EXHIBIT 10.201
Amended and Restated
Receivables Sale Agreement
Dated as of January 18, 2002
among
Crompton & Knowles Receivables Corporation,
as the Seller,
Crompton Corporation,
as the Initial Collection Agent,
ABN AMRO Bank N.V.,
as the Agent,
the Liquidity Providers
from time to time party hereto,
ABN AMRO Bank N.V.,
as the Enhancer,
and
Amsterdam Funding Corporation
Table of Contents
Page
Article I Purchases from Seller and Settlements 1
Section 1.1. Sales 1
Section 1.2. Interim Liquidations. 3
Section 1.3. Section of Discount Rates and Tranche
Periods. 4
Section 1.4. Fees and Other Costs and Expenses 5
Section 1.5. Maintenance of Sold Interest; Deemed
Collection 5
Section 1.6. Reduction in Commitments 6
Section 1.7. Repurchases. 6
Section 1.8. Assignment of Purchase Agreements. 6
Section 1.9. Extension of Liquidity Termination
Date 7
Article II Sales to and from Amsterdam; Allocations 7
Section 2.1. Required Purchases from Amsterdam 7
Section 2.2. Purchases by Amsterdam 9
Section 2.3. Allocations and Distributions 9
Article III Administration and Collections 11
Section 3.1. Appointment of Collection Agent 11
Section 3.2. Duties of Collection Agent 12
Section 3.3. Reports 12
Section 3.4. Lock-Box Arrangements 12
Section 3.5. Enforcement Rights 13
Section 3.6. Collection Agent Fee 13
Section 3.7. Responsibilities of the Seller 14
Section 3.8. Actions by Seller 14
Section 3.9. Indemnities by the Collection Agent. 14
Article IV Representations and Warranties 15
Section 4.1. Representations and Warranties 15
Article V Covenants 17
Section 5.1. Covenants of the Seller 17
Article VI Indemnification 22
Section 6.1. Indemnities by the Seller 22
Section 6.2. Increased Cost and Reduced Return 23
Section 6.3. Other Costs and Expenses 24
Section 6.4. Withholding Taxes 24
Section 6.5. Payments and Allocations 25
Article VII Conditions Precedent 25
Section 7.1. Conditions to Closing 25
Section 7.2. Conditions to Each Purchase 26
Article VIII The Agent 27
Section 8.1. Appointment and Authorization 27
Section 8.2. Delegation of Duties 27
Section 8.3. Exculpatory Provisions 27
Section 8.4. Reliance by Agent 27
Section 8.5. Assumed Payments 28
Section 8.6. Notice of Termination Events 28
Section 8.7. Non-Reliance on Agent and Other
Purchasers 28
Section 8.8. Agent and Affiliates. 29
Section 8.9. Indemnification 29
Section 8.10.Successor Agent. 29
Article IX Miscellaneous 29
Section 9.1. Termination 29
Section 9.2. Notices 30
Section 9.3. Payments and Computations 30
Section 9.4. Sharing of Recoveries 30
Section 9.5. Right of Setoff 31
Section 9.6. Amendments 31
Section 9.7. Waivers 31
Section 9.8. Successors and Assigns;
Participations; Assignments 32
Section 9.9. Intended Tax Characterization 33
Section 9.10.Waiver of Confidentiality 33
Section 9.11.Confidentiality of Agreement 34
Section 9.12.Agreement Not to Petition. 34
Section 9.13.Excess Funds 34
Section 9.14.No Recourse 34
Section 9.15.Limitation of Liability 35
Section 9.16.Headings; Counterparts. 35
Section 9.17.Cumulative Rights and Severability. 35
Section 9.18.Governing Law; Submission to
Jurisdiction 35
Section 9.19.Waiver of Trial by Jury 35
Section 9.20.Entire Agreement. 35
Signature 36
Schedules Description
Schedule I Definitions
Schedule II Liquidity Providers and Commitments of Committed
Purchasers
Exhibits Description
Exhibit A Form of Incremental Purchase Request
Exhibit B Form of Notification of Assignment from Amsterdam to
the Committed Purchasers
Exhibit C Form of Notification of Assignment from the
Committed Purchasers to Amsterdam
Exhibit D-1 Form of Periodic Report
Exhibit D-2 Form of Daily Report
Exhibit E Addresses and Names of Seller and Originator
Exhibit F Subsidiaries
Exhibit G Lock-Boxes and Lock-Box Banks
Exhibit H Form of Lock-Box Letter
Exhibit I Compliance Certificate
Exhibit J Credit and Collection Policy
Amended and Restated
Receivables Sale Agreement
This Amended and Restated Receivables Sale Agreement, dated
as of January 18, 2002, among Crompton & Knowles Receivables
Corporation, a Delaware corporation, as Seller (the "Seller"),
Crompton Corporation, a Delaware corporation, as the initial
Collection Agent (the "Initial Collection Agent"), ABN AMRO Bank
N.V., as agent for the Purchasers (the "Agent"), the liquidity
providers party hereto (the "Liquidity Providers"), ABN AMRO Bank
N.V., as provider of the Program LOC (the "Enhancer"), and
Amsterdam Funding Corporation ("Amsterdam"). Certain capitalized
terms used herein, and certain rules of construction, are defined
in Schedule I. The sole initial Liquidity Provider and the
Commitments of all Committed Purchasers are listed on
Schedule II.
Preliminary Statement
The Seller, Initial Collection Agent, Amsterdam, the
Enhancer, the Liquidity Provider and the Agent are parties to a
Receivables Sale Agreement, dated as of December 11, 1998 (the
"Original Agreement"); and
Subject to and upon the terms and conditions set forth
herein, the parties desire to amend and restate the Original
Agreement in the form of this Agreement.
Now, Therefore, in consideration of the mutual agreements
contained herein and the other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
Article I
Purchases from Seller and Settlements
Section 1.1. Sales.
