RECEIVABLES SALE AGREEMENT

Section 1.1    Initial Contribution of Receivables . 

Section 1.2    Purchase of Receivables .

(a)    Effective on the date hereof, in consideration for the Purchase Price and upon the terms and subject to the conditions set forth herein, each Originator does hereby sell, assign, transfer, set-over and otherwise convey to Buyer, without recourse (except to the extent expressly provided herein), and Buyer does hereby purchase from each Originator, all of such Originator’s right, title and interest in and to all Receivables existing as of the close of business on the Initial Cutoff Date (other than the Initial Contributed Receivables) and all Receivables thereafter arising through and including the Termination Date, together, in each case, with all Related Security relating thereto and all Collections thereof. In accordance with the preceding sentence, on the date hereof Buyer shall acquire all of each Originators’ right, title and interest in and to all Receivables existing as of the Initial Cut-Off Date and thereafter arising through and including the Termination Date, together with all Related Security relating thereto and all Collections thereof. Buyer shall be obligated to pay the Purchase Price for the Receivables purchased hereunder in accordance with Section 1.3 .

(b)    On the Monthly Reporting Date, each Originator shall (or shall require the Servicer to) deliver to Buyer a report in substantially the form of Exhibit VII hereto (each such report being herein called a “ Purchase Report ”) with respect to the Receivables sold by each Originator to Buyer during the Settlement Period then most recently ended. In addition to, and not in limitation of, the foregoing, in connection with the payment of the Purchase Price for any Receivables purchased hereunder, Buyer may request that each Originator deliver, and each Originator shall deliver, such approvals, opinions, information or documents as Buyer may reasonably request.

(c)    It is the intention of the parties hereto that the Purchase of Receivables made hereunder shall constitute a sale and/or contribution, which sale and/or contribution, as the case may be, is absolute and irrevocable and provides Buyer with the full benefits of ownership of the Receivables. Except for the Purchase Price Credits owed pursuant to Section 1.4 , the sale of Receivables hereunder is made without recourse to any Originator; provided , however , that (i) each Originator shall be liable to Buyer for all representations, warranties, covenants and indemnities made by such Originator pursuant to the terms of the Transaction Documents to which such Originator is a party, and (ii) such sale does not constitute and is not intended to result in an assumption by Buyer or any assignee thereof of any obligation of any Originator or any other Person arising in connection with the Receivables, the related Contracts and/or other Related Security or any other obligations of any Originator. In view of the intention of the parties hereto that the Purchase of Receivables made hereunder shall constitute a sale of such Receivables rather than loans secured thereby, each Originator agrees that it will, on or prior to the date hereof and in accordance with Section 4.1(e)(ii) , mark its master data processing system and all accounts receivable reports generated thereby, each Confidential Contract and its records relating to all other Contracts with a legend reasonably acceptable to Buyer and to the Administrator (as Buyer’s assignee), evidencing that Buyer has purchased such Receivables as provided in this Agreement and to note in its financial statements that its Receivables have been absolutely transferred to Buyer. Upon the request of Buyer or the Administrator (as Buyer’s assignee), each Originator will execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate to perfect and maintain the perfection of Buyer’s ownership interest in the Receivables and the Related Security and Collections with respect thereto, or as Buyer or the Administrator (as Buyer’s assignee) may reasonably request; provided , however , that unless and until an Amortization Event or an Unmatured Amortization Event has occurred, none of the Originators shall be required to take any actions to establish, maintain or perfect the Buyer’s ownership interest in the Related Security other than the filing of financing statements under the UCC of all appropriate jurisdictions.

Section 1.3    Payment for the Purchase .

