
All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. Unless otherwise specified, all terms used in Article
9 of
the UCC in the State of New York, and not specifically defined herein, are
used
herein as defined in such Article 9.
37
Exhibit
II
Jurisdiction
of Organization; Places of Business; Locations of Records;
Federal
Employer Identification Number(s); Other Names
ARCH CHEMICALS, INC.
Jurisdiction
of Organization: Virginia
Principal
places of business:
000
Xxxxxxx 0
X.X.
Xxx 0000
Xxxxxxx,
XX 00000-0000
(CHIEF
EXECUTIVE OFFICE)
|
X.X.
Xxx 000
0000
Xxxx Xxxx
Xxxxxxxxxxx,
XX 00000-0000
|
0000
Xxxxx Xxxxx Xxxx
Xxxxxxxxxx,
XX 00000
|
000
Xxxxxxx Xxxxx
Xxxxxxxx,
XX 00000
|
000
X-00 xx Xxxx Xxxx
Xxxx
Xxxxxxx, XX 00000
|
X.X.
Xxx 00
0
Xxxxxxxxxx Xxxx
XxXxxxxx,
XX 00000-0000
|
000
XxXxx Xxxx
X.X.
Xxx 000
Xxxxxxxxx,
XX 00000-0000
|
38
Location(s)
of Records:
000
Xxxxxxx 0
X.X.
Xxx 0000
Xxxxxxx,
XX 00000-0000
|
X.X.
Xxx 000
0000
Xxxx Xxxx
Xxxxxxxxxxx,
XX 00000-0000
|
0000
Xxxxx Xxxxx Xxxx
Xxxxxxxxxx,
XX 00000
|
000
Xxxxxxx Xxxxx
Xxxxxxxx,
XX 00000
|
000
X-00 xx Xxxx Xxxx
Xxxx
Xxxxxxx, XX 00000
|
X.X.
Xxx 00
0
Xxxxxxxxxx Xxxx
XxXxxxxx,
XX 00000-0000
|
000
XxXxx Xxxx
X.X.
Xxx 000
Xxxxxxxxx,
XX 00000-0000
|
Federal
employer identification number(s):
xx-xxxxxxx
Legal,
Trade & Assumed Names:
JPL
Corporation (former name from Aug. 25, 1998 through Nov. 5, 1998)
ARCH
CHEMICALS SPECIALTY PRODUCTS, INC.
Jurisdiction
of Organization: Delaware
Principal
places of business:
39
501
Xxxxxxx 7
X.X.
Xxx
0000
Xxxxxxx,
XX 00000-0000
(CHIEF
EXECUTIVE OFFICE)
0000
Xxxxx Xxxxxxxx Xxxx
Xxxxx
Xxxxx, XX 00000
X.X.
Xxx
00000
Xxxx,
XX
00000
Location(s)
of Records:
000
Xxxxxxx 0
X.X.
Xxx
0000
Xxxxxxx,
XX 00000-0000
0000
Xxxxx Xxxxxxxx Xxxx
Xxxxx
Xxxxx, XX 00000
Federal
employer identification number(s):
xx-xxxxxx
Legal,
Trade & Assumed Names:
Xxxx
Xxxx
Specialty Products, Inc. (former name from Dec. 31, 1990 through Feb. 9,
1999)
ARCH
PERSONAL CARE PRODUCTS, L.P.
Jurisdiction
of Organization: New Jersey
Principal
places of business:
00
Xxxxx
Xxxxx
Xxxxx
Xxxxxxxxxx, X.X. 00000
(CHIEF
EXECUTIVE OFFICE)
Location(s)
of Records:
00
Xxxxx
Xxxxx
Xxxxx
Xxxxxxxxxx, X.X. 00000
40
Federal
employer identification number(s):
xx-xxxxxx
Legal,
Trade & Assumed Names:
None
ARCH
WOOD PROTECTION, INC.
Jurisdiction
of Organization: Delaware
Principal
places of business:
0000
Xxxx
Xxxx Xxxxx
Xxxxx
000
Xxxxxx,
XX 00000
(CHIEF
EXECUTIVE OFFICE)
0000
Xxxxxx Xxxx
Xxxxxx,
XX 00000
Location(s)
of Records:
0000
Xxxx
Xxxx Xxxxx
Xxxxx
000
Xxxxxx,
XX 00000
0000
Xxxxxx Xxxx
Xxxxxx,
XX 00000
Federal
employer identification number(s):
xx-xxxxxx
Legal,
Trade & Assumed Names:
Xxxxxxx
Corporation (former name from Nov. 9, 1988 through Dec. 18, 2000)
Xxxxxxx
Timber Protection (DBA in South Carolina)
HUSA
Corp. (DBA in Texas)
ARCH
TREATMENT TECHNOLOGIES, INC.
Jurisdiction
of Organization: Virginia
41
Principal
places of business:
0000
Xxxx
Xxxx Xxxxx
Xxxxx
000, Xxxxxx, XX 00000
Location(s)
of Records:
0000
Xxxx
Xxxx Xxxxx
Xxxxx
000, Xxxxxx, XX 00000
Federal
employer identification number(s):
xx-xxxxxxx
Legal,
Trade & Assumed Names:
None
42
Exhibit
III
Lock-boxes;
Collection Accounts; Collection Banks
· PNC
Bank, National Association
Treasury
Management
Xxx
Xxxxx Xxxxxx, 00xx Xxxxx
Xxxx
Xxxxxxxxx, XX 00000
|
|
Lock
Box:
X.X.