(a) The Sold Interest. Subject to the terms and conditions
hereof, the Seller may, from time to time before the Liquidity
Termination Date, sell to Amsterdam, or, only if Amsterdam
declines to make the applicable purchase, ratably to the
Committed Purchasers an undivided percentage ownership interest
in the Receivables and all related Collections. Any such
purchase (a "Purchase") shall be made by each relevant Purchaser
remitting funds to the Seller, through the Agent, pursuant to
Section 1.1(c) or by the Collection Agent remitting Collections
to the Seller pursuant to Section 1.1(d). The aggregate
percentage ownership interest so acquired by a Purchaser in the
Receivables and related Collections (its "Purchase Interest")
shall equal at any time the following quotient:
I + PRP
ER
where:
I = the outstanding Investment of such
Purchaser at such time;
ER = the Eligible Receivables
Balance at such time; and
PRP = the Purchaser Reserve
Percentage at such time.
Except during a Liquidation Period for a Purchaser, such
Purchaser's Purchase Interest will change whenever its
Investment, its Purchaser Reserve Percentage or the Eligible
Receivables Balance changes. During a Liquidation Period for a
Purchaser its Purchase Interest shall remain constant, except for
redeterminations to reflect Investment acquired from or
transferred to another Purchaser under Article II. The sum of
all Purchasers' Purchase Interests at any time is referred to
herein as the "Sold Interest", which at any time is the aggregate
percentage ownership interest then held by the Purchasers in the
Receivables and Collections.
(b) Amsterdam Purchase Option and Other Purchasers'
Commitments. Subject to Section 1.1(d) concerning Reinvestment
Purchases, at no time will Amsterdam have any obligation to make
a Purchase. Each Liquidity Provider and the Enhancer (together
the "Committed Purchasers" and each a "Committed Purchaser")
severally hereby agrees, subject to Section 7.2 and the other
terms and conditions hereof, to make Purchases before the
Liquidity Termination Date, based on its Ratable Share of each
Purchase by the Committed Purchasers, to the extent its
Investment would not thereby exceed its Commitment, the Aggregate
Investment would not thereby exceed the Purchase Limit, and the
Matured Aggregate Investment would not thereby exceed the
Aggregate Commitments. Each Purchaser's first Purchase and each
additional Purchase by such Purchaser not made from Collections
pursuant to Section 1.1(d) is referred to herein as an
"Incremental Purchase." Each Purchase made by a Purchaser with
the proceeds of Collections in which it has a Purchase Interest,
which does not increase the outstanding Investment of such
Purchaser, is referred to herein as a "Reinvestment Purchase."
(c) Incremental Purchases. In order to request an
Incremental Purchase from a Purchaser, the Seller must provide to
the Agent an irrevocable written request (including by telecopier
or other facsimile communication) substantially in the form of
Exhibit A, by 10:00 a.m. (Chicago time) three Business Days
before the requested date (the "Purchase Date") of such Purchase,
specifying the requested Purchase Date (which must be a Business
Day) and the requested amount (the "Purchase Amount") of such
Purchase, which must be in a minimum amount of $1,000,000 and
multiples thereof (or, if less, an amount equal to the Maximum
Incremental Purchase Amount). An Incremental Purchase may only
be requested from Amsterdam unless Amsterdam, in its sole
discretion, determines not to make such Incremental Purchase in
which case the Seller will automatically be deemed to have
requested such Incremental Purchase from the Committed
Purchasers. The Agent shall promptly notify the contents of any
such request to each Purchaser from which the Purchase is
requested. If Amsterdam determines, in its sole discretion, to
make the requested Purchase, Amsterdam shall transfer to the
Agent's Account the amount of such Incremental Purchase on the
requested Purchase Date. If Amsterdam refuses to make a
requested Purchase, the Seller shall automatically be deemed to
have requested the Incremental Purchase from the Committed
Purchasers, subject to Section 7.2 and the other terms and
conditions hereof, each Committed Purchaser shall transfer its
Ratable Share of the requested Purchase Amount into the Agent's
Account by no later than 12:00 noon (Chicago time) on the
Purchase Date. The Agent shall transfer to the Designated
Account the proceeds of any Incremental Purchase delivered into
the Agent's Account.
(d) Reinvestment Purchases. Unless Amsterdam has provided to
the Agent, the Seller, and the Collection Agent a notice still in
effect that it no longer wishes to make Reinvestment Purchases
(in which case Amsterdam's Reinvestment Purchases, but not those
of the Committed Purchasers, shall cease), at any time before the
Liquidity Termination Date when no Interim Liquidation is in
effect, on each day that any Collections are received by the
Collection Agent a Purchaser's Purchase Interest in such
Collections shall automatically be used to make a Reinvestment
Purchase by such Purchaser, but only to the extent such
Reinvestment Purchase would not cause the Purchaser's Investment
to increase above the amount of such Investment at the start of
the day plus any Incremental Purchases made by the Purchaser on
that day. Amsterdam may revoke any notice provided under the
first sentence of this Section 1.1(d) by notifying the Agent, the
Seller, and the Collection Agent that it will make Reinvestment
Purchases.
(e) Security Interest. To secure all of the Seller's
obligations under the Transaction Documents, the Seller hereby
grants to the Agent (for the benefit of the Purchasers) a
security interest in all of the Seller's rights in the
Receivables, the Collections, and the Lock- Box Accounts.
Section 1.2. Interim Liquidations. (a) Optional. The Seller
may at any time direct that Reinvestment Purchases cease and that
an Interim Liquidation commence for all Purchasers by giving the
Agent and the Collection Agent at least three Business Days'
written (including telecopy or other facsimile communication)
notice specifying the date on which the Interim Liquidation shall
commence and, if desired, when such Interim Liquidation shall
cease before the Liquidity Termination Date (identified as a
specific date or as when the Aggregate Investment is reduced to a
specified amount). If the Seller does not so specify the date on
which an Interim Liquidation shall cease, it may cause such
Interim Liquidation to cease at any time before the Liquidity
Termination Date, subject to Section 1.2(b) below, by notifying
the Agent and the Collection Agent in writing (including by
telecopy or other facsimile communication) at least three
Business Days before the date on which it desires such Interim
Liquidation to cease.
