Exhibit 10.25(b)
RECEIVABLES PURCHASE AGREEMENT
Dated as of March 19, 2002
Among
ARCH CHEMICALS RECEIVABLES CORP., as Seller,
ARCH CHEMICALS, INC., as initial Servicer,
BLUE RIDGE ASSET FUNDING CORPORATION
and
WACHOVIA BANK, N.A., as Agent
TABLE OF CONTENTS
Page
Article I Purchase Arrangements.................................................................. 1
SECTION 1.1 PURCHASE FACILITY.......................................................... 1
SECTION 1.2 INCREMENTAL PURCHASES...................................................... 2
SECTION 1.3 DECREASES.................................................................. 2
SECTION 1.4 DEEMED COLLECTIONS; PURCHASE LIMIT......................................... 2
SECTION 1.5 PAYMENT REQUIREMENTS AND COMPUTATIONS...................................... 3
Article II Payments and Collections.............................................................. 4
SECTION 2.1 PAYMENTS OF RECOURSE OBLIGATIONS........................................... 4
SECTION 2.2 COLLECTIONS PRIOR TO THE FACILITY TERMINATION DATE......................... 4
SECTION 2.3 APPLICATION OF COLLECTIONS AFTER THE FACILITY TERMINATION DATE............. 5
SECTION 2.4 PAYMENT RECISSION.......................................................... 6
SECTION 2.5 CLEAN UP CALL.............................................................. 6
Article III Commercial Paper Funding............................................................. 7
SECTION 3.1 CP COSTS................................................................... 7
SECTION 3.2 CALCULATION OF CP COSTS.................................................... 7
SECTION 3.3 CP COSTS PAYMENTS.......................................................... 7
SECTION 3.4 DEFAULT RATE............................................................... 7
Article IV Liquidity Fundings.................................................................... 7
SECTION 4.1 LIQUIDITY FUNDINGS......................................................... 7
SECTION 4.2 YIELD PAYMENTS............................................................. 8
SECTION 4.3 SELECTION AND CONTINUATION OF INTEREST PERIODS............................. 8
SECTION 4.4 LIQUIDITY FUNDING YIELD RATES.............................................. 8
SECTION 4.5 SUSPENSION OF THE LIBO RATE................................................ 8
SECTION 4.6 DEFAULT RATE............................................................... 9
Article V Representations and Warranties......................................................... 9
SECTION 5.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES....................... 9
Article VI Conditions of Purchases............................................................... 14
SECTION 6.1 CONDITIONS PRECEDENT TO INITIAL INCREMENTAL PURCHASE....................... 14
SECTION 6.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.................... 14
Article VII Covenants............................................................................ 15
SECTION 7.1 AFFIRMATIVE COVENANTS OF THE SELLER PARTIES................................ 15
SECTION 7.2 NEGATIVE COVENANTS OF THE SELLER PARTIES................................... 22
Article VIII Administration and Collection....................................................... 24
SECTION 8.1 DESIGNATION OF SERVICER.................................................... 24
SECTION 8.2 DUTIES OF SERVICER......................................................... 25
SECTION 8.3 COLLECTION NOTICES......................................................... 27
SECTION 8.4 RESPONSIBILITIES OF THE SELLER............................................. 27
SECTION 8.5 MONTHLY REPORTS............................................................ 27
SECTION 8.6 SERVICING FEE.............................................................. 27
Article IX Amortization Events................................................................... 28
SECTION 9.1 AMORTIZATION EVENTS........................................................ 28
SECTION 9.2 REMEDIES................................................................... 30
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Article X Indemnification........................................................................ 31
SECTION 10.1 INDEMNITIES BY THE SELLER PARTIES.......................................... 31
SECTION 10.2 INCREASED COST AND REDUCED RETURN.......................................... 33
SECTION 10.3 OTHER COSTS AND EXPENSES................................................... 34
SECTION 10.4 ALLOCATIONS................................................................ 34
Article XI The Agent............................................................................. 35
SECTION 11.1 AUTHORIZATION AND ACTION................................................... 35
Article XII Assignments and Participations....................................................... 35
SECTION 12.1 ASSIGNMENTS AND PARTICIPATIONS BY BLUE RIDGE............................... 35
SECTION 12.2 PROHIBITION ON ASSIGNMENTS BY THE SELLER PARTIES........................... 35
Article XIII Miscellaneous....................................................................... 35
SECTION 13.1 WAIVERS AND AMENDMENTS..................................................... 35
SECTION 13.2 NOTICES.................................................................... 36
SECTION 13.3 PROTECTION OF AGENT'S SECURITY INTEREST.................................... 37
SECTION 13.4 CONFIDENTIALITY............................................................ 38
SECTION 13.5 BANKRUPTCY PETITION........................................................ 39
SECTION 13.6 LIMITATION OF LIABILITY.................................................... 39
SECTION 13.7 CHOICE OF LAW.............................................................. 39
SECTION 13.8 CONSENT TO JURISDICTION.................................................... 39
SECTION 13.9 WAIVER OF JURY TRIAL....................................................... 40
SECTION 13.10 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS............................. 40
SECTION 13.11 COUNTERPARTS; SEVERABILITY; SECTION REFERENCES............................. 40
SECTION 13.12 CHARACTERIZATION........................................................... 41
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Exhibits
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Jurisdiction of Organization of the Seller Parties; Places of
Business of the Seller Parties; Locations of Records; Federal
Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Lock-Boxes and Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Credit and Collection Policy
Exhibit VIII Form of Monthly Report
Exhibit IX Form of Short-Form Contract
Schedules
Schedule A Documents to be Delivered to the Agent on or Prior to the Initial
Purchase
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RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement, dated as of March 19, 2002 is
entered into by and among:
(a) Arch Chemicals Receivables Corp., a Delaware corporation (the
"Seller"),
(b) Arch Chemicals, Inc., a Virginia corporation ("Arch" or the
"Servicer"), as initial Servicer (the Servicer together with the Seller, the
"Seller Parties" and each, a "Seller Party"),
(c) Blue Ridge Asset Funding Corporation, a Delaware corporation
("Blue Ridge"), and
(d) Wachovia Bank, N.A., as agent for Blue Ridge and its assigns
under the Transaction Documents and under the Liquidity Agreement (together with
its successors and assigns in such capacity, the "Agent").
Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
The Seller desires to transfer and assign Receivable Interests from
time to time.
Blue Ridge shall purchase Receivable Interests from the Seller from
time to time either by issuing its Commercial Paper or by availing itself of a
Liquidity Funding to the extent available.
Wachovia Bank, N.A. has been requested and is willing to act as Agent
on behalf of Blue Ridge and its assigns in accordance with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
SECTION 1.1 PURCHASE FACILITY.
(a) Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article VI), from time to time prior to the
Facility Termination Date, the Seller may request that Blue Ridge purchase from
the Seller undivided ownership interests in the Receivables and the associated
Related Security (except for Restricted Contracts) and Collections, and Blue
Ridge shall make such Purchase; provided that no Purchase shall be made by Blue
Ridge if, after giving effect thereto, either (i) the Aggregate Invested Amount
would exceed the Purchase Limit, or (ii) the aggregate of the Receivable
Interests would exceed 100%. It is the intent of Blue Ridge to fund the
Purchases by the issuance of Commercial Paper. If for
any reason Blue Ridge is unable, or determines that it is undesirable, to issue
Commercial Paper to fund or maintain its investment in the Receivable Interests,
or is unable for any reason to repay such Commercial Paper upon the maturity
thereof, Blue Ridge will avail itself of a Liquidity Funding to the extent
available. If Blue Ridge funds or refinances its investment in a Receivable
Interest through a Liquidity Funding, in lieu of paying CP Costs on the Invested
Amount pursuant to Article III hereof, the Seller will pay Yield thereon at the
Alternate Base Rate or the LIBO Rate, selected in accordance with Article IV
hereof. Nothing herein shall be deemed to constitute a commitment of Blue Ridge
to issue Commercial Paper.
(b) The Seller may, upon at least ten (10) Business Days' notice
to the Agent, terminate in whole or reduce in part, the unused portion of the
Purchase Limit; provided that each partial reduction of the Purchase Limit shall
be in an amount equal to $5,000,000 (or a larger integral multiple of $1,000,000
if in excess thereof).
SECTION 1.2 INCREMENTAL PURCHASES.
The Seller shall provide the Agent with at least two (2) Business Days'
prior written notice in a form set forth as Exhibit II hereto of each
Incremental Purchase (each, a "Purchase Notice"). Each Purchase Notice shall be
subject to Section 6.2 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall not be
less than $1,000,000 or a larger integral multiple of $100,000) and the Purchase
Date. The Seller shall not request and Blue Ridge shall not be obligated to fund
more than one (1) Incremental Purchase in any consecutive seven (7) day period.
Following receipt of a Purchase Notice, the Agent will determine whether Blue
Ridge will fund the requested Incremental Purchase through the issuance of
Commercial Paper or through a Liquidity Funding. If Blue Ridge determines to
fund an Incremental Purchase through a Liquidity Funding, the Seller may cancel
the Purchase Notice or, in the absence of such a cancellation, the Incremental
Purchase will be funded through a Liquidity Funding. On each Purchase Date, upon
satisfaction of the applicable conditions precedent set forth in Article VI,
Blue Ridge shall deposit to the Facility Account, in immediately available
funds, no later than 2:00 p.m. (New York time), an amount equal to the requested
Purchase Price.
SECTION 1.3 DECREASES.
The Seller shall provide the Agent with prior written notice in
conformity with the Required Notice Period (a "Reduction Notice") of any
proposed reduction of Aggregate Invested Amount. Such Reduction Notice shall
designate (a) the date (the "Proposed Reduction Date") upon which any such
reduction of Aggregate Invested Amount shall occur (which date shall give effect
to the applicable Required Notice Period), and (b) the amount of Aggregate
Invested Amount to be reduced which shall be applied ratably to all Receivable
Interests in accordance with the respective Invested Amounts thereof (the
"Aggregate Reduction"). Only one (1) Reduction Notice shall be outstanding at
any time.
SECTION 1.4 DEEMED COLLECTIONS; PURCHASE LIMIT.
(a) If on any day:
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(i) the Outstanding Balance of any Receivable is reduced
or cancelled as a result of any defective or rejected goods or
services, any cash discount or any other adjustment by any Originator
or any Affiliate thereof, or as a result of any governmental or
regulatory action, or
(ii) the Outstanding Balance of any Receivable is 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
or an unrelated transaction), or
(iii) the Outstanding Balance of any Receivable is 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) the Outstanding Balance of any Receivable is less
than the amount included in calculating the Net Pool Balance for
purposes of any Monthly Report (for any reason other than receipt of
Collections or such Receivable becoming a Defaulted Receivable), or
(v) any of the representations or warranties of the
Seller set forth in Section 5.1(g), Section 5.1(i), Section 5.1(j),
Section 5.1(r), Section 5.1(s), Section 5.1(t) or Section 5.1(u) were
not true when made with respect to any Receivable,
then, on such day, the Seller shall be deemed to have received a Collection of
such Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such
reduction or cancellation or the difference between the actual Outstanding
Balance and the amount included in calculating such Net Pool Balance, as
applicable; and (B) in the case of clause (v) above, in the amount of the
Outstanding Balance of such Receivable and (in either case), not later than two
(2) Business Days thereafter shall pay to the Agent's Account Blue Ridge's
Portion of any such Collection deemed to have been received in the same manner
as actual cash collections are distributed under the terms of this Agreement.
(b) The Seller shall ensure that the Aggregate Invested Amount at
no time exceeds the Purchase Limit. If at any time the Aggregate Invested Amount
exceeds the Purchase Limit, the Seller shall pay to the Agent immediately an
amount to be applied to reduce the Aggregate Invested Amount (as allocated by
the Agent), such that after giving effect to such payment the Aggregate Invested
Amount is less than or equal to the Purchase Limit.
(c) The Seller shall also ensure that the Receivable Interests
shall at no time exceed in the aggregate 100%. If the aggregate of the
Receivable Interests exceeds 100%, the Seller shall pay to the Agent on or
before the next succeeding Settlement Date (or, if such excess is discovered on
a Settlement Date, on such Settlement Date) an amount to be applied to reduce
the Aggregate Invested Amount (as allocated by the Agent), such that after
giving effect to such payment the aggregate of the Receivable Interests equals
or is less than 100%
SECTION 1.5 PAYMENT REQUIREMENTS AND COMPUTATIONS.
All amounts to be paid or deposited by a Seller Party pursuant to any
provision of this Agreement shall be paid or deposited in accordance with the
terms hereof no later than 12:00
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noon (New York time) on the day when due in immediately available funds, and if
not received before 12:00 noon (New York time) shall be deemed to be received on
the next succeeding Business Day. If such amounts are payable to the Agent for
the account of Blue Ridge, they shall be paid to the Agent's Account, for the
account of Blue Ridge until otherwise notified by the Agent. Upon notice to the
Seller, the Agent may debit the Facility Account for all amounts due and payable
hereunder. All computations of CP Costs, Yield, per annum fees calculated as
part of any CP Costs, per annum fees hereunder and per annum fees under the Fee
Letter shall be made on the basis of a year of 360 days for the actual number of
days elapsed. If any amount hereunder shall be payable on a day which is not a
Business Day, such amount shall be payable on the next succeeding Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
SECTION 2.1 PAYMENTS OF RECOURSE OBLIGATIONS.
The Seller hereby promises to pay the following (collectively, the
"Recourse Obligations"):
(a) all amounts due and owing under Section 1.3 or Section 1.4 on
the dates specified therein;
(b) the fees set forth in the Fee Letter on the dates specified
therein;
(c) all accrued and unpaid Yield on the Receivable Interests
accruing Yield at the Alternate Base Rate or the Default Rate on each Settlement
Date applicable thereto;
(d) all accrued and unpaid Yield on the Receivable Interests
accruing Yield at the LIBO Rate on the last day of each Interest Period
applicable thereto;
(e) all accrued and unpaid CP Costs on the Receivable Interests
funded with Commercial Paper on each Settlement Date; and
(f) all Broken Funding Costs and Indemnified Amounts upon demand.
SECTION 2.2 COLLECTIONS PRIOR TO THE FACILITY TERMINATION DATE.
(a) Prior to the Facility Termination Date, Blue Ridge's Portion
of any Deemed Collections received by the Servicer and Blue Ridge's Portion of
any Collections received by the Servicer shall be set aside and held in trust by
the Servicer for the payment of any accrued and unpaid Aggregate Unpaids or for
a Reinvestment as provided in this Section 2.2. If at any time any Collections
are received by the Servicer prior to the Facility Termination Date, the Seller
hereby requests and Blue Ridge hereby agrees to make, simultaneously with such
receipt, a reinvestment by payment of the Purchase Price under the Receivables
Sale Agreement (each, a "Reinvestment") with Blue Ridge's Portion of the balance
of each and every Collection received by the Servicer such that after giving
effect to such Reinvestment, the Invested Amount of such
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Receivable Interest immediately after such receipt and corresponding
Reinvestment shall be equal to the amount of Invested Amount immediately prior
to such receipt.
(b) On each day on which any of the conditions precedent set forth
in Section 6.2 are not satisfied and on each Settlement Date prior to the
Facility Termination Date, the Servicer shall remit to the Agent's Account the
amounts set aside during the preceding Settlement Period that have not been
subject to a Reinvestment and apply such amounts (if not previously paid in
accordance with Section 2.1) to the Aggregate Unpaids in the order specified:
first, ratably to the payment of all accrued and unpaid CP Costs, Yield
and Broken Funding Costs (if any) that are then due and owing,
second, to the accrued and unpaid Servicing Fee (so long as the
Servicer is not Arch or an Affiliate of Arch),
third, ratably to the payment of all accrued and unpaid fees under the
Fee Letter (if any) that are then due and owing,
fourth, if required under Section 1.3 or Section 1.4, to the ratable
reduction of Aggregate Invested Amount,
fifth, for the ratable payment of all other unpaid Recourse
Obligations, if any, that are then due and owing,
sixth, to the accrued and unpaid Servicing Fee (so long as the Servicer
is Arch or an Affiliate of Arch), and
seventh, the balance, if any, to the Seller or otherwise in accordance
with the Seller's instructions.
