Exhibit 10.25(a)
RECEIVABLES SALE AGREEMENT
DATED AS OF March 19, 2002
between
ARCH CHEMICALS, INC.,
as an Originator,
ARCH SPECIALTY CHEMICALS, INC.,
as an Originator,
ARCH CHEMICALS SPECIALTY PRODUCTS, INC.,
as an Originator,
ARCH ELECTRONIC CHEMICALS, 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
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Article I Amounts and Terms of the Purchase................................ 2
SECTION 1.1 INITIAL CONTRIBUTION OF RECEIVABLES......................... 2
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............................................... 18
SECTION 5.1 TERMINATION EVENTS.......................................... 18
SECTION 5.2 REMEDIES.................................................... 20
Article VI Indemnification................................................. 21
SECTION 6.1 INDEMNITIES BY ORIGINATORS.................................. 21
SECTION 6.2 OTHER COSTS AND EXPENSES.................................... 23
Article VII Miscellaneous.................................................. 23
SECTION 7.1 WAIVERS AND AMENDMENTS...................................... 23
SECTION 7.2 NOTICES..................................................... 23
SECTION 7.3 PROTECTION OF OWNERSHIP INTERESTS OF BUYER.................. 24
SECTION 7.4 CONFIDENTIALITY............................................. 25
SECTION 7.5 BANKRUPTCY PETITION......................................... 26
SECTION 7.6 LIMITATION OF LIABILITY..................................... 26
SECTION 7.7 CHOICE OF LAW............................................... 26
SECTION 7.8 CONSENT TO JURISDICTION..................................... 26
SECTION 7.9 WAIVER OF JURY TRIAL........................................ 27
SECTION 7.10 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS............. 27
SECTION 7.11 COUNTERPARTS; SEVERABILITY; SECTION REFERENCES............. 28
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Exhibits
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
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RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of March 19, 2002, is by and
among ARCH CHEMICALS, INC., a Virginia corporation, ARCH SPECIALTY CHEMICALS,
INC., a Delaware corporation, ARCH CHEMICALS SPECIALTY PRODUCTS, INC., a
Delaware corporation, ARCH ELECTRONIC CHEMICALS, INC., a Pennsylvania
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
(except for Restricted Contracts) 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 (except
for Restricted Contracts) and Collections pursuant to that certain Receivables
Purchase Agreement dated as of March 19, 2002 (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, Blue Ridge Asset Funding Corporation ("Blue Ridge"), the banks
and other financial institutions from time to time party thereto as "Liquidity
Banks" and Wachovia Bank, N.A. or any successor agent appointed pursuant to the
terms of the Purchase Agreement, as agent for Blue Ridge and such Liquidity
Banks (in such capacity, the "Agent").
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 (except for Restricted
Contracts) 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 (except for Restricted Contracts) 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 (other than the Initial Contributed
Receivables) and thereafter arising through and including the Termination Date,
together with all Related Security relating thereto (except for Restricted
Contracts) 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, which sale 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
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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), ▇▇▇▇ 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 Agent (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 sold to Buyer. Upon the request of
Buyer or the Agent (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 Agent (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.
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 made available to Buyer in connection with its subsequent sale of an
interest in such Receivables to the Purchasers 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.
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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).
(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 the Agent for the benefit of the Purchasers 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, the Purchasers.
(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.
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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
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year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
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 Agent 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 Agent (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 Agent 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 such sale
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,
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all Collections and Related Security (except for Restricted Contracts) 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.
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.
(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
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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 or
omit to state a material fact or any fact necessary to make the statements
contained therein, taken as a whole, not misleading.
(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.
(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
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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 (except for Restricted Contracts), 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.
(l) Collections. The conditions and requirements set forth in subclause
(i) of Section 4.1(i) have since May 15, 2001 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.
9
(m) Material Adverse Effect. Since September 30, 2001, 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).
(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. Sections 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
10
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.