(b) Mandatory. If at any time before the Liquidity
Termination Date any condition in Section 7.2 is not fulfilled,
the Seller shall immediately notify the Agent and the Collection
Agent, whereupon Reinvestment Purchases shall cease and an
Interim Liquidation shall commence, which shall only cease upon
the Seller confirming to the Agent that the conditions in
Section 7.2 are fulfilled.
Section 1.3. Selection of Discount Rates and Tranche Periods.
(a)(1) The provisions of this subsection (a)(1) shall apply to
all Investment of Amsterdam funded with commercial paper issued
on or before the Agent makes the election described in clause
(a)(2) below: All such Investment shall be allocated to one or
more Tranches reflecting the Discount Rates at which such
Investment accrues Discount and the Tranche Periods for which
such Discount Rates apply. All such Investment of Amsterdam shall
accrue Discount at the CP Rate. Each CP Tranche shall be in the
minimum amount of $1,000,000 and in multiples thereof. All
Discount accrued at the CP Rate during a Tranche Period shall be
payable by the Seller on the last day of such Tranche Period;
(2) At the Agent's option, the Agent may notify the Seller that
the provisions of this subsection (a)(2) shall apply to all
Investment of Amsterdam funded with Pooled Commercial Paper
issued after the Agent delivers a notice to the Seller that it
elects to have the provisions of this clause (a)(2) to be
applicable to the Investment of Amsterdam: The Seller shall pay
Funding Charges with respect to Amsterdam's Purchase Interest for
each day that any Investment in respect of such Purchase Interest
is outstanding. Each such Purchase Interest will accrue Funding
Charges each day based on the Pooled Allocation. On each
Settlement Date the Seller shall pay to the Agent (for the
benefit of Amsterdam) an aggregate amount equal to all accrued
and unpaid Funding Charges in respect of such Purchase Interest
for the immediately preceding Discount Period; (3) All Investment
of the Committed Purchasers shall be allocated to one or more
Tranches reflecting the Discount Rates at which such Investment
accrues Discount and the Tranche Periods for which such Discount
Rates apply. In each request for an Incremental Purchase from a
Committed Purchaser and three Business Days before the expiration
of any Tranche Period applicable to any Committed Purchaser's
Investment, the Seller may request the Tranche Period(s) to be
applicable to such Investment and the Discount Rate(s) applicable
thereto. All Investment of the Committed Purchasers may accrue
Discount at either the Eurodollar Rate or the Prime Rate, in all
cases as established for each Tranche Period applicable to such
Investment. Each Tranche shall be in the minimum amount of
$1,000,000 and in multiples thereof or, in the case of Discount
accruing at the Prime Rate, in any amount of Investment that
otherwise has not been allocated to another Tranche Period. Any
Investment of the Committed Purchasers not allocated to a Tranche
Period shall be a Prime Tranche. During the pendency of a
Termination Event, the Agent may reallocate any outstanding
Investment of the Committed Purchasers to a Prime Tranche. All
Discount accrued on the Investment of the Committed Purchasers
during a Tranche Period shall be payable by the Seller on the
last day of such Tranche Period or, for a Eurodollar Tranche with
a Tranche Period of more than three months, 90 days after the
commencement, and on the last day, of such Tranche Period.
(b) The Agent shall allocate the Investment of Amsterdam to
Tranche Periods in its sole discretion. If, by the time required
in Section 1.3(a), the Seller fails to select a Discount Rate or
Tranche Period for any Investment of the Committed Purchasers,
such amount of Investment shall automatically accrue Discount at
the Prime Rate for a three Business Day Tranche Period. Any
Investment purchased from Amsterdam pursuant to the Transfer
Agreement shall accrue Discount at the Prime Rate and have an
initial Tranche Period of three Business Days.
(c) If the Agent or any Committed Purchaser determines (i)
that maintenance of any Eurodollar Tranche would violate any
applicable law or regulation, (ii) that deposits of a type and
maturity appropriate to match fund any of such Purchaser's
Eurodollar Tranches are not available or (iii) that the
maintenance of any Eurodollar Tranche will not adequately and
fairly reflect the cost of such Purchaser of funding Eurodollar
Tranches, then the Agent, upon the direction of such Purchaser,
shall suspend the availability of, and terminate any outstanding,
Eurodollar Tranche so affected. All Investment allocated to any
such terminated Eurodollar Tranche shall be reallocated to a
Prime Rate Tranche.
Section 1.4. Fees and Other Costs and Expenses. (a) The Seller
shall pay to the Agent (i) for the ratable benefit of the
Liquidity Providers, such amounts as agreed to with the Liquidity
Providers and the Agent in the Fee Letter, and (ii) for the
account of the Enhancer and the Agent, such amounts as agreed to
with the Enhancer and the Agent in the Fee Letter.
(b) If the amount of Investment allocated to any CP or
Eurodollar Tranche is reduced before the last day of its Tranche
Period, or if a requested Incremental Purchase at the Eurodollar
Rate does not take place on its scheduled Purchase Date, the
Seller shall pay the Early Payment Fee to each Purchaser that had
its Investment so reduced or scheduled Purchase not made.
(c) Investment shall be payable solely from Collections and
from amounts payable under Sections 1.5, 1.7 and 6.1 (to the
extent amounts paid under Section 6.1 indemnify against
reductions in or non-payment of Receivables). The Seller shall
pay, as a full recourse obligation, all other amounts payable
hereunder, including, without limitation, all Discount, fees
described in clauses (a) and (b) above and amounts payable under
Article VI.
Section 1.5. Maintenance of Sold Interest; Deemed Collection.
(a) General. If at any time before the Liquidity Termination
Date the Eligible Receivables Balance is less than the sum of the
Aggregate Investment (or, if a Termination Event exists, the
Matured Aggregate Investment) plus the Aggregate Reserve, the
Seller shall pay to the Agent an amount equal to such deficiency
for application to reduce the Investments of the Purchasers
ratably in accordance with the principal amount of their
respective Investments, applied first to Prime Tranches and
second to the other Tranches with the shortest remaining
maturities unless otherwise specified by the Seller. Any amount
so applied to reduce Amsterdam's Investment shall be deposited in
the Special Transaction Subaccount.