Xxx 000000
Xxxxxxxxxx,
XX 00000-0000
|
Collection
Account Number:
XXXXXXX
|
· The
Northern Trust Company
00
Xxxxx XxXxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
|
|
Lock
Box:
X.X.
Xxx 00000
Xxxxxxx,
XX 00000-0000
Lock
Box:
X.X.
Xxx 00000
Xxxxxxx,
XX 00000
|
Collection
Account Number:
XXXXX
Collection
Account Number:
XXXXX
|
· XX
Xxxxxx Xxxxx Bank
Xxx
Xxxxx Xxxxxxxxx Xxxxx
Xxx
Xxxx, XX 00000
|
|
Lock
Box:
X.X.
Xxx 000000
Xxxxxx,
XX 00000-0000
|
Collection
Account Number:
XXX-XXX-XXXX
|
·
The
Toronto-Dominion Bank
Transit
1104
00
Xxxxx Xx X
Xxxxxxx,
Xxxxxxx X0X0X0
|
|
Lock
Box:
X.X.
Xxx 0000 Xxxxxx Xxxxxxx X
Xxxxxxx,
XX X0X0X0
Lockbox:
T6260
|
Collection
Account Number:
XXXXXXXXXXX
(Canadian Dollars)
|
43
· Wachovia
Bank
000
Xxxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
|
|
Lock
Box:
X.X.
Xxx 000000
Xxxxxxx,
XX 00000-0000
X.X.
Xxx 000000
Xxxxxxx,
XX 00000-0000
X.X.
Xxx 000000
Xxxxxxx,
XX 00000
X.X.
Xxx 000000
Xxxxxxx,
XX 00000
X.X.
Xxx 00000
Xxxxxxxxx,
XX 00000-0000
X.X.
Xxx 000000
Xxxxxxxxx,
XX 00000-0000
|
Collection
Account Number:
XXXXXXXXXXXX
XXXXXXXXXXXX
XXX-XXXX-XXX-XXX
XXX-XXXX-XXX-XXX
XXXXXXXXXXXXX
XXXXXXXXXXXXX
|
44
Exhibit
IV
Form
of
Compliance Certificate
This
Compliance Certificate is furnished pursuant to Section 4.1(a)(iii) of that
certain Receivables Sale Agreement dated as of June 27, 2005, between
[Originator
Name]
(“Originator”)
and
certain of its affiliates, as sellers, and Arch Chemicals Receivables Corp.,
as
buyer (as amended, restated or otherwise modified from time to time, the
“Agreement”).
Capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in the Agreement.
THE
UNDERSIGNED HEREBY CERTIFIES THAT:
1. I
am the
duly elected ______________ of Originator.
2. I
have
reviewed the terms of the Agreement and I have made, or have caused to be made
under my supervision, a detailed review of the transactions and financial
conditions of Arch and its Subsidiaries during the accounting period covered
by
the attached financial statements.
3. The
examinations described in paragraph 2 did not disclose, and I have no knowledge
of, the existence of any condition or event which constitutes a Termination
Event or an Unmatured Termination Event, as each such term is defined under
the
Agreement, during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate[,
except as set forth below].
[4. Described
below are the exceptions, if any, to paragraph 3 by listing, in detail, the
nature of the condition or event, the period during which it has existed and
the
action which Arch Chemicals and its Subsidiaries have taken, are taking, or
propose to take with respect to each such condition or event:
_______________________________].
The
foregoing certifications, together with the computations set forth in Schedule
I
hereto and the financial statements delivered with this Certificate in support
hereof, are made and delivered this ____ day of ______________,
200_.
_____________________________
[Name]
45
Exhibit
V
Credit
and Collection Policy
[see
attached]
46
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Effective:
September
2004
Supercedes:
March 2002
Page:
1
of
13
CREDIT
AND COLLECTION POLICY
CREDIT
1. |
OBJECTIVES
|
Ø |
Credit
sales are made only to customers having the financial ability to
pay.
|
Ø |
Collections
are made for all credit sales.
|
Ø |
All
write-offs of uncollectible customer account balances are
authorized.
|
2. |
CREDIT
CONTROL & CREDIT LINE
ESTABLISHMENT
|
2.1
Control Considerations
1. |
Credit
department operations are to be separate from the marketing or sales
function. This is necessary to ensure the independent credit judgment
essential for protection of the company’s investment in trade accounts
receivable.
|
2. |
Credit
approval authority resides with the Director, Corporate Credit, or
in the
case of decentralized credit management, credit approval authority
is to
be designated and delegated by the senior finance management of each
division or subsidiary (See Exhibit A, Table of Authority, Credit
Line
Approval Levels). Such delegation is to be in writing, and is to
state the
credit line amount beyond which higher management approval is required.
It
is permissible to re-delegate credit approval authority to additional
personnel within the credit function or finance, as
appropriate.
|
3. |
Credit
terms are to be approved by the business segment’s General Manager or
Financial Officer, or by their delegate, and by the Director of Corporate
Credit, as required (see special credit terms, section 2.6 below).