(c) Prior to the Facility Termination Date, any Collections
received by the Servicer that do not constitute Blue Ridge's Portion of such
Deemed Collections or Collections shall be paid to the Seller.
(d) In the event that a Collection Notice has been delivered
pursuant to any Collection Account Agreement, all amounts received in any
Collection Account shall at the sole discretion of the Agent, either (i) be
retained in such Collection Account or other account of the Agent for such day,
Settlement Period or part thereof and applied on the Settlement Date in
accordance with the terms of this Agreement or (ii) be released to the Seller
and applied in accordance with the terms of this Agreement.
SECTION 2.3 APPLICATION OF COLLECTIONS AFTER THE FACILITY TERMINATION
DATE.
(a) On the Facility Termination Date and on each day thereafter,
the Servicer shall set aside and hold in trust, for the benefit of the Secured
Parties, all Collections received on each such day. On and after the Facility
Termination Date, the Servicer shall, on each Settlement Date and on each other
Business Day specified by the Agent: (i) remit to the Agent's Account
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the amounts set aside pursuant to the preceding sentence, and (ii) apply such
amounts to reduce the Aggregate Unpaids as follows:
first, to the reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
second, ratably to the payment of all accrued and unpaid CP Costs,
Yield and Broken Funding Costs,
third, to the accrued and unpaid Servicing Fee (so long as the Servicer
is not Arch or an Affiliate of Arch)
fourth, ratably to the payment of all accrued and unpaid fees under the
Fee Letter,
fifth, to the ratable reduction of Aggregate Invested Amount,
sixth, for the ratable payment of all other Aggregate Unpaids,
seventh, to the accrued and unpaid Servicing Fee (so long as the
Servicer is Arch or an Affiliate of Arch), and
eighth, to the Seller.
SECTION 2.4 PAYMENT RECISSION.
No payment of any of the Aggregate Unpaids shall be considered paid or
applied hereunder to the extent that, at any time, all or any portion of such
payment or application is rescinded by application of law or judicial authority,
or must otherwise be returned or refunded for any reason. The Seller shall
remain obligated for the amount of any payment or application so rescinded,
returned or refunded, and shall promptly pay to the Agent (for application to
the Person or Persons who suffered such recission, return or refund) the full
amount thereof, plus interest thereon at the Default Rate from the date of any
such recission, return or refunding.
SECTION 2.5 CLEAN UP CALL.
The Servicer (so long as the Servicer is an Affiliate of the Seller)
shall have the right (after providing written notice to the Agent in accordance
with the Required Notice Period), at any time following the reduction of the
Aggregate Invested Amount to a level that is less than 10.0% of the original
Purchase Limit, to repurchase all, but not less than all, of the then
outstanding Receivable Interests. The purchase price in respect thereof shall be
an amount equal to the Aggregate Unpaids through the date of such repurchase,
payable in immediately available funds to the Agent's Account. Such repurchase
shall be made free and clear of any Adverse Claim created by the Agent but
otherwise shall be without representation, warranty or recourse of any kind by,
on the part of, or against Blue Ridge or the Agent.
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ARTICLE III
COMMERCIAL PAPER FUNDING
SECTION 3.1 CP COSTS.
The Seller shall pay CP Costs with respect to the Invested Amount of
all Receivable Interests funded through the issuance of Commercial Paper. Each
Receivable Interest that is funded substantially with Pooled Commercial Paper
will accrue CP Costs each day on a pro rata basis, based upon the percentage
share that the Invested Amount in respect of such Receivable Interest represents
in relation to all assets held by Blue Ridge and funded substantially with
related Pooled Commercial Paper.
SECTION 3.2 CALCULATION OF CP COSTS.
Not later than the third Business Day immediately preceding each
Monthly Reporting Date, Blue Ridge shall calculate the aggregate amount of CP
Costs applicable to its Receivable Interests for the Calculation Period then
most recently ended and shall notify the Seller of such aggregate amount.
SECTION 3.3 CP COSTS PAYMENTS.
On each Settlement Date, the Seller shall pay to the Agent (for the
benefit of Blue Ridge) an aggregate amount equal to all accrued and unpaid CP
Costs in respect of the Invested Amount of all Receivable Interests funded with
Commercial Paper for the Calculation Period then most recently ended in
accordance with Article II.
SECTION 3.4 DEFAULT RATE.
From and after the occurrence of an Amortization Event, all Receivable
Interests funded through the issuance of Commercial Paper shall accrue CP Costs
at the Default Rate.
ARTICLE IV
LIQUIDITY FUNDINGS
SECTION 4.1 LIQUIDITY FUNDINGS.
Prior to the occurrence of an Amortization Event, the outstanding
Invested Amount of each Receivable Interest funded with a Liquidity Funding
shall accrue Yield for each day during its Interest Period at either the LIBO
Rate or the Alternate Base Rate in accordance with the terms and conditions
hereof. Until the Seller gives the required notice to the Agent of another Yield
Rate in accordance with Section 4.4, the initial Yield Rate for any Receivable
Interest funded with a Liquidity Funding shall be the Alternate Base Rate
(unless the Default Rate is then applicable). If any undivided interest in a
Receivable Interest initially funded with Commercial Paper is sold to the
Liquidity Banks pursuant to the Liquidity Agreement, such undivided interest in
such Receivable Interest shall be deemed to have an Interest Period commencing
on the date of such sale.
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SECTION 4.2 YIELD PAYMENTS.
On the Settlement Date for each Receivable Interest that is funded with
a Liquidity Funding, the Seller shall pay to the Agent (for the benefit of the
Liquidity Banks) an aggregate amount equal to the accrued and unpaid Yield
thereon for the entire Interest Period of each such Liquidity Funding in
accordance with Article II.
SECTION 4.3 SELECTION AND CONTINUATION OF INTEREST PERIODS.
(a) With consultation from (and approval by) the Agent, the Seller
shall from time to time request Interest Periods for the Receivable Interests
funded with Liquidity Fundings, provided that if at any time any Liquidity
Funding is outstanding, the Seller shall always request Interest Periods such
that at least one Interest Period shall end on the date specified in clause (i)
of the definition of Settlement Date.
(b) The Seller or the Agent, upon notice to and consent by the
other received at least three (3) Business Days prior to the end of an Interest
Period (the "Terminating Tranche") for any Liquidity Funding, may, effective on
the last day of the Terminating Tranche: (i) divide any such Liquidity Funding
into multiple Liquidity Fundings, (ii) combine any such Liquidity Funding with
one or more other Liquidity Fundings that have a Terminating Tranche ending on
the same day as such Terminating Tranche or (iii) combine any such Liquidity
Funding with a new Liquidity Funding to be made by the Liquidity Banks on the
day such Terminating Tranche ends.
SECTION 4.4 LIQUIDITY FUNDING YIELD RATES.
The Seller may select the LIBO Rate (subject to Section 4.5 below) or
the Alternate Base Rate for each Liquidity Funding. The Seller shall by 12:00
noon (New York time): (a) at least three (3) Business Days prior to the
expiration of any Terminating Tranche with respect to which the LIBO Rate is
being requested as a new Yield Rate and (b) at least one (1) Business Day prior
to the expiration of any Terminating Tranche with respect to which the Alternate
Base Rate is being requested as a new Yield Rate, give the Agent irrevocable
notice of the new Yield Rate for the Liquidity Funding associated with such
Terminating Tranche. Until the Seller gives notice to the Agent of another Yield
Rate, the initial Yield Rate for any Receivable Interest assigned or
participated to the Liquidity Banks pursuant to the Liquidity Agreement shall be
the Alternate Base Rate (unless the Default Rate is then applicable).
SECTION 4.5 SUSPENSION OF THE LIBO RATE.
(a) If any Liquidity Bank notifies the Agent that it has
determined that funding its ratable share of the Liquidity Fundings at a LIBO
Rate would violate any applicable law, rule, regulation, or directive of any
governmental or regulatory authority, whether or not having the force of law, or
that (i) deposits of a type and maturity appropriate to match fund its Liquidity
Funding at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Liquidity Funding at
such LIBO Rate, then the Agent will promptly notify the Seller Parties and the
Agent shall suspend the availability of such LIBO Rate and require the Seller to
select the Alternate Base Rate for any Liquidity Funding accruing Yield
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at such LIBO Rate; provided, however, the failure to so notify any Seller Party
shall not result in the non-suspension of the availability of such LIBO Rate.
(b) If less than all of the Liquidity Banks give a notice to the
Agent pursuant to Section 4.5(a), each Liquidity Bank which gave such a notice
shall be obliged, at the request of the Seller, Blue Ridge or the Agent, to
assign all of its rights and obligations hereunder to (i) another Liquidity Bank
or (ii) another funding entity nominated by the Seller or the Agent that is an
Eligible Assignee willing to participate in the Liquidity Agreement through the
Liquidity Termination Date in the place of such notifying Liquidity Bank;
provided that (A) the notifying Liquidity Bank receives payment in full of all
Aggregate Unpaids owing to it (whether due or accrued), and (B) the replacement
Liquidity Bank otherwise satisfies the requirements of the Liquidity Agreement.
SECTION 4.6 DEFAULT RATE.
From and after the occurrence of an Amortization Event, all Liquidity
Fundings shall accrue Yield at the Default Rate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES.
Each Seller Party hereby represents and warrants to the Agent and Blue
Ridge, as to itself, as of the date hereof and as of the date of each
Incremental Purchase and the date of each Reinvestment that:
(a) Existence and Power. Such Seller Party's jurisdiction of
organization is correctly set forth in the preamble to this Agreement and such
jurisdiction is its sole jurisdiction of organization. Such Seller Party 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 Seller Party is validly existing and in good standing under the laws of its
jurisdiction of organization and no other state or jurisdiction, and such
jurisdiction must maintain a public record showing the organization to have been
organized. Such Seller Party is duly qualified to do business and is in good
standing as a foreign entity, and has and holds all organizational 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 Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of the Seller, the
Seller's use of the proceeds of Purchases made hereunder, are within its
corporate powers and authority and have been duly authorized by all necessary
corporate action on its part. This Agreement and each other Transaction Document
to which such Seller Party is a party has been duly executed and delivered by
such Seller Party.
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(c) No Conflict. The execution and delivery by such Seller Party
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 Seller Party 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 Seller
Party 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 Seller Party'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 Seller
Party 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 Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
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
Seller Party or any of its Affiliates to the Agent or Blue Ridge 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 Seller Party or any of its Affiliates to the Agent or Blue
Ridge will be, true and accurate in every material respect on the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(h) Use of Proceeds. No proceeds of any Purchase hereunder will be
used by such Seller Party (i) for a purpose that violates, or would be
inconsistent with, (A) Section 7.2(e) of this Agreement or (B) Regulation T, U
or X promulgated by the Board of Governors of the Federal Reserve System from
time to time 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
10
the repurchase of equity securities of Arch 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. The Seller is (i) the legal and beneficial owner
of the Receivables and (ii) is the legal and beneficial owner of the Related
Security with respect thereto (other than Restricted Contracts), 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 the Seller's ownership interest in each Receivable, its
Collections, "Supporting Obligations" (as defined in Article 9 of the UCC in
effect in each relevant jurisdiction), the Seller'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 the Seller that secures 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 is effective to create a valid
security interest in favor of the Agent for the benefit of the Secured Parties
in the Purchased Assets to secure payment of the Aggregate Unpaids, 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 the Agent's (on behalf of the Secured Parties) security
interest in the Receivables, its Collections, "Supporting Obligations" (as
defined in Article 9 of the UCC in effect in each relevant jurisdiction), the
Seller'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 the Seller that secures 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 Seller Party'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 jurisdiction
of organization, principal places of business and chief executive office of such
Seller Party and the offices where it keeps all of its Records are located at
the address(es) listed on Exhibit III or such other locations of which the Agent
has been notified in accordance with Section 7.2(a) in jurisdictions where all
action required by Section 13.3(a) has been taken and completed. The Seller's
Federal Employer Identification Number is correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in
subclause (i) of Section 7.1(j) and Section 8.2 have since May 15, 2001 been
satisfied and duly performed. The conditions and requirements set forth in
subclause (ii) of Section 7.1(j) have been satisfied from and after the Closing
Date. The names, addresses and jurisdictions of organization of all Collection
Banks, together with the account numbers of the Collection Accounts of the
Seller at each Collection Bank and the post office box number of each Lock-Box,
are listed on Exhibit IV. The Seller has not granted any Person, other than the
Agent as contemplated by this Agreement,
11
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. (i) The initial Servicer represents
and warrants that since September 30, 2001, no event has occurred that would
have a material adverse effect on the financial condition or operations of the
initial Servicer and its Subsidiaries taken as a whole or the ability of the
initial Servicer to perform its obligations under this Agreement, and (ii) the
Seller represents and warrants that since September 30, 2001, no event has
occurred that would have a material adverse effect on (A) the financial
condition or operations of the Seller, (B) the ability of the Seller to perform
its obligations under the Transaction Documents, or (C) the collectibility of
the Receivables generally or any material portion of the Receivables.
(n) Names. The name in which the Seller has executed this
Agreement is identical to the name of the Seller as indicated on the public
record of its state of organization which shows the Seller to have been
organized. In the past five (5) years, the Seller has not used any corporate
names, trade names or assumed names other than the name in which it has executed
this Agreement.
(o) Ownership of the Seller. Arch owns, directly or indirectly,
100% of the issued and outstanding capital stock of the Seller, free and clear
of any Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of the Seller.
(p) Not a Holding Company or an Investment Company. Such Seller
Party 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 Seller Party 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 Seller Party 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 Seller
Party 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 the Agent has been notified in accordance with Section
7.1(a)(vii).
12
(s) Payments to Originators. With respect to each Receivable
transferred to the Seller under the Receivables Sale Agreement, the Seller has
given reasonably equivalent value to each of the Originators in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by any Originator of any Receivable under the Receivables Sale
Agreement is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. Sections 101 et seq.), as amended.
(t) Enforceability of Contracts. Each Contract with respect to
each Receivable is effective to create, and has created, a legal, valid and
binding obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other 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 included in the Net Pool
Balance as an Eligible Receivable on the date of any Monthly Report was an
Eligible Receivable on such date.
(v) Purchase Limit and Maximum Receivable Interests. Immediately
after giving effect to each Incremental Purchase hereunder, the Aggregate
Invested Amount is less than or equal to the Purchase Limit and the aggregate of
the Receivable Interests does not exceed 100%.
(w) Accounting. The manner in which such Seller Party accounts for
the transactions contemplated by this Agreement and the Receivables Sale
Agreement does not jeopardize the characterization of the transactions
contemplated herein and therein as being true sales.
(x) Separateness. From the date of the formation of the Seller,
the Seller has complied with all provisions of Section 7.1(i) applicable to it.
(y) 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.
(z) Enforcement. No Confidential Contract with respect to any
Receivable contains either (i) restrictions on the ability of the owner of such
Receivable to enforce the obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon or (ii) provisions relating to specific procedures that must be
followed to enforce the related Receivable that could reasonably be expected to
adversely effect the value of the Receivable or the ability to enforce any such
obligation.
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ARTICLE VI
CONDITIONS OF PURCHASES
SECTION 6.1 CONDITIONS PRECEDENT TO INITIAL INCREMENTAL PURCHASE.
The initial Incremental Purchase of a Receivable Interest under this
Agreement is subject to the conditions precedent that (a) the Agent shall have
received on or before the Closing Date those documents listed on Schedule A and
(b) the Agent shall have received all fees and expenses required to be paid on
such date pursuant to the terms of this Agreement and the Fee Letter.
SECTION 6.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.
