Fourth Amended and Restated
Receivables Sale Agreement
Dated as of September 28,
2006
among
Crompton & Knowles
Receivables Corporation,
as the
Seller,
Chemtura
Corporation,
as the Initial Collection
Agent,
ABN AMRO Bank
N.V.,
as the Agent and the
Amsterdam Purchaser Agent,
Wachovia Bank, National
Association,
as the VFCC Purchaser Agent
and LC Issuer
Calyon New York
Branch,
as the Atlantic Purchaser
Agent
the other Purchaser Agents
from time to time party hereto
the Related Bank Purchasers
from time to time party hereto,
and
Amsterdam Funding
Corporation
Atlantic Asset
Securitization LLC
Variable Funding Capital
Company, LLC and
the other Conduit Purchasers
from time to time party hereto
Table of
Contents
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Article I
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Purchases from Seller, Letters of Credit and
Settlements
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Sales
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Letters of
Credit
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Interim
Liquidations.
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Discount Rates
and Tranche Periods.
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Fees and Other
Costs and Expenses
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Computation of
Effective Receivable Interest; Deemed Collection
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Reduction in
Commitments
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Repurchases.
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Assignment of
Purchase Agreements.
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Extension of
Termination Date
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Grant of
Security Interest
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Article II
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Sales
to and from Conduit Purchasers; Allocations
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Required
Purchases from Conduit Purchaser
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Purchases by a
Conduit Purchaser
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Allocations and
Distributions
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Release of
Excess Cash Collateral
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Article III
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Administration and
Collections
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Appointment of
Collection Agent
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Duties of
Collection Agent
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Reports
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Lock-Box
Arrangements
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Enforcement
Rights
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Collection
Agent Fee
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Responsibilities of the Seller
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Actions by
Seller
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Indemnities by
the Collection Agent.
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Article IV
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Representations and
Warranties
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Representations
and Warranties
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Article V
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Covenants
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Covenants of
the Seller
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Article VI
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Indemnification
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Indemnities by
the Seller
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Increased Cost
and Reduced Return
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Other Costs and
Expenses
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Withholding
Taxes
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Payments and
Allocations
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Article VII
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Conditions Precedent
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Conditions to
Closing
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Conditions to
Each Purchase
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Article VIII
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The
Agent
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Appointment and
Authorization
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Delegation of
Duties
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Exculpatory
Provisions
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Reliance by
Agent
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Assumed
Payments
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Notice of
Termination Events
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Non-Reliance on
Agent, Purchaser Agents and Other Purchasers
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Agents and
Affiliates.
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Indemnification
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Successor
Agent.
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Article IX
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Miscellaneous
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Termination
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Notices
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Payments and
Computations
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Sharing of
Recoveries
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Right of
Setoff
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Amendments
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Waivers
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Successors and
Assigns; Participations; Assignments
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Intended
Tax Characterization
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Waiver
of Confidentiality
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Confidentiality of Agreement
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Agreement Not
to Petition.
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Excess
Funds
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No
Recourse
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Limitation of Liability
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Headings;
Counterparts.
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Cumulative
Rights and Severability.
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Governing Law; Submission to
Jurisdiction
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Waiver
of Trial by Jury
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Entire
Agreement.
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Original Sale
Agreement
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Schedules
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Description
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Schedule I
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Definitions
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Schedule II
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Related Bank
Purchasers and Commitments of Related Bank Purchasers
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Exhibits
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Description
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Exhibit A
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Form of
Incremental Purchase Request
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Exhibit B
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Form of
Notification of Assignment from the Related Bank Purchasers to
Amsterdam
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Exhibit C-1
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Form of Monthly
Report
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Exhibit C-2
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Form of Weekly
Report
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Exhibit C-3
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Form of Daily
Report
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Exhibit D
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Addresses and
Names of Seller and Originator
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Exhibit E
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Subsidiaries
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Exhibit F
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Lock-Boxes and
Lock-Box Banks
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Exhibit G
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Form of
Lock-Box Letter
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Exhibit H
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[Reserved]
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Exhibit I
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Credit and
Collection Policy
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Fourth Amended and
Restated
Receivables Sale
Agreement
This Fourth Amended and Restated Receivables
Sale Agreement, dated as of September 28, 2006 (this
“Agreement” ), among Crompton &
Knowles Receivables Corporation, a Delaware corporation, as Seller
(the “Seller” ), Chemtura Corporation
(f/k/a Crompton Corporation), a Delaware corporation, as the
initial Collection Agent (the “Initial Collection
Agent” ), and, together with any successor thereto,
the “Collection Agent” ), ABN AMRO Bank
N.V., as agent for the Purchaser Group to which Amsterdam is a
party and the Purchasers (the “Agent”
), Calyon New York Branch ( “Calyon” ),
as the Purchaser Agent for the Purchaser Group to which Atlantic is
a party, Wachovia Bank, National Association (
“Wachovia” ), as Letter of Credit
issuer (in such capacity, the “LC
Issuer” ) and as Purchaser Agent for the Purchaser
Group to which VFCC is a party, the other Purchaser Agents from
time to time party hereto, the related bank purchasers party hereto
(the “Related Bank Purchasers” ),
Amsterdam Funding Corporation (
“Amsterdam” ), as a Conduit Purchaser,
Atlantic Asset Securitization LLC (
“Atlantic” ), as a Conduit Purchaser,
Variable Funding Capital Company, LLC (
“VFCC” ), as a Conduit Purchaser and
the other Conduit Purchasers from time to time party hereto.
Certain capitalized terms used herein, and certain rules of
construction, are defined in Schedule I.
Preliminary
Statement
Reference is made to the Third Amended and
Restated Receivables Sale Agreement dated as of March 2, 2006 (as
amended prior to the date hereof, the “Original Sale
Agreement” ), among the parties hereto (other than
the LC Issuer). The Seller has requested that a sub-facility for
standby letters of credit be added to the facility evidenced by the
Original Sale Agreement. This Agreement amends and replaces in its
entirety the Original Sale Agreement, and from and after the date
hereof, all references to the Original Sale Agreement in any
Transaction Document or in any other instrument or document shall,
without more, be deemed to refer to this Agreement.
Now, Therefore, in consideration of the mutual agreements contained
herein and the other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
Article I
Purchases from Seller,
Letters of Credit and Settlements
(a) Sold Interest; Seller
Interest. Subject to the terms and conditions hereof, the
Seller may, from time to time before the Termination Date, sell to
the Conduit Purchasers, or, only if a Conduit Purchaser declines to
make the applicable purchase, ratably to the Related Bank
Purchasers for such Conduit Purchaser, an undivided percentage
ownership interest in the Receivables and all related Collections.
Any such purchase (a “Purchase” ) shall
be made by each relevant Purchaser remitting funds to the Seller,
through its Purchaser Agent, pursuant to Section 1.1(c) or by
the Collection Agent remitting Collections to the Seller pursuant
to Section 1.1(d). The aggregate percentage ownership interest
so acquired by a Purchaser in the Receivables and related
Collections (its “Purchase Interest” )
shall equal at any time the following quotient:
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I
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=
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the outstanding
Investment of such Purchaser at such time;
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ERB
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=
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the Eligible
Receivables Balance at such time; and
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PRP
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=
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the Purchaser
Reserve Percentage at such time.
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Except during a
Liquidation Period for a Purchaser, such Purchaser’s Purchase
Interest will change whenever its Investment, its Purchaser Reserve
Percentage or the Eligible Receivables Balance changes. During a
Liquidation Period for a Purchaser, its Purchase Interest shall
remain constant at the percentage in effect as of the day
immediately preceding the beginning of such Liquidation Period,
except for redeterminations to reflect Investment acquired from or
transferred to another Purchaser hereunder or under the Transfer
Agreement. The sum of all Purchasers’ Purchase Interests at
any time is referred to herein as the “Sold
Interest” , which at any time is the aggregate
percentage ownership interest then held by the Purchasers in the
Receivables and Collections. All right, title and interest in the
Receivables and related Collections not constituting part of the
Sold Interest shall constitute the “Seller
Interest”. On each day hereafter on which
Collections are received, the Collection Agent shall allocate such
Collections ratably to the Sold Interest and to the Seller
Interest. Collections allocated to the Sold Interest shall
hereinafter be referred to as “ Purchaser
Collections,” and Collections allocated to the
Seller Interest shall hereinafter be referred to as
“Seller Collections.”
(b) Conduit Purchasers Purchase Option
and Other Purchasers’ Commitments . Subject to
Section 1.1(d) concerning Reinvestment Purchases, at no time
will the Conduit Purchasers have any obligation to make a Purchase.