In the
case of decentralized divisions and subsidiaries, credit terms are
to be
approved by the senior manager and senior credit executive of such
entities.
|
Page
1
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
2
of 13
2.2
Credit Applications
1. |
Applications
for credit terms may result from correspondence direct from customers,
or
as a result of contacts with prospective customers by marketing or
sales
personnel. The sales or customer service representative contacted
by the
customer is required to have the customer complete the Arch Chemicals
Customer Information Application (See Exhibit C for attached copy),
or to
complete a comparable credit application or credit information form.
All
such credit applications are to be promptly forwarded to the Director
of
Corporate Credit, or to a designated credit manager or analyst, for
handling.
|
2. |
The
Arch Chemicals credit application, or other similar form utilized
by the
customer or Arch business segment, should generally contain the following
information:
|
§ |
Customer's
name and address
|
§ |
Names
and titles of customer contacts
|
§ |
Bank
and trade references
|
§ |
Estimated
annual or monthly sales volume
|
§ |
Credit
line requested
|
§ |
Tax-exempt
status
|
§ |
Signatures
(i.e., Applicant, Arch Sales Manager, Arch Credit
Manager)
|
3. |
If
the sales to the prospective customer will be tax exempt, the customer
is
to supply a copy of their tax exemption certificate with their credit
application. Corporate Credit or the local credit office should maintain
a
copy of the certificate for use by the Corporate Tax
Dept.
|
2.3
Credit Investigation
1. |
Upon
receipt of a request or application for credit, credit investigations
should be started promptly. The extent of a particular credit
investigation is dependent upon many factors, such as the potential
number
and dollar volume of orders, the size of a one-time order, available
credit information, etc. Some sources of information are:
|
§ |
Dun
& Bradstreet (D&B)
|
§ |
Credit
group reports
|
§ |
Bank
and trade reference checks (at least
three)
|
§ |
Customer
financial statements, either audited or
unaudited
|
Page
2
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
3
of 13
2. |
The
Credit department should contact three of the customer’s trade references
using the Trade Credit Reference Request (see Exhibit D for attached
copy)
or a similar credit inquiry tool. When necessary, a D&B or comparable
credit bureau report, and bank references should also be obtained
and
reviewed. Bank references are generally difficult to obtain and may
be of
limited value, therefore processing of the customer’s credit application
should not be unduly delayed in order to seek a bank
reference.
|
3. |
Credit
investigations involving customers located in foreign countries may
also
potentially include assessments of the following risk factors before
credit is approved:
|
§ |
Commercial
law variation
|
§ |
Stability
of the country in which the customer is
located
|
§ |
Availability
of foreign exchange
|
§ |
Financial
statement variation (i.e., accounting method differences)
|
2.4
Credit Limit Amounts
New
customer accounts are to be established only when properly authorized by the
credit function. The responsible credit manager, analyst or other designated
individual, in consultation with the management of the business unit, is to
establish the criteria for granting credit limits to customers. The criteria
should be such that:
1. |
Credit
will be provided to customers in sufficient amounts to maximize sales,
while at the same time controlling exposure to minimize bad debt
losses.
The attached schedule of Dun & Bradstreet Ratings and Credit Lines may
be used as a general reference guide.
|
2. |
Credit
limit amounts or exposure levels are to be determined by the Director
of
Credit, or by a person designated by the business segment financial
management, upon completion of the credit
investigation.
|
3. |
Credit
limit amounts represent a credit limit beyond which a manager of
the
credit function is to specifically approve each additional order,
unless
an overriding credit rating (See Exhibit B) or credit risk code in
the
system has been designated for the customer in question. (See
Exhibit A, Table of Credit Line
Authority)
|
4. |
Credit
files are to be maintained and kept current. Files for new customers
should include a credit application, completed trade credit references,
and other credit information and/or financial statement data (See
Credit History section 2.5)
|
Page
3
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
4
of 13
5. |
The
following information shall be entered into the customer’s master records:
a credit limit, credit risk code (if a systematic risk code tool
exists),
and a credit review date, if
required.
|
6. |
All
credit limits and credit risk category codes are subject to review
and
change if any of the following
occur:
|
a. |
Information
is received indicating an unfavorable change in credit agency rating,
adverse report from suppliers or bank, adverse report from sales
rep.,
etc.
|
b. |
Remittances
are not received in accordance with agreed-upon terms of
payment.
|
c. |
Customers’
orders exceed their credit limit.
|
It
is then the responsibility of the Credit function to review the affected
customers’ credit limits and risk
categories.
|
7. |
Accounts
with a historically good payment record and no measurable credit
risk, may
be assigned a credit limit and risk code sufficient to meet their
anticipated requirements. This is intended to see that all of the
customer’s purchasing requirements will be met.
|
8. |
Restrictions
are to be placed on accounts commensurate with specific credit risks.
