RECEIVABLES PURCHASE AGREEMENT

Exhibit 4.23

[EXECUTION COPY]

 

$450,000,000

 

RECEIVABLES PURCHASE AGREEMENT

 

Dated as of December 17, 2003

 

among

 

EQUISTAR RECEIVABLES II, LLC, as the Seller ,

 

EQUISTAR CHEMICALS, LP

as the Servicer,

 

THE BANKS AND OTHER FINANCIAL INSTITUTIONS PARTY HERETO,

as Purchasers,

 

BANK ONE, NA,

CREDIT SUISSE FIRST BOSTON

AND

JPMORGAN CHASE BANK,

as Co-Documentation Agents

 

CITICORP USA, INC.

AND

BANK OF AMERICA, N.A.,

as Co-Asset Agents,

 

CITICORP USA, INC.,

as Administrative Agent,

 

AND

 

CITIGROUP GLOBAL MARKETS INC.

AND

BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arrangers

and Joint Bookrunners

TABLE OF CONTENTS

 

 

i

TABLE OF CONTENTS

(continued)

 

 

ii

TABLE OF CONTENTS

(continued)

 

 

iii

EXHIBITS

 

SCHEDULES

 

RECEIVABLES PURCHASE AGREEMENT

 

RECEIVABLES PURCHASE AGREEMENT dated as of December 17, 2003 (this “ Agreement ”) among EQUISTAR RECEIVABLES II, LLC, a Delaware limited liability company (the “ Seller ”), EQUISTAR CHEMICALS, LP, a Delaware limited partnership, as the Servicer (as hereinafter defined), the banks and other financial institutions listed on the signature pages hereof as the Initial Purchasers (the “ Initial Purchasers ”), BANK ONE, NA, CREDIT SUISSE FIRST BOSTON and JPMORGAN CHASE BANK, as co-documentation agents (the “Co-Documentation Agents”), BANK OF AMERICA, N.A., a national banking association, and CITICORP USA, INC., a Delaware corporation (“ CUSA ”), as co-asset agents (the “ Co-Asset Agents ”), and CUSA, as Administrative Agent (the “ Agent ” and, together with the Co-Asset Agents and the Co-Documentation Agents, the “ Facility Agents ”) for the Purchasers.

 

PRELIMINARY STATEMENTS:

 

The Seller will from time to time purchase or otherwise acquire from the Originators Pool Receivables in which the Seller intends to sell interests referred to herein as Receivable Interests.

 

The Purchasers may at any time and from time to time purchase Receivable Interests from the Seller.

 

Equistar Chemicals, LP has been requested and is willing to act as the Servicer upon the terms and subject to the conditions set forth herein.

 

CUSA has been requested and is willing to act as the Agent upon the terms and subject to the conditions set forth herein.

 

Certain terms which are capitalized and used throughout this Agreement (in addition to those defined above) are defined in Article I of this Agreement.

 

NOW, THEREFORE, in consideration of the premises, the parties hereto agree as follows:

 

ARTICLE I

 

D EFINITIONS

 

Section 1.1 Certain Defined Terms.

 

As used in this Agreement, the following terms shall have the following meanings:

 

“ ABF Administrative Agent ” means CUSA, as administrative agent under the ABF Collateral Documents, and any successor in such capacity.

 

“ ABF Agreement ” means the Credit Agreement dated as of December 17, 2003 among Equistar and its Subsidiaries party thereto, the lenders and co-collateral agents party thereto and CUSA, as administrative agent.

 

“ ABF Collateral Availability ” means “Collateral Availability” as defined in the ABF Agreement. For the avoidance of doubt, if the ABF Agreement ceases to be in effect, ABF Collateral Availability shall be deemed to be zero.

“ ABF Collateral Documents ” means the “Collateral Documents” as defined in the ABF Agreement.

 

“ ABF Excess Availability ” means “Excess Availability” as defined in the ABF Agreement. For the avoidance of doubt, if the ABF Agreement ceases to be in effect, ABF Excess Availability shall be deemed to be zero.

 

“ Adjusted LIBO Rate ” means, with respect to any Yield Period for any Capital Investment, an interest rate per annum equal to the rate per annum obtained by dividing (a) the LIBO Rate by (b) a percentage equal to (i) 100% minus (ii) the reserve percentage applicable 2 Business Days before the first day of such Yield Period under regulations issued from time to time by the Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the LIBO Rate is determined) having a term equal to such Yield Period.

 

“ Affiliate ” means as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person. The term “ control ” (including, with correlative meanings, “ controlled by ” and “under common control with” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. As used with reference to Equistar and its Subsidiaries, “ Affiliate ” shall include any Partner and any Affiliate of any Partner.

 

“ Agent’s Account ” means the Deposit Account of the Agent (account number 3685-2248, ABA 021000089, Reference: CUSA – Medium Term Finance) maintained with Citibank at its office at 388 Greenwich Street, New York, New York 10013, Attention: David Jaffe, or such other account as the Agent shall specify in writing to the Seller, the Servicer and the Purchasers.

 

“ Agent’s Fee ” means those agency fees set forth in the Citicorp Fee Letter.

 

“ Alternate Base Rate ” means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal at all times to the highest of the following:

 

(a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate (or equivalent rate otherwise named);

 

(b) the sum (adjusted to the nearest 0.25% or, if there is no nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum, (ii) the rate per annum obtained by dividing (A) the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if any such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from 3 New York certificate of deposit dealers of recognized standing selected by Citibank, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period by the Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities

 

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consisting of or including (among other liabilities) three-month U.S. dollar nonpersonal time deposits in the United States and (iii) the average during such three-week period of the maximum annual assessment rates estimated by Citibank for determining the then current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any successor) for insuring Dollar deposits in the United States; and

 

(c) 0.5% per annum plus the Federal Funds Rate.

 

“ Applicable Base Rate ” for any period for any Capital Investment, an interest rate per annum equal to the sum of (a) the Alternate Base Rate in effect from time to time plus (b) the Applicable Margin.

 

“ Applicable LIBO Rate ” for any Yield Period for any Capital Investment, an interest rate per annum equal to the sum of (a) the Adjusted LIBO Rate for such Yield Period plus (b) the Applicable Margin.

 

“ Applicable Margin ” means (a) for the initial period commencing on the Closing Date and ending on the last day of the calendar month in which the Agent receives unaudited financial statements of Equistar and its Consolidated Subsidiaries as of, and for the fiscal quarter ending, June 30, 2004 in accordance with and satisfying the requirements of Section 5.5(b), in the case of Capital Investments having a Yield determined with reference to the Alternate Base Rate, 1.25% per annum and, in the case of Capital Investments having a Yield determined with reference to the Adjusted LIBO Rate, 2.25% per annum; and (b) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

 

 

provided , however , that upon the occurrence and during the continuance of an Event of Termination, the “ Applicable Margin ” shall be the sum of the otherwise applicable rate set forth in the table above for Alternate Base Rate or Adjusted LIBO Rate, as the case may be, plus 2.00% per annum. Changes in the Applicable Margin resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective as to all Capital Investments on the first day of the next calendar month.

 

“ Applicable Reserve ” means, at any date, an amount equal to (NRPB x RP) plus such reserves as agreed upon by the Agent and the Seller, with adjustments effective upon at least five Business Days’ notice by the Agent, where:

 

NRPB = the Net Receivables Pool Balance at the close of business of the Servicer on such date.

 

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RP = the Reserve Percentage at the close of business of the Servicer on such date.

 

“ Applicable Unused Commitment Fee Rate ” means (i) for the initial period commencing on the Closing Date and ending on the last day of the calendar month in which the Agent receives unaudited financial statements of Equistar and its Consolidated Subsidiaries as of, and for the fiscal quarter ending, June 30, 2004 in accordance with and satisfying the requirements of Section 5.5(b), 0.50% per annum, and (ii) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

 

 

Changes in the Applicable Unused Commitment Fee Rate resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective on the first day of the next calendar month.

 

“ Applicable Yield ” means (a) for any Capital Investment (other than in respect of Swing Purchases), at the Seller’s election upon written notice to the Agent, given not later than 11:00 A.M. (New York time) on the third Business Day preceding (in the case of the Applicable LIBO Rate) or the Business Day of (in the case of the Applicable Base Rate) the applicable Investment Event, the Applicable LIBO Rate or the Applicable Base Rate, as the case may be and (b) for any Capital Investment in respect of a Swing Purchase, and for each other Obligation hereunder, the Applicable Base Rate.

 

“ Approved Electronic Communications ” means each notice, demand, communication, information, document and other material that the Seller or Servicer is obligated to, or otherwise chooses to, provide to the Agent pursuant to any Transaction Document or the transactions contemplated therein, including any financial statement, financial and other report, notice, request, certificate and other information material; provided , however , that “ Approved Electronic Communication ” shall, unless otherwise agreed by the Agent, exclude (x) any Notice of Purchase, Swing Purchase Request, Notice of Conversion or Continuation, and any other notice, demand, communication, information, document and other material relating to a request for a new, or a conversion of an existing, Purchase, (ii) any notice relating to the payment due under any Transaction Document prior to the scheduled date therefor, (iii) any notice of any Potential Event of Termination or Event of Termination and (iv) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Article III or any other condition to any Purchase or other Investment Event.

 

“ Approved Electronic Platform ” has the meaning specified in Section 8.7.

 

“ Approved Fund ” means any fund that, in the ordinary course of its business, invests in bank loans and financial assets of a type similar to the Receivable Interests and that is advised or managed by (a) a Purchaser, (b) an Affiliate of a Purchaser or (c) a Person or an Affiliate of a Person that administers or manages a Purchaser.

 

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“ Assignee ” means in the case of any assignment of any rights and obligations pursuant to Section 9.1, any assignee of such rights and obligations.

 

“ Assignment and Acceptance ” means an assignment and acceptance, in substantially the form of Exhibit A hereto, entered into by any Purchaser and an Assignee pursuant to Section 9.1.

 

“ Available Capital ” means, at any time (a) the Maximum Capital minus (b) the aggregate Capital outstanding at such time.

 

“ Average Monthly Excess Availability ” means, for any calendar month, the sum, without duplication, of (i) the average daily Total Excess Availability plus (ii) the average daily unrestricted cash of Equistar and its Subsidiaries (as determined by Equistar from treasury records on a non-GAAP basis), in each case for such calendar month.

 

“ Bankruptcy Code ” means title 11, United States Code.

 

“ Board ” means the Board of Governors of the Federal Reserve System of the United States.

 

“ Business Day ” means any day (other than a Saturday or Sunday) on which (i) banks are not authorized or required to close in New York, New York or Houston, Texas and (ii) if the term “ Business Day ” is used in connection with the Adjusted LIBO Rate, dealings in United States dollars are carried on in the London interbank market.

 

“ Capital ” means, at any time, the sum of all Capital Investments outstanding of all Purchasers and the Swing Purchaser at such time.