Each Related Bank Purchaser severally hereby agrees, subject to
Section 7.2 and the other terms and conditions hereof, to make
Purchases before the Termination Date, based on the applicable
Purchaser Group’s Ratable Share of each Purchase (and in the
case of each Related Bank Purchaser, the Commitment Percentage of
its Purchaser Group’s Ratable Shares of such Purchase) by the
Related Bank Purchasers, to the extent its Investment would not
thereby exceed its Commitment, the Aggregate Investment would not
thereby exceed the Purchase Limit, and the aggregate Credit
Exposure would not thereby exceed the Aggregate Commitments. Each
Purchaser’s first Purchase, and each additional Purchase by
such Purchaser not made solely from Purchaser Collections pursuant
to Section 1.1(d), is referred to herein as an
“Incremental Purchase.” Each Purchase
made by a Purchaser with the proceeds of Purchaser Collections
which does not increase the outstanding Investment of such
Purchaser, is referred to herein as a “Reinvestment
Purchase.” All Purchases hereunder shall be made
ratably by each Purchaser Group in accordance with the Commitment
of such Purchaser Group.
(c) Incremental Purchases . In
order to request an Incremental Purchase from a Purchaser, the
Seller must provide to the Agent and each Purchaser Agent an
irrevocable written request (including by telecopier or other
facsimile communication) substantially in the form of
Exhibit A, by 10:00 a.m. (Chicago time) three Business
Days before the requested date (the “Purchase
Date” ) of such Purchase, specifying the requested
Purchase Date (which must be a Business Day) and the requested
amount (the “Purchase Amount” ) of such
Purchase, which must be in a minimum amount of $1,000,000 and
multiples thereof (or, if less, an amount equal to the Maximum
Incremental Purchase Amount). All Incremental Purchases must be
requested ratably from all Conduit Purchasers unless, upon such
request, a Conduit Purchaser, in its sole discretion, determines
not to make its Ratable Share of the requested Incremental
Purchase, in which case the Seller will automatically be deemed to
have requested such Incremental Purchase from the Related Bank
Purchasers of such Conduit Purchaser. Each Purchaser Agent shall
promptly notify the related Purchasers from which a Purchase is
requested of the contents of such request. If a Conduit Purchaser
determines, in its sole discretion, to make the requested Purchase,
such Conduit Purchaser shall transfer to the applicable Purchaser
Agent’s Account the amount of such Incremental Purchase on
the requested Purchase Date. If a Conduit Purchaser refuses to make
a requested Purchase the Seller shall automatically be deemed to
have requested the Incremental Purchase from the Related Bank
Purchasers of such Conduit Purchaser, subject to Section 7.2
and the other terms and conditions hereof, each Related Bank
Purchaser shall transfer its Ratable Share of the requested
Purchase Amount into the applicable Purchaser Agent’s Account
by no later than 12:00 noon (Chicago time) on the Purchase Date.
Each Purchaser Agent shall transfer to the Seller Account the
proceeds of any Incremental Purchase to the extent of funds
actually received by such Purchaser Agent in such Purchaser
Agent’s Account.
(d) Reinvestment Purchases .
Unless a Conduit Purchaser has provided to the Agent, its Purchaser
Agent, the Seller and the Collection Agent a notice still in effect
that it no longer wishes to make Reinvestment Purchases (in which
case, such Conduit Purchaser’s Reinvestment Purchases, but
not those of its Related Bank Purchasers, shall cease), at any time
before the Termination Date when no Interim Liquidation is in
effect, on each day that any Purchaser Collections are received by
the Collection Agent, a Purchaser’s Purchase Interest in such
Purchaser Collections shall automatically be used to make a
Reinvestment Purchase by such Purchaser, but only to the extent
such Reinvestment Purchase would not cause the Purchaser’s
Investment to increase above the amount of such Investment at the
start of the day plus any Incremental Purchases made by the
Purchaser on that day. A Conduit Purchaser may revoke any notice
provided under the first sentence of this Section 1.1(d) by
notifying the Agent, its Purchaser Agent, the Seller and the
Collection Agent that it will make Reinvestment
Purchases.
Section 1.2.
Letters of
Credit . (a)
Issuance and Modification . Subject to the terms
and conditions hereof, the Seller may, from time to time before the
Termination Date, request that the LC Issuer issue Letters of
Credit, and the LC Issuer hereby agrees to issue each Letter of
Credit and to renew, extend, increase, decrease or otherwise modify
each such Letter of Credit ( “Modify,”
and each such action a “Modification”
), from time to time upon the request of the Seller prior to the
Termination Date; provided that no Letter of Credit
shall be issued or Modified by the LC Issuer if: (i) after giving
effect thereto, the aggregate Credit
Exposure would exceed the Aggregate Commitment, (ii) after giving
effect thereto, the LC Obligations would
exceed the LC Sublimit, (iii) after giving effect thereto,
the Effective Receivable Interest (as most
recently computed or recomputed by the Collection Agent in a
Periodic Report and expressed as a percentage) would exceed 100.0%
at any time; (iv) the face amount of such Letter of Credit is less
than $1,000,000; (v) such Letter of Credit has an original expiry
date more than one year after the later of (A) its date of
issuance, and (B) the date of its most recent Modification; or (vi)
the LC Issuer has received written notice that a Termination Event
or Potential Termination Event exists and is continuing.
(b) Letter of Credit Requests.
The Seller shall give the LC Issuer and the Purchaser Agents
reasonable prior notice of the proposed date of issuance or
Modification of each Letter of Credit (and in no event shall such
notice be given later than 12:00 noon (Chicago time) three Business
Days prior to such issuance or Modification), by delivering a copy
of the Letter of Credit Request provided to it under the Purchase
Agreement, together with a transmittal letter in substantially the
form of Exhibit H hereto, duly completed by the Seller. The
issuance or Modification by the LC Issuer of any Letter of Credit
shall, in addition to the conditions precedent set forth in Article
VII, be subject to the conditions precedent that such Letter of
Credit shall be reasonably satisfactory to the LC Issuer and that
the Seller shall have executed and delivered such application
agreement and/or such other instruments and agreements relating to
such Letter of Credit as the LC Issuer shall have reasonably
requested (each, an “LC Application” ).
In no event shall the LC Issuer be obligated to issue a
Modification if, on the proposed date of such Modification, the LC
Issuer would not be obligated to issue a new Letter of Credit if
requested or if the beneficiary does not consent to the proposed
terms of the Modification. In the event of any conflict between the
terms of this Agreement and the terms of any LC Application, the
terms of this Agreement shall control.
(c)
Reimbursement by Seller; Interest; Pledge of Seller
Interest. Upon receipt from the beneficiary of any Letter
of Credit of any demand for payment under such Letter of Credit,
the LC Issuer shall notify the Purchaser Agents and the Seller as
to the amount to be paid by the LC Issuer as a result of such
demand and the proposed payment date (the “LC Payment
Date” ). The responsibility of the LC Issuer to the
Seller shall be only to determine that the documents (including
each demand for payment) delivered under each Letter of Credit in
connection with such presentment shall be in conformity in all
material respects with such Letter of Credit. The Seller shall be
irrevocably and unconditionally obligated to reimburse the LC
Issuer on or before the applicable LC Payment Date for any amounts
to be paid by the LC Issuer upon any drawing under any Letter of
Credit, without presentment, demand, protest or other formalities
of any kind, either from cash on hand or, subject to the terms and
conditions hereof, with the proceeds of a Purchase (and, in the
event that the Seller does not have sufficient cash on hand to make
any such reimbursement, the Seller hereby irrevocably and
unconditionally commits that it will request a Purchase on the
terms and conditions specified in this Agreement); provided that
the Seller shall not hereby be precluded from asserting any claim
for direct (but not consequential) damages suffered by the Seller
to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of the LC Issuer or (ii) the LC
Issuer’s failure to pay under any Letter of Credit issued by
it after the presentation to it of a request strictly complying
with the terms and conditions of such Letter of Credit. All such
amounts paid by the LC Issuer and remaining unpaid by the Seller
(whether from cash on hand or with the proceeds of a Purchase made
in accordance with this Agreement) shall bear interest (
“Interest” ), payable on each
Settlement Date in arrears out of Seller Collections, for each day
until paid at a rate per annum equal to the Default Rate.
Regardless of whether the applicable LC Payment Date has occurred,
the Purchaser Agents are hereby irrevocably directed to pay the
proceeds of each Purchase made while any Reimbursement Obligation
remains outstanding directly to the LC Issuer until all such
Reimbursement Obligations, together with all accrued and unpaid
interest and LC Fees thereon, are paid in full. The Seller’s
Reimbursement Obligations, and the Seller’s obligation to pay
Interest pursuant to this Section 1.2(c), shall be secured by a
pledge of the Seller Interest.