(b) Deemed Collections. If on any day the outstanding
balance of a Receivable is reduced or cancelled as a result of
any defective or rejected goods or services, any cash discount or
adjustment (including any adjustment resulting from the
application of any special refund or other discounts or any
reconciliation), any setoff or credit (whether such claim or
credit arises out of the same, a related, or an unrelated
transaction) including without limitation, a Receivable Setoff or
other similar reason not arising from the financial inability of
the Obligor to pay undisputed indebtedness, the Seller shall be
deemed to have received on such day a Collection on such
Receivable in the amount of such reduction or cancellation. If
on any day any representation, warranty, covenant or other
agreement of the Seller related to a Receivable is not true or is
not satisfied, the Seller shall be deemed to have received on
such day a Collection in the amount of the outstanding balance of
such Receivable. All such Collections deemed received by the
Seller under this Section 1.5(b) shall be remitted by the Seller
to the Collection Agent in accordance with Section 5.1(i).
(c) Adjustment to Sold Interest. At any time before the
Liquidity Termination Date that the Seller is deemed to have
received any Collection under Section 1.5(b) ("Deemed
Collections") that derive from a Receivable that is otherwise
reported as an Eligible Receivable, so long as no Liquidation
Period then exists, the Seller may satisfy its obligation to
deliver such amount to the Collection Agent by instead notifying
the Agent that the Sold Interest should be recalculated by
decreasing the Eligible Receivables Balance by the amount of such
Deemed Collections, so long as such adjustment does not cause the
Sold Interest to exceed 100%.
(d) Payment Assumption. Unless an Obligor otherwise
specifies or another application is required by contract or law,
any payment received by the Seller from any Obligor shall be
applied as a Collection of Receivables of such Obligor (starting
with the oldest such Receivable) and remitted to the Collection
Agent as such.
Section 1.6. Reduction in Commitments. The Seller may, upon
thirty days' notice to the Agent, reduce the Aggregate Commitment
in increments of $1,000,000, so long as the Aggregate Commitment
at all times equals at least the outstanding Matured Aggregate
Investment. Each such reduction in the Aggregate Commitment
shall reduce the Commitment of each Committed Purchaser in
accordance with its Ratable Share and shall ratably reduce the
Purchase Limit so that the Aggregate Commitment remains at least
102% of the Purchase Limit.
Section 1.7. Repurchases. (a) Optional. At any time that the
Aggregate Investment is less than 10% of the Aggregate Commitment
in effect on the date hereof, the Seller may, upon thirty days'
notice to the Agent, repurchase the entire Sold Interest from the
Purchasers at a price equal to the outstanding Matured Aggregate
Investment and all other amounts then owed hereunder.
(b) Mandatory. If at any time before the Liquidity
Termination Date the Sold Interest exceeds 100%, unless the
Seller remedies the situation by satisfying its obligations under
Section 1.5(a), any Purchaser may direct that all Purchasers
ratably reassign to the Seller, without recourse, representation
or warranty, a portion of the Purchase Interest of each Purchaser
so that the Sold Interest does not exceed 100%. The Seller shall
purchase such reassigned Purchase Interests at a purchase price
equal to the Matured Value of the Investment so reassigned by
each Purchaser.
Section 1.8. Assignment of Purchase Agreements. The Seller
hereby assigns and otherwise transfers to the Agent (for the
benefit of the Agent, each Purchaser and any other Person to whom
any amount is owed hereunder), all of the Seller's right, title
and interest in, to and under each Purchase Agreement. The
Seller shall execute, file and record all financing statements,
continuation statements and other documents required to perfect
or protect such assignment. This assignment includes (a) all
monies due and to become due to the Seller from each Originator
or the Parent under or in connection with each Purchase Agreement
(including fees, expenses, costs, indemnities and damages for the
breach of any obligation or representation related to such
agreement) and (b) all rights, remedies, powers, privileges and
claims of the Seller against each Originator or the Parent under
or in connection with each Purchase Agreement. All provisions of
each Purchase Agreement shall inure to the benefit of, and may be
relied upon by, the Agent, each Purchaser and each such other
Person. At any time that a Termination Event has occurred and is
continuing, the Agent shall have the sole right to enforce the
Seller's rights and remedies under each Purchase Agreement to the
same extent as the Seller could absent this assignment, but
without any obligation on the part of the Agent, any Purchaser or
any other such Person to perform any of the obligations of the
Seller under each Purchase Agreement (or any of the promissory
notes executed thereunder). All amounts distributed to the
Seller under each Purchase Agreement from Receivables sold to the
Seller thereunder shall constitute Collections hereunder and
shall be applied in accordance herewith.
Section 1.9. Extension of Liquidity Termination Date. The
Seller may advise the Liquidity Providers and the Enhancer in
writing of its desire to extend the Liquidity Termination Date
for an additional 364 days, provided (i) such request is made not
more than 120 days prior to, and not less than 90 days prior to,
the Liquidity Termination Date, and (ii) not more than one such
request for the extension of the Liquidity Termination Date may
be made in any one calendar year and (iii) in no event shall the
Liquidity Termination Date be extended beyond January 17, 2003.
In the event that the Liquidity Providers and the Enhancer are
agreeable to such extension, the Agent shall so notify the Seller
in writing (it being understood that the Liquidity Providers and
the Enhancer may accept or decline such a request in their sole
discretion and on such terms as they may elect) not less than 45
days prior to the Liquidity Termination Date and the Seller and
the Liquidity Providers and the Enhancer shall enter into such
documents as the Liquidity Providers and the Enhancer may deem
necessary or appropriate to reflect such extension, and all
reasonable costs and expenses incurred by the Liquidity Providers
and the Enhancer in connection therewith (including reasonable
attorneys' fees) shall be paid by the Seller. The Liquidity
Providers or the Enhancer shall be deemed to have refused to
grant the requested extension in the event the Agent shall fail
to so notify the Seller of their agreement to such an extension.