(a)    The Purchase Price for the Purchase of Receivables in existence as of the close of business on the Initial Cutoff Date (other than the Initial Contributed Receivables) shall be payable in full by Buyer to each Originator on the date hereof, and shall be paid to each Originator in the following manner:

(i)    by delivery of immediately available funds, to the extent of funds on hand to Buyer or made available to Buyer in connection with its subsequent sale of an interest in such Receivables to TPF under the Purchase Agreement; provided   that a portion of such funds shall be offset by amounts such Originator has agreed to make as capital contributions such that after giving effect thereto, the Buyer’s Net Worth shall not be less than the Required Capital Amount, and

(ii)    the balance, by delivery of the proceeds of the related subordinated revolving loan from such Originator to Buyer (each, a “ Subordinated Loan ” and collectively, the “ Subordinated Loans ”) in an amount not to exceed the least of (A) the remaining unpaid portion of such Purchase Price, (B) the maximum Subordinated Loan that could be borrowed without rendering Buyer’s Net Worth less than the Required Capital Amount, and (C) fifteen percent (15%) of such Purchase Price. Each Originator is hereby authorized by Buyer to endorse on the schedule attached to the related Subordinated Note an appropriate notation evidencing the date and amount of each advance thereunder, as well as the date of each payment with respect thereto, provided that the failure to make such notation shall not affect any obligation of Buyer thereunder.

(b)    With respect to any Receivables coming into existence after the Initial Cutoff Date, on each Settlement Date, Buyer shall pay, to the relevant Originator, the Purchase Price therefor in accordance with Section 1.3(d) and in the following manner:

first, by delivery of immediately available funds, to the extent of funds available to Buyer from its subsequent sale of an interest in the Receivables to TPF under the Purchase Agreement or other cash on hand; and

second, either (i) by delivery of the proceeds of the related Subordinated Loan, provided that the making of any such Subordinated Loan shall be subject to the provisions set forth in Section 1.3(a)(ii) or (ii) unless such Originator or Buyer has declared the Termination Date to have occurred pursuant to this Agreement, by accepting a contribution to its capital in an amount equal to the remaining unpaid balance of such Purchase Price.

(c)    From and after the Termination Date, no Originator shall be obligated to (but may, at its option): (i) sell Receivables to Buyer, or (ii) contribute Receivables to Buyer’s capital pursuant to clause third of Section 1.3(b) unless, in either case, such Originator reasonably determines that the Purchase Price therefor will be satisfied with funds available to Buyer from sales of interests in the Receivables pursuant to the Purchase Agreement, Collections, proceeds of Subordinated Loans, other cash on hand or otherwise.

(d)    Although the Purchase Price for each Receivable coming into existence after the Initial Cutoff Date shall be due and payable in full by Buyer to the related Originator on the date such Receivable came into existence, settlement of the Purchase Price between Buyer and such Originator shall be effected on a monthly basis on Settlement Dates with respect to all Receivables coming into existence during the same Calculation Period and based on the information contained in the Purchase Report delivered by such Originator for the Calculation Period then most recently ended. Although settlement shall be effected on Settlement Dates, increases or decreases in the amount owing under the related Subordinated Note made pursuant to Section 1.3 and any contribution of capital by an Originator to Buyer made pursuant to Section 1.3(b) shall be deemed to have occurred and shall be effective as of the last Business Day of the Calculation Period to which such settlement relates.

Section 1.4    Purchase Price Credit Adjustments . 

(a)    the Outstanding Balance of a Receivable is:

(i)    reduced or cancelled as a result of any defective or rejected goods or services, any cash discount or any other adjustment or otherwise by any Originator or any Affiliate thereof, or as a result of any governmental or regulatory action, or,

(ii)    reduced or canceled as a result of a setoff in respect of any claim by the Obligor thereof (whether such claim arises out of the same or a related transaction or an unrelated transaction), or

(iii)    reduced on account of the obligation of any Originator or any Affiliate thereof to pay to the related Obligor any rebate or refund; or

(iv)    less than the amount included in calculating the Outstanding Balance for purposes of any Purchase Report (for any reason other than such Receivable becoming a Defaulted Receivable or payment in full of the entire Outstanding Balance being made on such Receivable); or

(b)    any of the representations and warranties set forth in Section 2.1(h) , Section 2.1(i) , Section 2.1(j) , Section 2.1(r) , Section 2.1(s) , Section 2.1(t) are not true when made or deemed made with respect to any Receivable,

Section 1.5    Payments and Computations, Etc. 