(d)
Obligations Absolute. The Seller’s
obligations under this Section 1.2 shall be absolute and
unconditional under any and all circumstances and irrespective of
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument
relating thereto; (ii) the existence of any claim, counterclaim,
set-off, defense or other right that the Seller or any Originator
may have at any time against any beneficiary or any transferee of
such Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the applicable LC Issuer or
any other person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any
agreement or instrument relating thereto, or any unrelated
transaction; (iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect (provided that
such draft, demand, certificate or other document presented
pursuant to such Letter of Credit appears on its face to comply
with the terms thereof) or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission
or otherwise of any document required in order to make a drawing
under such Letter of Credit; (iv) any payment by the LC Issuer
under such Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such
Letter of Credit (provided that such draft, demand, certificate or
other document presented pursuant to such Letter of Credit appears
on its face to comply with the terms thereof); or any payment made
by the LC Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or
other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in
connection with any proceeding under the Bankruptcy Code of the
United States, or any other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights
of creditors generally; (v) any exchange, release or non-perfection
of any collateral, or any release or amendment or waiver of or
consent to the departure from any guarantee, for all or any of the
obligations of the Seller or any Originator in respect of any
Letter of Credit; or (vi) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Seller of the
applicable Originator, provided that the Seller shall not hereby be
precluded from asserting any claim for direct (but not
consequential) damages suffered by the Seller to the extent, but
only to the extent, caused by (i) the willful misconduct or gross
negligence of the LC Issuer or (ii) the LC Issuer’s failure
to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms
and conditions of such Letter of Credit. The Seller shall promptly
examine a copy of each Letter of Credit and each amendment thereto
that is delivered to it, and, in the event of any claim of
noncompliance with Seller’s instructions or other
irregularity, the Seller will immediately (and in any event within
5 Business Days) notify the LC Issuer. The Seller shall be
conclusively deemed to have waived any such claim against the LC
Issuer and its correspondents unless such notice is given as
aforesaid.
(e)
Actions of the LC Issuer. With respect to any
actions taken or omitted in the absence of gross negligence or
willful misconduct, the LC Issuer shall be entitled to rely, and
shall be fully protected in relying, upon any Letter of Credit,
draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the
LC Issuer.
(f)
Participations. By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the amount
thereof) and without any further action on the part of the LC
Issuer or the Related Bank Purchasers, the LC Issuer hereby grants
to each Related Bank Purchaser, and each Related Bank Purchaser
hereby acquires from the LC Issuer, a participation in such Letter
of Credit equal to such Related Bank Purchaser’s Percentage
of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each
Related Bank Purchaser hereby absolutely and unconditionally agrees
to pay to the LC Issuer, such Related Bank Purchaser’s
Percentage of each draw honored by the LC Issuer pursuant to a
Letter of Credit and not reimbursed by the Seller on the date due
as provided in Section 1.2(c), or of any reimbursement payment
required to be refunded to the Seller for any reason. Each Related
Bank Purchaser acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of
Letter of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and
continuance of a Termination Event or Collection Agent Replacement
Event or reduction or termination of the Commitments, and that each
such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. The Related Bank Purchasers
shall be entitled to receive their ratable shares of any LC Fees
and Interest actually collected by the LC Issuer, but in no event
shall they be entitled to share in any other fees, commissions,
charges or expenses payable to the LC Issuer.
(g) LC
Issuer Agreements . Promptly after the occurrence thereof,
the LC Issuer shall report to each of the Purchaser Agents: (i) the
date and amount of each issuance, extension, amendment, renewal and
cancellation of a Letter of Credit, (ii) the date and amount of
each draw honored under a Letter of Credit, and (iii) the date and
amount of each failure by the Seller to reimburse a Reimbursement
Obligation required to be reimbursed to the LC Issuer. The LC
Issuer shall invoice the Seller for LC Fees no later than the 15
th day of each month hereafter and shall disburse each
Related Bank Purchaser’s share of LC Fees and Interest
received by the LC Issuer within one (1) Business Day after the LC
Issuer’s receipt thereof.
(h)
Cash-Collateralization of LC Obligations. On the
Termination Date, the Seller shall be and become thereby
unconditionally obligated, without any further notice, act or
demand, to pay to the LC Issuer, an amount equal to all
Reimbursement Obligations then outstanding, together with accrued
and unpaid Interest and L/C Fees thereon, and to deposit into the
Letter of Credit Collateral Account an amount equal to the
Aggregate Face Amount Outstanding, together with an amount equal to
the L/C Fees that will accrue thereon through the expiry date of
each Letter of Credit. The LC Issuer may at any time or from time
to time after funds are deposited in the Letter of Credit
Collateral Account, apply such funds to the payment of draws under
outstanding Letter of Credit and any other amounts as shall from
time to time have become due and payable by Seller to the LC Issuer
under the Transaction Documents. After all of the LC Obligations
have been indefeasibly paid in full and the obligation of the LC
Issuer to issue Letter of Credit has been terminated, any funds
remaining in the Letter of Credit Collateral Account shall be
returned by the LC Issuer to the Seller or paid to whomever may be
legally entitled thereto at such time.
Section 1.3. Interim
Liquidations . (a)
Optional . The Seller may at any time direct that
Reinvestment Purchases cease and that an Interim Liquidation
commence for all Purchasers by giving the Agent, the LC Issuer,
each Purchaser Agent and the Collection Agent at least three
Business Days’ written (including telecopy or other facsimile
communication) notice specifying the date on which the Interim
Liquidation shall commence and, if desired, when such Interim
Liquidation shall cease before the Termination Date (identified as
a specific date or as when the Aggregate Investment is reduced to a
specified amount). If the Seller does not so specify the date on
which an Interim Liquidation shall cease, it may cause such Interim
Liquidation to cease at any time before the Termination Date,
subject to Section 1.3(b) below, by notifying the Agent, the
LC Issuer, each Purchaser Agent and the Collection Agent in writing
(including by telecopy or other facsimile communication) at least
three Business Days before the date on which it desires such
Interim Liquidation to cease.
(b) Mandatory . If, at any time
before the Termination Date, any condition in Section 7.2 is
not fulfilled, the Seller shall immediately notify the Agent, the
LC Issuer, each Purchaser Agent and the Collection Agent, whereupon
Reinvestment Purchases shall cease and an Interim Liquidation shall
commence, which shall only cease upon the Seller confirming to the
Agent that the conditions in Section 7.2 are
fulfilled.
Section 1.4. Discount Rates and Tranche
Periods. (a) Each Conduit Purchaser’s
Investment will accrue Funding Charges for each day on which it is
outstanding. On each Settlement Date the Seller shall pay to each
Purchaser Agent (for the benefit for the related Conduit Purchaser)
an aggregate amount equal to all accrued and unpaid Funding Charges
in respect of such Investment for the immediately preceding
Discount Period. Each Purchaser Agent shall allocate the Investment
of the related Conduit Purchaser to one or more Tranche Periods in
its sole discretion.
(b) All Investments of the Related Bank
Purchasers shall be allocated to one or more Tranches reflecting
the Discount Rates at which such Investment accrues Discount and
the Tranche Periods for which such Discount Rates apply. In each
request for an Incremental Purchase from a Related Bank Purchaser
and three Business Days before the expiration of any Tranche Period
applicable to any Related Bank Purchaser’s Investment, the
Seller may request the Tranche Period(s) to be applicable to such
Investment and the Discount Rate(s) applicable thereto. All
Investment of the Related Bank Purchasers may accrue Discount at
either the Eurodollar Rate or the Prime Rate, in all cases as
established for each Tranche Period applicable to such Investment.
Each Tranche shall be in the minimum amount of $1,000,000 and in
multiples thereof or, in the case of Discount accruing at the Prime
Rate, in any amount of Investment that otherwise has not been
allocated to another Tranche Period. Any Investment of the Related
Bank Purchasers not allocated to a Tranche Period shall be a Prime
Tranche. During the pendency of a Termination Event, the applicable
Purchaser Agent may reallocate any outstanding Investment of the
Related Bank Purchasers to a Prime Tranche. All Discount accrued on
the Investment of the Related Bank Purchasers during a Tranche
Period shall be payable by the Seller on the last day of such
Tranche Period or, for a Eurodollar Tranche with a Tranche Period
of more than three months, 90 days after the commencement, and on
the last day, of such Tranche Period.
(c) If, by the time required in
Section 1.4(b), the Seller fails to select a Discount Rate or
Tranche Period for any Investment of any Related Bank Purchaser,
such amount of Investment shall automatically accrue Discount at
the Prime Rate for a three Business Day Tranche Period. Any
Investment purchased from a Conduit Purchaser pursuant to a
Transfer Agreement shall accrue Discount at the Prime Rate and have
an initial Tranche Period of three Business Days.
(d) If a Purchaser Agent or any Related Bank
Purchaser determines (i) that maintenance of any Eurodollar Tranche
would violate any applicable law or regulation, (ii) that deposits
of a type and maturity appropriate to match fund any of such
Related Bank Purchaser’s Eurodollar Tranches are not
available or (iii) that the maintenance of any Eurodollar Tranche
will not adequately and fairly reflect the cost of such Related
Bank Purchaser of funding Eurodollar Tranches, then such Purchaser
Agent, upon the direction of such Purchaser, shall suspend the
availability of, and terminate any outstanding, Eurodollar Tranche
so affected. All Investment allocated to any such terminated
Eurodollar Tranche shall be reallocated to a Prime Rate
Tranche.
Section 1.5. Fees and Other Costs and
Expenses .