Article II
Sales to and from Amsterdam; Allocations
Section 2.1. Required Purchases from Amsterdam. (a) Amsterdam
may, at any time, and on the earlier of the Amsterdam Termination
Date and 10 Business Days following the Agent and Amsterdam
learning of a continuing Termination Event, Amsterdam shall, sell
to the Committed Purchasers any percentage designated by
Amsterdam of Amsterdam's Investment and its related Amsterdam
Settlement (each, a "Put"). If the Put occurs due to the
Amsterdam Termination Date or a Termination Event, the designated
percentage shall be 100% or such lesser percentage as is
necessary to obtain the maximum available Purchase Price from
each Committed Purchaser. Immediately upon notice of a Put from
Amsterdam to the Agent, the Agent shall deliver to each Purchaser
a notification of assignment in substantially the form of
Exhibit B, and each Committed Purchaser shall purchase from
Amsterdam its Purchase Percentage of Amsterdam's Investment and
related Amsterdam Settlement by transferring to the Agent's
Account an amount equal to such Purchaser's Purchase Price by not
later than 1:00 p.m. (Chicago time) on the date such funds are
requested; provided, however, that the Enhancer may exchange for
part or all of the Purchase Price payable by it an equal amount
of the Program Unreimbursed Draw Amount.
(b) If a Liquidity Provider fails to transfer to the Agent
its full Purchase Price when required by Section 2.1(a) (the
aggregate amount not made available to the Agent by each such
Liquidity Provider being the "Unpaid Amount"), then, upon notice
from the Agent by not later than 1:15 p.m. (Chicago time), each
Liquidity Provider not owing an Unpaid Amount shall transfer to
the Agent's Account, by not later than 1:45 p.m. (Chicago time),
an amount equal to the lesser of such Liquidity Provider's
proportionate share (based on its Commitment divided by the
Commitments of all Liquidity Providers that have not so failed to
pay their full Purchase Price) of the Unpaid Amount and its
Unused Commitment. If the Agent does not then receive the Unpaid
Amount in full, upon notice from the Agent by not later than
2:00 p.m. (Chicago time) on such day, each Liquidity Provider
that has not failed to fund any part of its obligations on such
day under this Section 2.1 shall pay to the Agent, by not later
than 2:30 p.m. (Chicago time), its proportionate share
(determined as described above) of the amount of such remaining
deficiency up to the amount of its Unused Commitment. Any
Liquidity Provider that fails to make a payment under this
Section 2.1 on the date of a Put shall pay on demand to each
other Liquidity Provider that makes a payment under this
subsection (b) the amount paid by it to cover such failure,
together with interest thereon, for each day from the date such
payment was made until the date such other Liquidity Provider has
been paid such amount in full, at a rate per annum equal to the
Federal Funds Rate plus two percent (2%) per annum. In addition,
without prejudice to any other rights Amsterdam may have under
applicable law, any Liquidity Provider that has failed to
transfer to the Agent under Section 2.1(a) its full Purchase
Price shall pay on demand to Amsterdam the difference between
such unpaid Purchase Price and the amount paid by other Liquidity
Providers or the Agent to cover such failure, together with
interest thereon, for each day from the date such Purchase Price
was due until the date paid, at a rate per annum equal to the
Federal Funds Rate plus two percent (2%) per annum.
(c) Any portion of Amsterdam's Investment and related
Amsterdam Settlement purchased by a Committed Purchaser
(including any purchased under Section 2.1(b) in fulfillment of
another Liquidity Provider's obligation unless such purchase is
reimbursed in full, with interest, by such other Liquidity
Provider under Section 2.1(b)) shall be considered part of such
Purchaser's Investment and related Amsterdam Settlement from the
date of the relevant Put. Each such sale by Amsterdam to a
Committed Purchaser shall be without recourse, representation or
warranty except for the representation and warranty that such
Investment and related amounts are being sold by Amsterdam free
and clear of any Adverse Claim created or granted by Amsterdam.
Immediately upon any purchase by the Committed Purchasers of any
portion of Amsterdam's Investment, the Seller shall pay to the
Agent (for the ratable benefit of such Purchasers) an amount
equal to the sum of the Assigned Amsterdam Settlement and the
amount calculated for all such Purchasers pursuant to clause (b)
of the definition of Purchase Price.
(d) The proceeds from each Put received by Amsterdam (other
than amounts described in clauses (b)(ii) and (iii) of the
definition of Purchase Price), shall be transferred into the
Special Transaction Subaccount and used solely to pay that
portion of the outstanding commercial paper of Amsterdam issued
to fund or maintain the Investment of Amsterdam so transferred.
Until used to pay CP Notes, all proceeds of any Put pursuant to
this Section shall be invested in Permitted Investments. All
earnings on such Permitted Investments shall be promptly remitted
to the Seller.
(e) The obligation of each Committed Purchaser to make any
purchase from Amsterdam pursuant to this Section 2.1 shall be
several, not joint, and shall be absolute and unconditional;
provided, however, that no Committed Purchaser shall have any
obligation to make such a purchase at a time that (i) Amsterdam
shall have voluntarily commenced any proceeding or filed any
petition under any bankruptcy, insolvency or similar law seeking
the dissolution, liquidation or reorganization of Amsterdam or
(ii) involuntary proceedings or an involuntary petition shall
have been commenced or filed against Amsterdam under any
bankruptcy, insolvency or similar law seeking the dissolution,
liquidation or reorganization of Amsterdam and such proceeding or
petition shall not have been dismissed or stayed for a period of
thirty (30) days, or any of the actions sought in such proceeding
or petition (including the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other
similar official for, Amsterdam or for any substantial part of
Amsterdam's property) shall occur.