 

“ Capital Investment ” means, with respect to any Purchaser, or Swing Purchaser, as the case may be, and in respect of any Receivable Interest, the original amount paid to the Seller for such Receivable Interest at the time of its acquisition by such Purchaser or Swing Purchaser, as the case may be, pursuant to Section 2.1, 2.2 or 2.3, reduced from time to time by such Purchaser’s Ratable Portion of Collections received and distributed on account of such Capital pursuant to Section 2.6, 2.7 or 2.8 or, with respect to the Swing Purchaser, any amounts received pursuant to Section 2.3(e); provided , however , that if such Capital Investment in respect of such Receivable Interest shall have been reduced by any distribution of any portion of Collections and thereafter such distribution is rescinded or must otherwise be returned for any reason, such Capital Investment in respect of such Receivable Interest shall be increased by the amount of such distribution, all as though such distribution had not been made.

 

“ Capitalized Lease Obligations ” of any Person means obligations of such Person and its consolidated subsidiaries to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real and/or personal property, which obligations are accounted for as a capital lease on the consolidated balance sheet of such Person, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“ Cash Assets Account ” means, collectively, the Deposit Account of the Seller (account number 30557635, ABA 021000089, Reference: Equistar Receivables II, LLC/A/R Cash Assets I) and the Deposit Account of the Seller (account number 30558996, ABA 021000089, Reference: Equistar Receivables II, LLC/A/R Cash Assets II), in each case maintained with Citibank at its office at 388 Greenwich Street, New York, New York 10013, Attention: David Jaffe, or such other account as the Seller and the Agent may agree.

 

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“ Cash Assets ” means any cash on deposit in, and Liquid Investments held in, the Cash Assets Account.

 

“ Cash Management Obligation ” means any direct or indirect liability, contingent or otherwise, of the Seller in respect of cash management services (including treasury, depository, overdraft, electronic funds transfer and other cash management arrangements) provided after the date hereof (regardless of whether these or similar services were provided prior to the date hereof by the Agent, any Purchaser or any Affiliate or any of them) by the Agent or a Co-Asset Agent in connection with this Agreement or any other Transaction Document, including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith.

 

“ Change of Control ” shall occur if at any time:

 

(a) members of the Existing Control Group shall cease to own in the aggregate, through ownership by one or more of them, partnership interests representing more than 50% of the total equity interest and voting power of Equistar; or

 

(b) partnership interests representing in aggregate more than 25% of the total equity interests or voting power of Equistar are transferred to Persons other than the members of the Existing Control Group which transferees do not have (and are not subsidiaries of parents that have) senior unsecured credit ratings from S&P and Moody’s (or if the senior unsecured debt of such transferees or parents is not rated by such agencies, such transferees do not provide opinions from such rating agencies that such transferees or parents could reasonably be expected to obtain senior unsecured credit ratings from such agencies) of at least the lower of (x) BBB- and Baa3 or (y) the senior unsecured debt ratings of the transferor (or its parent);

 

(c) any Person other than a member of the Existing Control Group shall acquire the right directly or indirectly to exercise a substantial portion of the powers of Lyondell to act on behalf of the Partnership Governance Committee and of the representatives of Lyondell on the Partnership Governance Committee, in each case, as in effect on the Closing Date or the right directly or indirectly to exercise a substantial portion of the rights and powers of the Partnership Governance Committee with respect to matters that require unanimous consent under the Limited Partnership Agreement as in effect on the date hereof without the need for the consent of a member of the Existing Control Group; or

 

(d) Equistar shall cease to own, directly or indirectly, 100% of the Equity Interests in (x) the Seller or (y) any Originator (other than Equistar) unless such other Originator ceases to be an Originator in accordance with Section 7.03 of the Receivables Sale Agreement; or

 

(e) any mandatory repayment or mandatory offer to purchase under the Indentures occurs or is required to be made as a result of the occurrence of a “ Change of Control ” (or similar term).

 

“ Citibank ” means Citibank, N.A., a national banking association, and its successors.

 

“ Citicorp Fee Letter ” means the Administrative Agency and Collateral Monitoring Fee Letter dated November 12, 2003 among Equistar, CUSA and Citicorp Global Markets Inc.

 

“ Closing Date ” means December 17, 2003.

 

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

 

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“ Collections ” means, with respect to any Pool Receivable, all cash collections and other cash proceeds of such Pool Receivable, including (i) all cash proceeds of the Related Security with respect to such Pool Receivable and (ii) any amounts in respect of such Pool Receivable deemed to have been received, and actually paid, pursuant to Section 2.9(b) or Section 2.9(c).

 

“ Commitment ” means (i) in respect of each Initial Purchaser, the commitment of such Purchaser to make Purchases and acquire other Capital Investments in the aggregate amount set forth as the “ Commitment ” under the name of such Initial Purchaser on the signature pages hereto and (ii) in respect of each other Purchaser that became a Purchaser by entering into an Assignment and Acceptance, the amount set forth as the “ Commitment ” for such Purchaser in the Register maintained by the Agent pursuant to Section 9.2, in each case, as such amount may be reduced from time to time as the result of any assignment of any Commitment or any portion thereof pursuant to Section 9.1 or as such amount may be reduced from time to time pursuant to Section 2.4(a).

 

“ Commitment Termination Date ” means the fourth anniversary of the Closing Date.

 

“ Concentration Account ” means the Deposit Account of the Seller (account number 3751447207, ABA 111000012, Reference: Equistar Receivables II, LLC/Receivables Concentration) maintained with Bank of America, N.A. at its office at 901 Main Street, Dallas, Texas 75202-3714 or such other account as the Seller and the Agent may agree.

 

“ Confidential Information Memorandum ” means the Confidential Information Memorandum dated November 2003 relating to Equistar and the transactions contemplated by the Transaction Documents.

 

“ Consent and Agreement ” means a consent and agreement dated the Closing Date, in substantially the form of Exhibit E hereto, with respect to the Receivables Sale Agreement, duly executed by the Seller and each Originator.

 

“ consolidated ” means, with respect to any Person, the consolidation of accounts of such Person and its Subsidiaries in accordance with GAAP.

 

“Consolidated Subsidiary ” means at any date any Subsidiary the accounts of which would in accordance with GAAP be consolidated with those of Equistar in its consolidated annual statements if such statements were prepared as of such date.

 

“ Constituent Documents ” means, with respect to any Person, (a) the articles of incorporation, certificate of incorporation or certificate of formation (or the equivalent organizational documents) of such Person, (b) the by-laws, partnership agreement or operating agreement (or the equivalent governing documents) of such Person and (c) any document setting forth the manner of election and duties of the directors, general partners or managing members of such Person (if any) and the designation, amount or relative rights, limitations and preferences of any class or series of such Person’s Stock.

 

“ Contract ” means an agreement between any Originator and an Obligor in any written form acceptable to such Originator, or, in the case of any open account agreement, as evidenced by an invoice (x) setting forth the amount payable, the payment due date and other relevant terms of payment and a description, in reasonable detail, of the goods or services covered thereby or (y) otherwise approved by the Agent in its Discretion from time to time (which approval shall not be unreasonably withheld), in each case pursuant to or under which such Obligor shall be obligated to pay for goods or services from time to time.

 

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“ Credit and Collection Policy ” means those credit and collection policies and practices in effect on the date hereof relating to Contracts and Receivables and described in Schedule II hereto, as modified from time to time in compliance with Section 5.3(f) and Section 5.6(a).

 

“ CUSA ” has the meaning assigned to that term in the recital of parties hereto.

 

“ Deposit Account ” has the meaning set forth in Article 9 of the UCC.

 

“ Discretion ” refers to the Agent’s good faith exercise of its discretion in a manner consistent with its customary credit policies for receivables purchase or receivables-based credit facilities. Except where a different standard of conduct is expressly provided for in the proviso to clause (d) of the definition of “Eligible Receivable”, actions by the Agent in respect of the determination of Eligible Receivables or the Net Receivables Pool Balance or the Applicable Reserve or in connection with any approval by the Agent of Contracts or other matters relating to the Pool Receivables and Related Security shall be taken by the Agent in its Discretion.

 

“ Eligible Receivable ” means each Pool Receivable arising out of the sale of inventory or the performance of services in the ordinary course of business by an Originator to a Person that is not an Affiliate of any Originator or, to the extent such Person is an Affiliate of any Originator, to Millennium or LYONDELL-CITGO Refining LP or any of their respective subsidiaries (it being understood that none of Occidental and its subsidiaries and Oxy Vinyls, LP is deemed to be an Affiliate of any Originator for purposes of this definition of “Eligible Receivable” so long as Occidental does not, directly or through one or more of its subsidiaries, own any Equity Interests issued by Equistar); provided , however , that a Pool Receivable shall not be an “ Eligible Receivable ” if any of the following shall be true:

 

(a) any warranty contained in Section 4.1(i) of this Agreement with respect to such specific Receivable is not true and correct with respect to such Receivable; or

 

(b) the Obligor on such Receivable has disputed liability or made any claim with respect to such Receivable or any other Receivable due from such Obligor to the Seller or any Originator but only to the extent of such dispute or claim; or

 

(c) (x) the Obligor in respect of such Receivable is Millennium or LYONDELL-CITGO Refining LP or any of their respective subsidiaries, unless such Obligor has executed a no-offset letter satisfactory to the Agent, in its Discretion; provided , however , that if such Obligor has not executed a no-offset letter satisfactory to the Agent, in its Discretion, such Receivables shall be Eligible Receivables pursuant to this clause (c)(x) only to the extent the aggregate Outstanding Balance of such Receivables exceeds 125% of the aggregate amount of accounts payable and other indebtedness owing by the Originators to such Obligor or any of its Affiliates as at such date; or (y) the Obligor in respect of such Receivable, or any Person that the Agent or any Transaction Party knows or reasonably believes is an Affiliate of such Obligor, is also a supplier to or creditor of any Transaction Party, unless such Obligor has executed a no-offset letter satisfactory to the Agent, in its Discretion; provided , however , that if such Obligor has not executed a no-offset letter satisfactory to the Agent, in its Discretion, such Receivables shall be Eligible Receivables pursuant to this clause (c)(y) only to the extent the aggregate Outstanding Balance of such Receivables exceeds the aggregate amount of accounts payable and, to the extent known to any Responsible Officer of the Servicer, other indebtedness owing by the Originators to such Obligor or any such Affiliate as at such date; or

 

(d) the transaction represented by such Receivable is to an Obligor which, if a natural person, is not a resident of the United States or, if not a natural person, is organized under

 