(a) The Seller shall pay to each Purchaser Agent for the
benefit of the members of its Purchaser Group in such proportions
as they may have agreed, the fees specified in the Fee Letter. The
Seller shall also pay to the LC Issuer the facing fee specified in
the Fee Letter (the “Facing Fee”
).
(b) If the
amount of Investment allocated to any CP or Eurodollar Tranche is
reduced before the last day of its Tranche Period, or if a
requested Incremental Purchase at the Eurodollar Rate does not take
place on its scheduled Purchase Date, the Seller shall pay the
Early Payment Fee to each Purchaser that had its Investment so
reduced or scheduled Purchase not made.
Section 1.6. Computation of Effective
Receivable Interest; Deemed Collection . (a) General . The Effective
Receivable Interest (and the portions thereof comprising the Sold
Interest and the Pledged Interest) shall be computed as of the last
day of each Reporting Period (after giving effect to any payments
to be made on the next succeeding Settlement Date pursuant to this
Agreement) and on the Termination Date. In addition, (i) if, on any
Business Day prior to the Termination Date, the Seller desires the
Purchasers to make an Incremental Purchase or desires the LC Issuer
to issue, increase or extend a Letter of Credit and the Effective
Receivable Interest as reflected on the most recent Periodic Report
delivered to the Agent and the Purchaser Agents would exceed 100.0%
after giving effect to such proposed Incremental Purchase, Letter
of Credit issuance or Letter of Credit increase, the Seller may
provide to the Agent and the Purchaser Agents, not later than
delivery of the notice for such Incremental Purchase pursuant to
Section 1.1(c), a written recomputation of the Effective Receivable
Interest reflecting the proposed increase in Aggregate Investment
or LC Obligations and changes since the last day of the prior
Settlement Period in the Eligible Receivables Balance and Aggregate
Reserves, in which case, the Effective Receivable Interest shall be
recomputed as of the date of such recomputation; and (ii) at any
time, the Agent or LC Issuer may reasonably require the Collection
Agent to provide an updated Periodic Report based on the
information then available to Collection Agent, for purposes of
recomputing the Effective Receivable Interest or demonstrating that
the Credit Exposure does not exceed the Aggregate Commitments as of
any other date and that the LC Obligations do not exceed the LC
Sublimit, and the Collection Agent agrees to do so within three (3)
Business Days after its receipt of the Agent’s request. If,
at any time, the sum of the Credit Exposure plus the Aggregate
Reserve is greater than the Eligible Receivables Balance, the
Seller shall pay ratably to each of the Purchaser Agents for its
respective Purchaser Group an amount of Purchaser Collections equal
to such Purchaser Group’s deficiency for application to
reduce the Investments of the Purchasers ratably in accordance with
the principal amount of their respective Investments, applied
first to such Purchaser’s Prime Tranches and
second to the other Tranches applicable to the
Investment of such Purchaser with the shortest remaining maturities
unless otherwise specified by the Seller and next,
only if the excess described above persists, the Seller shall pay
to the LC Issuer, in order to Cash-Collateralize the LC
Obligations, Seller Collections in an amount necessary to eliminate
such excess. In addition, if any at time, the LC Obligations exceed
the LC Sublimit, the Seller shall pay to the LC Issuer, in order to
Cash-Collateralize the LC Obligations, Seller Collections in an
amount necessary to eliminate such excess.
(b) Deemed Collections . If on
any day the outstanding balance of a Receivable is reduced or
cancelled as a result of any defective or rejected goods or
services, any cash discount or adjustment (including any adjustment
resulting from the application of any special refund or other
discounts or any reconciliation), any setoff or credit (whether
such claim or credit arises out of the same, a related, or an
unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness
or the remittance of cash by such Obligor, the Seller shall be
deemed to have received on such day a Collection on such Receivable
in the amount of such reduction or cancellation. If on any day any
representation, warranty, covenant or other agreement of the Seller
related to a Receivable is not true or is not satisfied, the Seller
shall be deemed to have received on such day a Collection in the
amount of the outstanding balance of such Receivable. All such
Collections deemed received by the Seller under this
Section 1.6(b) ( “Deemed
Collections” ) shall be remitted by the Seller to
the Collection Agent in accordance with
Section 5.1(i).
(c) Adjustment to Sold Interest
. At any time before the Termination Date that the
Seller is deemed to have received any Deemed Collection deriving
from a Receivable that is otherwise reported as an Eligible
Receivable, so long as no Liquidation Period then exists, the
Seller may satisfy its obligation to deliver such amount to the
Collection Agent by instead notifying the Agent that each of the
Sold Interest and the Seller Interest should be recalculated by
decreasing the Eligible Receivables Balance by the amount of such
Deemed Collections, so long as such adjustment does not cause the
Effective Receivable Interest to exceed 100.0%.
(d) Payment Assumption . Unless
an Obligor otherwise specifies or another application is required
by contract or law, any payment received by the Seller from any
Obligor shall be applied as a Collection of Receivables of such
Obligor (starting with the oldest such Receivable) and remitted to
the Collection Agent as such.
Section 1.7. Reduction in
Commitments . The
Seller may, upon thirty days’ notice to the Agent and each
Purchaser Agent, reduce the Aggregate Commitment in increments of
$1,000,000, so long as the Aggregate Commitment at all times equals
at least the Credit Exposure. Each such reduction in the Aggregate
Commitment shall reduce the Commitment of each Purchaser Group in
accordance with its Ratable Share and the Commitment of each
Related Bank Purchaser with a Purchaser Group in accordance with
its Commitment Percentage and shall ratably reduce the Purchase
Limit so that the Aggregate Commitment remains equal to 102% of the
Purchase Limit.
Section 1.8. Repurchases.
(a) Optional . At
any time that the Aggregate Investment is less than 10% of the
Aggregate Commitment in effect on the date hereof, the Seller may,
upon thirty days’ notice to the Agent, repurchase the entire
Sold Interest from the Purchasers at a price equal to the
outstanding Matured Aggregate Investment and all other amounts then
owed hereunder and Cash-Collateralize all LC Obligations in an
amount equal to 100.0% of the amount thereof.
(b) Mandatory . If at any time
before the Termination Date, the Effective Receivable Interest
exceeds 100.0%, unless the Seller remedies the situation by
satisfying its obligations under Section 1.6(a), any Purchaser
may direct that all Purchasers ratably reassign to the Seller,
without recourse, representation or warranty, a portion of the
Purchase Interest of each Purchaser so that the Effective
Receivable Interest does not exceed 100.0%. The Seller shall
purchase such reassigned Purchase Interests at a purchase price
equal to the Matured Value of the Investment so reassigned by each
Purchaser.
Section 1.9. Assignment of Purchase
Agreements. (a) The
Seller hereby assigns and otherwise transfers to the Agent (for the
benefit of the Agent, the LC Issuer, each Purchaser Agent, each
Purchaser and any other Person to whom any amount is owed
hereunder), all of the Seller’s right, title and interest in,
to and under each Purchase Agreement. The Seller shall execute,
file and record all financing statements, continuation statements
and other documents required to perfect or protect such assignment.
This assignment includes (a) all monies due and to become due
to the Seller from each Originator or the Parent under or in
connection with each Purchase Agreement (including fees, expenses,
costs, indemnities and damages for the breach of any obligation or
representation related to such agreement) and (b) all rights,
remedies, powers, privileges and claims of the Seller against each
Originator or the Parent under or in connection with each Purchase
Agreement. All provisions of each Purchase Agreement shall inure to
the benefit of, and may be relied upon by, the Agent, the LC
Issuer, each Purchaser Agent, each Purchaser and each such other
Person. At any time that a Termination Event has occurred and is
continuing, the Agent shall have the sole right to enforce the
Seller’s rights and remedies under each Purchase Agreement to
the same extent as the Seller could absent this assignment, but
without any obligation on the part of the Agent, any Purchaser
Agent, the LC Issuer, any Purchaser or any other such Person to
perform any of the obligations of the Seller under each Purchase
Agreement (or any of the promissory notes executed thereunder). All
amounts distributed to the Seller under each Purchase Agreement
from Receivables sold to the Seller thereunder shall constitute
Collections hereunder and shall be applied in accordance
herewith.
(b) The Seller hereby irrevocably authorizes the
Agent, on behalf of the Purchasers and the LC Issuer, at any time,
and from time to time, to file in any filing office in any
jurisdiction any initial financing statements and amendments
thereto that describe either all of the Seller’s assets or
the Collateral, as collateral, and hereby ratifies the filing of
any initial financing statements or amendments thereto filed by the
Agent on behalf of the Purchasers and the LC Issuer that describe
all of the Seller’s assets or the Collateral, as collateral
which were filed prior to the execution of this
Agreement.