Section 2.2. Purchases by Amsterdam. If the Seller requests an
increase in Amsterdam's Investment when any Committed Purchaser
has any outstanding Investment, Amsterdam shall determine the
amount, if any, by which it desires to increase its Investment
(the "Desired Increase") and shall so notify the Agent. Such
request may only be made at the end of a Tranche Period. If
Amsterdam has a Desired Increase, the Agent shall deliver to the
Committed Purchasers a notification of assignment in
substantially the form of Exhibit C and, before purchasing any
additional Investment from the Seller, Amsterdam shall purchase
in full the Investment of the Committed Purchasers, at a purchase
price equal to such Investment plus accrued and unpaid Discount
thereon. If the Desired Increase is less than the sum of the
total Investment of the Committed Purchasers and accrued
Discount, Amsterdam shall purchase a ratable portion of each
Liquidity Provider's Investment and only after all such
Investment and accrued Discount thereon is purchased may
Amsterdam purchase Investment of the Enhancer and Discount
thereon. Any sale from any Committed Purchaser to Amsterdam
pursuant to this Section 2.2 shall be without recourse,
representation or warranty except for the representation and
warranty that the Investment sold by such Purchaser is free and
clear of any Adverse Claim created or granted by such Purchaser
and that such Purchaser has not suffered a Bankruptcy Event.
Section 2.3. Allocations and Distributions.
(a) Amsterdam Termination and Non-Reinvestment Periods.
Before the Liquidity Termination Date unless an Interim
Liquidation is in effect, on each day during a period that
Amsterdam is not making Reinvestment Purchases (as established
under Section 1.1(d)) and at all times on and after the Amsterdam
Termination Date, the Collection Agent (i) shall set aside and
hold solely for the benefit of Amsterdam (or deliver to the
Agent, if so instructed pursuant to Section 3.2(a)) Amsterdam's
Purchase Interest in all Collections received on such day and
(ii) shall distribute on the last day of each CP Tranche Period
to the Agent (for the benefit of Amsterdam) the amounts so set
aside up to the amount of Amsterdam's Investment allocated to
such Tranche Period and, to the extent not already paid in full,
all Discount thereon and all other amounts then due from the
Seller in connection with such Investment and Tranche Period.
The Sold Interest, and each Purchaser's Purchase Interest, shall
be recalculated to give effect to any application of any portion
of the Sold Interest in Collections to pay Discount or other
amounts (except Investment) under this Section 2.3(a), and the
Seller shall comply with Section 1.5(a) after such recalculation.
(b) Liquidity Termination Date and Interim Liquidations. On
each day on and after the Liquidity Termination Date, and during
any Interim Liquidation, the Collection Agent shall set aside and
hold solely for the account of the Agent, for the benefit of the
Purchasers, (or deliver to the Agent, if so instructed pursuant
to Section 3.2(a)) the Sold Interest in all Collections received
on such day and such Collections shall be allocated as follows:
(i) first, only so long as (A) the sum of the Matured
Value of the Amsterdam Investment, the Matured Value of the
Liquidity Provider Investment, and the Enhancer Investment
is less than (B) the product of the Sold Interest (or, if
less, 100%) multiplied by the Eligible Receivables Balance,
to the payment of all Discount then due and not paid to the
Enhancer;
(ii) second, to Amsterdam and to the Liquidity
Providers (ratably, based on the Matured Value of their
Investments) until all Investment of, and Discount due but
not already paid to, the Liquidity Providers and Amsterdam
has been paid in full;
(iii) third, to the Enhancer until all Investment of,
and Discount due but not already paid to, the Enhancer has
been paid in full;
(iv) fourth, to the Purchasers until all other amounts
owed to the Purchasers have been paid in full;
(v) fifth, to the Agent until all amounts owed to the
Agent have been paid in full;
(vi) sixth, to any other Person to whom any amounts are
owed under the Transaction Documents until all such amounts
have been paid in full; and
(vii) seventh, to the Seller (or as otherwise required
by applicable law).
Unless an Interim Liquidation has ended by such date (in which
case Reinvestment Purchases shall resume to the extent provided
in Section 1.1(d)), on the last day of each Tranche Period
(unless otherwise instructed by the Agent pursuant to
Section 3.2(a)), the Collection Agent shall deposit into the
Agent's Account, from such set aside Collections, all amounts
allocated to such Tranche Period and all Tranche Periods that
ended before such date, due in accordance with the priorities in
clauses (i)-(iii) above. No distributions shall be made to pay
amounts under clauses (iv) - (vii) until sufficient Collections
have been set aside to pay all amounts described in clauses (i) -
(iii) that may become payable for all outstanding Tranche
Periods. All distributions by the Agent shall be made ratably
within each priority level in accordance with the respective
amounts then due each Person included in such level unless
otherwise agreed by the Agent and all Purchasers. As provided in
Section 1.4(c) all Discount and other amounts payable hereunder
other than Investment are payable by the Seller. If any part of
the Sold Interest in any Collections is applied to pay any such
amounts pursuant to this Section 2.3(b), the Seller shall pay to
the Collection Agent the amount so applied for distribution as
part of the Sold Interest in Collections.
Article III
Administration and Collections
Section 3.1. Appointment of Collection Agent. (a) The
servicing, administering and collecting of the Receivables shall
be conducted by a Person (the "Collection Agent") designated to
so act on behalf of the Purchasers under this Article III. As
the Initial Collection Agent, the Parent is hereby designated as,
and agrees to perform the duties and obligations of, the
Collection Agent. The Parent acknowledges that the Agent and
each Purchaser have relied on the Parent's agreement to act as
Collection Agent (and the agreement of any of the sub-collection
agents to so act) in making the decision to execute and deliver
this Agreement and agrees that it will not voluntarily resign as
Collection Agent. At any time after the occurrence of a
Collection Agent Replacement Event, the Agent may designate a new
Collection Agent to succeed the Parent (or any successor
Collection Agent).
(b) The Parent may, and if requested by the Agent shall,
delegate its duties and obligations as Collection Agent to an
Affiliate (acting as a sub-collection agent). Notwithstanding
such delegation, the Parent shall remain primarily liable for the
performance of the duties and obligations so delegated, and the
Agent and each Purchaser shall have the right to look solely to
the Parent for such performance. The Agent may at any time after
the occurrence of a Collection Agent Replacement Event remove or
replace any sub-collection agent.
(c) If replaced, the Collection Agent agrees it will
terminate, and will cause each existing sub-collection agent to
terminate, its collection activities in a manner requested by the
Agent to facilitate the transition to a new Collection Agent.