Customers deemed to be poor credit risks may be denied credit altogether
and sold only on a secured or cash-in-advance
basis.
|
9. |
Credit
limit amounts and credit files are to be reassessed by the credit
department on an ongoing basis and adjusted as necessary to reflect
any
changes in credit risk.
|
10. |
Credit
limit amounts, or any changes thereto, are to be promptly furnished
to
Sales & Marketing as requested, for their use in dealing with
customers, and as requested, to any departments involved in the checking
of credit prior to accepting and/or shipping customer orders.
|
11. |
All
changes to credit limit amounts shall be documented in writing or
electronically on the accounts receivable or SAP system, and should
include:
|
§ |
Customer
name and address
|
§ |
Credit
limit amount and any applicable
restrictions
|
§ |
The
person approving the credit
|
Page
4
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
5
of 13
2.5
Credit History Files
As
much
as possible, the SAP system, or a comparable online system, is to serve as
an
electronic credit file, reflecting relevant notes and documentation on credit
lines and risk codes, and dates and reasons for changes to same. If possible,
Dun & Bradstreet or similar credit bureau reports are also to be retained in
an electronic filing system, utilizing desktop or server based software, or
a
similar shared database, that is accessible to credit department personnel.
In
addition, hard copy customer credit history files should be maintained. These
files may include such customer credit information as:
§ |
Customer
Information Application or credit application form (this may not
be
available for customers of many years standing)
|
§ |
Sales
Tax Exemption information, if
applicable
|
§ |
Trade
references
|
§ |
Financial
statements, if available
|
§ |
D&B
or other credit bureau hard copy reports and relevant
alerts
|
§ |
Relevant
information from newspapers (electronic or paper) or trade
publications
|
§ |
Information
provided by various credit reporting
services
|
§ |
Information
provided by the customer or Sales
|
The
accounts receivable system and credit history files are to be checked for past
credit standings, to determine if the name of a former customer appears on
a new
customer credit application. Any amounts previously written off as uncollectible
debts should be pursued for possible recovery.
2.6
Special Credit Terms
The
authorized standard payment terms for Arch Chemicals (domestic) are Net 30.
Payment terms for exports made from the U.S. to International customers may
vary
from 60 to 90 days or more, based on country risk and industry and local
practice. Standard payment terms for International subsidiaries and affiliates,
and any exceptions to these, are to be determined by the general management
and
finance/credit management of these businesses.
Any
special terms arrangements increase the working capital required to conduct
operations, and adversely affect A/R turnover and DSO. Consequently,
any
request from customers or
Page
5
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
6
of 13
sales
personnel for special credit terms are
to
be
made in writing, and should be approved by the segment/division’s head of Sales,
General Manager and/or its Finance Officer. These
special terms are then to be presented to the Director, Corporate Credit, or
to
the appropriate business segment manager responsible for credit
management.
Exceptions:
Ordinarily,
special payment terms other than Net 30 are justified only to meet a competitive
situation and if the sale would otherwise be lost. In
order to justify such a competitive credit terms exception, the customer should
supply Sales with written proof of such competitive terms, in the form of a
P.O.
or invoice copy.
Following
are some additional examples of specific credit terms exceptions:
§ |
In
support of the shipment of seasonal products and for early buy programs,
such as for HTH water chemicals.
|
§ |
In
exchange for payment by electronic funds transfer (EFT) or
ACH.
|
2.7
Terms for EFT Payments (Electronic Funds Transfer)
EFT
terms
arrangements for domestic U.S. customers shall be coordinated with and approved
by Corporate Treasury and Corporate Credit. If the customer requires extra
days
as a condition for making EFT payments, Corporate Treasury and Corporate Credit
must be consulted.
Any
additional dating terms allowed to domestic U.S. customers that pay by
EFT
should not exceed 4 days, unless approved by Treasury and the Director of
Corporate Credit.
Such
additional terms, if granted, are intended as an incentive to do EFT and/or
in
compensation for the customer’s perceived loss of mail and check float.
Page
6
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
7
of 13
Trade
A/R COLLECTION
3.1
Monitoring Accounts Receivable for Past Due Balances
Open
customer accounts must be monitored to determine past due balances that may
require follow-up, and to provide all necessary information required to enforce
collection.
1. |
Monitoring
open customer accounts may be accomplished during the order entry
process
and through a regular review of customer Aged Trial Balance reports.
In
addition, during the cash application process, customer accounts
may be
reviewed and necessary action taken to clear aged deductions and
questionable items. However, all adjustments resulting from such
action
must be approved in writing or in accordance with established procedures
(i.e., credit memo approval process,
etc.).
|
2. |
Aged
accounts receivable balances and ATB reports are to be reviewed
periodically (at least quarterly), to identify unusual open items
and
customers who are becoming slow-pay accounts,
etc.
|
3. |
When
departments other than the credit function are responsible for monitoring
open customer balances, the system must ensure that all appropriate
past
due information is provided to the credit function for its use in
effecting collection and managing credit
risk.
|
4. |
Comments
should be made on-line in any relevant system fields where text notes
may
be recorded (e.g., in SAP’s Credit Master Sheet, or in its Display
Customer Line Items or DMC screens). Customer service, credit analysts
or
other responsible personnel are to document their findings in these
notes
and/or in other written form (e.g., on copies of ATB reports) to
serve as
a document of collections efforts and to be supplied to credit personnel,
as needed.
|
3.2
Accounts Receivable Collection Practices
Credit
functions, accounts receivable staff and at times Customer Service, may be
responsible for working together to collect past due balances, and to review
and
resolve payment discrepancies. Whatever collections methods are used, (see
general guidelines in section
Page
7
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
8
of 13
3.2.4
below), any additional or detailed collections procedures should be in writing
and should be consistently followed. Each function shall have access to ATB
reports and customer’s A/R displays on the system, as required to effect
collection of accounts receivable.