Section 1.6    Transfer of Records .

(a)    In connection with the Purchase of Receivables hereunder, each Originator hereby sells, transfers, assigns and otherwise conveys to Buyer all of such Originator’s right and title to and interest in the Records relating to all Receivables sold or contributed by it hereunder, without the need for any further documentation in connection with the Purchase (it being understood and agreed that any Records that are not freely assignable (whether by express provision or by virtue of confidentiality provisions) according to their terms are excluded from such sale, transfer, assignment or conveyance; provided , that upon reasonable request of the Buyer (or its assigns), the applicable Originator will use its reasonable efforts to obtain consent to the assignment from the relevant counterparty). In connection with such transfer, each Originator hereby grants to each of Buyer, the Administrator and the Servicer an irrevocable, non-exclusive license to use, without royalty or payment of any kind, all software used by such Originator to account for the Receivables, to the extent necessary to administer the Receivables, whether such software is owned by such Originator or is owned by others and used by such Originator under license agreements with respect thereto, provided that should the consent of any licensor of such software be required for the grant of the license described herein, to be effective, the applicable Originator hereby agrees that upon the reasonable request of Buyer (or Buyer’s assignee), such Originator will use its reasonable efforts to obtain the consent of such third-party licensor. The license granted hereby shall be irrevocable until the indefeasible payment in full of the Aggregate Unpaids, and shall terminate on the date this Agreement terminates in accordance with its terms.

(b)    Each Originator (i) shall take such action requested by Buyer and/or the Administrator (as Buyer’s assignee), from time to time hereafter, that may be reasonably necessary or appropriate to ensure that Buyer and its assigns under the Purchase Agreement have an enforceable ownership interest in the Records relating to the Receivables purchased from the Originators hereunder ;   provided , however , that the applicable Originator shall not be required to take any actions with respect to its Records other than those required by Sections 1.6(a) and 4.1(e) hereto unless and until an Unmatured Amortization Event has occurred, and (ii) shall use its reasonable efforts to ensure that Buyer, the Administrator and the Servicer each has an enforceable right (whether by license or sublicense or otherwise) to use all of the computer software used to account for the Receivables and/or to recreate such Records.

Section 1.7    Characterization . 

Section 2.1    Representations and Warranties of each Originator . 

(a)    Existence and Power . Such Originator’s jurisdiction of organization is correctly set forth in Exhibit II to this Agreement and such jurisdiction is its sole jurisdiction of organization. Such Originator is duly organized under the laws of its jurisdiction of organization and is a “registered organization” as defined in the UCC in effect in such jurisdiction. Such Originator is validly existing and in good standing under the laws of its jurisdiction of organization, and no other state or jurisdiction, and as to which such state or jurisdiction must maintain a public record showing the organization to have been organized. Such Originator is qualified to do business and is in good standing as a foreign entity, and has and holds all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except where the failure to so qualify or so hold could not reasonably be expected to have a Material Adverse Effect.

(b)    Power and Authority; Due Authorization, Execution and Delivery . The execution and delivery by such Originator of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, such Originator’s use of the proceeds of the Purchase made hereunder, are within its organizational powers and authority and have been duly authorized by all necessary organizational action on its part. This Agreement and each other Transaction Document to which such Originator is a party has been duly executed and delivered by such Originator.

(c)    No Conflict . The execution and delivery by such Originator of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) its Organizational Documents, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of such Originator or its Subsidiaries (except as created hereunder) except, in any case, where such contravention or violation could not reasonably be expected to have a Material Adverse Effect; and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.