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the laws of a jurisdiction outside the United States or has its chief executive office outside the United States (it being understood for purposes of this clause (d) that a territory of the United States that has enacted Revised Article 9 of the Uniform Commercial Code and Puerto Rico are considered to be part of the United States), unless (i) such Receivable is backed by a letter of credit acceptable to the Agent, in its reasonable discretion and (x) such letter of credit names the Agent (for the benefit of itself and each Purchaser) as the beneficiary or (y) the issuer of such letter of credit has consented to the assignment of the proceeds thereof to the Agent, (ii) such Obligor is, if a natural person, a resident of Canada or, if not a natural person, is organized under the laws of Canada or a province thereof and has its chief executive office in Canada and such Receivable is denominated in U.S. Dollars or (iii) such Receivable is backed by insurance reasonably acceptable to the Agent and the relevant insurance policy names the Agent (for the benefit of itself and each Purchaser) as additional insured and loss payee; provided , however , that the Receivables of any Obligor located in a jurisdiction outside the United States or Canada approved by the Agent in its sole discretion, which jurisdiction shall be listed in Schedule V hereto as and when approved by the Agent, and which Obligor is listed on Schedule VI-A hereto (as of the date hereof and as such Schedule may be updated from time to time by the Originators upon five Business Days’ prior written notice to the Agent), shall be Eligible Receivables pursuant to this clause (d) to the extent that (A) such Receivables are denominated in U.S. Dollars and arise from sales of inventory shipped from the United States and (B) the aggregate Outstanding Balance of all such Receivables does not exceed 15% of the Outstanding Balance of all Eligible Receivables; or

 

(e) the sale to such Obligor represented by such Receivable is not a final sale (e.g., such sale is on a bill-and-hold, guaranteed sale, sale-and-return or sale-on-approval basis or, until billed, a consignment basis); or

 

(f) such Receivable is subject to any Lien other than a Permitted Lien described in clause (i) or (ii) of the definition thereof; or

 

(g) such Receivable is subject to any deduction, offset, counterclaim, return privilege or other conditions (other than (i) sales discounts given in the ordinary course of the Originators’ business and reflected in the amount of such Receivable as set forth in the invoice or other supporting material therefor or (ii) an offset or counterclaim of a nature specifically addressed in another clause of this definition) but only to the extent of the amount of such deduction, offset, counterclaim, return privilege or other condition being asserted by the Obligor; or

 

(h) the Obligor on such Receivable is located in any State of the United States requiring the holder of such Receivable, as a precondition to commencing or maintaining any action in the courts of such State either to (i) receive a certificate of authorization to do business in such State or be in good standing in such State or (ii) file a Notice of Business Activities Report with the appropriate office or agency of such State, in each case unless the holder of such Receivable has received such a certificate of authority to do business, is in good standing or, as the case may be, has duly filed such a notice in such State; or

 

(i) the Obligor on such Receivable is a Governmental Authority, unless the applicable Originator and the Seller have each assigned its rights to payment of such Receivable to the Agent pursuant to the Assignment of Claims Act of 1940, as amended, in the case of a federal Governmental Authority, and pursuant to applicable law, if any, in the case of any other Governmental Authority, and such assignment has been accepted and acknowledged by the appropriate government officers; or

 

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(j) 50% or more of the Outstanding Balance of the Receivables of the Obligor are not Eligible Receivables by reason of clause (b) or (g) above or clause (o) below; provided that Receivables that are determined not to be Eligible Receivables, solely as a result of the provisions of clause (n) below, shall be excluded in calculating such percentage; or

 

(k) the payment obligation represented by such Receivable is denominated in a currency other than U.S. Dollars; or

 

(l) such Receivable is not evidenced by an invoice that would be a Contract or by other supporting material acceptable to the Agent, in its Discretion; provided , however , that this clause (l) shall not render ineligible Unbilled Receivables that would otherwise constitute Eligible Receivables under other clauses of this definition; or

 

(m) any Originator, the Seller or any other Person, in order to be entitled to collect such Receivable, is required to deliver any additional goods or merchandise to, perform any additional service for, or perform or incur any additional obligation to, the Person to whom or to which it was made; or

 

(n) the total Receivables of such Obligor to the Originators (taken as a whole) represent more than 15% (or such lesser percentage with respect to certain Obligors as the Agent may determine in its Discretion) of the Outstanding Balance of the Eligible Receivables of the Originators (taken as a whole) at such time, but only to the extent of such excess; or

 

(o) such Receivable (or any portion thereof) remains unpaid for more than (i) 60 days from the original payment due date, or (ii) if such Receivable arises from the sale of inventory, 90 days from the original invoice date thereof or, in the case of any such Receivable from an Obligor listed, and with the payment terms described, in Schedule VI-B hereto (as of the date hereof and as such Schedule may be updated from time to time by the Originators upon five Business Days’ prior written notice to the Agent), 120 days from the original invoice date thereof, provided that such Receivables from such Obligors listed in Schedule VI-B shall be Eligible Receivables under this clause (o) only to the extent that the Outstanding Balance of all such Receivables does not exceed 10% of the Outstanding Balance of all Eligible Receivables; or

 

(p) the Obligor on such Receivable (i) has (A) pending, by or against such Obligor, a petition for bankruptcy or any other relief under the Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization or relief of debtors, (B) an assignment for the benefit of creditors, (C) any other application for relief under the Bankruptcy Code or any such other law or (D) the appointment of a receiver or a trustee for all or a substantial part of its assets or affairs or (ii) has, while such Receivable remains outstanding, failed, suspended business operations, become insolvent or called a meeting of its creditors for the purpose of obtaining any financial concession or accommodation; or

 

(q) consistent with the Credit and Collection Policy, such Receivable is or should be written off the Seller’s or any Originator’s books as uncollectible; or

 

(r) such Receivable is not payable into a Lock-Box Account that is the subject of a Lock-Box Agreement; or

 

(s) such Receivable does not arise under a Contract which has been duly authorized and which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable enforceable against such Obligor in accordance with its terms; or

 

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(t) such Receivable, together with the Contract related thereto, contravenes in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) or with respect to which the applicable Originator is in violation of any such law, rule or regulation in any material respect; or

 

(u) such Receivable does not satisfy the requirements of the Credit and Collection Policy in all material respects; or

 

(v) such Receivable does not constitute an “ account ” within the meaning of Section 9-102(a)(2) of the UCC of the jurisdiction the law of which governs the perfection of the interest created by a Receivable Interest; or

 

(w) the sale to such Obligor on such Receivable is on a F.O.B. customer basis but only for so long as the inventory giving rise to such Receivable has not yet arrived at its destination and possession thereof has not been taken by the Obligor; or

 

(x) such Receivable (i) is subject to an unsecured claim in favor of a surety or (ii) arises under a Contract that is not governed by the laws of the United States or a State thereof; or

 

(y) such Receivable is an Unbilled Receivable; provided , however, that Unbilled Receivables in respect of inventory that have been shipped shall be Eligible Receivables under this clause (y) to the extent that the Outstanding Balance of all such Receivables does not exceed 25% (or, if such determination is being made at any time other than as of the last day of any calendar month, 35%) of the Outstanding Balance of all Eligible Receivables; provided , further , however , that any Unbilled Receivable as to which an invoice has not been issued to the relevant Obligor more than 31 days after the date of the sale of goods by the relevant Originator giving rise to such Receivable shall not be an Eligible Receivable; or

 

(z) there is a chargeback represented by the unpaid portion of such Receivable as to which less than full payment was made; or

 

(aa) such Receivable is billed in advance of the relevant shipment of inventory or performance of services; or

 

(bb) such Receivable arises under a Contract that (i) specifies a fixed price and fixed volume for 90 or more days and (ii) provides for material liquidated damages; or

 

(cc) (i) such Receivable does not comply with such other reasonable criteria and requirements (other than those relating to the collectibility of such Receivable) as the Agent, in its Discretion, may from time to time specify to the Seller upon 30 days’ notice, or (ii) the Agent, based upon such credit and collateral considerations as it may deem appropriate, in the exercise of its Discretion, and upon at least five Business Days’ notice, notifies the Seller of its determination that such Receivable might not be paid or is otherwise ineligible, in which event such Receivable shall not be an Eligible Receivable on the effective date of ineligibility specified in such notice.

 

For the avoidance of doubt, it is acknowledged and agreed that any calculation of ineligibility made pursuant to more than one clause above shall be made without duplication.

 

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“ Equistar ” means Equistar Chemicals, LP, a Delaware limited partnership.

 

“ Equistar Receivables ” means Equistar Receivables II, LLC, a Delaware limited liability company.

 

“ Equistar Undertaking ” means the Undertaking Agreement dated as of the Closing Date, insubstantially the form of Exhibit J hereto, by Equistar in favor of the Agent and the Purchasers.

 

“ Equity Interest ” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with Equistar, is treated as a single employer under Section 414 of the Code.

 

“ Eurocurrency Liabilities ” has the meaning assigned to that term in Regulation D of the Board.

 

“ Events of Termination ” has the meaning specified in Section 7.1.

 

“ Existing Control Group ” means Lyondell, Millennium and Occidental, the successor of any member of the Existing Control Group (including any entity that is a party to any merger or business combination transaction to which such member shall be a party; provided that immediately after such transaction Equity Interests having a majority of the voting power of such entity’s outstanding Equity Interests shall be held by holders of the Equity Interests of such member immediately prior to such transaction), and their respective subsidiaries.

 

“ Existing Program ” means the receivables securitization facility established pursuant to the Receivables Sale Agreement dated as of October 22, 2002 among Equistar, as Originator, Equistar Receivables, LLC as Buyer, and Equistar, as Buyer’s Servicer, and the Receivables Purchase Agreement dated as of October 22, 2002 among Equistar Receivables, LLC as Seller, Equistar, as Servicer, the Conduit, Financial Institutions and Managing Agent party thereto and Bank One, NA (Main Office Chicago), as Collateral Agent.

 

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

 

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“ Fiscal Year ” means each twelve-month period ending on December 31.

 

“ GAAP ” means generally accepted accounting principles in the United States consistently applied, in effect from time to time.

 

“ Governmental Authority ” means any nation, sovereign or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any central bank.

 

“ Guarantee ” of or by any Person means any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (b) to purchase property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness or (c) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness; provided that the obligation of any JV Owner Subsidiary which is a general partner in a Joint Venture which arises by operation of law in respect of any Indebtedness of such Joint Venture shall not be deemed a Guarantee by such JV Owner Subsidiary of such Indebtedness.

 

“ Indebtedness ” of any Person means, without duplication, (a) the outstanding principal amounts of all obligations of such Person for borrowed money (including repurchase obligations), (b) the outstanding principal amounts of all obligations of such Person evidenced by bonds, debentures, notes or similar instruments or letters of credit in support of bonds, notes, debentures or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person to pay the deferred purchase price of property or services under any conditional sale or other title retention agreement, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than accounts payable to suppliers and accrued liabilities (i) that are incurred in the ordinary course of business and paid within 60 days after the date due or (ii) that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP), (f) all Capitalized Lease Obligations of such Person, (g) all non-contingent obligations (and, solely for purposes of Section 5.3(a) hereof and Section 4.01 of the Equistar Undertaking, all contingent obligations, which contingent obligations shall for such purposes be deemed to be in an outstanding principal amount equal to the maximum contingent amount thereof) of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (h) all Stock or Stock Equivalents of such Person which are subject to redemption otherwise than at the sole option of such Person at any time prior to the date 12 months after the Commitment Termination Date to the extent not held by any Transaction Party; provided that any Stock or Stock Equivalents of such Person which are included as Indebtedness solely as a result of provisions thereof which give the holders thereof the right to require such Person to repurchase or redeem such Stock or Stock Equivalents upon the occurrence of a “change of control” occurring prior to the date falling 12 months after the Commitment Termination Date shall not be considered Indebtedness of such Person if the “change of control” provisions applicable to such Stock or Stock Equivalents are no more favorable to the holders of such Stock or Stock Equivalents than those contained in this Agreement, (i) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property or assets owned or acquired by such

 

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Person, whether or not the obligations secured thereby have been assumed and (j) all Guarantees of such Person. For avoidance of doubt, Indebtedness does not include any obligation of a JV Owner Subsidiary which is a general partner in a Joint Venture which arises by operation of law in respect of any Indebtedness of such Joint Venture.