1. |
During
the cash application process, deductions (short payments) should
be
assigned reason codes, if the system provides this capability, in
order to
facilitate subsequent investigation and
resolution.
|
2. |
Appropriate
notations of the collections actions taken are to be made in the
online
system or in another relevant tracking tool, and/or placed in the
credit
file to document the follow-up.
|
3. |
Detailed
collection practices and the system of follow-up on past due accounts
may
vary depending on the type of business or on the marketing methods
of each
business unit.
|
4. |
Guidelines
and examples of some past due account actions and collection follow-up
that should be taken are:
|
§ |
Past
dues are to be identified by a regular online review of customer
account
balances, or by the periodic review (e.g., monthly) of customers’ Aged
Trial Balance (ATB) reports.
|
§ |
A
customer contact should be made (by phone, fax or email) once an
invoice
has gone past due beyond accepted payment terms in excess of an acceptable
time period.
|
§ |
Generally,
this collections contact should be made
as early as one day and no later than 30 days after
invoice due date. Active collections follow-up may vary by business,
however it is encouraged to begin as early as 10 to 15 days after
due
date.
|
§ |
Telephone
or email contact should seek to identify reasons for delinquency
and to
assure prompt payment of both the delinquent item(s) and all other
obligations.
|
§ |
A
commitment should be sought for payment resolution by a certain date,
with
customers’ promises and payment information (e.g., check number, check
date, date mailed, check amount) recorded in the online system or
in a
manual file or report.
|
§ |
As
appropriate, action dates for follow-up collection calls should be
used
and noted in an online system (e.g. SAP’s DMC), in Microsoft Outlook, in
an electronic calendar, or in another appropriate reminder, “tickler
system,” or work prioritization
tool.
|
§ |
Statements
shall be faxed or mailed to delinquent customers, as
appropriate.
|
§ |
Reminder
letters shall be sent to delinquent customers, as
appropriate.
|
§ |
Sales
representatives and/or customer service may assist in the collections
effort.
|
5. |
Each
business unit may establish the point beyond which interest may
potentially be charged on past due customer balances. Rates to be
charged
should not be less than those that Arch must pay when obtaining short
term
financing. Consideration should be given to the ultimate collectibility
of
interest charges, and the need to monitor that any such charges that
are
assessed do not become stale
receivables.
|
Page
8
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
9
of
13
given
to
the ultimate collectibility of interest charges, and the need to monitor that
any such charges that are assessed do not become stale receivables.
3.3
Use of Collection Agencies
1. |
Seriously
past due accounts are to be placed in the hands of a professional
collection agency or lawyer only after all other collection efforts
have
been exhausted. Sales shall be notified and a final demand letter
shall be
sent to the customer before placing a debt.
|
2. |
The
approval of the Director of Credit, or of the affiliate/business
segment’s
credit manager or credit authority, is required when placing an account
with an outside collection agency. Subsequently, Credit should consult
with Legal to obtain necessary approval prior to commencing a lawsuit
for
collection, if the suit is for a material amount, and/or it has the
potential for a counter claim on breach of contract or product
liability.
|
3. |
Following
placement for collection, Corporate Credit or the business segment’s
credit professional is to closely monitor the collection efforts
of the
collection agency until either the customer makes a satisfactory
arrangement to pay the past due account or the collection agency
has
determined the account to be
uncollectible.
|
3.4
Accounts Receivable Write-offs
See
CAP 83.0 for detailed policy and procedures on Doubtful Accounts and Bad Debts.
1. |
Financial
Officers or their delegates must approve all write-offs of uncollectible
accounts.
|
2. |
Periodically,
but at least annually, past due accounts and accounts placed for
collections are to be reviewed with the Financial Officer, or with
the
affiliate/subsidiary finance manager, to assess whether any write-offs
are
appropriate.
|
3. |
Estimated
bad debts shall also be analyzed periodically, in order to determine
the
adequacy of the Bad Debt Reserve. Corporate Credit, or the responsible
credit professional of the affiliate or business segment, should
assist in
the identification of potentially uncollectible accounts for this
reserve
analysis.
|
Page
9
of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
10
of 13
4. |
The
determination that an account balance is uncollectible shall be made
in
consultation with Corporate Credit and the financial officers of
the
business segments. In the case of International subsidiaries and
affiliates, this decision shall be made by the credit and finance
management of the business. Upon write-off approval, accounts will
be
transferred to the Allowance for Doubtful
Accounts.
|
5. |
When
collection agencies recommend write-offs of accounts that have been
only
partially collected, customers should be contacted to confirm amounts
paid. This will serve as a check on the accuracy of agency
remittances.
|
6. |
Accounts
written off as uncollectible may nevertheless be able to pay some
percentage of the outstanding balance at a later date. Therefore,
credit
files on these accounts are to be maintained and periodically followed
up
by the credit functions, regardless of whether the customer became
bankrupt, went out of business, or refused to pay.
|
3.5
Credits to A/R
Credits
may be granted from time to time consistent with the applicable sections of
the
separate Accounts Receivable Trade (CAP 61.1) and Billing (CAP 81.1)
policies.