(d)    Governmental Authorization . Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Originator of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.

(e)    Actions, Suits . There are no actions, suits or proceedings pending, or to the best of such Originator’s knowledge, threatened, against it, or any of its properties, in or before any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect. Such Originator is not in default with respect to any order of any court, arbitrator or governmental body which default could reasonably be expected to have a Material Adverse Effect.

(f)    Binding Effect . This Agreement and each other Transaction Document to which such Originator is a party constitute the legal, valid and binding obligations of such Originator enforceable against such Originator in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(g)    Accuracy of Information . All information (other than any projection or other forward-looking information) heretofore furnished by such Originator or any of its Affiliates to Buyer (or its assigns) for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information (other than any projection or other forward-looking information) hereafter furnished by such Originator or any of its Affiliates to Buyer (or its assigns) will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material misstatement of fact.

(h)    Use of Proceeds . No portion of any Purchase Price payment hereunder will be used by such Originator (i) for a purpose that violates, or would be inconsistent with, any law, rule or regulation applicable to such Originator or (ii) to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended other than the repurchase of equity securities of Arch Chemicals so long as such repurchase does not violate Sections 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

(i)    Good Title . Immediately prior to the Purchase hereunder and upon the creation of each Receivable coming into existence after the Initial Cut-Off Date, such Originator (i) is the legal and beneficial owner of the Receivables created by it and (ii) is the legal and beneficial owner of the Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect such Originator’s ownership interest in each Receivable, its Collections, “Supporting Obligations” (as defined in Article 9 of the UCC in effect in each relevant jurisdiction), each Originator’s right, title and interest in, to and under each of the Transaction Documents to which it is a party, returned goods the sale of which gave rise to any Receivable, security interests in favor of any Originator that secure payment of such Receivable and all other items of Related Security in which an interest therein may be perfected by the filing of a financing statement under Article 9 of the UCC and proceeds of the foregoing.

(j)    Perfection . This Agreement, together with the filing of the financing statements contemplated hereby, is effective to transfer to Buyer (and Buyer shall acquire from such Originator) (i) legal and equitable title to, with the right to sell and encumber each Receivable existing and hereafter arising, together with the Collections with respect thereto, and (ii) all of such Originator’s right, title and interest in the Related Security associated with each Receivable, in each case, free and clear of any Adverse Claim, except as created by the Transactions Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership interest in the Receivables, its Collections, “Supporting Obligations” (as defined in Article 9 of the UCC in effect in each relevant jurisdiction), each Originator’s right, title and interest in, to and under each of the Transaction Documents to which it is a party, returned goods the sale of which gave rise to any Receivable, security interests in favor of any Originator that secure payment of such Receivable and all other items of Related Security in which an interest therein may be perfected by the filing of a financing statement under Article 9 of the UCC and proceeds of the foregoing. Such Originator’s jurisdiction of organization is a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, record or registration system as a condition or result of such a security interest’s obtaining priority over the rights of a lien creditor which respect to collateral.

(k)    Places of Business and Locations of Records . The principal places of business and chief executive office of such Originator and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit II or such other locations of which Buyer has been notified in accordance with Section 4.2(a) in jurisdictions where all action required by Section 4.2(a) has been taken and completed. Such Originator’s Federal Employer Identification Number is correctly set forth on Exhibit II .

(l)    Collections . The conditions and requirements set forth in subclause (i) of Section 4.1(i) have at all times since June 27, 2005, been satisfied and duly performed. The conditions and requirements set forth in subclause (ii) of Section 4.1(i) have been satisfied from and after the Closing Date. The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of such Originator at each Collection Bank and the post office box number of each Lock-Box, are listed on Exhibit III . Such Originator has not granted any Person, other than Buyer (and its assigns) dominion and control of any Lock-Box or Collection Account, or the right to take dominion and control of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event.