Each Incremental Purchase and each Reinvestment shall be subject to the
further conditions precedent that (a) in the case of each such Purchase: (i) the
Servicer shall have delivered to the Agent on or prior to the date of such
Purchase, in form and substance satisfactory to the Agent, all Monthly Reports
as and when due under Section 8.5 and (ii) upon the Agent's request, the
Servicer shall have delivered to the Agent at least three (3) days prior to such
Purchase an interim Monthly Report showing the amount of Eligible Receivables;
(b) the Agent shall have received such other approvals, opinions or documents as
it may reasonably request and (c) on each Purchase Date, the following
statements shall be true (and acceptance of the proceeds of such Incremental
Purchase or Reinvestment shall be deemed a representation and warranty by the
Seller that such statements are then true):
(i) the representations and warranties set forth in
Section 5.1 are true and correct on and as of the date of such
Incremental Purchase or Reinvestment as though made on and as of such
Purchase Date;
(ii) no event has occurred and is continuing, or would
result from such Incremental Purchase or Reinvestment, that will
constitute an Amortization Event, and no event has occurred and is
continuing, or would result from such Incremental Purchase or
Reinvestment, that would constitute an Unmatured Amortization Event;
and
(iii) the Aggregate Invested Amount does not exceed the
Purchase Limit and the aggregate Receivable Interests do not exceed
100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or Blue Ridge, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of the
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of the Seller to satisfy any of the foregoing
conditions precedent in respect of any Reinvestment shall give rise to a right
of the Agent, which right may be exercised at any time on demand of the Agent,
to rescind the related purchase and direct the Seller to pay to the Agent's
Account, for the benefit of Blue Ridge, an amount equal to the Collections prior
to the Facility Termination Date that shall have been applied to the affected
Reinvestment.
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ARTICLE VII
COVENANTS
SECTION 7.1 AFFIRMATIVE COVENANTS OF THE SELLER PARTIES.
Until the date on which the Aggregate Unpaids have been indefeasibly
paid in full and this Agreement terminates in accordance with its terms, each
Seller Party hereby covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(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 and its
consolidated subsidiaries for such fiscal year certified in a manner
acceptable to the Agent by KPMG Peat Marwick LLP, independent public
accountants or any other independent public accountants of recognized
national standing.
(ii) Quarterly Reporting. Within 45 days after the close
of the first three (3) quarterly periods of each of its respective
fiscal years, balance sheets of each of the Seller Parties as at the
close of each such period and consolidated statements of income and a
statement of cash flows for Arch and its consolidated subsidiaries for
the period from the beginning of such fiscal year to the end of such
quarter, all certified by its respective 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 V signed by such Seller Party'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 Seller Party
copies of all financial statements, reports and proxy statements so
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 Seller Party 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 the Agent or Blue
Ridge, copies of the same if such notice, request, consent, financial
statements, certification, report or other communication can reasonably
be expected to have an adverse effect on the Receivables, the Related
Security or the Agent's rights therein.
15
(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 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 the Agent's consent thereto.
(viii) Other Information. Promptly, from time to time, such
other information, documents, records or reports relating to (A) the
financial condition or operations of such Seller Party as the Agent may
from time to time reasonably request in order to protect the interests
of the Agent, for the benefit of Blue Ridge, under or as contemplated
by this Agreement or (B) the Receivables as the Agent may reasonably
request.
Information required to be delivered pursuant to paragraphs
(i), (ii), (iv) and (v) of this Section 7.1(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 such Seller Party shall deliver
paper copies of the statements, reports, financial statements and other
information referred to in paragraphs (i), (ii), (iv) and (v) of this
Section 7.1(a) to the Agent promptly upon request following such
filing.
(b) Notices. Such Seller Party will notify the Agent 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) Amortization Events or Unmatured Amortization Events.
The occurrence of each Amortization Event and each Unmatured
Amortization Event, by a statement of an Authorized Officer of such
Seller Party.
(ii) Judgments and Proceedings. (A) The entry of any
judgment or decree against the Servicer or its Subsidiaries if the
amount of such judgment or decree then outstanding against the Servicer
and its Subsidiaries exceeds $5,000,000 after deducting (1) the amount
with respect to which the Servicer or any such Subsidiary, as the case
may be, is insured and with respect to which the insurer has not
disclaimed responsibility in writing, and (2) the amount for which the
Servicer or any such Subsidiary is otherwise indemnified if the terms
of such indemnification are satisfactory to the Agent, and (B) the
institution of any litigation, arbitration proceeding or governmental
proceeding against the Servicer which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect; and (C) the entry of any judgment or decree or the institution
of any litigation, arbitration proceeding or governmental proceeding
against the Seller.
(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.
16
(iv) Termination Date. The occurrence of the "Termination
Date" under and as defined in the Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other financing arrangement
pursuant to which the Seller is a debtor or an obligor; or 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 the
Servicer is a debtor or an obligor.
(vi) Notices under Receivables Sale Agreement. Copies of
all notices delivered under the Receivables Sale Agreement.
(c) Compliance with Laws and Preservation of Corporate Existence.
Such Seller Party 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 Seller Party will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where its business is
conducted, except where the failure to so preserve and maintain or qualify could
not reasonably be expected to have a Material Adverse Effect.
(d) Audits. In addition to information that may be required
pursuant to Section 7.1(a)(viii), each Seller Party will furnish to the Agent
from time to time such information with respect to it and the Receivables as the
Agent may reasonably request. Such Seller Party will, from time to time during
regular business hours as requested by the Agent upon reasonable notice and at
the sole cost of such Seller Party, permit the Agent, or its agents or
representatives (and shall cause each Originator to permit the Agent or its
agents or representatives): (i) to examine and make copies of and abstracts from
all Records in the possession or under the control of such Person relating to
the Purchased Assets, including, without limitation, the related Contracts
(other than any Confidential Contract (except for Confidential Contracts 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
disclosure thereof cannot be satisfied by the execution and delivery of a
confidentiality agreement), and (ii) to visit the offices and properties of such
Person for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to such Person's financial condition or
the Purchased Assets or any Person's performance under any of the Transaction
Documents or any Person's performance under the Contracts and, in each case,
with any of the officers or employees of the Seller or the Servicer having
knowledge of such matters (each of the foregoing examinations and visits, a
"Review"); provided, however, that, so long as no Amortization Event has
occurred and is continuing, (A) the Seller Parties shall only be responsible for
the costs and expenses of one (1) Review in any one calendar year, and (B) the
Agent will not request more than four (4) Reviews in any one calendar year.
17
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause each Originator to)
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). The Servicer will (and will cause each Originator to) give
the Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(ii) Such Seller Party will (and will cause each
Originator to) on or prior to the date hereof, xxxx its master data
processing system and all accounts receivable reports generated
thereby, each Confidential Contract and its records relating to all
other Contracts with a legend, reasonably acceptable to the Agent,
describing the Agent's security interest in the Purchased Assets.
(f) Compliance with Contracts and Credit and Collection Policy.
Such Seller Party will (and will cause each Originator to) 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 Agent, 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) Performance and Enforcement of Receivables Sale Agreement. The
Seller will, and will require each Originator to, perform each of their
respective obligations and undertakings under and pursuant to the Receivables
Sale Agreement, will purchase Receivables thereunder in strict compliance with
the terms thereof and will vigorously enforce the rights and remedies accorded
to the Seller under the Receivables Sale Agreement. The Seller will take all
actions to perfect and enforce its rights and interests (and the rights and
interests of the Agent, as the Seller's assignee) under the Receivables Sale
Agreement as the Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Receivables Sale
Agreement.
(h) Ownership. The Seller will (or will cause each Originator to)
take all necessary action to establish and maintain, irrevocably in Seller (i)
legal and equitable title to the Receivables and the Collections and (ii) all of
each Originator's right, title and interest in the Related Security associated
with the Receivables (except for the Restricted Contracts), in each case, free
and clear of any Adverse Claims, other than Adverse Claims in favor of the
Agent, for the benefit of the Secured Parties (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 the Agent's (for the benefit of the Secured Parties) security
interest in the Purchased Assets and such other action to perfect, protect
18
or more fully evidence the interest of the Agent for the benefit of the Secured
Parties as the Agent may reasonably request); provided, however, that unless and
until an Amortization Event or an Unmatured Amortization Event has occurred, no
Seller Party shall be required to take any actions to establish, maintain or
perfect the Agent's ownership interest in the Related Security other than the
filing of financing statements under the UCC of all appropriate jurisdictions.
(i) Reliance. The Seller acknowledges that the Agent and Blue
Ridge are entering into the transactions contemplated by this Agreement in
reliance upon the Seller's identity as a legal entity that is separate from each
Originator. Therefore, from and after the date of execution and delivery of this
Agreement, the Seller shall take all reasonable steps, including, without
limitation, all steps that the Agent or Blue Ridge may from time to time
reasonably request, to maintain the Seller's identity as a separate legal entity
and to make it manifest to third parties that the Seller is an entity with
assets and liabilities distinct from those of each Originator and any Affiliates
thereof (other than the Seller) 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, the Seller will:
(i) Hold itself out to the public and conduct its own
business in its own name and require that all full-time employees of
the Seller, if any, identify themselves as such and not as employees of
any Originator (including, without limitation, by means of providing
appropriate employees with business or identification cards identifying
such employees as the Seller's employees);
(ii) compensate all employees, consultants and agents
directly, from the Seller's own funds, for services provided to the
Seller by such employees, consultants and agents and, to the extent any
employee, consultant or agent of the Seller is also an employee,
consultant or agent of any Originator or any Affiliate thereof,
allocate the compensation of such employee, consultant or agent between
the Seller and such Originator or such Affiliate, as applicable, on a
basis that reflects the services rendered to the Seller and such
Originator or such Affiliate, as applicable;
(iii) [RESERVED];
(iv) separate stationery, invoices, checks and other
business forms in its own name;
(v) conduct all transactions with each Originator and the
Servicer (including, without limitation, any delegation of its
obligations hereunder as Servicer) strictly on an arm's-length basis,
allocate fairly and reasonably all overhead expenses (including,
without limitation, telephone and other utility charges) for items
shared between the Seller and such Originator on the basis of actual
use to the extent practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use;
(vi) at all times have a Board of Directors consisting of
at least one member that is an Independent Director;
(vii) observe all organizational formalities as a distinct
entity, and ensure that all corporate actions relating to (A) the
selection, maintenance or replacement of the
19
Independent Director, (B) the dissolution or liquidation of the Seller
or (C) the initiation of, participation in, acquiescence in or consent
to any bankruptcy, insolvency, reorganization or similar proceeding
involving the Seller, are duly authorized by unanimous vote of its
Board of Directors (including the Independent Director);
(viii) maintain the Seller's books and records separate and
distinct from those of each Originator and any Affiliate thereof and
otherwise in such a manner so that such books and records are readily
identifiable as its own assets rather than assets of any Originator or
any Affiliate thereof;
(ix) prepare its financial statements separately from
those of each Originator and insure that any consolidated financial
statements of any Originator or any Affiliate thereof that include the
Seller and that are filed with the Securities and Exchange Commission
or any other governmental agency have notes clearly stating that the
Seller is a separate legal entity and that its assets will be available
first and foremost to satisfy the claims of the creditors of the
Seller;
(x) except as herein specifically otherwise provided,
maintain the funds and other assets of the Seller separate from, and
not commingled with, those of any Originator or any Affiliate thereof
and only maintain bank accounts or other depository accounts to which
the Seller alone is the account party, into which the Seller alone
makes deposits and from which the Seller alone (or the Agent hereunder)
has the power to make withdrawals;
(xi) pay all of the Seller's operating expenses from the
Seller's own assets (except for certain payments by any Originator or
other Persons pursuant to allocation arrangements that comply with the
requirements of this Section 7.1(i)) and pay its own liabilities out of
its own funds;
(xii) operate its business and activities such that: it
does not engage in any business or activity of any kind, or enter into
any transaction or indenture, mortgage, instrument, agreement,
contract, lease or other undertaking, other than the transactions
contemplated and authorized by this Agreement and the Receivables Sale
Agreement; and does not create, incur, guarantee, assume or suffer to
exist any indebtedness or other liabilities, whether direct or
contingent, other than (A) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business, (B) the incurrence of obligations under
this Agreement, (C) the incurrence of obligations, as expressly
contemplated in the Receivables Sale Agreement, to make payment to the
applicable Originator thereunder for the purchase of Receivables from
such Originator under the Receivables Sale Agreement, and (D) the
incurrence of operating expenses in the ordinary course of business of
the type otherwise contemplated by this Agreement;
(xiii) maintain its corporate charter in conformity with
this Agreement, such that it does not amend, restate, supplement or
otherwise modify its Certificate of Incorporation or By-Laws in any
respect that would impair its ability to comply with the
20
terms or provisions of any of the Transaction Documents, including,
without limitation, Section 7.1(i) of this Agreement;
(xiv) maintain the effectiveness of, and continue to
perform under the Receivables Sale Agreement, such that it does not
amend, restate, supplement, cancel, terminate or otherwise modify the
Receivables Sale Agreement, or give any consent, waiver, directive or
approval thereunder or waive any default, action, omission or breach
under the Receivables Sale Agreement or otherwise grant any indulgence
thereunder, without (in each case) the prior written consent of the
Agent;
(xv) maintain its corporate separateness such that it does
not merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions, and except as otherwise contemplated herein) all or
substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of, any
Person, nor at any time create, have, acquire, maintain or hold any
interest in any Subsidiary;
(xvi) maintain at all times the Required Capital Amount (as
defined in the Receivables Sale Agreement) and refrain from making any
dividend, distribution, redemption of capital stock or payment of any
subordinated indebtedness which would cause the Required Capital Amount
to cease to be so maintained;
(xvii) operate its business and activities such that it (A)
does not hold itself out as having agreed to guarantee or be obligated
for the debts of any Originator or any Affiliate thereof, (B) does not
hold out its credit as being available to satisfy the obligations of
any Originator or any Affiliate thereof and (C) has not pledged assets
for the benefit of any Originator or any Affiliate thereof; and
(xviii) take such other actions as are necessary on its part
to ensure that the facts and assumptions set forth in the opinion
issued by Cravath, Swaine & Xxxxx, as counsel for the Seller, in
connection with the closing or initial Purchase under this Agreement
and relating to substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all
material respects at all times.
(j) Collections. Such Seller Party 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 the Purchased Assets are remitted directly
to the Seller or any Affiliate of the Seller, the Seller 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, the Seller will
itself hold or, if applicable, will cause such payments to be held in trust for
the exclusive benefit of the Agent and Blue Ridge. The Seller will maintain
exclusive ownership, dominion and control (subject to the terms of this
Agreement) of each Lock-Box and Collection Account and shall 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 the Agent
as contemplated by this Agreement.
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(k) Taxes. Such Seller Party will file all tax returns and reports
required by law to be filed by it and will 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. The Seller will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of the Agent or Blue Ridge.
(l) Payment to Applicable Originator. With respect to any
Receivable purchased by the Seller from an Originator, such sale shall be
effected under, and in compliance with the terms of, the Receivables Sale
Agreement, including, without limitation, the terms relating to the amount and
timing of payments to be made to such Originator in respect of the purchase
price for such Receivable.
(m) Acceptable Assignment Clause: The Seller Parties will within
thirty (30) days from the Closing Date, take all necessary action to modify the
existing Short-Form Contract and invoices generated after the Closing Date to
include the Acceptable Assignment Clause and provide a copy of the modified
Short-Form Contract and form of invoice to the Agent.
(n) Renewal Contracts: The Seller Parties will make commercially
reasonable efforts to ensure that any renewal of a Contract existing as of the
Closing Date, which renewal occurs after the 30th day following the Closing Date
contains the Acceptable Assignment Clause.
(o) Additional Confidential Contracts: At least five (5) Business
Days prior to the generation of a Receivable that (i) is generated under any
Contract that is not an Existing Confidential Contract and that contains
confidentiality provisions that prohibit the disclosure of such Contract or the
terms thereof to the Agent and (ii) the Seller desires to be treated as an
Eligible Receivable, the Seller will give written notice to the Agent of such
Contract and the name of the applicable Obligor.
(p) Change of Collection Account and Lock-Box with Fleet Bank: No
later than 30 days from the Closing Date, the Seller will cause Arch Personal
Care Products, L.P. to replace the Lock-Box and Collection Account with Fleet
Bank with another Lock-Box and Collection Account at another institution
providing similar services, acceptable to the Agent on terms and conditions
substantially identical to those contained in Exhibit VI attached hereto,
together with such other changes that are satisfactory to the Agent.