 

“ Indemnified Amounts ” has the meaning specified in Section 10.1.

 

“ Indemnified Party ” means each Facility Agent, each Purchaser and each of their respective Affiliates, and each of the directors, officers, employees, agents, representative, attorneys, consultants and advisors of or to any of the foregoing.

 

“ Indentures ” means the 1996 Indentures, the 1999 Indenture, the 2001 Indenture and the 2003 Indenture.

 

“ Intercreditor Agreement ” means the Intercreditor Agreement dated as of December 17, 2003 by and among CUSA, as Receivables Agent, CUSA, as Lender Agent, Equistar Receivables, as Transferor, Equistar, as Originator, as Initial Servicer and as Borrower, and the other Originators and Loan Parties from time to time party thereto, substantially in the form of Exhibit K .

 

“ Investment ” means, with respect to any Person, (a) all investments by such Person in another Person (including an Affiliate of such Person) in the form of direct or indirect loans, advances or extensions of credit to such other Person (including any Guarantee by such Person of Indebtedness or capital stock (which capital stock is subject to redemption otherwise than at the sole option of the issuer thereof at any time prior to the date 12 months after the Commitment Termination Date) of such other Person) or capital contributions or purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other Securities of such other Person, together with all items that are or would be classified as investments of such investing Person on a balance sheet prepared in accordance with GAAP, and (b) any purchase by such Person of all or a significant part of the assets of a business conducted by any other Person, or all or substantially all of the assets constituting the business of a division, branch or other unit operation of any other Person; provided that (i) trade credit and accounts receivable in the ordinary course of business, (ii) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees and (ii) reimbursement obligations in respect of letters of credit and tender, bid, performance, government contract, surety and appeal bonds, in each case solely with respect to obligations of Equistar or any Subsidiary (other than a Joint Venture Subsidiary and, in each case, subject to the provisions of Section 4.10 of the Equistar Undertaking) shall not be considered Investments.

 

“ Investment Event ” means any Purchase, any conversion of Capital Investments bearing Yield at the Applicable LIBO Rate to Capital Investments bearing Yield at the Applicable Base Rate, any conversion of Capital Investments bearing Yield at the Applicable Base Rate to Capital Investments bearing Yield at the Applicable LIBO Rate and any continuation of Capital Investments bearing Yield at the Applicable LIBO Rate for an additional Yield Period.

 

“ Joint Venture ” means any joint venture (a) in which Equistar has a direct or indirect economic interest of at least 20% and not more than 80% and (b) which is accounted for by Equistar on the equity method in accordance with GAAP.

 

“ Joint Venture Subsidiary ” means any Subsidiary which is a Joint Venture.

 

“ JV Owner Subsidiary ” means each Subsidiary (a) that, at any time, directly holds an equity interest in any Joint Venture and (b) that has no other material assets.

 

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“ LIBO Rate ” means, with respect to any Yield Period for any Capital Investment as to which Yield is based on the Applicable LIBO Rate, the rate appearing on Page 3750 of the MoneyLine Telerate Markets (or on any successor or substitute page of such service) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Yield Period, as the rate for Dollar deposits with a maturity comparable to such Yield Period. In the event that such rate is not available at such time for any reason, then the LIBO Rate shall be the rate at which Dollar deposits in an amount approximately equal to the Capital Investment of CUSA and for a period comparable to such Yield Period are offered by the principal office of Citibank in London to prime banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Yield Period.

 

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset or (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, in each case whether or not filed, recorded or otherwise perfected under applicable law.

 

“ Limited Partnership Agreement ” means the Amended and Restated Limited Partnership Agreement of Equistar dated as of May 15, 1998, by and among the respective Partners.

 

“ Liquid Investments ” has the meaning set forth in Section 2.18(b).

 

“ Liquidation Cost ” has the meaning set forth in Section 2.12.

 

“ Liquidation Day ” means, for any Receivable Interest, each Business Day that occurs on or after the Termination Date.

 

“ Lock-Box Account ” means a Deposit Account (including, without limitation, any concentration account) maintained at a Lock-Box Bank for the purpose of receiving Collections and subject to a valid Lock-Box Agreement.

 

“ Lock-Box Agreement ” means an agreement, in substantially the form of Exhibit C hereto (with such modifications thereto as consented to by the Agent), between any Originator or the Seller, as the case may be, the Agent, and a Lock-Box Bank.

 

“ Lock-Box Bank ” means any of the banks specified on Schedule I hereof and any other bank specified as a “ Lock-Box Bank ” in accordance with this Agreement, in each case holding one or more Lock-Box Accounts.

 

“ Lyondell ” means Lyondell Chemical Company, a Delaware corporation.

 

“ Material Adverse Effect ” means (a) a material adverse effect on the business, assets, operations or financial condition of Equistar and its Subsidiaries, taken as a whole, (b) material impairment of the ability of the Transaction Parties to perform any of their obligations under the Transaction Documents, (c) material impairment of the collectibility of the Pool Receivables generally or of any material portion of the Pool Receivables or the ability of the Servicer (if the Servicer is Equistar or an Affiliate of Equistar) to collect Pool Receivables or (d) material impairment of the rights of or benefits available to the Agent or the Purchasers under the Transaction Documents; provided , however , that a downgrade in any debt rating of Equistar or any of its Subsidiaries shall not, by itself, constitute a Material Adverse Effect.

 

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“ Material Subsidiary ” means (a) any Subsidiary that accounts for more than 5% of the assets, or more than 5% of the revenues for the four fiscal quarters most recently ended, of Equistar and its Subsidiaries on a Consolidated basis, (b) any Subsidiary designated by Equistar as a Material Subsidiary for purposes of the Transaction Documents by notice to the Agent, (c) any Subsidiary that owns any Equity Interest in a Material Subsidiary described in clause (a) or (b), and (d) at any time when Subsidiaries (other than Material Subsidiaries described in clauses (a), (b) and (c)) in the aggregate account for more than 10% of the assets, or more than 10% of the revenues for the four fiscal quarters most recently ended, of Equistar and its Subsidiaries on a Consolidated basis, all Subsidiaries; provided that the term “Material Subsidiary” shall exclude the Seller and shall include any other Transaction Party other than Equistar.

 

“ Maximum Capital ” means, at any time, the lesser of (a) the Total Commitments and (b)(i) the Net Receivables Pool Balance minus (ii) the Applicable Reserve in effect at such time .

 

“ Millennium ” means Millennium Chemicals Inc., a Delaware corporation.

 

“ Moody’s ” means Moody’s Investors Service, Inc., and its successors.

 

“ Multiemployer Plan ” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which Equistar or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

 

“ Net Receivables Pool Balance ” means, at any time, the Outstanding Balance of the Eligible Receivables in the Receivables Pool as at such time reduced by (a) Unapplied Cash and Credits (to the extent not already deducted in determining the Outstanding Balance), (b) the Yield and Fee Reserve at such time and (c) to the extent not already deducted in determining Eligible Receivables, (i) amounts accrued or recorded by the Originators as a reserve in respect of volume rebates or other offsetting deductions, or in respect of credits in past due and (ii) such dilution reserves and other reductions as the Agent in its Discretion deems appropriate and as notified by the Agent to the Seller at least five Business Days prior to the effectiveness thereof.

 

“ 1996 Indentures ” means (i) the Indenture dated as of January 29, 1996 between Equistar (succeeding Lyondell), as issuer, and JP Morgan Chase Bank (as successor by merger to Texas Commerce Bank National Association), as trustee, relating to 6  ¹ / 2 % Unsecured Notes due February 21, 2006 and (ii) the Indenture dated as of January 29, 1996 between Equistar (succeeding Lyondell), as issuer, and JP Morgan Chase Bank (as successor by merger to Texas Commerce Bank National Association), as trustee, relating to 7.55% Unsecured Debentures due February 21, 2026.

 

“ 1999 Indenture ” means the Indenture dated as of January 15, 1999 between Equistar and Equistar Funding Corporation, as issuers, and The Bank of New York, as trustee.

 

“ Notice of Conversion or Continuation ” has the meaning specified in Section 2.16(a).

 

“ Notice of Purchase ” has the meaning specified in Section 2.2(a).

 

“ Obligations ” means, with respect to any Transaction Party, the obligations of such Transaction Party under the Transaction Documents (as the same may hereafter be amended, restated, extended, supplemented or otherwise modified from time to time) with respect to the due and punctual payment, whether at maturity, by acceleration or otherwise, of all monetary obligations of such

 

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Transaction Party, whether for fees, costs, indemnification or otherwise (other than Capital), including, with respect to the Seller, Yield, amounts payable as deemed Collections pursuant to Section 2.9(b) or 2.9(c), the Agent’s Fee, the Unused Commitment Fee, the Servicer Fee, Cash Management Obligations and amounts payable by the Seller pursuant to Section 2.12, 2.13, 2.14, 10.1 and 11.5.

 

“ Obligor ” means a Person obligated to make payments pursuant to a Contract.

 

“ Occidental ” means Occidental Petroleum Corporation, a Delaware corporation.

 

“ Originator ” means Equistar and any wholly owned Subsidiaries of Equistar from time to time party to the Receivables Sale Agreement as “Sellers” thereunder.

 

“ Other Taxes ” has the meaning specified in Section 2.14(b).

 

“ Outstanding Balance ” of any Receivable at any time means the then outstanding principal balance thereof.

 

“ Partners ” means the direct or indirect wholly owned subsidiaries through which Lyondell, Millennium and, if applicable, Occidental hold their interests in Equistar.

 

“ Partnership Governance Committee ” means Equistar’s Partnership Governance Committee, together with any successor or substitute committee exercising similar power and authority.

 

“ Payment Date ” means (a) in respect of Yield, the Unused Commitment Fee and the Servicer Fee, (i) the second Business Day of each calendar month, commencing on the first such day following the Closing Date and (ii) if not previously paid in full, the Termination Date, and (b) with respect to all other Obligations of the Seller hereunder, the date such Obligation is due or otherwise on demand by the Agent from and after the time such Obligation becomes due and payable (whether by acceleration or otherwise).

 

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor thereto.