(m)    Material Adverse Effect . Since March 31, 2005, no event has occurred that would have a Material Adverse Effect.

(n)    Names . The name in which such Originator has executed this Agreement is identical to the name of such Originator as indicated on the public record of its state of organization which shows such Originator to have been organized. In the past five (5) years, such Originator has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement and as listed on Exhibit II .

(o)    Ownership of Buyer . Arch Chemicals owns, directly or indirectly, 100% of the issued and outstanding equity interests of Buyer, free and clear of any Adverse Claim. Such equity interests are validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Buyer. 

(p)    Not a Holding Company or an Investment Company . Such Originator is not a “holding company” or a “subsidiary holding company” of a “holding company” within the meaning of the Public Utility Holding Company Act of 1935, as amended, or any successor statute. Such Originator is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute.

(q)    Compliance with Law . Such Originator has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Receivable, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation, except where such contravention or violation could not reasonably be expected to have a Material Adverse Effect.

(r)    Compliance with Credit and Collection Policy . Such Originator has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any material change to such Credit and Collection Policy, except such material change as to which Buyer (or its assigns) has been notified in accordance with Section 4.1(a)(vii) .

(s)    Payments to Originator . With respect to each Receivable transferred to Buyer hereunder, the Purchase Price received by such Originator constitutes reasonably equivalent value in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by such Originator of any Receivable hereunder is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq .), as amended.

(t)    Enforceability of Contracts . Each Contract with respect to each Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(u)    Eligible Receivables . Each Receivable reflected in any Purchase Report as an Eligible Receivable was an Eligible Receivable on the date of its acquisition by Buyer hereunder.

(v)    Accounting . The manner in which such Originator accounts for the transactions contemplated by this Agreement does not jeopardize the characterization of the transactions contemplated herein as being true sales.

(w)    Contract Provisions . Except for customary adjustments in the ordinary course of business, no Contract with respect to any Receivable contains provisions that either (i) permit or provide for any reduction in the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon or (ii) could otherwise hinder the ability to receive Collections with respect to such Receivable.

Section 3.1    Conditions Precedent to Purchase . 

Section 3.2    Conditions Precedent to Subsequent Purchases . 

(i)    the representations and warranties set forth in Article II are true and correct on and as of the date such Receivable came into existence as though made on and as of such date, except to the extent such representations and warranties are expressly limited to an earlier date; and

(ii)    no event has occurred and is continuing that will constitute a Termination Event or an Unmatured Termination Event.

Section 4.1    Affirmative Covenants of Originators . 

(a)    Financial Reporting . Such Originator will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish to Buyer (or its assigns):

(i)    Annual Reporting . Within 90 days after the close of each of its fiscal years, audited, unqualified consolidated financial statements (which shall include balance sheets, statements of income and retained earnings and a statement of cash flows) for Arch Chemicals and its consolidated Subsidiaries for such fiscal year certified in a manner acceptable to Buyer (or its assigns) by KPMG LLP, independent public accountants or any other independent public accountants of recognized national standing.

(ii)    Quarterly Reporting . Within 45 days after the close of the first three (3) quarterly periods of each of its respective fiscal years, balance sheets of Arch Chemicals and its consolidated Subsidiaries as at the close of each such period and consolidated statements of income and a statement of cash flows for Arch Chemicals and its Subsidiaries for the period from the beginning of such fiscal year to the end of such quarter, all certified by its chief financial officer, principal accounting officer, treasurer or corporate controller.

(iii)    Compliance Certificate . Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit IV signed by such Originator’s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.

(iv)    Shareholders Statements and Reports . Promptly after becoming publicly available to the shareholders of such Originator, copies of all financial statements, reports and proxy statements furnished to them.

(v)    S.E.C. Filings . Promptly after becoming publicly available, copies of all registration statements and annual, quarterly, monthly or other regular reports which such Originator or any of its Subsidiaries files with the Securities and Exchange Commission.