SECTION 7.2 NEGATIVE COVENANTS OF THE SELLER PARTIES.
Until the date on which the Aggregate Unpaids have been indefeasibly
paid in full and this Agreement terminates in accordance with its terms, each
Seller Party hereby covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller Party will not
(i) change its jurisdiction of organization or name, (ii) cease to be a
"registered organization" (within the meaning of any applicable enactment of the
UCC) or (iii) relocate its chief executive office at any time while the location
of its chief executive office is relevant to perfection of the Agent's security
interest, for the benefit of the Secured Parties, in the Receivables, Related
Security and
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Collections, or change any office where Records are kept unless it shall have:
(A) given the Agent at least thirty (30) days' prior written notice thereof and
(B) delivered to the Agent all financing statements, instruments and other
documents requested by the Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be
required by the Agent pursuant to Section 8.2(b), such Seller Party 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 the Agent 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 the Servicer 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 Seller Party will not, and will not permit any Originator to, 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 Agent 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 the Agent's consent thereto. Except as provided
in Section 8.2(d), the Servicer will not, and will not permit any Originator to,
extend, amend or otherwise modify the terms of any Receivable or any Contract
related thereto other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. The Seller 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 of
the Purchased Assets, or assign any right to receive income with respect thereto
(other than, in each case, the creation of a security interest therein in favor
of the Agent as provided for herein or in any Transaction Document), and the
Seller will defend the right, title and interest of the Secured Parties in, to
and under any of the foregoing property, against all claims of third parties
claiming through or under the Seller or the Originator. The Seller will not
create or suffer to exist any mortgage, pledge, security interest, encumbrance,
lien, charge or other similar arrangement on any of its inventory.
(e) Use of Proceeds. The Seller will not use the proceeds of the
Purchases for any purpose other than (i) paying for Receivables and Related
Security under and in accordance with the Receivables Sale Agreement, including
without limitation, making payments on the Subordinated Notes (as defined
therein) to the extent permitted thereunder and under the Receivables Sale
Agreement, (ii) paying its ordinary and necessary operating expenses when and as
due, and (iii) making Restricted Junior Payments to the extent permitted under
this Agreement.
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(f) Termination Date Determination. The Seller will not designate
the Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to any Originator in respect thereof, without the prior written
consent of the Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
(g) Restricted Junior Payments. The Seller will not make any
Restricted Junior Payment if after giving effect thereto, the Seller's Net Worth
(as defined in the Receivables Sale Agreement) would be less than the Required
Capital Amount (as defined in the Receivables Sale Agreement).
(h) The Seller Indebtedness. The Seller will not incur or permit
to exist any Indebtedness or liability on account of deposits except: (i) the
Aggregate Unpaids, (ii) the Subordinated Loans (as defined in the Receivables
Sale Agreement), and (iii) other current accounts payable arising in the
ordinary course of business and not overdue.
(i) Prohibition on Additional Negative Pledges. No such Seller
Party will enter into or assume any agreement (other than this Agreement and the
other Transaction Documents) prohibiting the creation or assumption of any
Adverse Claim upon the Purchased Assets except as contemplated by the
Transaction Documents, or otherwise prohibiting or restricting any transaction
contemplated hereby or by the other Transaction Documents, and no such Seller
Party will enter into or assume any agreement creating any Adverse Claim upon
the Subordinated Notes (as defined in the Receivables Sale Agreement).
(j) Contract Provisions. Except for customary adjustments in the
ordinary course of business, such Seller Party will not (and will not permit any
Originator to) 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 .
(k) Enforcement. Such Seller Party will not (and will not permit
any Originator to) permit any Confidential Contract with respect to any
Receivable to contain either (i) restrictions on the ability of the owner of
such Receivable to enforce the obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon or (ii) any provisions relating to specific procedures that
must be followed to enforce the related Receivable that could reasonably be
expected to adversely effect the value of the Receivable or the ability to
enforce any such obligation.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.1 DESIGNATION OF SERVICER.
(a) The servicing, administration and collection of the
Receivables shall be conducted by such Person (the "Servicer") so designated
from time to time in accordance with this Section 8.1. Arch is hereby designated
as, and hereby agrees to perform the duties and obligations of,
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the Servicer pursuant to the terms of this Agreement. The Agent may, upon the
occurrence of an Unmatured Amortization Event (other than one arising as a
result of a Voluntary Termination, unless another Unmatured Amortization Event
occurs), designate as Servicer any Person to succeed Arch or any successor
Servicer provided that the Rating Agency Condition is satisfied.
(b) Arch may delegate, and Arch hereby advises the Agent and Blue
Ridge that it has delegated, to each Originator, as sub-servicer of the
Servicer, certain of its duties and responsibilities as Servicer hereunder in
respect of the Receivables originated by such Originator. Without the prior
written consent of the Agent (which consent shall not be unreasonably withheld)
Arch shall not be permitted to delegate any of its duties or responsibilities as
Servicer to any Person other than (i) the Seller, (ii) any Originator, and (iii)
with respect to certain Defaulted Receivables, outside collection agencies in
accordance with its customary practices. Neither the Seller nor the Originators
shall be permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by Arch. If at any time the
Agent shall designate as Servicer any Person other than Arch, all duties and
responsibilities theretofore delegated by Arch to the Seller or any Originator
may, at the discretion of the Agent, be terminated forthwith on notice given by
the Agent to Arch and to the Seller and such Originator.
(c) Notwithstanding the foregoing subsection (b): (i) Arch shall
be and remain primarily liable to the Agent and Blue Ridge for the full and
prompt performance of all duties and responsibilities of the Servicer hereunder
and (ii) the Agent and Blue Ridge shall be entitled to deal exclusively with
Arch in matters relating to the discharge by the Servicer of its duties and
responsibilities hereunder. The Agent and Blue Ridge shall not be required to
give notice, demand or other communication to any Person other than Arch in
order for communication to the Servicer and its sub-servicer or other delegate
with respect thereto to be accomplished. Arch, at all times that it is the
Servicer, shall be responsible for providing any sub-servicer or other delegate
of the Servicer with any notice given to the Servicer under this Agreement.
SECTION 8.2 DUTIES OF SERVICER.
(a) The Servicer shall take or cause to be taken all such actions
as may be necessary or advisable to collect each Receivable from time to time,
all in accordance with applicable laws, rules and regulations, with reasonable
care and diligence, and in accordance with the Credit and Collection Policy.
(b) The Servicer will instruct all Obligors to pay all Collections
directly to a Lock-Box or Collection Account. The Servicer shall effect a
Collection Account Agreement substantially in the form of Exhibit VI with each
bank party to a Collection Account at any time. In the case of any remittances
received in any Lock-Box or Collection Account that shall have been identified,
to the satisfaction of the Servicer, to not constitute Collections or other
proceeds of the Receivables or the Related Security, the Servicer shall promptly
remit such items to the Person identified to it as being the owner of such
remittances. From and after the date the Agent delivers to any Collection Bank a
Collection Notice pursuant to Section 8.3, the Agent may request that the
Servicer, and the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new depositary
account specified by the Agent and, at all times thereafter, the Seller and the
Servicer shall not deposit or otherwise
25
credit, and shall not permit any other Person to deposit or otherwise credit to
such new depositary account any cash or payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance
with the procedures described herein and in Article II. The Servicer shall set
aside and hold in trust for the account of the Seller and Blue Ridge their
respective shares of the Collections in accordance with Article II. The Servicer
shall, upon the request of the Agent during the occurrence of an Unmatured
Amortization Event, segregate, in a manner acceptable to the Agent, all cash,
checks and other instruments received by it from time to time constituting
Collections from the general funds of the Servicer or the Seller prior to the
remittance thereof in accordance with Article II. If the Servicer shall be
required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for Blue Ridge on the
first Business Day following receipt by the Servicer of such Collections, duly
endorsed or with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of any Receivable or adjust the Outstanding Balance
of any Receivable as the Servicer determines to be appropriate to maximize
Collections thereof; provided, however, that such extension or adjustment shall
not alter the status of such Receivable as a Delinquent Receivable or Defaulted
Receivable or limit the rights of the Agent or Blue Ridge under this Agreement.
The Agent shall have the right to direct the Servicer to commence or settle any
legal action with respect to any Receivable (whether or not such Receivable is a
Defaulted or Delinquent Receivable) of an Obligor which is an Obligor under any
Defaulted or Delinquent Receivable; provided, however, that the Servicer shall
not be required to comply with such direction if the Seller determines, in its
reasonable business judgment, that it is preferable not to enforce or settle any
Delinquent or Defaulted Receivable, in which case such Defaulted or Delinquent
Receivable (and, at the option of the Agent, any other Receivable of such
Obligor) shall be treated as a Deemed Collection, and payment shall be made
thereon in a manner consistent with Section 1.4(a).
(e) The Servicer shall hold in trust for the Seller and the Agent
and Blue Ridge all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent during the occurrence of an Unmatured Amortization Event,
deliver or make available to the Agent all such Records (other than any Record
that contains confidentiality provisions (except for Records as to which the
related Obligor has consented to such delivery) that cannot be satisfied by the
execution and delivery of a confidentiality agreement), at a place selected by
the Agent. The Servicer shall, as soon as practicable following receipt thereof
turn over to the Seller any cash collections or other cash proceeds received
with respect to Indebtedness not constituting Receivables. The Servicer shall,
from time to time at the request of the Agent or Blue Ridge, furnish to Blue
Ridge (promptly after any such request) a calculation of the amounts set aside
for Blue Ridge pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed
by it to any Originator or the Seller shall, except as otherwise specified by
such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Agent, be applied as a
26
Collection of any Receivable of such Obligor (starting with the oldest such
Receivable) to the extent of any amounts then due and payable thereunder before
being applied to any other receivable or other obligation of such Obligor.
SECTION 8.3 COLLECTION NOTICES.
The Agent is authorized at any time to date and to deliver to the
Collection Banks the Collection Notices. The Seller hereby transfers to the
Agent for the benefit of Blue Ridge, effective when the Agent delivers such
notice, the exclusive ownership and control of each Lock-Box and the Collection
Accounts. In case any authorized signatory of the Seller whose signature appears
on a Collection Account Agreement shall cease to have such authority before the
delivery of such notice, such Collection Notice shall nevertheless be valid as
if such authority had remained in force. The Seller hereby authorizes the Agent,
and agrees that the Agent shall be entitled (a) at any time after delivery of
the Collection Notices, to endorse the Seller's name on checks and other
instruments representing Collections, (b) at any time after the occurrence of an
Amortization Event, to enforce the Receivables, the related Contracts and the
Related Security, and (c) at any time after the occurrence of an Amortization
Event, to take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Agent rather than the Seller.
SECTION 8.4 RESPONSIBILITIES OF THE SELLER.
Anything herein to the contrary notwithstanding, the exercise by the
Agent, on behalf of Blue Ridge, of the Agent's rights hereunder shall not
release the Servicer, any Originator or the Seller from any of their duties or
obligations with respect to any Receivables or under the related Contracts. The
Agent and Blue Ridge shall have no obligation or liability with respect to any
Receivables or related Contracts, nor shall any of them be obligated to perform
the obligations of the Seller or any Originator thereunder.
SECTION 8.5 MONTHLY REPORTS.
The Servicer shall prepare and forward to the Agent (a) on each Monthly
Reporting Date, a Monthly Report (which shall include, without limitation, a
reporting satisfactory to the Agent relating to the Confidential Contracts and
any other Contracts entered into or renewed after the Closing Date that do not
contain an Acceptable Assignment Clause) and an electronic file of the data
contained therein and (b) at such times as the Agent shall request, a listing by
Obligor of all Receivables together with an aging of such Receivables; provided,
however, that the Agent may request that the Servicer deliver a Monthly Report
more frequently than monthly but not more frequently than weekly.
SECTION 8.6 SERVICING FEE.
As compensation for the Servicer's servicing activities on their
behalf, the Servicer shall be paid the Servicing Fee in arrears on each
Settlement Date out of Collections.
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ARTICLE IX
AMORTIZATION EVENTS
SECTION 9.1 AMORTIZATION EVENTS.
The occurrence of any one or more of the following events shall
constitute an Amortization Event:
(a) Any of the Seller Parties shall fail (i) to make any payment
or deposit (other than in respect of the Invested Amount) required to be made by
it under the Transaction Documents and such failure shall continue for three (3)
consecutive Business Days, or (ii) to make any payment or deposit required to be
made by it under the Transaction Documents when due with respect to a payment in
respect of the Invested Amount.
(b) (i) Any representation or warranty made by any of the Seller
Parties in this Agreement or the Receivables Sale Agreement shall prove to have
been incorrect in any respect when made or deemed made, (ii) any information
contained in any Monthly Report shall prove to have been incorrect in any
respect when made, or (iii) any representation, warranty, certification or
statement (other than relating to projections or other forward-looking
information) made by any of the Seller Parties in any other Transaction Document
or in any other document delivered pursuant hereto or thereto (other than in a
Monthly Report) shall prove to have been incorrect in any material respect when
made or deemed made.
(c) Any of the Seller Parties shall fail to perform or observe any
covenant contained in Section 7.1(p), Section 7.2 or Section 8.5 when due.
(d) Any of the Seller Parties shall fail to perform or observe any
other covenant or agreement under any Transaction Documents and such failure
shall continue for ten (10) consecutive Business Days.
(e) Failure of the Seller to pay any Indebtedness (other than the
Aggregate Unpaids) when due or the default by the Seller in the performance of
any term, provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of the Seller
shall be declared to be due and payable or required to be prepaid (other than by
a regularly scheduled payment) prior to the date of maturity thereof.
(f) Failure of Arch or any of its Subsidiaries other than the
Seller to pay Indebtedness in excess of $5,000,000 in aggregate principal amount
(hereinafter, "Material Indebtedness") when due; or the default by Arch or any
of its Subsidiaries other than the Seller in the performance of any term,
provision or condition contained in any agreement under which any Material
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Material Indebtedness to cause, such
Material Indebtedness to become due prior to its stated maturity and, unless
such Material Indebtedness is earlier accelerated, such default is not cured
within 15 days after its occurrence; or any Material Indebtedness of Arch or
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any of its Subsidiaries other than the Seller shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled payment)
prior to the date of maturity thereof.
(g) An Event of Bankruptcy shall occur with respect to any Seller
Party or any of its Subsidiaries.
(h) As at the end of any Calculation Period:
(i) the three-month rolling average Delinquency Ratio
shall exceed 6.5%,
(ii) the three-month rolling average Default Ratio shall
exceed 2.2%, or
(iii) the three-month rolling average Dilution Ratio shall
exceed 4.9%.
(i) A Change of Control shall occur.
(j) (i) One or more final judgments of a court of competent
jurisdiction for the payment of money in an aggregate amount of $10,750 or more
shall be entered against the Seller or (ii) one or more final judgments of a
court of competent jurisdiction for the payment of money in an amount in excess
of $5,000,000, individually or in the aggregate, shall be entered against Arch
or any of its Subsidiaries (other than the Seller) on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for sixty (60)
consecutive days without a stay of execution.
(k) The "Termination Date" under and as defined in the Receivables
Sale Agreement shall occur under the Receivables Sale Agreement or any
Originator shall for any reason cease to transfer, or cease to have the legal
capacity to transfer, or otherwise be incapable of transferring Receivables to
the Seller under the Receivables Sale Agreement.
(l) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of the Seller, or any Originator shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of Blue Ridge
shall cease to have a valid and perfected first priority security interest in
the Receivables, its Collections, "Supporting Obligations" (as defined in
Article 9 of the UCC in effect in each relevant jurisdiction), the Seller'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 the Seller that secures 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, or any Person shall contest the
Agent's perfected first priority ownership interest in that portion of the
Related Security in which perfection cannot be accomplished under Article 9 of
the relevant UCC, or any Secured Party shall incur any loss resulting from the
Seller's failure to perfect Agent's ownership interest in that portion of the
Related Security in which perfection cannot be accomplished under Article 9 of
the relevant UCC.