Section 1.10. Extension of Termination
Date . The Seller
may advise the LC Issuer, the Related Bank Purchasers and each
Purchaser Agent in writing of its desire to extend the Termination
Date for an additional period, provided
(i) such request is made not more than 120 days prior to, and
not less than 90 days prior to, the then current Termination Date,
and (ii) not more than one such request for the extension of
the Termination Date may be made in any one calendar year. In the
event that the LC Issuer and the Related Bank Purchasers are
agreeable to such extension, they shall notify the Agent and the
Agent shall so notify the Seller in writing (it being understood
that the LC Issuer and the Related Bank Purchasers may accept or
decline such a request in their sole discretion and on such terms
as they may elect) not less than 45 days prior to the Termination
Date, and the Seller, the LC Issuer and the Related Bank Purchasers
shall enter into such documents as the LC Issuer or the Related
Bank Purchasers may deem necessary or appropriate to reflect such
extension, and all reasonable costs and expenses incurred by the LC
Issuer and Related Bank Purchasers in connection therewith
(including reasonable attorneys’ fees) shall be paid by the
Seller. The LC Issuer and the Related Bank Purchasers shall be
deemed to have refused to grant the requested extension in the
event the Agent shall fail to so notify the Seller of their
agreement to such an extension.
Section 1.11. Grant of Security
Interest . To secure
payment of the Investment, Discount, LC Fees and other fees
described in the Fee Letter, Facing Fees, LC Obligations,
Indemnified Losses, and all other amounts payable and obligations
of the Seller under the Transaction Documents, whether now existing
or hereafter arising, absolute or contingent, the Seller hereby
grants to the Agent (for the benefit of the Purchasers and the LC
Issuer) a security interest in all of the Seller’s right,
title and interest in, to and under all existing and hereafter
acquired right, title and interest in, to and under the
Receivables, the Collections, the Lock-Box Accounts, each Purchase
Agreement, and all proceeds of the foregoing (collectively, the
“Collateral” ). From and after the
Termination Date, the Agent, on behalf of the Purchasers and the LC
Issuer, shall have, in addition to the rights and remedies it may
have under this Agreement, all other rights and remedies provided
to a secured creditor after default under the Uniform Commercial
Code and other applicable law, which rights and remedies shall be
cumulative.
Article II
Sales to and from Conduit
Purchasers; Allocations
Section 2.1. Required Purchases from a
Conduit Purchaser .
(a) Each Conduit Purchaser may, at any
time, sell to its Related Bank Purchasers pursuant to the relevant
Transfer Agreement any percentage designated by such Conduit
Purchaser of such Conduit Purchaser’s Investment and its
related Conduit Purchaser Settlement (each, a
“Put” ).
(b)Any portion of any Investment of a Conduit
Purchaser and related Conduit Purchaser Settlement purchased by a
Related Bank Purchaser shall be considered part of such Related
Bank Purchaser’s Investment and related Conduit Purchaser
Settlement from the date of the relevant Put. Immediately upon any
purchase by a Related Bank Purchaser of any portion of the relevant
Conduit Purchaser’s Investment, the Seller shall pay to the
relevant Purchaser Agent (for the ratable benefit of each such
Purchaser) an amount equal to the sum of (i) the Assigned
Settlement and (ii) all unpaid Discount owed to such Conduit
Purchaser (whether or not then due) to the end of each applicable
Tranche Period to which any Investment being Put has been
allocated, (iii) all accrued but unpaid fees (whether or not then
due) payable to such Conduit Purchaser in connection herewith at
the time of such purchase and (iv) all accrued and unpaid costs,
expenses and indemnities due to such Conduit Purchaser from the
Seller in connection herewith.
Section 2.2. Purchases by a Conduit
Purchaser .
Each Conduit Purchaser may at any time
deliver to its Purchaser Agent and each of its Related Bank
Purchasers a notification of assignment in substantially the form
of Exhibit B. If a Conduit Purchaser delivers such notice,
each of its Related Bank Purchasers shall sell to such Conduit
Purchaser and such Conduit Purchaser shall purchase in full from
each such Related Bank Purchasers, the Investment of such Related
Bank Purchasers on the last day of the relevant Tranche Periods, at
a purchase price equal to such Investment plus accrued and unpaid
Discount thereon. Any sale from any Related Bank Purchaser to the
relevant Conduit Purchaser pursuant to this Section 2.2 shall
be without recourse, representation or warranty except for the
representation and warranty that the Investment sold by such
Related Bank Purchaser is free and clear of any Adverse Claim
created or granted by such Related Bank Purchaser and that such
Related Bank Purchaser has not suffered a Bankruptcy
Event.
Section 2.3. Allocations and
Distributions . As
provided in Section 1.1(a), on each day hereafter on which
Collections are received, the Collection Agent shall allocate such
Collections to the Sold Interest and to the Seller
Interest.
(a) Purchaser Collections Prior to the
Termination Date or an Interim Liquidation. On the
Business Day following each Deposit Date occurring prior to the
Termination Date (unless an Interim Liquidation is in effect), the
Collection Agent shall set aside from Purchaser Collections the
amounts necessary to make all distributions to the Agent, the
Purchaser Agents, the Purchasers and the Collection Agent required
by this Section 2.3(a) with respect to the next succeeding
Settlement Date. On each Settlement Date prior to the Termination
Date (unless an Interim Liquidation is in effect), all Purchaser
Collections so set aside during the preceding Settlement Period
shall be applied where applicable by the Collection Agent (or, if
the Agent is then in control of any Purchaser Collections, by the
Agent) in the following order:
(i) first, to payment of all
out-of-pocket expenses due and payable to the Agent (other than in
its capacity as a Purchaser Agent);
(ii) second, ratably to the
Agent and each Purchaser Agent, to payment of all fees and other
amounts not described in clause (i) above due to the Agent and such
Purchaser Agents;
(iii) third, ratably to each
Purchaser Group, to payment of all Funding Charges and Discount
(without duplication) due and payable to such Purchaser Group on
such date;
(iv) fourth, ratably to each
Purchaser Group, to payment of any reduction of their respective
Investments required by Section 1.6(a);
(v) fifth, ratably to each
Purchaser Group, to payment of all other amounts due and payable to
such Purchaser Group under the Transaction Documents;
(vi) sixth, to the Collection
Agent, to payment of the Collection Agent Fee due and payable on
such date; and
(vii) seventh, to the
Seller.
On the last day
of each Tranche Period for a Eurodollar Tranche or Prime Tranche,
the Collection Agent (or, if the Agent is then in control of any
Purchaser Collections, the Agent) shall pay Discount due and
payable to such Related Bank Purchasers from accounts set aside for
such purpose pursuant to Section 3.2(a).
(b) Purchaser Collections after the
Termination Date and during Interim Liquidations. On each
day during any Interim Liquidation and on each day on and after the
Termination Date, the Collection Agent shall set aside and hold in
trust solely for the account of each Purchaser Agent, for the
benefit of the Agent and the Purchasers, (or deliver to each
Purchaser Agent, if so instructed pursuant to Section 3.2(a))
the Sold Interest in all Purchaser Collections received on such day
and such Purchaser Collections shall be allocated in the following
order:
(i) first, to the Agent until
all out-of-pocket expenses owed to the Agent (other than in its
capacity as a Purchaser Agent) have been paid in full;
(ii) second, ratably to the
Agent and each Purchaser Agent until all other amounts owed to the
Agent and the Purchaser Agents have been paid in full;
(iii) third, to each Purchaser
Group until all amounts owed to such Purchaser Group have been paid
in full;
(iv) fourth, to any other Person
(other than the Seller, the Collection Agent or an Originator) to
whom any amounts are owed under the Transaction Documents until all
such amounts have been paid in full; and
(v) fifth, to the Collection
Agent until all amounts owed to the Collection Agent under the
Agreement have been paid in full;
(vi) sixth, solely if the
Termination Date has occurred, to the LC Issuer, in payment of any
accrued and unpaid Interest, LC Fees or other amounts that are then
due and owing or to be held as additional cash collateral for the
LC Obligations until they are fully Cash-Collateralized;
and
(vii) seventh, to the
Seller.
On the last day
of each Tranche Period (unless otherwise instructed by the Agent
pursuant to Section 3.2(a)), the Collection Agent shall
deposit into the Agent’s Account, from such set aside
Collections, all amounts allocated to such Tranche Period and all
Tranche Periods that ended before such date that are due in
accordance with clause (ii) above. No distributions shall be made
to pay amounts under clauses (iii) - (vi) until sufficient
Collections have been set aside to pay all amounts described in
clauses (i) and (ii) that may become payable for all outstanding
Tranche Periods. All distributions by the Agent or any Purchaser
Agent shall be made ratably within each priority level in
accordance with the respective amounts then due each Person
included in such level unless otherwise agreed by all Purchaser
Agents.