(vi)    Copies of Notices . Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than Buyer, the Administrator or TPF, copies of the same if such notice, request, consent, financial statements, certification, report or other communication can reasonably be expected to have an adverse effect on the Receivables, the Related Security or the Buyer’s (or its assigns) rights therein.

(vii)    Change in Credit and Collection Policy . At least thirty (30) days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice (A) indicating such proposed change or amendment, and (B) if such proposed change or amendment would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting Buyer’s (and the Administrator’s, as Buyer’s assignee) consent thereto.

(viii)    Other Information . Promptly, from time to time, such other information, documents, records or reports relating to (i) the financial condition or operations of such Originator as Buyer (or its assigns) may from time to time reasonably request in order to protect the interests of Buyer (and its assigns) under or as contemplated by this Agreement or (ii) the Receivables as the Buyer (or its assigns) may reasonably request.

Information required to be delivered pursuant to paragraphs (i) , (ii) , (iv) and (v) of this Section 4.1(a) shall be deemed to have been delivered by the date indicated therein, provided that such information has been filed with the Securities and Exchange Commission by such date; provided further that the Originator shall deliver paper copies of the statements, reports, financial statements and other information referred to in paragraph (i) , (ii) , (iv) and (v) of this Section 4.1(a) to the Buyer promptly upon request following such filing.

(b)    Notices . Such Originator will notify Buyer (or its assigns) in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

(i)    Termination Events or Unmatured Termination Events . The occurrence of each Termination Event and each Unmatured Termination Event, by a statement of an Authorized Officer of such Originator.

(ii)    Judgment and Proceedings . (A) The entry of any judgment or decree against such Originator or any of its Subsidiaries if the amount of such judgment or decree then outstanding against such Originator and its Subsidiaries exceeds $5,000,000 after deducting (1) the amount with respect to which such Originator or any such Subsidiary is insured and with respect to which the insurer has not disclaimed responsibility in writing, and (2) the amount for which such Originator or any such Subsidiary is otherwise indemnified if the terms of such indemnification are satisfactory to Buyer (or its assigns), and (B) the institution of any litigation, arbitration proceeding or governmental proceeding against such Originator which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(iii)    Material Adverse Effect . The occurrence of any event or condition that has had, or could reasonably be expected to have, a Material Adverse Effect.

(iv)    Defaults Under Other Agreements . The occurrence of a default that could lead to an event of default or an event of default under any other financing arrangement in a principal amount greater than or equal to $5,000,000 pursuant to which such Originator is a debtor or an obligor.

(c)    Compliance with Laws and Preservation of Existence . Such Originator will comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Such Originator will preserve and maintain its legal existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign entity in each jurisdiction where its business is conducted, except where the failure to so qualify or remain in good standing could not reasonably be expected to have a Material Adverse Effect. Notwithstanding the preceding sentence, it is expressly understood and agreed that any Originator may merge or consolidate with, or transfer all or substantially all of its assets to, any other Originator , so long as Buyer (or its assigns) shall have received such approvals, opinions or documents as it may reasonably request.

(d)    Audits . In addition to information that may be required pursuant to Section 4.1(a)(viii) , each Originator will furnish to Buyer (or its assigns) from time to time such information with respect to it and the Receivables as Buyer (or its assigns) may reasonably request. Each Originator will, from time to time during regular business hours as requested by Buyer (or its assigns), upon reasonable notice and at the sole cost of such Originator, permit Buyer (or its assigns) or their respective agents or representatives (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Originator relating to the Receivables and the Related Security, including, without limitation, the related Contracts (other than any Confidential Contract (except for any Confidential Contract as to which the related Obligor has consented to such disclosure or which may be disclosed to others who are subject to a confidentiality agreement) as to which the disclosure thereof cannot be satisfied by the execution and delivery of a confidentiality agreement), and (ii) to visit the offices and properties of such Originator for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Originator’s financial condition or the Receivables and the Related Security or such Originator’s performance under any of the Transaction Documents or such Originator’s performance under the Contracts and, in each case, with any of the officers or employees of Originator having knowledge of such matters (each of the foregoing examinations and visits, a “ Review ”); provided , however , that so long as no Termination Event has occurred and is continuing, (A) such Originator shall only be responsible for the costs and expenses of one (1) Review in any one calendar year, and (B) the Buyer (or its assigns) will not request more than four (4) Reviews in any one calendar year.