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(m) On any Settlement Date, after giving effect to the turnover of
Collections by the Servicer on such date and the application thereof to the
Aggregate Unpaids in accordance with this Agreement, the Aggregate Invested
Amount shall exceed the Purchase Limit.
(n) [RESERVED].
(o) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Tax Code with regard to any of the Receivables
or the Related Security or the PBGC shall, file notice of a lien pursuant to
Section 4068 of ERISA with regard to any of the Receivables or the Related
Security, and any such lien shall not have been released within the earlier to
occur of (i) seven (7) days after the date of such filing and (ii) the day on
which the Agent becomes aware of such filing.
(p) Any Plan of any Seller Party or any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the
minimum funding standard required by applicable law, the terms of such
Plan, Section 412 of the Tax Code or Section 302 of ERISA for any plan
year or a waiver of such standard is sought or granted with respect to
such Plan under applicable law, the terms of such Plan or Section 412
of the Tax Code or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the terms of such Plan;
or
(iii) shall require Arch or any of its ERISA Affiliates to
provide security under applicable law, the terms of such Plan, Section
401 or 412 of the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to Arch or any of its ERISA
Affiliates under applicable law, the terms of such Plan, or Title IV
ERISA,
and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC or a Plan that would have a Material Adverse Effect.
(q) Any event shall occur which has, or could be reasonably
expected to have a Material Adverse Effect.
(r) The Net Pool Balance shall at any time be less than an amount
equal to the sum of (i) the Aggregate Invested Amount plus (ii) the Required
Reserve.
SECTION 9.2 REMEDIES.
Upon the occurrence and during the continuation of an Amortization
Event, the Agent may, or upon the direction of the Required Liquidity Banks
shall, take any of the following actions: (a) except upon a Voluntary
Termination (unless another Amortization Event occurs), replace the Person then
acting as Servicer, (b) declare the Facility Termination Date to have occurred,
whereupon Reinvestments shall immediately terminate and the Facility Termination
Date shall forthwith occur, all without demand, protest or further notice of any
kind, all of which
30
are hereby expressly waived by the Seller Parties; provided, however, that upon
the occurrence of an Event of Bankruptcy with respect to a Seller Party, the
Facility Termination Date shall automatically occur, without demand, protest or
any notice of any kind, all of which are hereby expressly waived by such Seller
Party, (c) deliver the Collection Notices to the Collection Banks, (d) exercise
all rights and remedies of a secured party upon default under the UCC and other
applicable laws, and (e) notify Obligors of the Agent's security interest in the
Receivables and other Purchased Assets. The aforementioned rights and remedies
shall be without limitation, and shall be in addition to all other rights and
remedies of the Agent and Blue Ridge otherwise available under any other
provision of this Agreement, by operation of law, at equity or otherwise, all of
which are hereby expressly preserved, including, without limitation, all rights
and remedies provided under the UCC, all of which rights shall be cumulative.
ARTICLE X
INDEMNIFICATION
SECTION 10.1 INDEMNITIES BY THE SELLER PARTIES.
Without limiting any other rights that the Agent or Blue Ridge may have
hereunder or under applicable law, (a) the Seller hereby agrees to indemnify
(and pay upon demand to) the Agent, Blue Ridge, each of the Liquidity Banks and
each of the respective assigns, officers, directors, agents and employees of the
foregoing (each, an "Indemnified Party") from and against any and all damages,
losses, claims, taxes, liabilities, costs, expenses and for all other amounts
payable, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Blue Ridge or
any of its Liquidity Banks of an interest in the Receivables, and (b) the
Servicer hereby agrees to indemnify (and pay upon demand to) each Indemnified
Party for Indemnified Amounts awarded against or incurred by any of them arising
out of the Servicer's activities as Servicer hereunder excluding, however, in
all of the foregoing instances under the preceding clauses (a) and (b):
(i) Indemnified Amounts to the extent a final judgment of
a court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;
(ii) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that are uncollectible on account of
the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
(iii) taxes imposed by the United States, the Indemnified
Party's jurisdiction of organization (or in the case of an individual,
primary resident) or any other jurisdiction in which such Indemnified
Party has established a taxable nexus other than in connection with the
transactions contemplated hereby, on or measured by the overall net
income of such Indemnified Party to the extent that the computation of
such taxes is consistent with the characterization for income tax
purposes of the acquisition by Blue Ridge of
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Receivables as a loan or loans by Blue Ridge to the Seller secured by
the Receivables, the Related Security, the Collection Accounts and the
Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of the Seller Parties or limit the recourse of Blue Ridge to the
Seller Parties for amounts otherwise specifically provided to be paid by the
Seller Parties under the terms of this Agreement. Without limiting the
generality of the foregoing indemnification, the Seller shall indemnify the
Agent and Blue Ridge for Indemnified Amounts (including, without limitation,
losses in respect of uncollectible receivables, regardless of whether
reimbursement therefor would constitute recourse to the Seller or the Servicer)
relating to or resulting from:
(i) any representation or warranty made by a Seller Party
or any Originator (or any officers of any such Person) under or in
connection with this Agreement, any other Transaction Document or any
other information or report delivered by any such Person pursuant
hereto or thereto, which shall have been false or incorrect when made
or deemed made;
(ii) the failure by the Seller, the Servicer or any
Originator to comply with any applicable law, rule or regulation with
respect to any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein with any
such applicable law, rule or regulation or any failure of the
Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(iii) any failure of the Seller, the Servicer or any
Originator to perform its duties, covenants or other obligations in
accordance with the provisions of this Agreement or any other
Transaction Document;
(iv) any products liability, personal injury or damage
suit, or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Contract
or any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting from the sale of the
merchandise or service related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any
time with other funds;
(vii) any investigation, litigation or proceeding related
to or arising from this Agreement or any other Transaction Document,
the transactions contemplated hereby, the use of the proceeds of any
Purchase, the Purchased Assets or any other investigation, litigation
or proceeding relating to the Seller, the Servicer or the Originator in
which any Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;
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(viii) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event of the type described in
Section 9.1(g);
(x) any failure of the Seller to acquire and maintain
legal and equitable title to, and ownership of any of the Purchased
Assets from the applicable Originator, free and clear of any Adverse
Claim (other than as created hereunder); or any failure of the Seller
to give reasonably equivalent value to any Originator under the
Receivables Sale Agreement in consideration of the transfer by such
Originator of any Receivable, or any attempt by any Person to void such
transfer under statutory provisions or common law or equitable action
(except as created by the Transaction Documents);
(xi) any failure to vest and maintain vested in the Agent
for the benefit of Blue Ridge, or to transfer to the Agent for the
benefit of the Secured Parties, a valid first priority perfected
security interests in the Purchased Assets, free and clear of any
Adverse Claim (except as created by the Transaction Documents);
(xii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Purchased Assets, and the proceeds thereof, whether at
the time of any Purchase or at any subsequent time;
(xiii) any action or omission by a Seller Party which
reduces or impairs the rights of the Agent or Blue Ridge with respect
to any Purchased Assets or the value of any Purchased Assets;
(xiv) any attempt by any Person to void any Purchase or the
Agent's security interest in the Purchased Assets under statutory
provisions or common law or equitable action; and
(xv) the failure of any Receivable included in the
calculation of the Net Pool Balance as an Eligible Receivable to be an
Eligible Receivable at the time so included.
SECTION 10.2 INCREASED COST AND REDUCED RETURN.
If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency (a "Regulatory Change"): (a)
that subjects any Funding Source to any charge or withholding on or with respect
to any Funding Agreement or a Funding Source's obligations under a Funding
Agreement, or on or with respect to the Receivables, or changes the basis of
taxation of payments to any Funding Source of any amounts payable under any
Funding Agreement (except for changes in the rate of tax on the overall net
33
income of a Funding Source or taxes excluded by Section 10.1) or (b) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (c) that imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its obligations
under a Funding Agreement, or to reduce the rate of return on a Funding Source's
capital as a consequence of its obligations under a Funding Agreement, or to
reduce the amount of any sum received or receivable by a Funding Source under a
Funding Agreement or to require any payment calculated by reference to the
amount of interests or loans held or interest received by it, then, promptly
upon demand by the Agent, the Seller shall pay to the Agent, for the benefit of
the relevant Funding Source, such amounts charged to such Funding Source or such
amounts to otherwise compensate such Funding Source for such increased cost or
such reduction; provided, however, that no Funding Source shall be entitled to
any compensation for any increased costs under this Section 10.2 unless the
Agent or such Funding Source delivers a reasonably detailed certificate to the
Seller setting forth the amounts and the basis for such increased costs.
SECTION 10.3 OTHER COSTS AND EXPENSES.
The Seller shall pay to the Agent and Blue Ridge promptly on demand all
reasonable costs and out-of-pocket expenses in connection with the preparation,
execution, delivery and administration of this Agreement, the transactions
contemplated hereby and the other documents to be delivered hereunder, including
without limitation, the cost of Blue Ridge's auditors auditing the books,
records and procedures of the Seller, reasonable fees and out-of-pocket expenses
of legal counsel for Blue Ridge and the Agent with respect thereto and with
respect to advising Blue Ridge and the Agent as to their respective rights and
remedies under this Agreement. The Seller shall pay to the Agent promptly on
demand any and all reasonable costs and expenses of the Agent and Blue Ridge, if
any, including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following an Amortization
Event. The Seller shall reimburse Blue Ridge promptly on demand for all other
costs and expenses incurred by Blue Ridge ("Other Costs"), including, without
limitation, the cost of auditing Blue Ridge's books by certified public
accountants, the cost of rating the Commercial Paper by independent financial
rating agencies, and the reasonable fees and out-of-pocket expenses of counsel
for Blue Ridge or any counsel for any shareholder of Blue Ridge with respect to
advising Blue Ridge or such shareholder as to matters relating to Blue Ridge's
operations.
SECTION 10.4 ALLOCATIONS.
Blue Ridge shall in its reasonable judgment allocate the liability for
Other Costs among the Seller and other Persons with whom Blue Ridge has entered
into agreements to purchase interests in or finance receivables and other
financial assets ("Other Customers"). If any Other Costs are attributable to the
Seller and not attributable to any Other Customer, the Seller shall be solely
liable for such Other Costs. However, if Other Costs are attributable to Other
Customers and not attributable to the Seller, such Other Customer shall be
solely liable for such Other
34
Costs. All allocations to be made pursuant to the foregoing provisions of this
Article X shall be made by Blue Ridge in its sole discretion and shall be
binding on the Seller and the Servicer.
ARTICLE XI
THE AGENT
SECTION 11.1 AUTHORIZATION AND ACTION.
Blue Ridge, on behalf of itself and its assigns, hereby designates and
appoints Wachovia to act as its agent under the Liquidity Agreement, this
Agreement and under each other Transaction Document, and authorizes the Agent to
take such actions as agent on its behalf and to exercise such powers as are
delegated to the Agent by the terms of the Liquidity Agreement, this Agreement
and the other Transaction Documents together with such powers as are reasonably
incidental thereto, including, without limitation, the power to perfect all
security interests granted under the Transaction Documents. The provisions of
Article ___ of the Liquidity Agreement are hereby incorporated by this reference
with the same force and effect as if fully set forth herein, and shall govern
the relationship between the Agent, on the one hand, and Blue Ridge, on the
other.
ARTICLE XII
ASSIGNMENTS AND PARTICIPATIONS
SECTION 12.1 ASSIGNMENTS AND PARTICIPATIONS BY BLUE RIDGE.
Each of the parties hereto, on behalf of its successors and assigns,
hereby agrees and consents to the complete or partial sale by Blue Ridge of all
or any portion of its rights under, interest in, title to and obligations under
this Agreement to the Liquidity Banks pursuant to the Liquidity Agreement,
regardless of whether such sale constitutes an assignment or the sale of a
participation in such rights and obligations.
SECTION 12.2 PROHIBITION ON ASSIGNMENTS BY THE SELLER PARTIES.
No Seller Party may assign any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each of Blue Ridge
and without satisfying the Rating Agency Condition.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 WAIVERS AND AMENDMENTS.
(a) No failure or delay on the part of the Agent or Blue Ridge in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein
35
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 13.1(b). Blue Ridge, the Seller and the Agent, may enter into written
modifications or waivers of any provisions of this Agreement, provided, however,
that no such modification or waiver shall:
(i) without the consent of Blue Ridge and each affected
Liquidity Bank, (A) extend the Liquidity Termination Date or the date
of any payment or deposit of Collections by the Seller or the Servicer,
(B) reduce the rate or extend the time of payment of Yield or any CP
Costs (or any component of Yield or CP Costs), (C) reduce any fee
payable to the Agent for the benefit of Blue Ridge, (D) change the
Invested Amount of any Receivable Interest, (E) amend, modify or waive
any provision of the definition of Required Liquidity Banks or this
Section 13.1(b), (F) consent to or permit the assignment or transfer by
the Seller of any of its rights and obligations under this Agreement,
(G) change the definition of "Eligible Receivable," "Loss Reserve,"
"Dilution Reserve," "Yield Reserve," "Servicing Reserve," "Servicing
Fee Rate," "Required Reserve" or "Required Reserve Factor Floor" or (H)
amend or modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (G) above
in a manner that would circumvent the intention of the restrictions set
forth in such clauses; or
(ii) without the written consent of the then Agent, amend,
modify or waive any provision of this Agreement if the effect thereof
is to affect the rights or duties of such Agent,
and any material amendment, waiver or other modification of this Agreement shall
require satisfaction of the Rating Agency Condition.
SECTION 13.2 NOTICES.
Except as provided in this Section 13.2, all communications and notices
provided for hereunder shall be in writing (including bank wire, telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other parties hereto at their respective addresses or telecopy numbers set forth
on the signature pages hereof or at such other address or telecopy number as
such Person may hereafter specify for the purpose of notice to each of the other
parties hereto. Each such notice or other communication shall be effective (a)
if given by telecopy, upon the receipt thereof, (b) if given by mail, three (3)
Business Days after the time such communication is deposited in the mail with
first class postage prepaid or (c) if given by any other means, when received at
the address specified in this Section 13.2. The Seller hereby authorizes the
Agent to effect Purchases and Interest Period and Yield Rate selections based on
telephonic notices made by any Person whom the Agent in good faith believes to
be acting on behalf of the Seller. The Seller agrees to deliver promptly to the
Agent a written confirmation of each telephonic notice signed by an authorized
officer of the Seller; provided, however, the absence of such confirmation shall
not affect the validity of such notice. If the written
36
confirmation differs from the action taken by the Agent, the records of the
Agent shall govern absent manifest error.
SECTION 13.3 PROTECTION OF AGENT'S SECURITY INTEREST.
(a) The Seller agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request, to
perfect, protect or more fully evidence the Agent's security interest in the
Purchased Assets, or to enable the Agent or Blue Ridge to exercise and enforce
their rights and remedies hereunder; provided, however, that unless and until an
Amortization Event or an Unmatured Amortization Event has occurred, no Seller
Party shall be required to take any actions to establish, maintain or perfect
the Seller's ownership interest in the Related Security other than the filing of
financing statements under the UCC of all appropriate jurisdictions. During the
occurrence and continuance of an Unmatured Amortization Event or an Amortization
Event, the Agent may, or the Agent may direct the Seller or the Servicer to,
notify the Obligors of Receivables, at the Seller's expense, of the ownership or
security interests of Blue Ridge under this Agreement. During the occurrence and
continuance of an Unmatured Amortization Event or an Amortization Event, the
Agent may direct the Seller or Servicer (and if the Seller or Servicer fails to
do so) Agent may direct that payments of all amounts due or that become due
under any or all Receivables be made directly to an account specified by the
Agent or its designee which may be an account of the Agent or its designee. The
Seller or the Servicer (as applicable) shall, at the Agent's request, withhold
the identities of the Agent and Blue Ridge in any such notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent or Blue Ridge may (but shall not be required to) upon
notice to such Seller Party perform, or cause performance of, such obligations,
and the Agent's or Blue Ridge's costs and expenses incurred in connection
therewith shall be payable by the Seller as provided in Section 10.3. The Seller
Parties irrevocably authorize the Agent at any time and from time to time in the
sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to
act on behalf of the Seller Parties (i) to execute on behalf of the Seller as
debtor and to file financing statements necessary or desirable in the Agent's
sole discretion to perfect and to maintain the perfection and priority of the
interest of Blue Ridge in the Receivables and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as the
Agent in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of the Agent's security interest in the
Purchased Assets, for the benefit of the Secured Parties. This appointment is
coupled with an interest and is irrevocable. From and after July 1, 2001: (A)
each of the Seller Parties hereby authorizes the Agent to file financing
statements and other filing or recording documents with respect to the
Receivables and Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the signature or other
authorization of the Seller Parties, in such form and in such offices as the
Agent reasonably determines appropriate to perfect or maintain the perfection of
the security interest of the Agent hereunder, (B) each of the Seller Parties
acknowledges and agrees that it is not authorized to, and will not, file
financing statements or other filing or recording documents with respect to the
Receivables or Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the express prior
written approval by the Agent, consenting to the
37
form and substance of such filing or recording document, and (C) each of the
Seller Parties approves, authorizes and ratifies any filings or recordings made
by or on behalf of the Agent in connection with the perfection of the security
interests in favor of the Seller or the Agent.