 

“ Permitted Dividend ” means any dividend or distribution by Equistar on any class of its Equity Interests; provided that a portion of such class is held by a member of the Existing Control Group.

 

“ Permitted Lien ” means (i) an inchoate tax or PBGC Lien, (ii) a Lien created by the Transaction Documents, (iii) a Lien in favor of a Lock-Box Bank in respect of a Lock-Box Amount or (iv) a Lien in favor of a securities intermediary in respect of any securities account, or any securities entitlement therein, under the “control” (within the meaning of Section 9-104 of the UCC) of the Agent.

 

“ Person ” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

 

“ Plan ” means any employee pension benefit plan (as defined in Section 3(2) of ERISA) (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code with respect to which Equistar or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“ Pool Receivable ” means a Receivable in the Receivables Pool.

 

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“ Potential Event of Termination ” means any event that, with the giving of notice or the passage of time or both, would constitute an Event of Termination.

 

“ Principal Financial Officer ” of any Person means the chief financial officer, the treasurer or the principal accounting officer of such Person (including any Person designated by the Partnership Governance Committee as a Principal Financial Officer for purposes of this Agreement or any other Transaction Document). Any action taken or document delivered by a Principal Financial Officer pursuant to the Transaction Documents shall be taken or delivered in his capacity as such.

 

“ Purchase ” means a purchase by the Purchasers or the Swing Purchaser of a Receivable Interest from the Seller pursuant to Article II.

 

“ Purchasers ” means the Initial Purchasers and each Assignee that shall become a party hereto pursuant to Section 9.1.

 

“ Ratable Portion ” or “ ratably ” means, with respect to any Purchaser, the percentage obtained by dividing (a) the Commitment of such Purchaser by (b) the Total Commitments (or, at any time after the Termination Date, the percentage obtained by dividing the aggregate Capital Investments then owing to such Purchaser by the Capital then owing).

 

“ Receivable ” means the indebtedness (whether constituting accounts or general intangibles or chattel paper or otherwise) of any Obligor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto.

 

“ Receivable Asset Availability ” means, at any time, (i) the sum of (x) the Net Receivables Pool Balance minus the Applicable Reserve in effect at such time, plus (y) Cash Assets at such time, minus (ii) the aggregate Capital outstanding at such time.

 

“ Receivables Excess Availability ” means, at any time, the sum of (i) Available Capital plus (ii) Cash Assets at such time.

 

“ Receivable Interest ” means, at any time, an undivided percentage ownership interest at such time in (a) all then outstanding Pool Receivables arising prior to the time of the most recent computation or recomputation of such undivided percentage interest pursuant to Section 2.5, (b) all Related Security with respect to such Pool Receivables and (c) all Collections with respect to, and other proceeds of, such Pool Receivables. Such undivided percentage interest for such Receivable Interest shall be computed as:

 

 

where:

 

C = the outstanding Capital Investments made by the Purchasers or the Swing Purchasers, as the case may be, in connection with such Receivable Interest at such time;

 

AR = the Purchasers’ or Swing Purchaser’s (as the case may be) Ratable Portion of the aggregate Applicable Reserve at such time; and

 

NRPB = the Net Receivables Pool Balance at such time;

 

provided , however , that upon the occurrence of the Termination Date, the Receivable Interests then outstanding under this Agreement, if more than one Receivable Interest, shall be combined into one

 

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Receivable Interest hereunder (such one Receivable Interest, whether the one Receivable Interest then outstanding or the one Receivable Interest resulting from such combination of Receivable Interests, being the “ Special Receivable Interest ”) and such Special Receivable Interest shall be senior and prior to any undivided percentage ownership interest held by the Seller in (and, for the avoidance of doubt, while the Special Receivable Interest is greater than zero, the Seller shall not be entitled to assert or enforce any claim in respect of such retained undivided percentage ownership interest in) (i) all then outstanding Pool Receivables arising prior to the Termination Date, (ii) all Related Security with respect to such Pool Receivables and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables.

 

Each Receivable Interest shall be determined from time to time pursuant to the provisions of Section 2.5.

 

“ Receivables Pool ” means at any time the aggregation of all then outstanding Receivables.

 

“ Receivables Sale Agreement ” means the Receivables Sale Agreement, dated as of the Closing Date, in substantially the form of Exhibit D hereto, among each Originator, as seller and, if applicable, as buyer’s servicer, and Equistar Receivables, as buyer.

 

“ Records ” means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor.

 

“ Register ” has the meaning specified in Section 9.2.

 

“ Regulation U ” means Regulation U of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

 

“ Regulation X ” means Regulation X of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

 

“ Related Security ” means with respect to any Receivable:

 

(i) all right, title and interest of the Seller in, under and to all security agreements and other Contracts that relate to such Receivable;

 

(ii) all of the Seller’s interest in the goods (including returned goods), if any, relating to the sale which gave rise to such Receivable;

 

(iii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract relating to such Receivable or otherwise, together with all financing statements signed or authenticated by an Obligor describing any collateral securing such Receivable;

 

(iv) all letter of credit rights, guarantees, 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 relating to such Receivable or otherwise;

 

(v) all Records relating to such Receivable (subject, in the case of Records consisting of computer programs, data processing software and other intellectual property under license from third parties, to restrictions imposed by such license on the sublicensing or transfer thereof);

 

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(vi) all of the Seller’s right, title and interest in and to the following: (x) the Receivables Sale Agreement, including, without limitation, (A) all rights to receive moneys due and to become due under or pursuant to the Receivables Sale Agreement, (B) all rights to receive proceeds of any indemnity, warranty or guaranty with respect to the Receivables Sale Agreement, (C) claims for damages arising out of or for breach of or default under the Receivables Sale Agreement, and (D) the right to perform under the Receivables Sale Agreement and to compel performance and otherwise exercise all remedies thereunder; and (y) all lock-boxes to which Collections are sent or deposited and all Restricted Accounts, and all funds and investments therein, and

 

(vii) all proceeds of any and all of the foregoing (including, without limitation, proceeds which constitute property of the types described in clause (vi) above).

 

“ Reportable Event ” means any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder with respect to a Plan (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

 

“ Required Net Receivables Pool Balance ” means, at any time, the sum of (i) the Capital at such time plus (ii) the aggregate Applicable Reserve at such time.

 

“ Required Purchasers ” means, at any time, Purchasers holding more than 50% of the aggregate Total Commitments or, after the Termination Date, more than fifty percent (50%) of the aggregate Capital at such time.

 

“ Requirement of Law ” means, with respect to any Person, the common law and all federal, state, local and foreign laws, rules and regulations, orders, judgments, decrees and other determinations of any Governmental Authority or arbitrator, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“ Reserve Percentage ” means, as of the Closing Date, 15%, provided that the Reserve Percentage may, upon five Business Days’ notice by the Agent to the Seller and the Servicer, be increased or, subject to Section 11.1, decreased by the Agent at any time in its Discretion.

 

“ Responsible Officer ” means the chief executive officer, the president, any Principal Financial Officer or any vice president of any Transaction Party but, in any event, with respect to financial matters and each Seller Report, any Principal Financial Officer of the applicable Transaction Party. Any action taken or document delivered by a Responsible Officer pursuant to the Transaction Documents shall be taken or delivered in his capacity as such.

 

“ Restricted Accounts ” means the Seller’s Account, the Lock-Box Accounts, the Concentration Account, the Sweep Account and the Cash Assets Account.

 

“ S&P ” means Standard & Poor’s Ratings Service.

 

“ SEC ” means the Securities and Exchange Commission.

 

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“ Security ” means any Stock, Stock Equivalent, voting trust certificate, bond, debenture, note or other evidence of Indebtedness, whether secured, unsecured, convertible or subordinated, or any certificate of interest, share or participation in, any temporary or interim certificate for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing, but shall not include any evidence of the obligations of the Transaction Parties hereunder.

 

“ Seller Party ” means the Seller or the Servicer.

 

“ Seller Report ” means a report, in substantially the form of Exhibit B hereto, furnished by the Servicer to the Agent for the benefit of each Purchaser pursuant to Section 5.5(f).

 

“ Seller’s Account ” means the Deposit Account of the Seller (account number 3751968281 ABA111000012, Reference: Equistar Receivables II, LLC/Multipurpose Account) maintained with Bank of America, N.A. at its office at 901 Main Street, Dallas Texas 75202-3714, Attention: Sharon V. Hamm.

 

“ Servicer ” has the meaning specified in Section 6.1.

 

“ Servicer Fee ” has the meaning specified in Section 2.11.

 

“ Shortfall Condition ” exists on any day if the aggregate Receivable Interests on such day would exceed 100% (after giving effect to any calculated reduction of Capital by an amount equal to the amount on deposit in the Cash Assets Account as of the close of business on such day pursuant to Section 2.6(a)(iii) or 2.7(a)(iii), as applicable).

 

“ Solvent ” means, with respect to any Person as of any date of determination, that, as of such date, (a) the fair value of the assets of such Person, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of such Person will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) such Person is able to pay all liabilities of such Person as such liabilities mature and (d) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“ Special Receivable Interest ” has the meaning specified in the definition of “ Receivable Interest ” contained in this Section 1.1.

 

“ Stock ” means shares of capital stock (whether denominated as common stock or preferred stock), beneficial, partnership or membership interests, participations or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity, whether voting or non-voting.

 

“ Stock Equivalents ” means all securities convertible into or exchangeable for Stock and all warrants, options or other rights to purchase or subscribe for any Stock, whether or not presently convertible, exchangeable or exercisable.

 

“ Subordinated Note ” has the meaning specified in the Receivables Sale Agreement.

 

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“ Subsidiary ” means any subsidiary of Equistar or any other Transaction Party.

 

“ subsidiary ” means, with respect to any Person (the “ parent ”), any corporation, association or other business entity of which Securities or other ownership interests representing 50% or more of the ordinary voting power are, at the time as of which any determination is being made, beneficially owned by the parent, by one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“ Super Majority Purchasers ” means at any time Purchasers holding more than 66  ² / 3 % of the aggregate Total Commitments or, after the Termination Date, more than 66  ² / 3 % of the aggregate Capital outstanding at such time.

 

“ Sweep Account ” means the Deposit Account of the Seller (account number 30557643, ABA 021000089, Reference: Equistar Receivables II, LLC/A/R Sweep) maintained with Citibank at its office at 388 Greenwich Street, New York, New York 10013, Attention: David Jaffe, or such other account as the Seller and the Agent may agree.

 

“ Swing Purchase ” has the meaning specified in Section 2.3.

 

“ Swing Purchase Request ” has the meaning specified in Section 2.3(b).

 

“ Swing Purchase Sublimit ” means, at any time, $50,000,000.

 

“ Swing Purchaser ” means CUSA or any other Purchaser that becomes the Agent or agrees, with the approval of the Agent and the Seller, to act as the Swing Purchaser hereunder, in each case in its capacity as the Swing Purchaser hereunder.

 

“ Syndication Completion Date ” has the meaning specified in the Arrangement Fee Letter dated November 12, 2003 among Equistar, CUSA and Bank of America, N.A.