(e)    Keeping and Marking of Records and Books .

(i)    Such Originator will, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information, in each such case as reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). Such Originator will give Buyer (or its assigns) notice of any material change in the administrative and operating procedures referred to in the previous sentence.

(ii)    Such Originator will on or prior to the date hereof, mark its master data processing system and all accounts receivable reports generated thereby, each Confidential Contract and its records relating to all other Contracts with a legend, reasonably acceptable to Buyer (or its assigns), describing Buyer’s ownership interests in the Receivables and further describing the Receivable Interests of the Administrator (on behalf of TPF and its assigns) under the Purchase Agreement.

(f)    Compliance with Contracts and Credit and Collection Policy . Such Originator will timely and fully (i) perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, in each case to the same extent as though such Contracts had not been transferred to the Buyer, but only to the extent there would not be an adverse effect upon the Receivables, and (ii) comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract. 

(g)    Ownership . Such Originator will take all necessary action to establish and maintain, irrevocably in Buyer, (A) legal and equitable title to the Receivables and the Collections and (B) all of such Originator’s right, title and interest in the Related Security associated with the Receivables, in each case, free and clear of any Adverse Claims other than Adverse Claims in favor of Buyer (and its assigns) (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Buyer as Buyer (or its assigns) may reasonably request); provided , however , that unless and until an Amortization Event or an Unmatured Amortization Event has occurred, none of the Originators shall be required to take any actions to establish, maintain or perfect the Buyer’s ownership interest in the Related Security other than the filing of financing statements under the UCC of all appropriate jurisdictions.

(h)    TPF’s Reliance . Such Originator acknowledges that the Administrator and TPF are entering into the transactions contemplated by the Purchase Agreement in reliance upon Buyer’s identity as a legal entity that is separate from such Originator and any Affiliates thereof. Therefore, from and after the date of execution and delivery of this Agreement, such Originator will take all reasonable steps including, without limitation, all steps that Buyer or any assignee of Buyer may from time to time reasonably request to maintain Buyer’s identity as a separate legal entity and to make it manifest to third parties that Buyer is an entity with assets and liabilities distinct from those of such Originator and any Affiliates thereof and not just a division of such Originator or any such Affiliate. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, such Originator (i) will not hold itself out to third parties as liable for the debts of Buyer nor purport to own the Receivables and other assets acquired by Buyer, (ii) will take all other actions necessary on its part to ensure that Buyer is at all times in compliance with the “separateness covenants” set forth in Section 7.1(i) of the Purchase Agreement and (iii) will cause all tax liabilities arising in connection with the transactions contemplated herein or otherwise to be allocated between such Originator and Buyer on an arm’s-length basis and in a manner consistent with the procedures set forth in U.S. Treasury Regulations §§1.1502-33(d) and 1.1552-1.

(i)    Collections . Such Originator will cause (i) all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into a Collection Account and (ii) each Lock-Box and Collection Account to be subject at all times to a Collection Account Agreement that is in full force and effect. In the event any payments relating to Receivables are remitted directly to such Originator or any Affiliate of such Originator, such Originator will remit (or will cause all such payments to be remitted) directly to a Collection Bank and deposited into a Collection Account within two (2) Business Days following receipt thereof and, at all times prior to such remittance, such Originator will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of Buyer and its assigns. Such Originator will transfer exclusive ownership, dominion and control of each Lock-Box and Collection Account to Buyer and, will not grant the right to take dominion and control of any Lock-Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to Buyer (or its assigns) as contemplated by this Agreement and the Purchase Agreement.