Page
10 of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
11
of
13
Modification
Amendment
and modification to contracts for credit sales shall be made consistent with
this Credit and Collection Policy, and with Corporate policies and
procedures.
Page
11 of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
12
of 13
Exhibit
A
Table
of Authority
Credit
Line Approval Levels
Amount
in Dollars
|
|
Vice
President & Treasurer
|
Over
$5 million
|
|
|
|
|
Director,
Corporate Credit
|
Up
to $5 million
|
|
|
|
|
Financial
Officers
|
Up
to $2 million
|
|
|
|
|
Finance
Director / Subsidiary Finance
|
Up
to $1 million
|
Credit
Manager
|
Up
to $500,000
|
|
|
Senior
/ International Credit Analyst
|
Up
to $100,000
|
Credit
Analyst
|
Up
to $50,000
|
Page
12 of 13
Corporate
Accounting Procedure
Procedure
Number: CAP 82.1
Contact:
Xxxxx Xxxxxxxx, Director of Corporate Credit
Effective:
September 2004
Supercedes:
March 2002
Page:
13
of 00
Xxxxxxx
X
Xxx
& Xxxxxxxxxx Ratings and Pre-Authorized Credit
Limits
The
existence of a positive D&B rating indicating a customer’s financial
strength and credit capacity, can be used as a guideline for establishing a
credit limit, provided that no negative information exists from other credit
sources.
The
D&B rating must be “in date” or current, and it should be reviewed
periodically for any negative revisions.
“Grade
1”
|
Credit
Line
|
“Grade
2”
|
Credit
Line
|
|
D&B
Rating
|
Pre-Authorized
Guideline
|
D&B
Rating
|
Pre-Authorized
Guideline
|
|
5A1
|
500,000
|
5A2
|
400,000
|
|
4A1
|
400,000
|
4A2
|
300,000
|
|
3A1
|
250,000
|
3A2
|
200,000
|
|
2A1
|
200,000
|
2A2
|
100,000
|
|
1A1
|
100,000
|
1A2
|
75,000
|
|
BA1
|
50,000
|
BA2
|
40,000
|
|
BB1
|
40,000
|
BB2
|
30,000
|
|
CB1
|
30,000
|
CB2
|
20,000
|
|
CC1
|
25,000
|
CC2
|
15,000
|
|
DC1
|
20,000
|
DC2
|
15,000
|
|
DD1
|
15,000
|
DD2
|
10,000
|
|
EE1
|
10,000
|
EE2
|
5,000
|
Page
13 of 13
Exhibit
VI
Form
of
Subordinated Note
SUBORDINATED
NOTE
______________,
200_
1. Note.
FOR
VALUE RECEIVED, the undersigned, Arch Chemicals Receivables Corp., a Delaware
corporation (“SPV”),
hereby unconditionally promises to pay to the order of [ORIGINATOR
NAME],
a(n)
__________ ***[corporation] [limited
liability company] [partnership]***
(“Originator”),
in
lawful money of the United States of America and in immediately available funds,
on or before the date following the Termination Date which is one year and
one
day after the date on which (a) the Outstanding Balance of all Receivables
sold
under the “Sale Agreement” referred to below has been reduced to zero and (b)
Originator has paid to Buyer all indemnities, adjustments and other amounts
which may be owed thereunder in connection with the Purchase thereunder (the
“Collection
Date”),
the
aggregate unpaid principal sum outstanding of all “Subordinated Loans” made from
time to time by Originator to SPV pursuant to and in accordance with the terms
of that certain Receivables Sale Agreement dated as of June 27, 2005 between
Originator and certain of its affiliates, as sellers, and SPV, as buyer (as
amended, restated, supplemented or otherwise modified from time to time, the
“Sale
Agreement”).
Reference to Section
1.3
of the
Sale Agreement is hereby made for a statement of the terms and conditions under
which the loans evidenced hereby have been and will be made. All terms which
are
capitalized and used herein and which are not otherwise specifically defined
herein shall have the meanings ascribed to such terms in the Sale
Agreement.
2. Interest.
SPV
further promises to pay interest on the outstanding unpaid principal amount
hereof from the date hereof until payment in full hereof at a rate equal to
the
1-month LIBOR rate published in The Wall Street Journal on the first Business
Day of each month (or portion thereof) during the term of this Subordinated
Note, computed for actual days elapsed on the basis of a year consisting of
360
days and changing on the first business day of each month hereafter
(“LIBOR”);
provided, however, that if SPV shall default in the payment of any principal
hereof, SPV promises to pay, on demand, interest at the rate equal to LIBOR
plus
2.00% per annum on any such unpaid amounts, from the date such payment is due
to
the date of actual payment. Interest shall be payable on the first Business
Day
of each month in arrears; provided, however, that SPV may elect on the date
any
interest payment is due hereunder to defer such payment and upon such election
the amount of interest due but unpaid on such date shall constitute principal
under this Subordinated Note. The outstanding principal of any loan made under
this Subordinated Note shall be due and payable on the Collection Date and
may
be repaid or prepaid at any time without premium or penalty.