(c) Seller Collections prior to the
Termination Date. On each Settlement Date prior to the
Termination Date: (i) the Collection Agent shall pay to the LC
Issuer, Seller Collections in an amount equal to all accrued and
unpaid Interest, LC Fees and Facing Fee, if any, then due and owing
pursuant to the Fee Letter and the amount of any cash collateral
required pursuant to Section 1.6(a), and (ii) any remaining Seller
Collections shall be allocated by the Seller in the following
order:
(x) first, to purchase
additional Receivables under the Purchaser Agreements, such that
after giving effect thereto, the Eligible Receivables Balance is
greater than or equal to the Eligible Receivables Balance
immediately prior to receipt of such Seller Collections,
(y) second, to reduction of any
accrued and unpaid interest or principal under the Subordinated
Notes, and
(z) third, to the Seller, for
any purpose not inconsistent with the Transaction Documents unless
a Collection Agent Termination Event exists and is continuing or
any notice in the form attached to a Lock-Box Letter has been
delivered, in which case Seller Collections described in this
clause third shall be held in trust by the Seller
for the LC Issuer (or, if the Seller or one of its affiliates is
not then acting as the Collection Agent, such Seller Collections
shall be retained and held in trust by the Collection Agent for the
LC Issuer) until the next Settlement Date in a segregated account
which is subject to a first priority perfected security interest in
favor of the Agent, for the benefit of the LC Issuer and the
Related Bank Purchasers.
(d) Seller Collections after the
Termination Date . On each day on or after the Termination
Date on which any Seller Collections are received, such Seller
Collections shall be held in trust by the Collection Agent for the
LC Issuer until the next Settlement Date in a segregated account
which is subject to a first priority perfected security interest in
favor of the Agent, for the benefit of the LC Issuer and the
Related Bank Purchasers. On each Settlement Date on or after the
Termination Date, the Collection Agent shall pay all Seller
Collections to the LC Issuer for application in the following
order:
(i) first, to any accrued
and unpaid Interest;
(ii) second, to any accrued and
unpaid LC Fees and Facing Fees (it being understood that the LC
Issuer may take up to one Business Day to distribute each Related
Bank Purchaser’s share of any amounts applied to accrued LC
Fees);
(iii) third, to
Cash-Collateralize the LC Obligations in respect of all Letters of
Credit then outstanding, beginning with the Letter of Credit with
the earliest expiration date;
(iv) fourth, to the Agent, for
allocation in accordance with Section 2.3(b); and
(v) fifth, once all amounts
owing to the Agent, the Purchaser Agents, the Purchasers and LC
Issuer have been paid in full or fully Cash-Collateralized, to the
Seller.
Section 2.4. Release of Excess Cash
Collateral . If on
any Settlement Date prior to the Termination Date, the balances in
the Letter of Credit Collateral Account exceed the amount required
by this Agreement, unless a Termination Event, a Collection Agent
Replacement Event or an event which, with the passage of time, the
giving of notice, or both, would constitute a Termination Event or
Collection Agent Replacement Event, shall exist and be continuing,
the LC Issuer shall release the excess cash collateral to Seller.
In addition, promptly after reduction of all LC Obligations to
zero, the LC Issuer shall release all cash collateral to
Seller.
Article III
Administration and
Collections
Section 3.1. Appointment of Collection
Agent .
(a) The servicing, administering and
collecting of the Receivables shall be conducted by a Person (the
“Collection Agent” ) designated to so
act on behalf of the Purchasers and the LC Issuer under this
Article III. As the Initial Collection Agent, the Parent is hereby
designated as, and agrees to perform the duties and obligations of,
the Collection Agent. The Parent acknowledges that the Agent, the
LC Issuer and each Purchaser have relied on the Parent’s
agreement to act as Collection Agent (and the agreement of any of
the sub-collection agents to so act) in making the decision to
execute and deliver this Agreement and agrees that it will not
voluntarily resign as Collection Agent unless the Collection Agent
is prohibited from continuing to serve in such capacity by
applicable law. At any time after the occurrence of a Collection
Agent Replacement Event, the Agent may designate a new Collection
Agent to succeed the Parent (or any successor Collection
Agent).
(b) The Parent may, and if requested by the
Agent shall, delegate its duties and obligations as Collection
Agent to an Affiliate (acting as a sub-collection agent).
Notwithstanding such delegation, the Parent shall remain primarily
liable for the performance of the duties and obligations so
delegated, and the Agent, the LC Issuer, each Purchaser Agent and
each Purchaser shall have the right to look solely to the Parent
for such performance. The Agent (with the consent of each Purchaser
Agent) may at any time after the occurrence of a Collection Agent
Replacement Event remove or replace any sub-collection
agent.
(c) If replaced, the Collection Agent agrees it
will terminate, and will cause each existing sub-collection agent
to terminate, its collection activities in a manner requested by
the Agent to facilitate the transition to a new Collection Agent.
The Collection Agent shall cooperate with and assist any new
Collection Agent (including providing access to, and transferring,
all Records and allowing the new Collection Agent to use all
licenses, hardware or software necessary or desirable to collect
the Receivables). The Parent irrevocably agrees to act (if
requested to do so) as the data-processing agent for any new
Collection Agent in substantially the same manner as the Parent
conducted such data-processing functions while it acted as the
Collection Agent; provided, however , that the
Parent receives a then market rate compensation for providing such
services.
Section 3.2. Duties of Collection
Agent .
(a) The Collection Agent shall take, or
cause to be taken, all action necessary or advisable to collect
each Receivable in accordance with this Agreement, the Credit and
Collection Policy and all applicable laws, rules and regulations
using the skill and attention the Collection Agent exercises in
collecting other receivables or obligations owed solely to it. The
Collection Agent shall, in accordance herewith, set aside all
Collections to which a Purchaser or the LC Issuer is entitled. If
so instructed by the Agent, the Collection Agent shall transfer to
the Agent or the LC Issuer, as applicable, the amount of
Collections to which the Agent, the Purchaser Agents, the LC Issuer
and the Purchasers are entitled by the Business Day following
receipt and identification thereof. Each party hereto hereby
appoints the Collection Agent to enforce such Person’s rights
and interests in the Receivables, but (notwithstanding any other
provision in any Transaction Document) the Agent shall at all times
after the occurrence of a Collection Agent Replacement Event have
the sole right to direct the Collection Agent to commence or settle
any legal action to enforce collection of any
Receivable.
(b) If no Termination Event exists and the
Collection Agent determines that such action is appropriate in
order to maximize the Collections, the Collection Agent may, in
accordance with the Credit and Collection Policy, extend the
maturity of any Receivable (but no such extension shall be for a
period more than thirty (30) days) or adjust the outstanding
balance of any Receivable. Any such extension or adjustment shall
not alter the status of a Receivable as a Defaulted Receivable or
Delinquent Receivable or limit any rights of the Agent, any
Purchaser Agent or the Purchasers hereunder. If a Termination Event
exists, the Collection Agent may make such extensions or
adjustments only with the prior consent of the Agent and the
Instructing Group.
(c) The Collection Agent shall turn over to the
Seller (i) prior to the Termination Date, all Collections in
excess of the Effective Receivable Interest, less all reasonable
third party out-of-pocket costs and expenses of the Collection
Agent for collecting the Receivables and (ii) the collections
of and records for any indebtedness owed to the Seller that is not
a Receivable. The Collection Agent shall have no obligation to
remit any such funds or records to the Seller until the Collection
Agent receives evidence (satisfactory to the Agent) that the Seller
is entitled to such items. The Collection Agent has no obligations
concerning indebtedness that is not a Receivable other than to
deliver the Collections and records for such indebtedness to the
Seller when required by this Section 3.2(c).
Section 3.3. Reports
. On or before each Reporting Date,
the Collection Agent shall deliver to the Agent a Periodic Report
reflecting information as of the close of business of the
Collection Agent for the immediately preceding Reporting
Period.
Section 3.4. Lock-Box
Arrangements . The
Agent or the Instructing Group is hereby authorized, or, upon the
instruction of any of the Purchaser Agents, obligated, to give
notice at any time after the occurrence of a Collection Agent
Replacement Event to any or all Lock-Box Banks that the Agent is
exercising its rights under the Lock-Box Letters and to take all
actions permitted under the Lock-Box Letters. The Seller agrees to
take any action requested by the Agent to facilitate the foregoing.
After the Agent takes any such action under the Lock-Box Letters,
the Seller shall immediately deliver to the Agent any Collections
received by the Seller. If the Agent takes control of any Lock-Box
Account, the Agent shall distribute Collections it receives in
accordance herewith and shall deliver to the Collection Agent, for
distribution under Section 3.2, all amounts other than
Collections it receives from such Lock-Box Account.
Section 3.5. Enforcement
Rights .
(a) The Agent or the Instructing Group may, at any time after
the occurrence of a Collection Agent Replacement Event, direct the
Obligors and the Lock-Box Banks to make all payments on the
Receivables directly to the Agent or its designee. The Agent may,
and the Seller shall at the Agent’s request, withhold the
identity of the Purchasers from the Obligors and Lock-Box Banks.
Upon the Agent’s request (with the consent or at the
direction of the Instructing Group ) after the
occurrence of a Collection Agent Replacement Event, the Seller (at
the Seller’s expense) shall (i) give notice to each
Obligor of the Conduit Purchasers’ ownership of the Sold
Interest and direct that payments on Receivables be made directly
to the Agent or its designee, (ii) assemble for the Agent all
Records and collateral security for the Receivables and transfer to
the Agent (or its designee), or license to the Agent (or its
designee) the use of, all software then used by the Collection
Agent to collect the Receivables and (iii) segregate in a
manner acceptable to the Agent all Collections the Seller receives
and, promptly upon receipt, remit such Collections in the form
received, duly endorsed or with duly executed instruments of
transfer, to the Agent or its designee on behalf of the Purchaser
Agents and the Purchasers.