SECTION 13.4 CONFIDENTIALITY.
(a) Each of the Seller Parties shall maintain and shall cause each
of its employees and officers to maintain the confidentiality of this Agreement
and the other confidential or proprietary information with respect to the Agent
and Blue Ridge and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that the Seller Parties and their respective
officers and employees may disclose such information to such Seller Party's
directors, external accountants and attorneys and in accordance with any
applicable law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceeding (whether or not having the
force or effect of law).
(b) Anything herein to the contrary notwithstanding, the Seller
Parties hereby consent to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Liquidity Banks or Blue Ridge by each other,
(ii) by the Agent or Blue Ridge to any prospective or actual assignee or
participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Blue Ridge or any entity organized for the purpose of purchasing,
or making loans secured by, financial assets for which Wachovia acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided that each such
Person is informed of the confidential nature of such information. In addition,
Blue Ridge and the Agent may disclose any such nonpublic information in
accordance with any law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings (whether or not
having the force or effect of law).
(c) Blue Ridge and the Agent shall each maintain and shall cause
each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential or proprietary information with respect to
each Originator, the Obligors and their respective businesses obtained by it in
connection with the due diligence evaluations, structuring, negotiating and
execution of the Transaction Documents, and the consummation of the transactions
contemplated herein and any other activities of Blue Ridge or the Agent arising
from or related to the transactions contemplated herein provided, however, that
each of Blue Ridge and the Agent and its employees and officers shall be
permitted to disclose such confidential or proprietary information: (i) to the
other Purchasers, (ii) to any prospective or actual assignee or participant of
Blue Ridge, the Agent or the other Purchasers who execute a confidentiality
agreement for the benefit of any Originator and Seller on terms comparable to
those required of Blue Ridge and the Agent hereunder with respect to such
disclosed information, (iii) to any rating agency, provider of a surety,
guaranty or credit or liquidity enhancement to Blue Ridge, (iv) to any officers,
directors, employees, outside accountants and attorneys of any of the foregoing,
and (v) to the extent required pursuant to any applicable law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings with competent jurisdiction (whether or not having the
force or effect of law).
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SECTION 13.5 BANKRUPTCY PETITION.
The Seller, the Servicer, the Agent and each Liquidity Bank hereby
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all outstanding senior indebtedness of Blue Ridge, it
will not institute against, or join any other Person in instituting against,
Blue Ridge any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
SECTION 13.6 LIMITATION OF LIABILITY.
Except with respect to any claim arising out of the willful misconduct
or gross negligence of Blue Ridge, the Agent or any Liquidity Bank, no claim may
be made by a Seller Party or any other Person against Blue Ridge, the Agent or
any Liquidity Bank or their respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and the Seller Parties hereby waive, release, and agree not to xxx
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
SECTION 13.7 CHOICE OF LAW.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW AND EXCEPT
TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTEREST OF SELLER OR THE
SECURITY INTEREST OF THE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, IN ANY
OF THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
SECTION 13.8 CONSENT TO JURISDICTION.
EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO
THIS AGREEMENT, AND EACH SUCH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
39
PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER OR ANY
AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT
OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL
BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
SECTION 13.9 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
SECTION 13.10 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS.
(a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by the Seller
Parties pursuant to Article V, (ii) the indemnification and payment provisions
of Article X, and Section 13.4 and Section 13.5 shall be continuing and shall
survive any termination of this Agreement.
(c) Each of the Seller Parties, Blue Ridge and the Agent hereby
acknowledges and agrees that the Liquidity Banks are hereby made express third
party beneficiaries of this Agreement and each of the other Transaction
Documents.
SECTION 13.11 COUNTERPARTS; SEVERABILITY; SECTION REFERENCES.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. Delivery of an executed counterpart
of a signature page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of a signature page to this
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article,"
40
"Section," "Schedule" or "Exhibit" shall mean articles and sections of, and
schedules and exhibits to, this Agreement.
SECTION 13.12 CHARACTERIZATION.
(a) It is the intention of the parties hereto that each Purchase
hereunder shall constitute and be treated as an absolute and irrevocable sale,
which Purchase shall provide the Blue Ridge with the full benefits of ownership
of the applicable Receivable Interest. Except as specifically provided in this
Agreement, each sale of a Receivable Interest hereunder is made without recourse
to the Seller; provided, however, that (i) the Seller shall be liable to Blue
Ridge and the Agent for all representations, warranties, covenants and
indemnities made by the Seller pursuant to the terms of this Agreement, and (ii)
such sale does not constitute and is not intended to result in an assumption by
Blue Ridge or the Agent or any assignee thereof of any obligation of the Seller
or any Originator or any other person arising in connection with the
Receivables, the Related Security, or the related Contracts, or any other
obligations of the Seller or any Originator.
(b) In addition to any ownership interest which the Agent or Blue
Ridge may from time to time acquire pursuant hereto, the Seller hereby grants to
the Agent for the ratable benefit of Blue Ridge a valid security interest in all
of the Seller's right, title and interest, whether now owned or hereafter
acquired, in, to and under all Receivables now existing or hereafter arising,
the Collections, each Lock-Box, each Collection Account, all Related Security,
all other rights and payments relating to such Receivables, all proceeds of the
foregoing and all other assets of the Seller prior to all other liens on and
security interests therein to secure the prompt and complete payment of the
Aggregate Unpaids. The Agent, on behalf of Blue Ridge, shall have, in addition
to the rights and remedies that it may have under this Agreement, all other
rights and remedies provided to a secured creditor under the UCC and other
applicable law, which rights and remedies shall be cumulative.
[signature pages follow]
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers or attorneys-in-fact as
of the date hereof.
ARCH CHEMICALS RECEIVABLES CORP.
By: /s/ W. Xxxx Xxxx
---------------------------------------
Name: W. Xxxx Xxxx
-------------------------------------
Title: Vice President & Treasurer
------------------------------------
Address:
US Mail:
c/o Arch Chemicals, Inc.
000 Xxxxxxx 0
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Hand Delivery:
c/o Arch Chemicals, Inc.
000 Xxxxxxx 0
Xxxxxxx, XX 00000
Attention: Corporate Secretary
Phone: (000) 000-0000
Fax: (000) 000-0000
ARCH CHEMICALS, INC.
By: /s/ W. Xxxx Xxxx
---------------------------------------
Name: W. Xxxx Xxxx
-------------------------------------
Title: Treasurer
------------------------------------
Address:
US Mail:
000 Xxxxxxx 0
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Hand Delivery:
000 Xxxxxxx 0
Xxxxxxx, XX 00000
Attention: Corporate Secretary
Phone: (000) 000-0000
Fax: (000) 000-0000
[additional signatures to follow]
BLUE RIDGE ASSET FUNDING CORPORATION
By: Wachovia Bank, N.A., as Attorney-in-Fact
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
------------------------------------------
Title: Senior Vice President
-----------------------------------------
Address:
c/o Wachovia Bank, N.A., as Administrative Agent
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
WACHOVIA BANK, N.A., as a Liquidity Bank and
as Agent
By: /s/ W. Xxxxxx Xxxxxx
--------------------------------------------
Name: W. Xxxxxx Xxxxxx
------------------------------------------
Title: Director
-----------------------------------------
Address:
000 Xxxxxxxxx Xxxxxx, X.X., XX-000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
[end of signatures]
EXHIBIT I
DEFINITIONS
As used in the Agreement and the Exhibits and Schedules thereto, the
following terms shall have the meanings set forth in this Exhibit I (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined). If a capitalized term is used in the Agreement, or any Exhibit
or Schedule thereto, and is not otherwise defined therein or in this Exhibit I,
such term shall have the meaning assigned thereto in Exhibit I to the
Receivables Sale Agreement (hereinafter defined).
Acceptable Assignment Clause: A clause that provides that the seller under the
related contract shall have the right to assign that contract, but not to
delegate its duties thereunder, without the prior written consent of the
purchaser under that contract, to Arch Chemicals Receivables Corp., or to any
direct or any indirect wholly-owned affiliate of Arch Chemicals, Inc. and such
seller and its assigns shall have the right to assign any right to receive
payment under this contract, without the prior written consent of the purchaser
under that contract.
Adjusted Dilution Ratio: At any time, the rolling average of the Dilution Ratio
for the 12 Calculation Periods then most recently ended.
Adverse Claim: A lien, security interest, charge or encumbrance, or other right
or claim in, of or on any Person's assets or properties in favor of any other
Person.
Affiliate: With respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
such Person or any Subsidiary of such Person. A Person shall be deemed to
control another Person if the controlling Person owns 10% or more of any class
of voting securities of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
Agent: As defined in the preamble to this Agreement.
Agent's Account: Account #8735-098787 at Wachovia Bank, N.A., ABA #000000000.
Aggregate Invested Amount: On any date of determination, the aggregate Invested
Amount of all Receivable Interests outstanding on such date.
Aggregate Reduction: As defined in Section 1.3(b).
Aggregate Unpaids: At any time, an amount equal to the sum of (i) the Aggregate
Invested Amount, plus (ii) all Recourse Obligations (whether due or accrued) at
such time.
Agreement: This Receivables Purchase Agreement, as it may be amended or modified
and in effect from time to time.
Alternate Base Rate: For any day, the rate per annum equal to the higher as of
such day of (i) the Prime Rate, or (ii) one-half of one percent (0.50%) above
the Federal Funds Effective Rate. For
purposes of determining the Alternate Base Rate for any day, changes in the
Prime Rate or the Federal Funds Effective Rate shall be effective on the date of
each such change.
Amortization Date: The earliest to occur of (i) the day on which any of the
conditions precedent set forth in Section 6.2 are not satisfied, (ii) the
Business Day immediately prior to the occurrence of an Event of Bankruptcy with
respect to a Seller Party, (iii) the Business Day specified in a written notice
from the Agent following the occurrence of any other Amortization Event, and
(iv) the date which is ten (10) Business Days after the Agent's receipt of
written notice from the Seller that it wishes to terminate the facility
evidenced by this Agreement.
Amortization Event: As defined in Article IX.
Authorized Officer: With respect to any Person, its president, chief executive
officer, any vice president, corporate controller, treasurer or chief financial
officer.
Blue Ridge: As defined in the preamble to this Agreement.
Blue Ridge's Portion: On any date of determination, the sum of the percentages
represented by the Receivable Interests.
Broken Funding Costs: For any Receivable Interest which: (i) has its Invested
Amount reduced without compliance by the Seller with the notice requirements
hereunder or (ii) does not become subject to an Aggregate Reduction following
the delivery of any Reduction Notice or (iii) is assigned by Blue Ridge to the
Liquidity Banks under the Liquidity Agreement or terminated prior to the date on
which it was originally scheduled to end; an amount equal to the excess, if any,
of (A) the CP Costs or Yield (as applicable) that would have accrued during the
remainder of the Interest Periods or the tranche periods for Commercial Paper
determined by the Agent to relate to such Receivable Interest (as applicable)
subsequent to the date of such reduction, assignment or termination (or in
respect of clause (ii) above, the date such Aggregate Reduction was designated
to occur pursuant to the Reduction Notice) of the Invested Amount of such
Receivable Interest if such reduction, assignment or termination had not
occurred or such Reduction Notice had not been delivered, over (B) the sum of
(1) to the extent all or a portion of such Invested Amount is allocated to
another Receivable Interest, the amount of CP Costs or Yield actually accrued
during the remainder of such period on such Invested Amount for the new
Receivable Interest, and (2) to the extent such Invested Amount is not allocated
to another Receivable Interest, the income, if any, actually received during the
remainder of such period by the holder of such Receivable Interest from
investing the portion of such Invested Amount not so allocated.
Business Day: Any day on which banks are not authorized or required to close in
New York, New York or Atlanta, Georgia, and The Depository Trust Company of New
York is open for business, and, if the applicable Business Day relates to any
computation or payment to be made with respect to the LIBO Rate, any day on
which dealings in dollar deposits are carried on in the London interbank market.
Calculation Period: A calendar month.
2
Change of Control: (i) the acquisition by any Person, or two or more Persons
acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 51% or more of the outstanding shares of voting stock entitled to elect
a majority of the board of directors of Arch, or (ii) Arch ceases to own 100% of
the outstanding shares of voting stock of the Seller.
Closing Date: March 19, 2002.
Collection Account: Each concentration account, depositary account, lock-box
account or similar account in which any Collections are collected or deposited
and which is listed on Exhibit IV.
Collection Account Agreement: An agreement substantially in the form of Exhibit
VI among an Originator, Servicer, the Seller, the Agent and a Collection Bank.
Collection Bank: At any time, any of the banks holding one or more Collection
Accounts.
Collection Notice: A notice, in substantially the form of Annex A to Exhibit VI,
from the Agent to a Collection Bank.
Collections: With respect to any Receivable, all cash collections and other cash
proceeds in respect of such Receivable, including, without limitation, all
Finance Charges or other related amounts accruing in respect thereof and all
cash proceeds of Related Security with respect to such Receivable.
Commercial Paper: Promissory notes of Blue Ridge issued by Blue Ridge in the
commercial paper market.
Confidential Contract Limit: On any day, an amount equal to the product of the
Confidential Contract Percentage and the aggregate Outstanding Balance of all
Eligible Receivables on such day.
Confidential Contract Percentage: 11.5%.
Confidential Contracts: Those certain contracts described in the side letter,
dated as of the Closing Date among the Servicer, Blue Ridge and the Agent, as
such side letter may be amended, modified, restated or replaced from time to
time.
Contingent Obligation: Of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
Contract: With respect to any Receivable, any and all instruments, agreements,
invoices or other writings pursuant to which such Receivable arises or which
evidences such Receivable.
3
CP Costs: For each day, the sum of (i) discount or interest accrued on Pooled
Commercial Paper on such day, plus (ii) any and all accrued commissions in
respect of placement agents and Commercial Paper dealers, and issuing and paying
agent fees incurred, in respect of such Pooled Commercial Paper for such day,
plus (iii) other costs associated with funding small or odd-lot amounts with
respect to all receivable purchase or financing facilities which are funded by
Pooled Commercial Paper for such day, minus (iv) any accrual of income net of
expenses received on such day from investment of collections received under all
receivable purchase or financing facilities funded substantially with Pooled
Commercial Paper, minus (v) any payment received on such day net of expenses in
respect of Broken Funding Costs related to the prepayment of any investment of
Blue Ridge pursuant to the terms of any receivable purchase or financing
facilities funded substantially with Pooled Commercial Paper. In addition to the
foregoing costs, if the Seller shall request any Purchase during any period of
time determined by the Agent in its sole discretion to result in incrementally
higher CP Costs applicable to such Purchase, the principal associated with any
such Purchase shall, during such period, be deemed to be funded by Blue Ridge in
a special pool (which may include capital associated with other receivable
purchase or financing facilities) for purposes of determining such additional CP
Costs applicable only to such special pool and charged each day during such
period against such principal.