3. Principal
Payments.
Originator is authorized and directed by SPV to enter on the grid attached
hereto, or, at its option, in its books and records, the date and amount of
each
loan made by it which is evidenced by this Subordinated Note and the amount
of
each payment of principal made by SPV, and absent manifest error, such entries
shall constitute prima facie evidence of the accuracy of the information so
entered; provided that neither the failure of Originator to make any such entry
or any error therein shall expand, limit or affect the obligations of SPV
hereunder.
60
4. Subordination.
Originator shall have the right to receive, and SPV shall make, any and all
payments and prepayments relating to the loans made under this Subordinated
Note, provided that, after giving effect to any such payment or prepayment,
the
SPV’s Net Worth would be less than the Required Capital Amount. Originator
hereby agrees that at any time during which the conditions set forth in the
proviso of the immediately preceding sentence shall not be satisfied, Originator
shall be subordinate in right of payment to the prior payment of any
indebtedness or obligation of SPV owing to the Administrator or TPF under that
certain Receivables Purchase Agreement dated as of June 27, 2005 (as amended,
restated, supplemented or otherwise modified from time to time, the
“Purchase
Agreement”)
by and
among SPV, Arch Chemicals, Inc., as initial Servicer, Three Pillars Funding
LLC
and SunTrust Capital Markets, Inc., as agent and administrator for TPF and
its
liquidity providers (in such capacity, the “Administrator”).
The
subordination provisions contained herein are for the direct benefit of, and
may
be enforced by, the Administrator, TPF and/or any of their respective assignees
(collectively, the “Senior
Claimants”)
under
the Purchase Agreement. Until the date on which the “Aggregate Invested Amount”
outstanding under the Purchase Agreement has been repaid in full and all other
obligations of SPV and/or the Servicer thereunder and under the “Fee Letter”
referenced therein (all such obligations, collectively, the “Senior
Claim”)
have
been indefeasibly paid and satisfied in full, Originator shall not institute
against SPV any proceeding of the type described in Section
5.1(d)
of the
Sale Agreement unless and until the Collection Date has occurred. Should any
payment, distribution or security or proceeds thereof be received by Originator
in violation of this Section 4, Originator agrees that such payment shall be
segregated, received and held in trust for the benefit of, and deemed to be
the
property of, and shall be immediately paid over and delivered to the
Administrator for the benefit of the Senior Claimants.
5. Bankruptcy;
Insolvency.
Upon
the occurrence of any proceeding of the type described in Section
5.1(d)
of the
Sale Agreement involving SPV as debtor, then and in any such event the Senior
Claimants shall receive payment in full of all amounts due or to become due
on
or in respect of the Aggregate Invested Amount and the Senior Claim (including
“Yield”
as
defined and as accruing under the Purchase Agreement after the commencement
of
any such proceeding, whether or not any or all of such Yield is an allowable
claim in any such proceeding) before Originator is entitled to receive payment
on account of this Subordinated Note, and to that end, any payment or
distribution of assets of SPV of any kind or character, whether in cash,
securities or other property, in any applicable insolvency proceeding, which
would otherwise be payable to or deliverable upon or with respect to any or
all
indebtedness under this Subordinated Note, is hereby assigned to and shall
be
paid or delivered by the Person making such payment or delivery (whether a
trustee in bankruptcy, a receiver, custodian or liquidating trustee or
otherwise) directly to the Administrator for application to, or as collateral
for the payment of, the Senior Claim until such Senior Claim shall have been
paid in full and satisfied.
6. Amendments.
This
Subordinated Note shall not be amended or modified except in accordance with
Section
7.1
of the
Sale Agreement. The terms of this Subordinated Note may not be amended or
otherwise modified without the prior written consent of the Administrator for
the benefit of TPF and its assigns.
61
7. GOVERNING
LAW.
THIS
SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT NEW YORK, NEW YORK, AND SHALL
BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED
IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE OF NEW YORK. WHEREVER
POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH
MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION
OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE
LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION
OR
INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE
REMAINING PROVISIONS OF THIS SUBORDINATED NOTE.
8. Waivers.
All
parties hereto, whether as makers, endorsers, or otherwise, severally waive
presentment for payment, demand, protest and notice of dishonor. Originator
additionally expressly waives all notice of the acceptance by any Senior
Claimant of the subordination and other provisions of this Subordinated Note
and
expressly waives reliance by any Senior Claimant upon the subordination and
other provisions herein provided.
9. Assignment.
This
Subordinated Note may not be assigned, pledged or otherwise transferred to
any
party other than Originator without the prior written consent of the
Administrator, and any such attempted transfer shall be void.