 

“ Taxes ” has the meaning specified in Section 2.14(a).

 

“ Termination Date ” means the earlier of (i) the Commitment Termination Date, and (ii) the date of termination in whole of the aggregate Commitments pursuant to Section 2.4 or 7.1.

 

“ Total Asset Availability ” means, at any time, the sum of (i) Receivable Asset Availability plus (ii) ABF Collateral Availability, in each case at such time.

 

“ Total Commitments ” means the aggregate of all Commitments of all Purchasers, as such amount may be reduced from time to time pursuant to Section 2.4. On the Closing Date, the Total Commitments aggregate $450,000,000.

 

“ Total Excess Availability ” means, at any time, the sum of (i) Receivables Excess Availability plus (ii) ABF Excess Availability at such time. Total Excess Availability shall be determined, on a pro forma basis, based on the borrowing base certificate delivered pursuant to Section 4.02(m) of the ABF Agreement and the first monthly Seller Report delivered pursuant to Section 3.2(a)(i), to the extent required to be determined in respect of days prior to the Closing Date.

 

“ Transaction Documents ” means this Agreement, the Receivables Sale Agreement, each Subordinated Note, the Equistar Undertaking, the Lock-Box Agreements, the Consent and Agreement, the Intercreditor Agreement, and each additional security or control documentation delivered or required to

 

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be delivered pursuant to any of the foregoing to evidence the interests of the Seller and of Agent and the Purchasers, as applicable, in and to the Restricted Accounts, Receivables, Related Security, Collections and proceeds thereof.

 

“ Transaction Parties ” means the Seller, each Originator and the Servicer (if Equistar or an Affiliate of Equistar is the Servicer).

 

“ Triggering Event ” means any of the following events: (i) the Termination Date, (ii) the occurrence of an Event of Termination, (iii) Total Asset Availability being less than $150,000,000 for any period of five consecutive Business Days, (iv) Total Excess Availability being less than $100,000,000 for any period of five consecutive Business Days or (v) Total Asset Availability being less than $125,000,000 on any day; provided that if, following a Triggering Event described in clause (iii), (iv) or (v), Total Asset Availability subsequently equals or exceeds $175,000,000 for a period of 20 consecutive Business Days, such Triggering Event shall cease to exist upon the first day following such 20-Business Day period (unless the Servicer otherwise elects by notice to the Agent); and provided , further , that if, following a Triggering Event described in clause (ii), the related Event of Termination shall cease to exist, such Triggering Event shall cease to exist. For the avoidance of doubt, the cessation of an existing Triggering Event does not preclude the occurrence of a subsequent Triggering Event.

 

“ 2001 Indenture ” means the Indenture dated as of August 24, 2001 between Equistar and Equistar Funding Corporation, as issuers, and The Bank of New York, as trustee.

 

“ 2003 Indenture ” means the Indenture dated as of April 22, 2003 between Equistar and Equistar Funding Corporation, as issuers, and The Bank of New York, as trustee.

 

“ UCC ” means, at any time, the Uniform Commercial Code as from time to time in effect in the State of New York at such time; provided, however , that in the event that, by reason of mandatory provisions of law, the perfection, effect of perfection or non-perfection or priority of the interests of the Agent or the Purchasers in the Pool Receivables, Related Security and Collections created by the Transaction Documents is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “ UCC ” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

“ Unapplied Cash and Credits ” means, at any time, the aggregate amount of Collections or other cash or credits then held by or for the account of the Servicer, any Originator or the Seller in respect of the payment of Pool Receivables, but not yet applied or reinvested pursuant to Section 2.6 or Section 2.7 or applied pursuant to Section 2.8.

 

“ Unbilled Receivable ” means a Receivable for which, at the time of determination, an invoice or other evidence of an Obligor’s payment obligation for the purchase of goods from the Originator has not been rendered.

 

“ United States ” and “ U.S. ” each means United States of America.

 

“ Unused Commitment Fee ” has the meaning specified in Section 2.11.

 

“ U.S. Dollars ” and “ $ ” each means the lawful currency of the United States.

 

“ Voting Interests ” means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

 

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“ Welfare Plan ” means a welfare plan, as defined in Section 3(1) of ERISA.

 

“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

“ Yield ” means (a) for each Capital Investment made at the Applicable LIBO Rate, for any Yield Period:

 

 

where:

 

 

(b) for each Capital Investment made at the Applicable Base Rate for any period of time:

 

 

where:

 

 

provided , that no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable law; provided , further, that Yield for any Capital Investment shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.

 

“ Yield and Fee Reserve ” means, as of any date of determination an amount in U.S. Dollars equal to the sum of (A) the Servicer Fee accrued and unpaid through such date, (B) the aggregate Yield, Unused Commitment Fee and Agent’s Fee accrued and unpaid through such date and (C) the aggregate of any other Obligations then accrued and owing hereunder by the Seller to the Purchasers or the Agent.

 

“ Yield Period ” means, in the case of any Capital Investment made at the Adjusted LIBO Rate, (a) initially, the period commencing on the date such Capital Investment is made or on the date of conversion of a Capital Investment made at the Alternate Base Rate to a Capital Investment made at the

 

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Adjusted LIBO Rate and ending on the seventh day thereafter (if at the time of the relevant Notice of Purchase, all Purchasers participating therein agree to make a seven-day Yield Period available) or one, two, three or six months thereafter, as selected by the Seller in its Notice of Purchase and (b) thereafter, if such Capital Investment is continued, in whole or in part, as a Capital Investment made at the Adjusted LIBO Rate, a period commencing on the last day of the immediately preceding Yield Period therefor and ending on the seventh day thereafter (if at the time of the relevant Notice of Conversion or Continuation, all Purchasers participating therein agree to make a seven-day Yield Period available) or one, two, three or six months thereafter, as selected by the Seller in its Notice of Conversion or Continuation given to the Agent; provided, however , that all of the foregoing provisions relating to Yield Periods in respect of Capital Investment made at the Adjusted LIBO Rates are subject to the following:

 

(a) prior to the Syndication Completion Date, each Yield Period shall be for a period of seven days and all Yield Periods shall commence and end on the same day;

 

(b) if any Yield Period would otherwise end on a day that is not a Business Day, such Yield Period shall be extended to the next succeeding Business Day, unless the result of such extension would be to extend such Yield Period into another calendar month, in which event such Yield Period shall end on the immediately preceding Business Day;

 

(c) any Yield Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Yield Period) shall end on the last Business Day of a calendar month;

 

(d) the Seller may not select any Yield Period that ends after the Commitment Termination Date; and

 

(e) there shall be outstanding at any one time no more than 10 Yield Periods in the aggregate.

 

Section 1.2 Other Terms.

 

(a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if any Transaction Party notifies the Agent that it requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Agent notifies the Transaction Parties that the Required Purchasers request an amendment to any provision hereof for such purpose), then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

(b) Except where the context requires otherwise, the definitions in Section 1.1 shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “ include ”, “ includes ” and “ including ” shall be deemed to be followed by the phrase “ without limitation ”. Unless otherwise stated, references to Sections, Articles, Schedules and Exhibits made herein are to Sections, Articles, Schedules or Exhibits, as the case may be, of this Agreement. “ Writing ”, “ written ” and comparable terms refer to printing, typing and other means of reproducing words in a visible form. References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of such Person.

 

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(c) 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.

 

Section 1.3 Computation of Time Periods.

 

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “ from ” means “ from and including ”, the words “ to ” and “ until ” each means “ to but excluding ” and the word “ through ” means “ through and including ”.

 

ARTICLE II

 

A MOUNTS AND T ERMS OF THE P URCHASES

 

Section 2.1 Commitment.

 

On the terms and conditions herein set forth, each Purchaser severally agrees to make Purchases (i) on the Closing Date and from time to time thereafter on any Business Day during the period from the Closing Date to the Termination Date and (ii) in an aggregate amount for such Purchaser not to exceed at any time outstanding such Purchaser’s Commitment; provided , however , that no Purchaser shall be obligated to make any Purchase to the extent that, after giving effect to such Purchase, the Capital then outstanding would exceed the Maximum Capital. Purchases shall be made by the Purchasers simultaneously and ratably in accordance with their respective Commitments.

 

Section 2.2 Making Purchases.

 

(a) Each Purchase of a Receivable Interest by the Purchasers shall be made on notice from the Seller to the Agent, given not later than 11:00 a.m. (New York time) (i) on the third Business Day before the date of such Purchase in the case of the Purchase of any Receivable Interest initially bearing Yield at the Applicable LIBO Rate and (ii) on the Business Day of such Purchase in the case of the Purchase of any Receivable Interest initially bearing Yield at the Applicable Base Rate. Each such notice of a proposed Purchase of a Receivable Interest (a “ Notice of Purchase ”) shall be by telephone (confirmed promptly thereafter in writing) or facsimile, in substantially the form of Exhibit F hereto, and shall specify the requested aggregate amount of such Purchase to be paid to the Seller and the requested Business Day of such Purchase. Each Purchase of any Receivable Interest under this Section 2.2 shall be in an aggregate amount which is an integral multiple of $1,000,000 and which is not less than the lesser of $10,000,000 and the remaining available balance of the Commitments.

 

(b) The Agent shall give each Purchaser prompt notice of such notice of such proposed Purchase, the date of such Purchase, and the amount of such Purchaser’s Capital Investment in connection with such Purchase, by telephone or telefax. On the date of such Purchase, each Purchaser shall, upon satisfaction of the applicable conditions set forth in Section 3.2, make available to the Agent its Ratable Portion of the aggregate amount of such Purchase by deposit of such Ratable Portion in same day funds to the Agent’s Account, and, after receipt by the Agent of such funds, the Agent shall cause such funds to be made immediately available to the Seller at the Seller’s Account.

 

(c) Each Notice of Purchase delivered pursuant to Section 2.2(a) shall be irrevocable and binding on the Seller.

 

(d) Unless the Agent shall have received notice from a Purchaser prior to the date of any Purchase that such Purchaser will not make available to the Agent such Purchaser’s Ratable Portion of such Purchase, the Agent may assume that such Purchaser has made such Ratable Portion available to

 

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the Agent on the date of such Purchase in accordance with Section 2.2(b), and the Agent may, in reliance upon such assumption, make available to the Seller on such date a corresponding amount. However, if the Agent has received such notice from such Purchaser, the Agent may not make such assumption and may not make available to the Seller on such date such corresponding amount. If and to the extent that such Purchaser (other than a Purchaser that has delivered to the Agent a notice of the type described in the two immediately preceding sentences) shall not have made such Ratable Portion available to the Agent and the Agent has made such Ratable Portion available to the Seller, such Purchaser and the Seller severally agree to pay (to the extent not repaid by the Seller or such Purchaser, respectively) to the Agent promptly on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Seller until the date such amount is repaid to the Agent, at (i) in the case of the Seller, the Yield applicable to such amount and (ii) in the case of such Purchaser, the Federal Funds Rate. If such Purchaser shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Purchaser’s Ratable Portion of such Purchase for purposes of this Agreement.