The Collection Agent shall cooperate with and assist any new
Collection Agent (including providing access to, and
transferring, all Records and allowing the new Collection Agent
to use all licenses, hardware or software necessary or desirable
to collect the Receivables). The Parent irrevocably agrees to
act (if requested to do so) as the data-processing agent for any
new Collection Agent in substantially the same manner as the
Parent conducted such data-processing functions while it acted as
the Collection Agent; provided, however, that the Parent receives
a then market rate compensation for providing such services.
Section 3.2. Duties of Collection Agent. (a) The Collection
Agent shall take, or cause to be taken, all action necessary or
advisable to collect each Receivable in accordance with this
Agreement, the Credit and Collection Policy and all applicable
laws, rules and regulations using the skill and attention the
Collection Agent exercises in collecting other receivables or
obligations owed solely to it. The Collection Agent shall, in
accordance herewith, set aside all Collections to which a
Purchaser is entitled. If so instructed by the Agent, the
Collection Agent shall transfer to the Agent the amount of
Collections to which the Agent and the Purchasers are entitled by
the Business Day following receipt and identification thereof.
Each party hereto hereby appoints the Collection Agent to enforce
such Person's rights and interests in the Receivables, but
(notwithstanding any other provision in any Transaction Document)
the Agent shall at all times after the occurrence of a Collection
Agent Replacement Event have the sole right to direct the
Collection Agent to commence or settle any legal action to
enforce collection of any Receivable.
(b) If no Termination Event exists and the Collection Agent
determines that such action is appropriate in order to maximize
the Collections, the Collection Agent may, in accordance with the
Credit and Collection Policy, extend the maturity of any
Receivable (but no such extension shall be for a period more than
thirty (30) days) or adjust the outstanding balance of any
Receivable. Any such extension or adjustment shall not alter the
status of a Receivable as a Defaulted Receivable or Delinquent
Receivable or limit any rights of the Agent or the Purchasers
hereunder. If a Termination Event exists, the Collection Agent
may make such extensions or adjustments only with the prior
consent of the Instructing Group.
(c) The Collection Agent shall turn over to the Seller
(i) any percentage of Collections in excess of the Sold Interest,
less all reasonable third party out-of-pocket costs and expenses
of the Collection Agent for collecting the Receivables and
(ii) subject to Section 1.5(d), the collections and records for
any indebtedness owed to the Seller that is not a Receivable.
The Collection Agent shall have no obligation to remit any such
funds or records to the Seller until the Collection Agent
receives evidence (satisfactory to the Agent) that the Seller is
entitled to such items. The Collection Agent has no obligations
concerning indebtedness that is not a Receivable other than to
deliver the collections and records for such indebtedness to the
Seller when required by this Section 3.2(c).
Section 3.3. Reports. On or before the twentieth day of each
month, the Collection Agent shall deliver to the Agent a report
reflecting information as of the close of business of the
Collection Agent for the immediately preceding calendar month or
such other preceding period as is requested (each a "Periodic
Report"), containing the information described on Exhibit D-1
(with such modifications or additional information as requested
by the Agent or the Instructing Group); provided, however, that
in the event the senior unsecured long-term debt of the Parent is
rated (i) less than BB- by S&P or (ii) less than Ba3 by Moody's
(or either such rating is suspended or withdrawn) then the
Collection Agent shall deliver a report containing the
information described on Exhibit D-2 to the Agent on each
Business Day.
Section 3.4. Lock-Box Arrangements. The Agent is hereby
authorized to give notice at any time after the occurrence of a
Collection Agent Replacement Event to any or all Lock-Box Banks
that the Agent is exercising its rights under the Lock-Box
Letters and to take all actions permitted under the Lock-Box
Letters. The Seller agrees to take any action requested by the
Agent to facilitate the foregoing. After the Agent takes any
such action under the Lock-Box Letters, the Seller shall
immediately deliver to the Agent any Collections received by the
Seller. If the Agent takes control of any Lock-Box Account, the
Agent shall distribute Collections it receives in accordance
herewith and shall deliver to the Collection Agent, for
distribution under Section 3.2, all other amounts it receives
from such Lock-Box Account.
Section 3.5. Enforcement Rights. (a) The Agent may, at any time
after the occurrence of a Collection Agent Replacement Event,
direct the Obligors and the Lock-Box Banks to make all payments
on the Receivables directly to the Agent or its designee. The
Agent may, and the Seller shall at the Agent's request, withhold
the identity of the Purchasers from the Obligors and Lock-Box
Banks. Upon the Agent's request after the occurrence of a
Collection Agent Replacement Event, the Seller (at the Seller's
expense) shall (i) give notice to each Obligor of the Agent's
ownership of the Sold Interest and direct that payments on
Receivables be made directly to the Agent or its designee,
(ii) assemble for the Agent all Records and collateral security
for the Receivables and transfer to the Agent (or its designee),
or license to the Agent (or its designee) the use of, all
software then used by the Collection Agent to collect the
Receivables and (iii) segregate in a manner acceptable to the
Agent all Collections the Seller receives and, promptly upon
receipt, remit such Collections in the form received, duly
endorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(b) After the occurrence of a Collection Agent Replacement
Event, Seller hereby irrevocably appoints the Agent as its
attorney-in-fact coupled with an interest, with full power of
substitution and with full authority in the place of the Seller,
to take any and all steps deemed desirable by the Agent, in the
name and on behalf of the Seller to (i) collect any amounts due
under any Receivable, including endorsing the name of the Seller
on checks and other instruments representing Collections and
enforcing such Receivables, and (ii) exercise any and all of the
Seller's rights and remedies under each Purchase Agreement. The
Agent's powers under this Section 3.5(b) shall not subject the
Agent to any liability if any action taken by it (except for any
action taken pursuant thereto that constitutes gross negligence
or willful misconduct) proves to be inadequate or invalid, nor
shall such powers confer any obligation whatsoever upon the
Agent.
(c) Neither the Agent nor any Purchaser shall have any
obligation to take or consent to any action to realize upon any
Receivable or to enforce any rights or remedies related thereto.