(b) After the occurrence of a Collection Agent
Replacement Event, Seller hereby irrevocably appoints the Agent as
its attorney-in-fact coupled with an interest, with full power of
substitution and with full authority in the place of the Seller, to
take any and all steps deemed desirable by the Agent (with the
consent or at the direction of the Instructing Group), in the name
and on behalf of the Seller to (i) collect any amounts due under
any Receivable, including endorsing the name of the Seller on
checks and other instruments representing Collections and enforcing
such Receivables, and (ii) exercise any and all of the
Seller’s rights and remedies under each Purchase Agreement.
The Agent’s powers under this Section 3.5(b) shall not
subject the Agent to any liability if any action taken by it
(except for any action taken pursuant thereto that constitutes
gross negligence or willful misconduct) proves to be inadequate or
invalid, nor shall such powers confer any obligation whatsoever
upon the Agent.
(c) None of the Agent, the Purchaser Agents, the
LC Issuer nor any Purchaser shall have any obligation to take or
consent to any action to realize upon any Receivable or to enforce
any rights or remedies related thereto.
Section 3.6. Collection Agent
Fee . On or before
each Settlement Date, the Seller shall pay to the Collection Agent
a fee for the immediately preceding calendar month as compensation
for its services as Collection Agent (the “Collection
Agent Fee” ) equal to (a) at all times the
Parent or an Affiliate of any Originator is the Collection Agent,
such consideration as is acceptable to it, the receipt and
sufficiency of which is hereby acknowledged, and (b) at all
times any other Person is the Collection Agent, a reasonable amount
agreed upon by the Agent and the new Collection Agent on an
arm’s-length basis reflecting rates and terms prevailing in
the market at such time. The Collection Agent may only apply to
payment of the Collection Agent Fee the portion of the Collections
in excess of the Effective Receivable Interest or Purchaser
Collections that fund Reinvestment Purchases. The Agent may, with
the consent of the Instructing Group, pay the Collection Agent Fee
to the Collection Agent from Purchaser Collections. The Seller
shall be obligated to reimburse any such payment to the extent
required by Section 2.3.
Section 3.7. Responsibilities of the
Seller . The Seller
shall, or shall cause each Originator to, pay when due all Taxes
payable in connection with the Receivables or their creation or
satisfaction. The Seller shall, and shall cause each Originator to,
perform all of its obligations under agreements related to the
Receivables to the same extent as if interests in the Receivables
had not been transferred hereunder or, in the case of each
Originator, under each Purchase Agreement. The Agent’s, the
LC Issuer’s, any Purchaser Agent’s or any
Purchaser’s exercise of any rights hereunder shall not
relieve the Seller or any Originator from such obligations. None of
the Agent, the LC Issuer, any Purchaser Agent or any Purchaser
shall have any obligation to perform any obligation of the Seller
or of any Originator or any other obligation or liability in
connection with the Receivables.
Section 3.8. Actions by
Seller . The Seller
shall defend and indemnify the Agent, the LC Issuer, each Purchaser
Agent and each Purchaser against all costs, expenses, claims and
liabilities for any action taken by the Seller, any Originator or
any other Affiliate of the Seller or of such Originator (whether
acting as Collection Agent or otherwise) related to any Receivable
(other than with respect to the credit risk of an Obligor and for
which reimbursement would constitute recourse for uncollectible
Receivables), or arising out of any alleged failure of compliance
of any Receivable with the provisions of any law or regulation. If
any goods related to a Receivable are repossessed, the Seller
agrees to resell, or to have the applicable Originator or another
Affiliate resell, such goods in a commercially reasonable manner
for the account of the Agent and remit, or have remitted, to the
Agent the Purchasers’ and the LC Issuer’s share in the
gross sale proceeds thereof net of any out-of-pocket expenses and
any equity of redemption of the Obligor thereon. Any such moneys
collected by the Seller or the applicable Originator or other
Affiliate of the Seller pursuant to this Section 3.8 shall be
segregated and held in trust for the Agent and remitted to the
Agent’s Account within two Business Days after receipt and
identification thereof as part of the Effective Receivable Interest
in Collections for application as provided herein.
Section 3.9. Indemnities by the Collection
Agent. Without
limiting any other rights any Person may have hereunder or under
applicable law, the Collection Agent hereby indemnifies and holds
harmless the Agent, the LC Issuer, each Purchaser Agent and each
Purchaser and their respective officers, directors, agents and
employees (each an “Indemnified Party”
) from and against any and all damages, losses, claims,
liabilities, penalties, Taxes, costs and expenses (including
attorneys’ fees and court costs) (all of the foregoing
collectively, the “Indemnified Losses”
) at any time imposed on or incurred by any Indemnified Party
arising out of or otherwise relating to:
(i) any written representation or warranty made
by the Collection Agent (or any employee or agent of the Collection
Agent) in this Agreement, any other Transaction Document, any
Periodic Report or any other information or report delivered by the
Collection Agent pursuant hereto, which shall have been false or
incorrect in any material respect when made;
(ii) the failure by the Collection Agent to
comply with any applicable law, rule or regulation related to any
Receivable, or the nonconformity of any Receivable with any such
applicable law, rule or regulation;
(iii) any loss of a perfected security interest
(or in the priority of such security interest) as a result of any
commingling by the Collection Agent of funds to which the Agent,
the LC Issuer, any Purchaser Agent or any Purchaser is entitled
hereunder with any other funds; or
(iv) any failure of the Collection Agent, to
perform its duties or obligations in accordance with the provisions
of this Agreement or any other Transaction Document to which the
Collection Agent is a party;
whether arising
by reason of the acts to be performed by the Collection Agent
hereunder or otherwise, excluding only Indemnified Losses to the
extent (a) such Indemnified Losses resulted solely from
negligence or willful misconduct of the Indemnified Party seeking
indemnification, (b) solely due to the credit risk of the
Obligor and for which reimbursement would constitute recourse to
the Collection Agent for uncollectible Receivables, (c) such
Indemnified Losses include Taxes on, or measured by, the overall
net income of the Agent, the LC Issuer, any Purchaser Agent or any
Purchaser computed in accordance with the Intended Tax
Characterization, or (d) the applicable Originator is the
plaintiff and the Indemnified Party is the defendant unless such
Indemnified Party prevails in such legal action; provided,
however, that nothing contained in this sentence shall
limit the liability of the Collection Agent or limit the recourse
of the Agent, the LC Issuer, any Purchaser Agent and each Purchaser
to the Collection Agent for any amounts otherwise specifically
provided to be paid by the Collection Agent hereunder.
Article IV
Representations and
Warranties
Section 4.1. Representations and
Warranties . The
Seller represents and warrants to the Agent, the LC Issuer, each
Purchaser Agent and each Purchaser that:
(a) Corporate Existence and
Power. Each of the Seller and each Originator is either a
corporation or limited liability company duly organized, validly
existing and in good standing under the laws of its state of
organization and has all corporate or organizational power and
authority and all governmental licenses, authorizations, consents
and approvals required to carry on its business in each
jurisdiction in which its business is now conducted, except where
failure to obtain such license, authorization, consent or approval
would not have a material adverse effect on (i) its ability to
perform its obligations under, or the enforceability of, any
Transaction Document, (ii) its business or financial
condition, (iii) the interests of the Agent, any Purchaser
Agent, the LC Issuer or any Purchaser under any Transaction
Document or (iv) the enforceability or collectibility of any
Receivable.
(b) Corporate or Organizational
Authorization and No Contravention. The execution,
delivery and performance by each of the Seller and each Originator
of each Transaction Document to which it is a party (i) are
within its corporate or organizational powers, as applicable,
(ii) have been duly authorized by all necessary corporate or
organizational action, as applicable, (iii) do not contravene
or constitute a default under (A) any applicable law, rule or
regulation, (B) its or any Subsidiary’s charter, by-laws
or operating agreement, as applicable or (C) any agreement,
order or other instrument to which it or any Subsidiary is a party
or its property is subject and (iv) will not result in any
Adverse Claim on any Receivable or Collection or give cause for the
acceleration of any indebtedness of the Seller, any Originator or
any Subsidiary.
(c) Conduct of Business. The
Seller will perform, and will cause each Originator to perform, all
actions necessary to remain duly organized, validly existing and in
good standing in its jurisdiction of organization and to maintain
all requisite authority to conduct its business in each
jurisdiction in which it conducts business.
(d) Binding Effect. Each
Transaction Document to which the Seller or any Originator is a
party constitutes the legal, valid and binding obligation of such
Person enforceable against that Person in accordance with its
terms, except as limited by bankruptcy, insolvency, or other
similar laws of general application relating to or affecting the
enforcement of creditors’ rights generally and subject to
general principles of equity.