 

(e) The failure of any Purchaser to make available such Purchaser’s Ratable Portion of any Purchase shall not relieve any other Purchaser of its obligation, if any, hereunder to make available such other Purchaser’s Ratable Portion of such Purchase on the date of such Purchase, but no Purchaser shall be responsible for the failure of any other Purchaser to make available such other Purchaser’s Ratable Portion of such Purchase on the date of any Purchase. Nothing herein shall prejudice any rights that the Seller may have against any Purchaser as a result of any default by such Purchaser hereunder.

 

Section 2.3 Swing Purchases

 

(a) On the terms and subject to the conditions contained in this Agreement, the Swing Purchaser agrees to make, in U.S. Dollars, Purchases (each a “ Swing Purchase ”) otherwise committed to the Seller hereunder from time to time on any Business Day during the period from the Closing Date until the Termination Date representing an aggregate Capital Investment at any time outstanding (together with the aggregate outstanding Capital Investment relating to any other Purchase made by the Swing Purchaser hereunder in its capacity as the Swing Purchaser) not to exceed the Swing Purchase Sublimit; provided , however , that at no time shall the Swing Purchaser make any Swing Purchase to the extent that, after giving effect to such Swing Purchase, the Capital then outstanding would exceed the Maximum Capital.

 

(b) In order to request a Swing Purchase, the Seller may telephone the Agent (to be promptly confirmed thereafter in writing) or send the Agent by telecopy (or by electronic mail or similar means) a duly completed request in substantially the form of Exhibit G , setting forth the requested amount and date of such Swing Purchase (a “ Swing Purchase Request ”), to be received by the Agent not later than 12:00 p.m. (New York time) on the day of the proposed purchase. The Agent shall promptly notify the Swing Purchaser of the details of the requested Swing Purchase. Subject to the terms of this Agreement, the Swing Purchaser may make the Capital Investment in connection with such Swing Purchase available to the Agent and, in turn, the Agent shall make such amounts available to the Seller on the date of the relevant Swing Purchase Request. The Swing Purchaser shall not make any Swing Purchase in the period commencing on the first Business Day after it receives written notice from the Agent or any Purchaser that one or more of the conditions precedent contained in Section 3.2 shall not on such date be satisfied, and ending when such conditions are satisfied. The Swing Purchaser shall not otherwise be required to determine that, or take notice whether, the conditions precedent set forth in Section 3.2 have been satisfied in connection with the making of any Swing Purchase. The Capital Investment relating to each Swing Purchase shall be in an aggregate amount of not less than $100,000.

 

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(c) The Swing Purchaser shall notify the Agent in writing (which writing may be a telecopy or electronic mail) weekly, by no later than 10:00 a.m. (New York time) on the first Business Day of each week, of the aggregate amount of its Capital Investments at such time in respect of Swing Purchases.

 

(d) The Swing Purchaser may demand at any time that each Purchaser pay to the Agent, for the account of the Swing Purchaser, in the manner provided in clause (e) below, such Purchaser’s Ratable Portion of all or a portion of the Swing Purchaser’s Capital Investments at such time in respect of Swing Purchases, which demand shall be made through the Agent, shall be in writing and shall specify the amount of the Capital Investments demanded to be so reduced; provided that if the aggregate amount of the Swing Purchaser’s Capital Investments in respect of Swing Purchases on the last Business Day of any week exceeds $5,000,000, then the Swing Purchaser shall make such demand to the Agent on such last Business Day of such week and require each Purchaser to pay to the Agent, for the account of the Swing Purchaser, on such last Business Day of such week such Purchaser’s Ratable Portion of the Swing Purchaser’s Capital Investments in respect of Swing Purchases then outstanding.

 

(e) The Agent shall forward each notice referred to in clause (c) above and each demand referred to in clause (d) above to each Purchaser on the day such notice or such demand is received by the Agent (except that any such notice or demand received by the Agent after 2:00 p.m. (New York time) on any Business Day or any such demand received on a day that is not a Business Day shall not be required to be forwarded to the Purchasers by the Agent until the next succeeding Business Day), together with a statement prepared by the Agent specifying the amount of each Purchaser’s Ratable Portion of the aggregate amount of the Capital Investments in respect of Swing Purchases stated to be outstanding in such notice or demanded to be paid pursuant to such demand, and, notwithstanding whether or not the conditions precedent set forth in Section 3.2 and Section 2.1 shall have been satisfied (which conditions precedent the Purchasers hereby irrevocably waive), each Purchaser shall, before 12:00 noon (New York time) on the Business Day next succeeding the date of such Purchaser’s receipt of such notice or demand, make available to the Agent, in immediately available funds, for the account of the Swing Purchaser, the amount specified in such statement; provided , however , that notwithstanding anything to the contrary in the foregoing, no Purchaser shall be obligated to purchase a Ratable Portion of, or otherwise pay any sum in respect of, the Capital Investments in respect of a Swing Purchase to the extent that the purchase by such Purchaser of a Ratable Portion of, or payment of other sum in respect of, the Capital Investments in respect of such Swing Purchase would cause such Purchaser’s aggregate Capital Investment to exceed its Commitment. Upon such purchase by a Purchaser, such Purchaser shall, except as provided in clause (f), be deemed to have made a Purchase with a Capital Investment equal to the amount actually paid by such Purchaser. The Agent shall use such funds to reduce the Swing Purchaser’s Capital Investments in respect of Swing Purchases.

 

(f) Upon the occurrence of an Event of Termination under Section 7.1(f), each Purchaser shall acquire, without recourse or warranty, an undivided participation in the Swing Purchaser’s Capital Investments in respect of each Swing Purchase otherwise required to be repaid by such Purchaser pursuant to clause (e) above, which participation shall be in an amount equal to such Purchaser’s Ratable Portion of the Swing Purchaser’s Capital Investments in respect of such Swing Purchase, by paying to the Swing Purchaser on the date on which such Purchaser would otherwise have been required to make a payment in respect of such Swing Purchaser’s Capital Investments pursuant to clause (e) above, in immediately available funds, an amount equal to such Purchaser’s Ratable Portion of such Swing Purchaser’s Capital Investments. If all or part of such amount is not in fact made available by such Purchaser to the Swing Purchaser on such date, the Swing Purchaser shall be entitled to recover any such unpaid amount on demand from such Purchaser together with interest accrued from such date at the Federal Funds Rate for the first Business Day after such payment was due and thereafter at the Applicable Base Rate.

 

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(g) From and after the date on which any Purchaser (i) is deemed to have made a Purchase pursuant to clause (e) above with respect to any Swing Purchase or (ii) purchases an undivided participation interest in the Swing Purchaser’s Capital Investments in respect of a Swing Purchase pursuant to clause (f) above, the Swing Purchaser shall promptly distribute to such Purchaser such Purchaser’s Ratable Portion of all payments in respect of Capital Investments and Yield received by the Swing Purchaser on account of such Swing Purchase other than those received from a Purchaser pursuant to clause (e) or (f) above.

 

Section 2.4 Termination or Reduction of the Commitments; Voluntary Reductions of Capital.

 

(a) The Seller may, upon at least 3 Business Days’ notice to the Agent, and so long as, after giving effect to a proposed reduction, no Event of Termination or Potential Event of Termination, would exist, terminate in whole or reduce in part, the unused portions of the Commitments of the Purchasers; provided , however , that for purposes of this Section 2.4, the unused portions of the Commitments of the Purchasers shall be computed as (a) the Total Commitments immediately prior to giving effect to such termination or reduction less (b) the outstanding Capital at the time of such computation; provided , further , that each such partial reduction of the unused portions of the Commitments (x) shall be in an amount equal to at least $5,000,000 and shall be an integral multiple of $1,000,000 in excess thereof, (y) shall be made ratably among the Purchasers’ Commitments according to each Purchaser’s Ratable Portion and (z) shall reduce the Total Commitments in an amount equal to each such reduction.

 

(b) The Seller may, upon at least 3 Business Days’ notice to the Agent, reduce the outstanding Capital in whole or in part; provided that each such partial reduction of Capital shall be in a minimum amount of $10,000,000 and an integral multiple of $1,000,000.

 

Section 2.5 Receivable Interest.

 

(a) On the date of Purchase of any Receivable Interest, such Receivable Interest shall be initially computed, after giving effect to such Purchase, as of the close of business of the Servicer on such date. Thereafter until the Termination Date, such Receivable Interest shall be automatically recomputed as of the close of business of the Servicer on each day (other than a Liquidation Day).

 

(b) Such Receivable Interest shall remain constant from the time as of which any such computation or recomputation is made until the time as of which the next such recomputation, if any, shall be made. Each Receivable Interest, as computed as of the day immediately preceding the Termination Date, shall remain constant at all times on and after the Termination Date; and any Special Receivable Interest, as computed as of the Termination Date, shall remain constant at all times on and after the Termination Date.

 

(c) Such Receivable Interest shall become zero at such time as the Purchasers of such Receivable Interest shall have received the accrued Yield for such Receivable Interest, shall have recovered the Capital Investment of such Receivable Interest, and shall have received payment of all other amounts payable by the Seller to such Purchasers, and the Servicer shall have received the accrued Servicer Fee for such Receivable Interest.

 

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Section 2.6 Ordinary Settlement Procedures.

 

(a) On each Business Day (other than a Liquidation Day or a day on which a Triggering Event exists) the Servicer shall, out of Collections of Pool Receivables received on such Business Day:

 

(i) first, pay to the Servicer (if the Servicer is not Equistar or an Affiliate of Equistar) or the Agent and the Purchasers, as applicable, an amount in U.S. Dollars equal to the Servicer Fee, the Yield, the Unused Commitment Fee, the Agent’s Fee and any other Obligations of the Seller due and payable on such day;

 

(ii) second , distribute to the Agent for the account of the Swing Purchaser an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Swing Purchaser’s Capital Investments in respect of Swing Purchases to zero ;

 

(iii) third, if such day is the second Business Day following the date on which a Seller Report is or is required to be delivered, a Shortfall Condition exists as of the last day of the period covered by such Seller Report, and the Agent does not receive an updated Seller Report demonstrating that a Shortfall Condition does not exist on such second Business Day, distribute to the Agent for the account of the Purchasers an amount in U.S. Dollars equal to that amount, if any, which would be required to reduce Capital so that the aggregate Receivable Interests would not, after giving effect to such application and the Collections of Pool Receivables and the addition of new Pool Receivables on such day and the resulting automatic recomputation of such Receivable Interests pursuant to Section 2.5 as of the end of such day, exceed 100%; provided that (x) the Agent shall apply such amount, first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (y) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided , further , however , that if the Agent subsequently receives a request from the Servicer for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition, after giving effect to such requested withdrawal, does not exist, then the Agent shall release such amounts to the Servicer for further application under this Section 2.6(a);

 

(iv) fourth, distribute to the Agent for the account of the Purchasers of each Receivable Interest an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Capital Investment of such Receivable Interest pursuant to the notice of the Seller delivered under Section 2.4(b);

 

(v) fifth, distribute to the Agent for deposit into the Cash Assets Account such amount as the Seller, at its option, has specified to the Agent, which amount shall be deemed to reduce Capital by a corresponding amount; provided , however , that if the Agent subsequently receives a request from the Servicer for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition, after giving effect to such requested withdrawal, does not exist, then the Agent shall release such amounts to the Servicer for further application under this Section 2.6(a).