(x) Enforcement. No Confidential Contract with respect to any Receivable
contains either (i) restrictions on the ability of the owner of such Receivable
to enforce the obligation of the related Obligor to pay the Outstanding Balance
of the Receivable created thereunder and any accrued interest thereon or (ii)
provisions relating to specific procedures that must be followed to enforce the
related Receivable that could reasonably be expected to adversely effect the
value of the Receivable or the ability to enforce any such obligation.
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):
(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; and
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(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 (except for Restricted Contracts) 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 Peat Marwick 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.
(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.
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(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 Agent or Blue Ridge, 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 Agent'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.
(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
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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.
(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
14
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, ▇▇▇▇ 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 Agent (on behalf of the
Purchasers) 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.
(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 (except for Restricted Contracts)
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.
15
(h) Purchasers' Reliance. Such Originator acknowledges that the Agent and
the Purchasers 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 Sections 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.
(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.
(k) Acceptable Assignment Clause: Such Originator will within thirty (30)
days from the Closing Date, take (or cause to be taken) all necessary action to
modify the existing Short-Form Contract and all invoices generated after the
Closing Date to include the Acceptable Assignment Clause and provide a copy of
the modified Short-Form Contract and form of invoice to the Buyer.
16
(l) Renewal Contracts: Such Originator will make commercially reasonable
efforts to ensure that any renewal of a Contract existing as of the Closing
Date, which renewal occurs after the 30th day following the Closing Date
contains the Acceptable Assignment Clause.
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) Name Change, Offices and Records. Such Originator will not (i) change
its state of organization or name, (ii) cease to be a "registered organization"
(within the meaning of Article 9 of any applicable enactment of the UCC) or
(iii) relocate its chief executive office at any time while the location of its
chief executive office is relevant to perfection of Buyer's interest in the
Receivables or the associated Related Security and Collections, or any office
where Records are kept 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 Agent'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.
(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
17
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.
(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 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.
(g) Enforcement. Such Originator will not permit any Confidential Contract
with respect to any Receivable to contain either (i) restrictions on the ability
of the owner of such Receivable to enforce the obligation of the related Obligor
to pay the Outstanding Balance of the Receivable created thereunder and any
accrued interest thereon or (ii) provisions relating to specific procedures that
must be followed to enforce the related Receivable that could reasonably be
expected to adversely effect the value of the Receivable or the ability to
enforce any such obligation.
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 (other than with respect to a principal payment) and such
failure shall continue for three (3) consecutive Business Days, (ii) to make any
payment or deposit required hereunder when due with respect to a principal
payment, or (iii) to perform or observe any term, covenant or agreement
hereunder (other than as referred to in clauses (i) and (ii) 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.
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(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.
(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 Originator or any
of its Subsidiaries.
(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 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.
19
(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
(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 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.
20
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;
(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 the Purchasers of Receivable Interests
under the Purchase Agreement as a loan or loans by the Purchasers 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
21
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;
(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 as created by the
Transaction Documents);
(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;
22
(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.
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 Agent 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
23
communication shall be effective (a) if given by telecopy, upon the receipt
thereof, (b) if given by mail, three (3) 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).
(b) If any Originator fails to perform any of its obligations hereunder,
Buyer (or its assigns) 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 its assigns) at any time and from time to time
in the sole discretion of Buyer (or its assigns), and appoints Buyer (and its
assigns) as its attorney(ies)-in-fact, to act on behalf of such Originator (i)
to execute on behalf of such Originator as debtor and to file financing
statements necessary or desirable in Buyer's (or its assigns') sole discretion
to perfect and to maintain the perfection and priority of the 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 its assigns) in their sole discretion deem necessary
or desirable to perfect and to maintain the perfection and priority of Buyer's
interests in the Receivables. This appointment is coupled with an interest and
is irrevocable. (A) Each Originator hereby authorizes Buyer (or its assigns) 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 the signature or other
authorization of such Originator, in such form and in such offices as Buyer (or
any of its assigns) reasonably determines appropriate to perfect or maintain the
perfection of the ownership or security interests of Buyer (or its assigns)
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
24
amendments thereto, or continuation or termination statements thereof), without
the express prior written approval by the Agent (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 Agent (as Buyer's assign) in connection with the
perfection of the ownership or security interests in favor of Buyer or the Agent
(as Buyer's assign).