(e) Perfection of Ownership
Interest . Immediately preceding its sale of Receivables
to the Seller, each Originator was the owner of, and effectively
sold, such Receivables to the Seller, free and clear of any Adverse
Claim. The Seller owns the Receivables free of any Adverse Claim
other than the interests of the Purchasers and the LC Issuer
(through the Agent) therein that are created hereby, and each
Purchaser shall at all times have a valid undivided percentage
ownership interest (through the Agent) which shall be a first
priority perfected security interest for purposes of Article 9 of
the applicable Uniform Commercial Code, in the Receivables and
Collections (subject to, in the case of Collections, the
limitations on perfection of a security interest in proceeds set
forth in the applicable Uniform Commercial Code) to the extent of
its Purchase Interest then in effect. The Agent, on behalf of the
Purchasers and the LC Issuer has a first priority perfected
security interest in the Collateral.
(f) Accuracy of Information. All
written information furnished by the Seller, any Originator or any
Affiliate of any such Person to the Agent, any Purchaser Agent or
any Purchaser in connection with any Transaction Document, or any
transaction contemplated thereby, is true and accurate in all
material respects (and is not incomplete by omitting any
information necessary to prevent such information from being
materially misleading), in each case on the date the statement was
made and in light of the circumstances under which the statements
were made or the information was furnished.
(g) No Actions, Suits. There are
no actions, suits or other proceedings (including matters relating
to environmental liability) pending or threatened against or
affecting the Seller, any Originator or any Subsidiary, or any of
their respective properties, that (i) if adversely determined
(individually or in the aggregate), may have a material adverse
effect on the financial condition of the Seller, any Originator or
any Subsidiary or on the collectibility of the Receivables or
(ii) involve any Transaction Document or any transaction
contemplated thereby. None of the Seller, any Originator or any
Subsidiary is in default of any contractual obligation or in
violation of any order, rule or regulation of any Governmental
Authority, which default or violation may have a material adverse
effect upon (i) the financial condition of the Seller, the
Originators and the Subsidiaries taken as a whole or (ii) the
collectibility of the Receivables.
(h) No Material Adverse Change.
Since December 31, 2005, there has been no material adverse
change in the collectibility of the Receivables or the
Seller’s, any Originator’s or any Subsidiary’s
(i) financial condition or (ii) ability to perform its
obligations under any Transaction Document.
(i) Accuracy of Exhibits; Lock-Box
Arrangements. All information on Exhibits E-G (listing
offices and names of the Seller and each Originator and where they
maintain Records; the Subsidiaries; and Lock Boxes) is true and
complete, subject to any changes permitted by, and notified to the
Agent in accordance with, Article V. The Seller has delivered a
copy of all Lock-Box Agreements to the Agent. The Seller has not
granted any interest in any Lock-Box or Lock-Box Account to any
Person other than the Agent and, upon delivery to a Lock-Box Bank
of the related Lock-Box Letter, the Agent will have exclusive
ownership and control of the Lock-Box Account at such Lock-Box
Bank.
(j) Sales by each Originator .
Each sale or other transfer by each Originator to the Seller of an
interest in Receivables and their Collections has been made in
accordance with the terms of the applicable Purchase Agreement,
including the payment by the Seller to each Originator of the
purchase price described in such Purchase Agreement. Each such sale
or other transfer has been made for “reasonably
equivalent value” (as such term is used in
Section 548 of the Bankruptcy Code) and not for or on account
of “antecedent debt” (as such term is used in
Section 547 of the Bankruptcy Code) owed by such Originator to
the Seller.
Article V
Covenants
Section 5.1. Covenants of the
Seller . The Seller
hereby covenants and agrees to comply with the following covenants
and agreements, unless the Agent (with the consent of the
Instructing Group) shall otherwise consent:
(a) Financial Reporting . The
Seller will, and will cause each Originator and each Subsidiary to,
maintain a system of accounting established and administered in
accordance with GAAP and will furnish to the Agent and each
Purchaser Agent:
(i) Annual Financial Statements.
Within 120 days after each fiscal year of (A) the Parent,
copies of the Parent’s consolidated annual audited financial
statements (including a consolidated balance sheet, consolidated
statement of income and retained earnings and statement of cash
flows, with related footnotes) certified by independent certified
public accountants of nationally recognized standing or other firm
of independent certified public accountants satisfactory to the
Agent and prepared on a consolidated basis in conformity with GAAP,
and (B) for the Seller and each Originator, the annual balance
sheet for such Person (and, additionally for the Seller, an annual
profit and loss statement) certified by a Designated Financial
Officer thereof, in each case prepared on a consolidated basis in
conformity with GAAP as of the close of such fiscal year for the
year then ended;
(ii) Quarterly Financial
Statements. Within 60 days after each (except the
last) fiscal quarter of each fiscal year of (A) the Parent,
copies of its unaudited financial statements (including at least a
consolidated balance sheet as of the close of such quarter and
statements of earnings and sources and applications of funds for
the period from the beginning of the fiscal year to the close of
such quarter) certified by a Designated Financial Officer and
prepared in a manner consistent with the financial statements
described in part (A) of clause (i) of this Section 5.l(a) and
(B) the Seller and each Originator, the quarterly balance sheet for
such Person (and, additionally for the Seller, a profit and loss
statement) for the period from the beginning of such fiscal year to
the close of such quarter, in each case certified by a Designated
Financial Officer thereof and prepared in a manner consistent with
part (B) of clause (i) of Section 5.1(a);
(iii) Public Reports. Promptly
upon becoming available, a copy of each report or proxy statement
filed by the Parent with the Securities Exchange Commission or any
securities exchange;
(iv) Chemtura Credit Agreement
Certificate. A copy of the financial information,
certificates and other documentation described in
Section 5.01(i) of the Chemtura Credit Agreement, delivered as
and when required by such Section 5.01; and
(v) Other Information. With
reasonable promptness, such other information (including
non-financial information) as may be requested by the Agent, any
Purchaser Agent or any Purchaser (with a copy of such request to
the Agent).
(b)
Notices
. Immediately upon becoming aware of
any of the following the Seller will notify the Agent and each
Purchaser Agent and provide a description of:
(i) Potential Termination
Events. The occurrence of any Potential Termination
Event;
(ii) Representations and
Warranties. The failure of any representation or warranty
herein to be true (when made or at any time thereafter) in any
material respect;
(iii) Downgrading. The
downgrading, withdrawal or suspension of any rating by any rating
agency of any indebtedness of the Parent;
(iv) Litigation. The institution
of any litigation, arbitration proceeding or governmental
proceeding reasonably likely to be material to the Seller, any
Subsidiary or the collectibility or quality of the
Receivables;
(v) Judgments. The entry of any
judgment or decree against the Seller, any Originator or any
Subsidiary if the aggregate amount of all judgments then
outstanding against the Seller, the Originators and the
Subsidiaries exceeds $1,000,000; or
(vi) Changes in Business. Any
change in, or proposed change in, the character of the
Seller’s or any Originator’s business that could impair
the collectibility or quality of any Receivable.
If the Agent
receives such a notice, the Agent shall promptly give notice
thereof to each Purchaser Agent.
(c) Conduct of Business. The
Seller will perform, and will cause each Originator and Subsidiary
to perform, all actions necessary to remain duly incorporated,
validly existing and in good standing in its jurisdiction of
incorporation and to maintain all requisite authority to conduct
its business in each jurisdiction in which it conducts
business.
(d) Compliance with Laws. The
Seller will comply, and will cause each Originator and Subsidiary
to comply, with all laws, regulations, judgments and other
directions or orders imposed by any Governmental Authority to which
such Person or any Receivable or Collection may be
subject.
(e) Furnishing Information and Inspection
of Records. The Seller will furnish to the Agent, the LC
Issuer, each Purchaser Agent and the Purchasers such information
concerning the Receivables as the Agent, any such Purchaser Agent
or Purchaser may reasonably request. The Seller will, and will
cause each Originator to, permit, at any time during regular
business hours, the Agent, any Purchaser Agent or any Purchaser (or
any representatives thereof), once per year or at any time after
the occurrence of a Termination Event (at the expense of the
Seller) or at any other time (at the expense of the Agent or such
Purchaser (as applicable)) (i) to examine and make copies of
all Records, (ii) to visit the offices and properties of the
Seller for the purpose of examining the Records and (iii) to
discuss matters relating hereto with any of the Seller’s or
any Originator’s officers, directors, employees or
independent public accountants having knowledge of such matters.
The Agent may at any time have an independent public accounting
firm conduct an audit of the Records or make test verifications of
the Receivables and Collections. Such procedures shall be at the
expense of the Seller if (i) conducted no more frequently than once
per calendar year prior to the occurrence of a Termination Event,
or (ii) conducted at any time following the occurrence of a
Termination Event.
(f) Keeping Records.
(i) The Seller will, and will cause each Originator to, have
and maintain (A) administrative and operating procedures
(includin
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