 

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(vi) sixth, distribute to the Servicer (if the Servicer is Equistar or an Affiliate of Equistar) the accrued Servicer Fee to the extent then due and payable; and

 

(vii) seventh, reinvest the remainder of such Collections, for the benefit of the Purchasers, which reinvestment shall result in (x) an automatic recomputation of the undivided percentage interest represented by such Receivable Interest pursuant to Section 2.5 as of the end of such day and (y) the payment of such remainder to the Seller; provided , however , that to the extent the Agent or any Purchaser shall be required for any reason to pay over any amount representing Collections which have been previously reinvested for the benefit of such Purchaser pursuant hereto, such amount shall be deemed not to have been so reinvested but rather to have been retained by the Seller and paid over for the account of such Purchaser and, notwithstanding any provision herein to the contrary, such Purchaser shall have a claim for such amount;

 

provided , however , that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses second, third, fourth, fifth and sixth above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicer’s, the Agent’s or the Purchasers’ interest in the aggregate outstanding amounts described in such clause.

 

(b) Subject to Sections 2.7 and 2.8, all amounts in the Concentration Account shall be automatically transferred to the Seller’s Account, and payments and distributions by the Servicer pursuant to Section 2.6(a) shall be made from funds so transferred to the Seller’s Account. Payments to the Seller under clause (vii) of Section 2.6(a) shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the Inventory Concentration Account (as defined in the ABF Collateral Documents).

 

Section 2.7 Triggering Event Settlement Procedures.

 

(a) On each Business Day (other than a Liquidation Day) on which a Triggering Event exists, the Agent (and not the Servicer) shall, out of Collections of Pool Receivables received on such Business Day:

 

(i) first, pay to the Servicer (if the Servicer is not Equistar or an Affiliate of Equistar), the Agent and the Purchasers, as applicable, an amount in U.S. Dollars equal to the Servicer Fee, the Yield, the Unused Commitment Fee, the Agent’s Fee and any other Obligations of the Seller due and payable on such day;

 

(ii) second, distribute to the Swing Purchaser an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Swing Purchaser’s Capital Investments in respect of Swing Purchases to zero;

 

(iii) third, if such day is the second Business Day following the date on which a Seller Report is or is required to be delivered, a Shortfall Condition exists as of the last day of the period covered by such Seller Report, and the Agent does not receive an updated Seller Report demonstrating that a Shortfall Condition does not exist on such

 

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second Business Day, distribute to the Purchasers an amount in U.S. Dollars equal to that amount, if any, which would be required to reduce Capital so that the aggregate Receivable Interests would not, after giving effect to such application and the Collections of Pool Receivables and the addition of new Pool Receivables on such day and the resulting automatic recomputation of such Receivable Interests pursuant to Section 2.5 as of the end of such day, exceed 100%; provided that (x) the Agent shall apply such amount, first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (y) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided , further , however , that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either (x) the conditions to an Investment Event would be satisfied or (y) a Triggering Event ceases to exist, in each case after giving effect to such requested withdrawal, then the Agent shall release such amounts for further application under this Section 2.7(a);

 

(iv) fourth, distribute to the Purchasers of each Receivable Interest an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Capital Investment of such Receivable Interest pursuant to the notice of the Seller delivered under Section 2.4(b);

 

(v) fifth, deposit into the Cash Assets Account such amount as the Seller, at its option, has specified to the Agent, which amount shall be deemed to reduce Capital by a corresponding amount; provided , however , that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either (x) the conditions to an Investment Event would be satisfied or (y) a Triggering Event ceases to exist, in each case after giving effect to such requested withdrawal, then the Agent shall release such amounts for further application under this Section 2.7(a);

 

(vi) sixth, distribute to the Servicer (if the Servicer is Equistar or an Affiliate of Equistar) the accrued Servicer Fee to the extent then due and payable; and

 

(vii) seventh, reinvest the remainder of such Collections, for the benefit of the Purchasers, which reinvestment shall result in (x) the automatic recomputation of the undivided percentage interest represented by such Receivable Interest pursuant to Section 2.5 as of the end of such day and (y) the payment of such remainder to the Seller; provided , however , that (A) to the extent the Agent or any Purchaser shall be required for any reason to pay over any amount representing Collections which have been previously reinvested for the benefit of such Purchaser pursuant hereto, such amount shall be deemed not to have been so reinvested but rather to have been retained by the Seller and paid over for the account of such Purchaser and, notwithstanding any provision herein to the contrary, such Purchaser shall have a claim for such amount and (B) either (I) if Total

 

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Excess Availability is less than (AA) $100,000,000 on any such day occurring on or before March 30, 2005 or (BB) $75,000,000 on any such day occurring after March 30, 2005 or (II) if the conditions to an Investment Event would not be satisfied on such day, such reinvestment and payment shall not be made and instead such remainder shall be applied to reduce all Capital Investments as follows: (1) first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (2) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided , further , however , that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and either (I) the Agent receives a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either the conditions to an Investment Event would be satisfied or a Triggering Event does not exist, in each case after giving effect to such requested withdrawal, or (II) the aggregate Capital is zero, then the Agent shall release such amounts for reinvestment and payment to the Seller;

 

provided , however , that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses first, second, third, fourth, fifth and sixth above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicer’s, the Agent’s or the Purchasers’ interest in the aggregate outstanding amounts described in such clause.

 

(b) During the existence of a Triggering Event (other than on a Liquidation Day), all amounts in the Concentration Account shall be automatically transferred to the Sweep Account, and payments and distributions by the Agent pursuant to Section 2.7(a) shall be made from funds in the Sweep Account. Payments to the Seller under clause (vii) of Section 2.7(a) shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the “Sweep Account” as defined in the ABF Agreement.

 

Section 2.8 Liquidation Settlement Procedures.

 

On each Liquidation Day, the Agent shall transfer to the Sweep Account the Collections of Pool Receivables received on such day, and the Agent shall apply such Collections, and all amounts held in the Cash Assets Account, as follows:

 

(i) first, to pay Obligations of the Seller to the Agent under any Transaction Document in respect of any expense reimbursements, Cash Management Obligations or indemnities then due to the Agent;

 

(ii) second, to pay Obligations of the Seller to the Purchasers under any Transaction Document in respect of any expense reimbursements or indemnities then due to such Persons;

 

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(iii) third, to the Servicer (if the Servicer is not Equistar or an Affiliate of Equistar) in payment of the accrued Servicer Fee then due and payable, and to the Purchasers in payment of the accrued Unused Commitment Fees then due and payable;

 

(iv) fourth, to the Purchasers in payment of the accrued Yield then due and payable;

 

(v) fifth, to the Purchasers in reduction (to zero) of the Capital Investments in respect of each Receivable Interest;

 

(vi) sixth, to the Purchasers or a Co-Asset Agent in ratable payment of any other Obligations owed by the Seller hereunder or under any other Transaction Document (except for the Servicer Fee);

 

(vii) seventh, to the Servicer (if the Servicer is Equistar or an Affiliate of Equistar) in payment of the accrued Servicer Fee then due and payable; and

 

(viii) to the extent of any remainder, to the Seller;

 

provided , however , that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses first, second, third, fourth, fifth, sixth and seventh above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicer’s, the Agent’s or the Purchasers’ interest in the aggregate outstanding amounts described in such clause. Payments to the Seller under clause (viii) of Section 2.8 shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the “Sweep Account” as defined in the ABF Agreement.

 

Section 2.9 General Settlement Procedures.

 

(a) Except as set forth in clauses (a) and (b) below or as otherwise required by law or the underlying Contract, all Collections received from an Obligor of any Pool Receivable shall be applied to Pool Receivables then outstanding of such Obligor in the order of the age of such Pool Receivables, starting with the oldest such Pool Receivable, except if payment is designated by such Obligor for application to specific Pool Receivables.

 

(b) If, on any day, the Outstanding Balance of a Pool Receivable is either (x) reduced as a result of any defective, rejected or returned goods or services, any discount, or any adjustment by the Seller or any Originator, or (y) reduced or cancelled as a result of a setoff in respect of any claim by the Obligor thereof against the Seller or any Originator (whether such claim arises out of the same or a related transaction or an unrelated transaction), the Seller shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.1(i).

 

(c) If on any day (x) any of the representations or warranties in Section 4.1(i) is no longer true with respect to any Pool Receivable or (y) it is discovered that any Receivable that was included in the Net Receivables Pool Balance as an Eligible Receivable was not an Eligible Receivable at the time of such inclusion, the Seller shall be deemed to have received on such day a Collection in full of such Pool Receivable and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.1(i).

 

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Section 2.10 Payments and Computations, Etc.

 

(a) All amounts to be paid or deposited by the Seller or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 12:00 noon (New York time) on the day when due in U.S. Dollars in same day funds to the Agent’s Account. The Servicer or the Agent, as applicable, shall promptly thereafter cause to be distributed (i) like funds relating to the payment out of Collections in respect of Capital, Yield, Servicer Fee or other Obligations payable out of Collections, to the Purchasers (according to each Purchaser’s Ratable Portion) and the Servicer in accordance with the provisions of Section 2.6, 2.7, or 2.8, as applicable, and (ii) like funds relating to the payment by the Seller of other Obligations payable by the Seller hereunder, to the parties hereto for whose benefit such funds were paid (and if such funds are insufficient, such distribution shall be made, subject to Section 2.6, 2.7 or 2.8, as applicable, ratably in accordance with the respective amounts thereof). Upon the Agent’s acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.2, from and after the effective date specified in such Assignment and Acceptance, the Agent shall make all payments hereunder in respect of the interest assigned thereby to the Assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

 

(b) The Seller shall, to the extent permitted by law, pay to the Agent interest on all amounts not paid or deposited when due hereunder (except for those amounts with respect to which Yield accrues) at 2.00% per annum above the Alternate Base Rate in effect from time to time, payable on demand, provided , however , that such interest rate shall not at any time exceed the maximum rate permitted by applicable law. Such interest shall be for the account of, and distributed by the Agent to, the applicable Purchasers ratably in accordance with their respective interests in such overdue amount.

 

(c) All computations of interest and all computations of Yield, Unused Commitment Fee and other per annum fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.

 

(d) Unless the Agent shall have received notice from the Servicer or the Seller prior to the date on which any payment is due to the Purchasers hereunder that the Servicer or the Seller, as the case may be, will not make such payment in full, the Agent may assume that the Servicer or the Seller, as the case may be, has mad