(j)    Taxes . Such Originator will file all tax returns and reports required by law to be filed by it and promptly pay all taxes and governmental charges at any time owing, except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. Such Originator will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of Buyer and its assigns.

Section 4.2    Negative Covenants of Originators . 

(a)    Change in Name, Jurisdiction of Organization . Such Originator will not change (i) its name as it appears in official filings in the jurisdiction of its organization, (ii) its status as a “registered organization” (within the meaning of Article 9 of any applicable enactment of the UCC) in such jurisdiction, (iii) its organizational identification number, if any, issued by its jurisdiction of organization, or (iv) its jurisdiction of organization unless it shall have: (A) given Buyer (or its assigns) at least thirty (30) days’ prior written notice thereof and (B) delivered to Buyer (or its assigns) all financing statements, instruments and other documents requested by Buyer (or its assigns) in connection with such change or relocation.

(b)    Change in Payment Instructions to Obligors . Such Originator will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection Account, unless Buyer (or its assigns) shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account or Lock-Box, an executed Collection Account Agreement with respect to the new Collection Account or Lock-Box; provided , however , that such Originator may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account.

(c)    Modifications to Contracts and Credit and Collection Policy . Such Originator will not make any material change or material amendment to the Credit and Collection Policy unless, at least 30 days prior to such material change or material amendment, it has delivered to the Buyer (or its assigns) a copy of the Credit and Collection Policy then in effect and notice (i) indicating such proposed change or amendment, and (ii) if such proposed change would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting Buyer’s (and the Administrator’s, as Buyer’s assignee) consent thereto. Except as otherwise permitted in its capacity as Servicer pursuant to the Purchase Agreement, Originator will not extend, amend or otherwise modify the terms of any Receivable or Contract related thereto other than in accordance with the Credit and Collection Policy.

(d)    Sales, Liens . Such Originator will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under which any Receivable arises, or any Lock-Box or Collection Account, or assign any right to receive income with respect thereto (other than, in each case, (i) the creation of the interests therein in favor of Buyer (and its assigns) provided for herein or in any other Transaction Document and (ii) in connection with any transaction permitted by Section 4.1(c) ), and such Originator will defend the right, title and interest of Buyer in, to and under any of the foregoing property, against all claims of third parties claiming through or under such Originator. Such Originator shall not create or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory the sale of which gives rise to any Receivable.

(e)    Accounting for Purchase . Such Originator will not, and will not permit any Affiliate to, account for the transactions contemplated hereby in any manner other than the sale or capital contributions of the Receivables and the Related Security by such Originator to Buyer or in any other respect account for or treat the transactions contemplated hereby in any manner other than as a sale or contribution of the Receivables and the Related Security by such Originator to Buyer except (i) to the extent that such transactions are not recognized on account of consolidated financial reporting in accordance with generally accepted accounting principles and (ii) in accordance with applicable tax principles, each Purchase and contribution is ignored for tax reporting purposes.

(f)    Contract Provisions . Except for customary adjustments in the ordinary course of business, such Originator will not permit any Contract with respect to any Receivable to contain provisions that either (i) permit or provide for any reduction in the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon or (ii) could otherwise hinder the ability to receive Collections with respect to such Receivable.

Section 5.1    Termination Events . 

(a)    Any Originator shall fail (i) to make any payment or deposit required hereunder when due and such failure shall continue for three (3) consecutive Business Days, or (ii) to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (i) of this paragraph (a) ) or any other Transaction Document to which it is a party and such failure shall continue for ten (10) consecutive Business Days.

(b)    (i) Any representation or warranty made by any of the Originators in this Agreement or the Receivables Purchase Agreement shall prove to h