SECTION 7.4 CONFIDENTIALITY.
(a) Each Originator shall maintain and shall cause each of its employees
and officers to maintain the confidentiality of this Agreement and the other
confidential or proprietary information with respect to the Agent and Blue Ridge
and their respective businesses 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 Agent, the Liquidity Banks or Blue Ridge by each other,
(ii) by Buyer, the Agent or the Purchasers to any prospective or actual assignee
or participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Blue Ridge or any entity organized for the purpose of purchasing,
or making loans secured by, financial assets for which Wachovia acts as the
administrative 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, the
Purchasers and the Agent 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 this Agreement and the other
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 Agent and the other Purchasers, (ii) to any
prospective or actual assignee or participant of the Agent or the other
Purchasers who execute 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 Blue Ridge, (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,
25
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).
SECTION 7.5 BANKRUPTCY PETITION.
(a) Originator and Buyer each 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 Blue Ridge, it will not institute against, or
join any other Person in instituting against, Blue Ridge 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) Originator 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 Blue Ridge, the Agent or any Liquidity Bank, no claim may be
made by any Originator or any other Person against Blue Ridge, the Agent 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 ▇▇▇ 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
26
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.
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
Agent, for the benefit of the Purchasers, its rights, remedies, powers and
privileges hereunder and that the Agent may further assign such rights,
remedies, powers and privileges to the extent permitted in the Purchase
Agreement. Each Originator agrees that the Agent, 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 Agent 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.
27
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 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]
28
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. ▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇ ▇▇▇▇
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Title: Treasurer
--------------------------------------
Address:
US Mail:
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Hand Delivery:
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ARCH SPECIALTY CHEMICALS, INC.
By: /s/ W. ▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇ ▇▇▇▇
---------------------------------------
Title: Treasurer
--------------------------------------
Address:
US Mail:
c/o Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Hand Delivery:
c/o Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
[additional signatures to follow]
ARCH CHEMICALS SPECIALTY PRODUCTS, INC.
By: /s/ W. ▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇ ▇▇▇▇
---------------------------------------
Title: Treasurer
--------------------------------------
Address:
US Mail:
c/o Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Hand Delivery:
c/o Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ARCH ELECTRONIC CHEMICALS, INC.
By: /s/ W. ▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇ ▇▇▇▇
---------------------------------------
Title: Treasurer
--------------------------------------
Address:
US Mail:
c/o Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Hand Delivery:
c/o Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
[additional signatures to follow]
ARCH WOOD PROTECTION, INC.
By: /s/ W. ▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇ ▇▇▇▇
---------------------------------------
Title: Treasurer
--------------------------------------
Address:
US Mail:
c/o Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Hand Delivery:
c/o Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ARCH PERSONAL CARE PRODUCTS, L.P.
By: Arch PCI, Inc., as general partner
By: /s/ W. ▇▇▇▇ ▇▇▇▇
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Name: W. ▇▇▇▇ ▇▇▇▇
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Title: Treasurer
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Address:
US Mail:
c/o Arch Chemicals, Inc.
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Hand Delivery:
c/o Arch Chemicals, Inc.
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Attention: Corporate Secretary
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
[additional signatures to follow]
ARCH CHEMICALS RECEIVABLES CORP.
By: /s/ W. ▇▇▇▇ ▇▇▇▇
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Name: W. ▇▇▇▇ ▇▇▇▇
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Title: Vice President & Treasurer
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Address:
US Mail:
c/o Arch Chemicals, Inc.
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Hand Delivery:
c/o Arch Chemicals, Inc.
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Attention: Corporate Secretary
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
[end of signatures]
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).
Agent: As defined in the Preliminary Statements to the Agreement.
Agreement: The Receivables Sale Agreement, dated as of March 19, 2002, 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 Agent's or any Purchaser'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.
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 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
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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.
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.
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
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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.
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