Credit Agreement: That certain Five Year Credit Agreement, dated as of January
27, 1999, among the Servicer, Xxxx Corporation, Bank of America National Trust
and Savings Association, as syndication agent, Wachovia Bank, N.A., as
documentation agent, the lenders party thereto, and the Chase Manhattan Bank, as
Administrative Agent, as amended to date.
Credit and Collection Policy: The Seller's credit and collection policies and
practices relating to Contracts and Receivables existing on the date hereof and
summarized in Exhibit VII hereto, as modified from time to time in accordance
with this Agreement.
Cut-Off Date: The last day of a Calculation Period.
Days Sales Outstanding: As of any day, an amount equal to the product of (i) 91,
multiplied by (A) the amount obtained by dividing (1) the aggregate outstanding
balance of Receivables as of the most recent Cut-Off Date, by (2) the aggregate
amount of Receivables created during the three (3) Calculation Periods including
and immediately preceding such Cut-Off Date.
Deemed Collections: Collections deemed received by the Seller under Section
1.4(a).
Default Horizon Ratio: As of any Cut-Off Date, the ratio (expressed as a
decimal) computed by dividing (i) the aggregate sales generated by an Originator
during the six (6) Calculation Periods ending on such Cut-Off Date, by (ii) the
Net Pool Balance as of such Cut-off Date.
Default Rate: A rate per annum equal to the sum of (i) the Alternate Base Rate
plus (ii) 2.00%, changing when and as the Alternate Base Rate changes.
Default Ratio: As of any Cut-Off Date, the ratio (expressed as a percentage)
computed by dividing (i) the total amount of Receivables which became Defaulted
Receivables during the Calculation Period that includes such Cut-Off Date, by
(ii) the aggregate sales generated by an
4
Originator during the Calculation Period occurring six (6) months prior to the
Calculation Period ending on such Cut-Off Date.
Defaulted Receivable: A Receivable: (i) as to which the Obligor thereof has
suffered an Event of Bankruptcy; (ii) which, consistent with the Credit and
Collection Policy, would be written off the Seller's books as uncollectible; or
(iii) as to which any payment, or part thereof, remains unpaid for 121 days or
more from the original due date for such payment.
Delinquency Ratio: At any time, a percentage equal to (i) the aggregate
Outstanding Balance of all Receivables that were Delinquent Receivables at such
time divided by (ii) the aggregate Outstanding Balance of all Receivables at
such time.
Delinquent Receivable: A Receivable as to which any payment, or part thereof,
remains unpaid for 91-120 days from the original due date for such payment.
Dilution: The amount of any reduction or cancellation of the Outstanding Balance
of a Receivable as described in Section 1.4(a).
Dilution Horizon Ratio: As of any Cut-off Date, a ratio (expressed as a
decimal), computed by dividing (i) the aggregate sales generated by an
Originator during the two previous Calculation Periods ending on such Cut-Off
Date, by (ii) the Net Pool Balance as of such Cut-Off Date.
Dilution Ratio: As of any Cut-Off Date, a ratio (expressed as a percentage),
computed by dividing (i) the total amount of decreases in Outstanding Balances
due to Dilutions during the two previous Calculation Periods ending on such
Cut-Off Date, by (ii) the aggregate sales generated by an Originator during the
second preceding Calculation Period ending on such Cut-Off Date.
Dilution Reserve: For any Calculation Period, the product (expressed as a
percentage) of:
(i) the sum of (A) two times the Adjusted Dilution Ratio as of
the immediately preceding Cut-Off Date, plus (B) the Dilution
Volatility Component as of the immediately preceding Cut-Off Date,
times
(ii) the Dilution Horizon Ratio as of the immediately
preceding Cut-Off Date.
Dilution Volatility Component: The product (expressed as a percentage) of (i)
the difference between (A) the highest three (3)-month rolling average Dilution
Ratio over the past 12 Calculation Periods and (B) the Adjusted Dilution Ratio,
and (ii) a fraction, the numerator of which is equal to the amount calculated in
(i)(A) of this definition and the denominator of which is equal to the amount
calculated in (i)(B) of this definition.
Downgraded Liquidity Bank: A Liquidity Bank which has been the subject of a
Downgrading Event.
Downgrading Event: With respect to any Person means the lowering of the rating
with regard to the short-term securities of such Person to below (i) A-1 by S&P,
or (ii) P-1 by Moody's.
5
Eligible Assignee: A commercial bank having a combined capital and surplus of at
least $250,000,000 with a rating of its (or its parent holding company's)
short-term securities equal to or higher than (i) A-1 by S&P and (ii) P-1 by
Moody's.
Eligible Receivable: At any time, a Receivable:
(i) the Obligor of which (A) if a natural person, is a
resident of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any
political subdivision thereof and has its chief executive office in the
United States; (B) is not an Affiliate of any of the parties hereto and
(C) is not a government or a governmental subdivision or agency,
(ii) that arises under a Contract that (A) is an Existing
Restricted Contract, (b) contains an Acceptable Assignment Clause, or
(c) arises under a Restricted Contract for which consent to the
assignment has been obtained,
(iii) which is not a Defaulted Receivable or owing from an
Obligor as to which more than 50% of the aggregate Outstanding Balance
of all Receivables owing from such Obligor are Defaulted Receivables,
(iv) which was not a Delinquent Receivable on the date on
which it was acquired by the Seller from the applicable Originator,
(v) which by its terms is due and payable within 60 days of
the original billing date therefor and has not had its payment terms
extended more than once,
(vi) which is an "account" within the meaning of Section 9-106
and Section 9-105, respectively, of the UCC of all applicable
jurisdictions,
(vii) which is denominated and payable only in United States
dollars in the United States,
(viii) which arises under a Contract which, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor enforceable against
such Obligor in accordance with its terms subject to no offset,
counterclaim or other defense,
(ix) which arises under a Contract which (A) does not require
the Obligor under such Contract to consent to the transfer, sale,
pledge or assignment of the applicable Originator's (or its assignees'
under such Contract) rights to payment under such Contract, and (B)
does not contain a confidentiality provision that purports to restrict
the ability of Blue Ridge to exercise its rights under this Agreement,
including, without limitation, its right to review the Contract;
provided, however, this subclause (B) shall not apply to Existing
Confidential Contracts; provided, further, that this subclause (B)
shall not apply to a Contract containing such provisions that is
executed after the Closing Date if (1) the Seller has disclosed in
writing the name of the related Obligor to the Agent and (2) the Agent
has agreed in writing that the Receivables arising under such Contract
may be treated as Eligible Receivables,
6
(x) which arises under a Contract that contains an obligation
to pay a specified sum of money, contingent only upon the sale of goods
or the provision of services by the applicable Originator,
(xi) which, together with the Contract related thereto, does
not contravene any law, rule or regulation applicable thereto
(including, without limitation, any law, rule and regulation relating
to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and
with respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation except any such
contravention or violation which does not have an adverse effect on the
Receivables,
(xii) which satisfies all applicable requirements of the
Credit and Collection Policy,
(xiii) which was generated in the ordinary course of the
applicable Originator's business,
(xiv) which arises from the sale of goods, or the provision of
services, to the related Obligor by the applicable Originator, and
except for incidental amounts, relating to, for example the delivery or
shipment of the related goods to the Obligor, not from the sale of
goods or provision of services by any other Person (in whole or in
part),
(xv) as to which the Agent has not notified the Seller that
the Agent has reasonably determined that such Receivable or class of
Receivables is not acceptable as an Eligible Receivable, including,
without limitation, because such Receivable arises under a Contract
that is not reasonably acceptable to the Agent,
(xvi) which is not subject to any current dispute, right of
rescission, set-off, counterclaim or any other defense (including
defenses arising out of violations of usury laws) of the applicable
Obligor against the applicable Originator or any other Adverse Claim,
and the Obligor thereon holds no right as against such Originator to
cause such Originator to repurchase the goods or merchandise the sale
of which shall have given rise to such Receivable (except with respect
to sale discounts effected pursuant to the Contract, or defective goods
returned in accordance with the terms of the Contract); provided,
however, that if such dispute, offset, counterclaim or defense affects
only a portion of the Outstanding Balance of such Receivable, then such
Receivable may be deemed an Eligible Receivable to the extent of the
portion of such Outstanding Balance which is not so affected, and
provided, further, that Receivables of any Obligor which has any
accounts payable by the applicable Originator or by a wholly-owned
Subsidiary of such Originator (thus giving rise to a potential offset
against such Receivables) may be treated as Eligible Receivables to the
extent that the Obligor of such Receivables has agreed pursuant to a
written agreement in form and substance satisfactory to the Agent, that
such Receivables shall not be subject to such offset,
(xvii) as to which the applicable Originator has satisfied and
fully performed all obligations on its part with respect to such
Receivable required to be fulfilled by it, and
7
no further action is required to be performed by any Person with
respect thereto other than payment thereon by the applicable Obligor,
(xviii) as to which each of the representations and warranties
contained in Section 5.1(g), Section 5.1(i), Section 5.1(j), Section
5.1(r), Section 5.1(s), Section 5.1(t) and Section 5.1(u) is true and
correct,
(xix) all right, title and interest to and in which has been
validly transferred by the applicable Originator directly to the Seller
under and in accordance with the Receivables Sale Agreement, and the
Seller has good and marketable title thereto free and clear of any
Adverse Claim, and
(xx) as to which, if originated under a Confidential Contract,
the Agent has not notified the Seller in writing that the Agent has
determined (in its sole discretion) that such Receivable or class of
Receivables is not acceptable as an Eligible Receivable.
ERISA: The Employee Retirement Income Security Act of 1974, as amended from time
to time, and any rule or regulation issued thereunder.
ERISA Affiliate: Any trade or business (whether or not incorporated) under
common control with Arch within the meaning of Section 414(b) or (c) of the Tax
Code (and Sections 414(m) and (o) of the Tax Code for purposes of provisions
relating to Section 412 of the Tax Code).
Event of Bankruptcy: Shall be deemed to have occurred with respect to a Person
if either:
(i) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up,
or composition or readjustment of debts of such Person, the appointment
of a trustee, receiver, custodian, liquidator, assignee, sequestrator
or the like for such Person or all or substantially all of its assets,
or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
(ii) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee (other than a trustee under a
deed of trust, indenture or similar instrument), custodian,
sequestrator (or other similar official) for, such Person or for any
substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall be adjudicated insolvent, or
admit in writing its inability to pay its debts generally as they
become due, or, if a corporation or similar entity, its board of
directors shall vote to implement any of the foregoing.
8
Existing Confidential Contracts: Those Confidential Contracts of the four (4)
previously identified Obligors existing on the Closing Date.
Existing Restricted Contract: Any Restricted Contract existing on the Closing
Date or entered into within twenty (20) days after the Closing Date.
Facility Account: The Seller's account no. 1864002417 at Wachovia.
Facility Termination Date: The earlier of (i) the Liquidity Termination Date and
(ii) the Amortization Date.
Federal Bankruptcy Code: Title 11 of the United States Code entitled
"Bankruptcy," as amended and any successor statute thereto.
Federal Funds Effective Rate: For any period, a fluctuating interest rate per
annum for each day during such period equal to (i) 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 preceding Business Day) by the
Federal Reserve Bank of New York in the Composite Closing Quotations for U.S.
Government Securities; or (ii) if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 11:30
a.m. (New York time) for such day on such transactions received by the Agent
from three federal funds brokers of recognized standing selected by it.
Fee Letter: That certain letter agreement dated as of March 19, 2002 among the
Seller, Arch and the Agent, as it may be amended, restated or otherwise modified
and in effect from time to time.
Final Payout Date: The date on which all Aggregate Unpaids have been paid in
full and the Purchase Limit has been reduced to zero.
Finance Charges: With respect to a Contract, any finance, interest, late payment
charges or similar charges owing by an Obligor pursuant to such Contract.
Funding Agreement: (i) this Agreement, (ii) the Liquidity Agreement and (iii)
any other agreement or instrument executed by any Funding Source with or for the
benefit of Blue Ridge.
Funding Source: (i) any Liquidity Bank or (ii) any insurance company, bank or
other funding entity providing liquidity, credit enhancement or back-up purchase
support or facilities to Blue Ridge.
GAAP: Generally accepted accounting principles in effect in the United States of
America as in effect from time to time.
Incremental Purchase: A purchase of one or more Receivable Interests which
increases the total outstanding Aggregate Invested Amount hereunder.
Indebtedness: Of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of property or
services (other than accounts
9
payable arising in the ordinary course of such Person's business payable on
terms customary in the trade), (iii) obligations, whether or not assumed,
secured by liens or payable out of the proceeds or production from property now
or hereafter owned or acquired by such Person, (iv) obligations which are
evidenced by notes, acceptances, or other instruments, (v) capitalized lease
obligations, (vi) net liabilities under interest rate swap, exchange or cap
agreements, (vii) Contingent Obligations and (viii) liabilities in respect of
unfunded vested benefits under plans covered by Title IV of ERISA.
Indemnified Amounts: As defined in Section 10.1(a).
Indemnified Party: As defined in Section 10.1(a).
Independent Director: A member of the Board of Directors of the Seller who is
not at such time, and has not been at any time during the preceding five (5)
years: (i) a director, officer, employee or affiliate of any Originator or any
of their respective Subsidiaries or Affiliates (other than the Seller), or (ii)
the beneficial owner (at the time of such individual's appointment as an
Independent Director or at any time thereafter while serving as an Independent
Director) of any of the outstanding common shares of the Seller, any Originator,
or any of their respective Subsidiaries or Affiliates, having general voting
rights.
Interest Period: With respect to any Receivable Interest funded through a
Liquidity Funding:
(i) if Yield for such Receivable Interest is calculated on the
basis of the LIBO Rate, a period of one, two, three or six months, or
such other period as may be mutually agreeable to the Agent and the
Seller, commencing on a Business Day selected by the Seller or the
Agent pursuant to this Agreement. Such Interest Period shall end on the
day in the applicable succeeding calendar month which corresponds
numerically to the beginning day of such Interest Period, provided,
however, that if there is no such numerically corresponding day in such
succeeding month, such Interest Period shall end on the last Business
Day of such succeeding month; or
(ii) if Yield for such Receivable Interest is calculated on
the basis of the Alternate Base Rate, a period commencing on a Business
Day selected by the Seller and agreed to by the Agent, provided that no
such period shall exceed one month.
If any Interest Period would end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that in the case of Interest Periods corresponding to the LIBO Rate, if
such next succeeding Business Day falls in a new month, such Interest Period
shall end on the immediately preceding Business Day. In the case of any Interest
Period which commences before the Facility Termination Date and would otherwise
end on a date occurring after the Facility Termination Date, such Interest
Period shall end on the Facility Termination Date. The duration of each Interest
Period which commences after the Facility Termination Date shall be of such
duration as selected by the Agent.
Invested Amount: Of any Receivable Interest means, at any time, (i) the Purchase
Price of such Receivable Interest, minus (ii) the sum of the aggregate amount of
Collections and other payments received by the Agent which in each case are
applied to reduce such Invested Amount in accordance with the terms and
conditions of this Agreement; provided that such Invested
10
Amount shall be restored (in accordance with Section 2.5) in the amount of any
Collections or other payments so received and applied if at any time the
distribution of such Collections or payments are rescinded, returned or refunded
for any reason.
LIBO Rate: For any Interest Period, the rate per annum determined on the basis
of the offered rate for deposits in U.S. dollars of amounts equal or comparable
to the Invested Amount offered for a term comparable to such Interest Period,
which rates appear on a Bloomberg L.P. terminal, displayed under the address
"US0001M "Index" Q "Go"" (or any successor address) or if such rate is
unavailable, the rate appearing on Telerate page 3750 (or any successor page)
effective as of 11:00 A.M., London time, two Business Days prior to the first
day of such Interest Period, provided that if no such offered rates appear on
such pages, the LIBO Rate for such Interest Period will be the arithmetic
average (rounded upwards, if necessary, to the next higher 1/100th of 1%) of
rates quoted by not less than two major banks in New York, New York, selected by
the Agent, at approximately 10:00 a.m.(New York time), two Business Days prior
to the first day of such Interest Period, for deposits in U.S. dollars offered
by leading European banks for a period comparable to such Interest Period in an
amount comparable to the Invested Amount, divided by (i) one minus the maximum
aggregate reserve requirement (including all basic, supplemental, marginal or
other reserves) which is imposed against the Agent in respect of Eurocurrency
liabilities, as defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time (expressed as a decimal),
applicable to such Interest Period plus (ii) the Eurodollar Spread as defined in
the Credit Agreement.