ARCH CHEMICALS RECEIVABLES CORP. | ||
|
|
|
By: | /s/ | |
Name:
Title:
|
62
Schedule
to
SUBORDINATED
NOTE
SUBORDINATED
LOANS AND PAYMENTS OF PRINCIPAL
Date
|
Amount
of
Subordinated
Loan
|
Amount
of
Principal Paid
|
Unpaid
Principal
Balance
|
Notation
made
by (initials) |
63
Exhibit
VII
[Form
of]
Purchase
Report
For
the
Calculation Period beginning [date]
and
ending [date]
TO:
BUYER
AND THE AGENT (AS BUYER’S ASSIGNEE)
Aggregate
Outstanding Balance of all Receivables sold during the
period:
|
$_____________
|
A
|
|
Less:
Aggregate Outstanding Balance of all Receivables sold during such
period
which were not Eligible Receivables on the date when sold:
|
($____________)
|
(B)
|
|
Equals:
Aggregate Outstanding Balance of all Eligible Receivables sold during
the
period (A - B):
|
$___________
|
=C
|
|
Less:
Purchase Price discount during the Period:
|
($____________)
|
(D)
|
|
Equals:
Gross Purchase Price Payable during the period (C - D)
|
$____________
|
=E
|
|
Less:
Total Purchase Price Credits arising during the Period:
|
($____________)
|
(F)
|
|
Equals:
Net Purchase Price payable during the Period (E - F):
|
$____________
|
=G
|
|
Cash
Purchase Price Paid to Originator during the Period:
|
$_____________
|
H
|
|
Subordinated
Loans made during the Period:
|
$_____________
|
I
|
|
Less:
Repayments of Subordinated Loans received during the
Period:
|
($____________)
|
(J)
|
|
Equals:
Purchase Price paid in cash or Subordinated Loans during the
period
(H
+ I - J):
|
$_____________
|
=K
|
|
Aggregate
Outstanding Balance of Receivables contributed during the
Period:
|
$_____________
|
L
|
64
Schedule
A
DOCUMENTS
TO BE DELIVERED TO BUYER
ON
OR
PRIOR TO THE PURCHASE
1. Executed
copies of the Receivables Sale Agreement, duly executed by the parties
thereto.
2. Copy
of
the Credit and Collection Policy to attach to the Receivables Sale Agreement
as
an Exhibit.
3. A
certificate of each Originator’s [and, if applicable, its general partner’s]
Secretary or Assistant Secretary certifying:
(a) A
copy of
the Resolutions of its Board of Directors (or comparable body), authorizing
its
execution, delivery and performance of the Receivables Sale Agreement and the
other documents to be delivered by it thereunder;
(b) A
copy of
its Organizational Documents (also certified, to the extent that such documents
are filed with any governmental authority, by the Secretary of State of its
jurisdiction of organization on or within thirty (30) days prior to the Closing
Date);
(c) Good
Standing Certificates for such Person issued by the Secretaries of State of
its
state of organization and the state where it maintains its chief executive
office; and
(d) The
names
and signatures of the officers authorized on its behalf to execute the
Receivables Sale Agreement and any other documents to be delivered by it
thereunder.
4. Pre-filing
state and federal tax lien, judgment lien and UCC lien searches dated within
thirty (30) days of the Closing Date against each Originator from the following
jurisdictions:
(a) Jurisdiction
of Organization
(b) Location
of chief executive office
5. Time
stamped receipt copies of proper financing statements, duly filed under the
UCC
on or before the date of the initial Purchase (as defined in the Receivables
Sale Agreement) in all jurisdictions as may be necessary or, in the opinion
of
Buyer (or its assigns), desirable, under the UCC of all appropriate
jurisdictions or any comparable law in order to perfect the ownership interests
contemplated by the Receivables Sale Agreement.
6. Time
stamped receipt copies of proper UCC termination statements, if any, necessary
to release all security interests and other rights of any Person in the
Receivables, Contracts or Related Security previously granted by any
Originator.
65
7. Executed
Collection Account Agreements for each Lock-Box and Collection
Account.
8. A
favorable opinion of legal counsel for the Originators (and, if applicable,
its
general partner) reasonably acceptable to the Administrator which addresses
the
following matters and such other matters as the Administrator may reasonably
request:
(a) due
authorization, execution, delivery, enforceability and other corporate matters
with respect to each of the Originators (and such general partner);
(b) the
creation of a first priority perfected security interest in favor of the Buyer
(and the Administrator for the benefit of the Secured Parties as its assignee)
in (1) all of the Receivables and (2) all proceeds of any of the
foregoing;
(c) the
existence of a “true sale” of the Receivables from Originators to the Buyer
under the Receivables Sale Agreement;
(d) the
inapplicability of the doctrine of substantive consolidation to Buyer and any
Originator or its affiliates or in connection with any bankruptcy proceeding
involving Buyer, any Originator or such affiliates.
9. A
Certificate of each Originator’s chief financial officer or treasurer certifying
that, as of the closing date, no Termination Event or Unmatured Termination
Event exists and is continuing.
10. Executed
copies of all consents from and authorizations by any Persons and all waivers
and amendments to existing credit facilities, that are necessary in connection
with the Receivables Sale Agreement.
11. Executed
Subordinated Note by Buyer in favor of each Originator.
12. If
applicable, a direction letter executed by each Originator authorizing Buyer
(and the Administrator, as its assignee) and directing warehousemen to allow
Buyer (and the Administrator, as its assignee) to inspect and make copies from
each Originator’s books and records maintained at off-site data processing or
storage facilities.
66
Schedule
1.1
INITIAL
CONTRIBUTED RECEIVABLES
$4,693,701.48
67