Liquidity Agreement: That certain Liquidity Asset Purchase Agreement dated as of
March 19, 2002, by and among Blue Ridge, the Agent and the banks from time to
time party thereto, as the same may be amended, restated and/or otherwise
modified from time to time in accordance with the terms thereof.
Liquidity Bank: Each bank from time to time party to the Liquidity Agreement
(other than the Agent acting in its capacity as the Agent thereunder).
Liquidity Commitment: As to each Liquidity Bank, its commitment under the
Liquidity Agreement. The Liquidity Commitments, in the aggregate, shall equal
102% of the Purchase Limit hereunder.
Liquidity Funding: A purchase by any Liquidity Bank pursuant to its Liquidity
Commitment of all or any portion of, or any undivided interest in, a Receivable
Interest.
Liquidity Termination Date: The earlier to occur of the following:
(i) the date on which the Liquidity Banks' Liquidity
Commitments expire, cease to be available to Blue Ridge or otherwise
cease to be in full force and effect; or
(ii) the date on which a Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing for not less
than 30 days, and either (A) the Downgraded Liquidity Bank shall not
have been replaced by an Eligible Assignee pursuant to the Liquidity
Agreement, or (B) the Liquidity Commitment of such Downgraded Liquidity
Bank shall not have been funded or collateralized in such a manner that
will avoid a reduction in or withdrawal of the credit rating applied to
the
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Commercial Paper to which such Liquidity Agreement applies by any of
the rating agencies then rating such Commercial Paper.
Lock-Box: Each locked postal box with respect to which a bank who has executed a
Collection Account Agreement has been granted exclusive access for the purpose
of retrieving and processing payments made on the Receivables and which is
listed on Exhibit IV.
Loss Reserve: For any Calculation Period, the product (expressed as a
percentage) of (i) 2.0, times (ii) the highest three-month rolling average
Default Ratio during the 12 Calculation Periods ending on the immediately
preceding Cut-Off Date, times (iii) the Default Horizon Ratio as of the
immediately preceding Cut-Off Date.
Material Adverse Effect: A material adverse effect on (i) the financial
condition or operations of Arch and its Subsidiaries taken as a whole, (ii) the
ability of any Seller Party to perform its obligations under this Agreement,
(iii) the legality, validity or enforceability of this Agreement or any other
Transaction Document, (iv) the Agent's security interest, for the benefit of the
Secured Parties, in the Receivables generally or in any significant portion of
the Receivables, the Related Security or the Collections with respect thereto,
or (v) the collectibility of the Receivables generally or of any material
portion of the Receivables.
Material Indebtedness: As defined in Section 9.1(f)
Monthly Report: A report, in substantially the form of Exhibit VIII hereto
(appropriately completed), furnished by the Servicer to the Agent pursuant to
Section 8.5.
Monthly Reporting Date: The 15th day of each month after the date of this
Agreement (or if any such day is not a Business Day, the next succeeding
Business Day thereafter) or such other days of any month as Agent may request in
connection with Section 8.5 hereof.
Moody's: Xxxxx'x Investors Service, Inc.
Net Pool Balance: At any time, the aggregate Outstanding Balance of all Eligible
Receivables at such time reduced by the aggregate amount by which the
Outstanding Balance of all Eligible Receivables (i) of each Obligor and its
Affiliates exceeds the Obligor Concentration Limit for such Obligor and (ii)
that arise under Confidential Contracts exceed the Confidential Contract Limit.
Obligor: A Person obligated to make payments pursuant to a Contract.
Obligor Concentration Limit: At any time, in relation to the aggregate
Outstanding Balance of Receivables owed by any single Obligor and its Affiliates
(if any), the applicable concentration limit shall be determined as follows for
Obligors who have short term unsecured debt ratings currently assigned to them
by S&P and Moody's (or in the absence thereof, the equivalent long term
unsecured senior debt ratings), the applicable concentration limit shall be
determined according to the following table:
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Allowable % of Eligible
S&P Rating Xxxxx'x Rating Receivables
---------- -------------- -----------
A-1+ P-1 10%
A-1 P-1 8%
A-2 P-2 6%
A-3 P-3 3.5%
Below A-3 or Not Rated by either Below P-3 or Not Rated by
S&P or Moody's either S&P or Moody's 3.5%
; provided, however, that (i) if any Obligor has a split rating, the applicable
rating will be the lower of the two, (ii) if any Obligor is not rated by either
S&P or Moody's, the applicable Obligor Concentration Limit shall be the one set
forth in the last line of the table above, and (iii) subject to satisfaction of
the Rating Agency Condition and/or an increase in the percentage set forth in
clause (i)(A) of the definition of "Required Reserve," upon the Seller's request
from time to time, the Agent may agree to a higher percentage of Eligible
Receivables for a particular Obligor and its Affiliates (each such higher
percentage, a "Special Concentration Limit"), it being understood that any
Special Concentration Limit may be cancelled by the Agent upon not less than
five (5) Business Days' written notice to the Seller Parties.
Originators: Each Originator, in its capacity as a seller under the Receivables
Sale Agreement.
Other Costs: As defined in Section 10.3.
Other Customers: As defined in Section 10.4.
Outstanding Balance: Of any Receivable at any time means the then outstanding
principal balance thereof.
Participant: As defined in Section 12.2.
PBGC: The Pension Benefit Guaranty Corporation, or any successor thereto.
Pension Plan: A pension plan (as defined in Section 3(2) of ERISA) subject to
Title IV of ERISA which Arch sponsors or maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five plan years.
Person: 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: An employee benefit plan (as defined in Section 3(3) of ERISA) which Arch
or any of its ERISA Affiliates sponsors or maintains or to which Arch or any of
its ERISA Affiliates makes, is making, or is obligated to make contributions and
includes any Pension Plan, other than a Plan maintained outside the United
States primarily for the benefit of Persons who are not U.S. residents.
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Pooled Commercial Paper: Commercial Paper notes of Blue Ridge subject to any
particular pooling arrangement by Blue Ridge, but excluding Commercial Paper
issued by Blue Ridge for a tenor and in an amount specifically requested by any
Person in connection with any agreement effected by Blue Ridge.
Prime Rate: A rate per annum equal to the prime rate of interest announced from
time to time by Wachovia (which is not necessarily the lowest rate charged to
any customer), changing when and as said prime rate changes.
Proposed Reduction Date: As defined in Section 1.3(a).
Purchase: An Incremental Purchase or a Reinvestment.
Purchase Date: Each Business Day on which a Purchase is made hereunder.
Purchase Limit: $80,000,000.
Purchase Notice: As defined in Section 1.2.
Purchase Price: With respect to any Incremental Purchase of a Receivable
Interest, the amount paid to the Seller for such Receivable Interest which shall
not exceed the least of (i) the amount requested by the Seller in the applicable
Purchase Notice, (ii) the unused portion of the Purchase Limit on the applicable
purchase date and (iii) the excess, if any, of the Net Pool Balance (less the
Required Reserve) on the applicable purchase date over the aggregate outstanding
amount of Aggregate Invested Amount determined as of the date of the most recent
Monthly Report, taking into account such proposed Incremental Purchase.
Purchased Assets: All of the Seller's right, title and interest, whether now
owned and existing or hereafter arising in and to all of the Receivables, the
Related Security, the Collections and all proceeds of the foregoing.
Rating Agency Condition: That Blue Ridge has received written notice from S&P
and Moody's that an amendment, a change or a waiver will not result in a
withdrawal or downgrade of the then current ratings on Blue Ridge's Commercial
Paper.
Receivable: All indebtedness and other obligations owed to the Seller or any
Originator (at the time it arises, and before giving effect to any transfer or
conveyance under the Receivables Sale Agreement) or in which the Seller or any
Originator has a security interest or other interest, including, without
limitation, any indebtedness, obligation or interest constituting an account,
chattel paper, instrument or general intangible, arising in connection with the
sale of goods or the rendering of services by any Originator and further
includes, without limitation, the obligation to pay any Finance Charges with
respect thereto. Indebtedness and other rights and obligations arising from any
one transaction, including, without limitation, indebtedness and other rights
and obligations represented by an individual invoice, shall constitute a
Receivable separate from a Receivable consisting of the indebtedness and other
rights and obligations arising from any other transaction; provided further,
that any indebtedness, rights or obligations referred to in the immediately
preceding sentence shall be a Receivable regardless of whether the account
debtor or the Seller treats such indebtedness, rights or obligations as a
separate payment obligation; it
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being understood that any Receivable for which the Seller has received a
Purchase Price Credit pursuant to Section 1.4(b) of the Sale Agreement in an
amount equal to the full amount of the Outstanding Balance thereof shall not
constitute Receivables hereunder.
Receivable Interest: At any time, an undivided percentage ownership interest
(computed as set forth below) associated with a designated amount of Invested
Amount, selected pursuant to the terms and conditions hereof in (i) each
Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
IA + RR
-------
NPB
where:
IA = the Invested Amount of such Receivable Interest.
NPB = the Net Pool Balance.
RR = the Required Reserve.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Facility Termination Date, each
Receivable Interest shall be automatically recomputed (or deemed to be
recomputed) on each day prior to the Facility Termination Date. The variable
percentage represented by any Receivable Interest as computed (or deemed
recomputed) as of the close of the business day immediately preceding the
Facility Termination Date shall remain constant at all times thereafter.
Receivables Sale Agreement: That certain Receivables Sale Agreement, dated as of
March 19, 2002, among the Originators and the Seller, as the same may be
amended, restated or otherwise modified from time to time.
Records: 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, any Related Security therefor
and the related Obligor.
Recourse Obligations: As defined in Section 2.1.
Reduction Notice: As defined in Section 1.3.
Regulatory Change: As defined in Section 10.2.
Reinvestment: As defined in Section 2.2(a).
Related Security: All of the Seller's right, title and interest in, to and under
and with respect to any Receivable:
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(i) all of the Seller's interest in the inventory and goods
(including returned or repossessed inventory or goods), if any, the
sale of which by an Originator gave rise to such Receivable, and all
insurance contracts with respect thereto,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all financing statements and
security agreements describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to
the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of the Seller's right, title and interest in, to and
under the Receivables Sale Agreement in respect of such Receivable,
(vii) all proceeds of any of the foregoing.
Required Liquidity Banks: At any time, Liquidity Banks with Liquidity
Commitments in excess of 50% of the aggregate amount of all Liquidity
Commitments.
Required Notice Period: The number of days required notice set forth below
applicable to the Aggregate Reduction indicated below:
AGGREGATE REDUCTION REQUIRED NOTICE PERIOD
------------------- ----------------------
less than 25% of the Purchase Limit 2 Business Days
greater than or equal to 25% of the 2 Business Days
Purchase Limit
Required Reserve: On any day during a Calculation Period, the product of (i) the
greater of (A) the Required Reserve Factor Floor and (B) the sum of the Loss
Reserve, the Yield Reserve, the Dilution Reserve and the Servicing Reserve,
times (ii) the Net Pool Balance as of the Cut-Off Date immediately preceding
such Calculation Period.
Required Reserve Factor Floor: For any Calculation Period, the sum (expressed as
a percentage) of (i) 14% plus (ii) the product of the Adjusted Dilution Ratio
and the Dilution Horizon Ratio, in each case, as of the immediately preceding
Cut-Off Date.
Restricted Contracts: As defined in the Sale Agreement.
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Restricted Junior Payment: (i) any dividend or other distribution, direct or
indirect, on account of any shares of any class of capital stock of the Seller
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock or in any junior class of stock of the Seller, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of capital
stock of the Seller now or hereafter outstanding, (iii) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to the
Subordinated Loans (as defined in the Receivables Sale Agreement), (iv) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of capital stock of the Seller now or hereafter outstanding,
and (v) any payment of management fees by the Seller (except for reasonable
management fees to any Originator or its Affiliates in reimbursement of actual
management services performed).
Review: As defined in Section 7.1(d)(ii).
S&P: Standard and Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc.
Secured Parties: The Indemnified Parties.
Seller: As defined in the preamble to this Agreement.
Seller Parties: As defined in the preamble to this Agreement.
Servicer: At any time the Person (which may be the Agent) then authorized
pursuant to Article VIII to service, administer and collect Receivables.
Servicing Fee: For each day in a Calculation Period:
(i) an amount equal to (A) the Servicing Fee Rate (or, at any
time while Arch or one of its Affiliates is the Servicer, such lesser
percentage as may be agreed between the Seller and the Servicer on an
arms' length basis based on then prevailing market terms for similar
services), times (B) the aggregate Outstanding Balance of all
Receivables at the close of business on the Cut-Off Date immediately
preceding such Calculation Period, times (C) 1/360; or
(ii) on and after the Servicer's reasonable request made at
any time when Arch or one of its Affiliates is no longer acting as
Servicer hereunder, an alternative amount specified by the successor
Servicer not exceeding (A) 110% of such Servicer's reasonable costs and
expenses of performing its obligations under this Agreement during the
preceding Calculation Period, divided by (B) the number of days in the
current Calculation Period.
Servicing Fee Rate: 1.0% per annum.
17
Servicing Reserve: For any Calculation Period, the product (expressed as a
percentage) of (i) the Servicing Fee Rate, times (ii) a fraction, the numerator
of which is the highest Days Sales Outstanding for the most recent 12
Calculation Periods and the denominator of which is 360.
Settlement Date: (i) the 2nd Business Day after each Monthly Reporting Date, and
(ii) the last day of the relevant Interest Period in respect of each Receivable
Interest funded through a Liquidity Funding.
Settlement Period: (i) in respect of each Receivable Interest funded through the
issuance of Commercial Paper, the immediately preceding Calculation Period, and
(ii) in respect of each Receivable Interest funded through a Liquidity Funding,
the entire Interest Period of such Liquidity Funding.
Short-Form Contract: The form of Contract substantially in the form of Exhibit
IX.
Subsidiary: Of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Tax Code: The Internal Revenue Code of 1986, as the same may be amended from
time to time.
Terminating Tranche: As defined in Section 4.3(b).
Transaction Documents: Collectively, this Agreement, each Purchase Notice, the
Receivables Sale Agreement, each Collection Account Agreement, the Fee Letter,
the Subordinated Note (as defined in the Receivables Sale Agreement) and all
other instruments, documents and agreements executed and delivered in connection
herewith.
UCC: The Uniform Commercial Code as from time to time in effect in the specified
jurisdiction.
Unmatured Amortization Event: An event which, with the passage of time or the
giving of notice, or both, would constitute an Amortization Event.
Voluntary Termination: The occurrence of an Amortization Event resulting from
the occurrence of the "Termination Date" pursuant to subclause (iv) of the
definition of "Termination Date" in the Receivables Sale Agreement.
Wachovia: Wachovia Bank, N.A. in its individual capacity and its successors.
Yield: For each Interest Period relating to a Receivable Interest funded through
a Liquidity Funding, an amount equal to the product of the applicable Yield Rate
for such Receivable Interest multiplied by the Invested Amount of such
Receivable Interest for each day elapsed during such Interest Period, annualized
on a 360 day basis.
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Yield Rate: With respect to each Receivable Interest funded through a Liquidity
Funding, the LIBO Rate, the Alternate Base Rate or the Default Rate, as
applicable.
Yield Reserve: For any Calculation Period, the product (expressed as a
percentage) of (i) 1.5 times (ii) the Alternate Base Rate as of the immediately
preceding Cut-Off Date times (iii) a fraction the numerator of which is the
highest Days Sales Outstanding for the most recent 12 Calculation Periods and
the denominator of which is 360.
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. Unless otherwise specified, all terms used in Article 9 of
the UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.
19