Section 3.6. Collection Agent Fee. On or before the twentieth
day of each calendar month, the Seller shall pay to the
Collection Agent a fee for the immediately preceding calendar
month as compensation for its services (the "Collection Agent
Fee") equal to (a) at all times the Parent or an Affiliate of any
Crompton Entity is the Collection Agent, such consideration as is
acceptable to it, the receipt and sufficiency of which is hereby
acknowledged, and (b) at all times any other Person is the
Collection Agent, a reasonable amount agreed upon by the Agent
and the new Collection Agent on an arm's-length basis reflecting
rates and terms prevailing in the market at such time. The
Collection Agent may only apply to payment of the Collection
Agent Fee the portion of the Collections in excess of the Sold
Interest or Collections that fund Reinvestment Purchases. The
Agent may, with the consent of the Instructing Group, pay the
Collection Agent Fee to the Collection Agent from the Sold
Interest in Collections. The Seller shall be obligated to
reimburse any such payment to the extent required by Section 1.5
or 2.3.
Section 3.7. Responsibilities of the Seller. The Seller shall,
or shall cause each Originator to, pay when due all Taxes payable
in connection with the Receivables or their creation or
satisfaction. The Seller shall, and shall cause each Originator
to, perform all of its obligations under agreements related to
the Receivables to the same extent as if interests in the
Receivables had not been transferred hereunder or, in the case of
each Originator, under each Purchase Agreement. The Agent's or
any Purchaser's exercise of any rights hereunder shall not
relieve the Seller or any Originator from such obligations.
Neither the Agent nor any Purchaser shall have any obligation to
perform any obligation of the Seller or of any Originator or any
other obligation or liability in connection with the Receivables.
Section 3.8. Actions by Seller. The Seller shall defend and
indemnify the Agent and each Purchaser against all costs,
expenses, claims and liabilities for any action taken by the
Seller, any Originator or any other Affiliate of the Seller or of
such Originator (whether acting as Collection Agent or otherwise)
related to any Receivable (other than with respect to the credit
risk of an Obligor and for which reimbursement would constitute
recourse for uncollectible Receivables), or arising out of any
alleged failure of compliance of any Receivable with the
provisions of any law or regulation. If any goods related to a
Receivable are repossessed, the Seller agrees to resell, or to
have the applicable Originator or another Affiliate resell, such
goods in a commercially reasonable manner for the account of the
Agent and remit, or have remitted, to the Agent the Purchasers'
share in the gross sale proceeds thereof net of any out-of-pocket
expenses and any equity of redemption of the Obligor thereon.
Any such moneys collected by the Seller or the applicable
Originator or other Affiliate of the Seller pursuant to this
Section 3.8 shall be segregated and held in trust for the Agent
and remitted to the Agent's Account within two Business Days of
receipt as part of the Sold Interest in Collections for
application as provided herein.
Section 3.9. Indemnities by the Collection Agent. Without
limiting any other rights any Person may have hereunder or under
applicable law, the Collection Agent hereby indemnifies and holds
harmless the Agent and each Purchaser and their respective
officers, directors, agents and employees (each an "Indemnified
Party") from and against any and all damages, losses, claims,
liabilities, penalties, Taxes, costs and expenses (including
attorneys' fees and court costs) (all of the foregoing
collectively, the "Indemnified Losses") at any time imposed on or
incurred by any Indemnified Party arising out of or otherwise
relating to:
(i) any written representation or warranty made by the
Collection Agent (or any employee or agent of the Collection
Agent) in this Agreement, any other Transaction Document,
any Periodic Report or any other information or report
delivered by the Collection Agent pursuant hereto, which
shall have been false or incorrect in any material respect
when made;
(ii) the failure by the Collection Agent to comply with
any applicable law, rule or regulation related to any
Receivable, or the nonconformity of any Receivable with any
such applicable law, rule or regulation;
(iii) any loss of a perfected security interest (or in
the priority of such security interest) as a result of any
commingling by the Collection Agent of funds to which the
Agent or any Purchaser is entitled hereunder with any other
funds; or
(iv) any failure of the Collection Agent, to perform
its duties or obligations in accordance with the provisions
of this Agreement or any other Transaction Document to which
the Collection Agent is a party;
whether arising by reason of the acts to be performed by the
Collection Agent hereunder or otherwise, excluding only
Indemnified Losses to the extent (a) such Indemnified Losses
resulted solely from negligence or willful misconduct of the
Indemnified Party seeking indemnification, (b) solely due to the
credit risk of the Obligor and for which reimbursement would
constitute recourse to the Collection Agent for uncollectible
Receivables, (c) such Indemnified Losses include Taxes on, or
measured by, the overall net income of the Agent or any Purchaser
computed in accordance with the Intended Tax Characterization, or
(d) the applicable Originator is the plaintiff and the
Indemnified Party is the defendant unless such Indemnified Party
prevails in such legal action; provided, however, that nothing
contained in this sentence shall limit the liability of the
Collection Agent or limit the recourse of the Agent and each
Purchaser to the Collection Agent for any amounts otherwise
specifically provided to be paid by the Collection Agent
hereunder.
Article IV
Representations and Warranties
Section 4.1. Representations and Warranties. The Seller
represents and warrants to the Agent and each Purchaser that:
(a) Corporate Existence and Power. Each of the Seller
and each Crompton Entity is either a corporation or limited
liability company duly organized, validly existing and in
good standing under the laws of its state of organization
and has all corporate or organizational power and authority
and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each
jurisdiction in which its business is now conducted, except
where failure to obtain such license, authorization, consent
or approval would not have a material adverse effect on
(i) its ability to perform its obligations under, or the
enforceability of, any Transaction Document, (ii) its
business or financial condition, (iii) the interests of the
Agent or any Purchaser under any Transaction Document or
(iv) the enforceability or collectibility of any Receivable.
(b) Corporate or Organizational Authorization and No
Contravention. The execution, delivery and performance by
each of the Seller and each Crompton Entity of each
Transaction Document to which it is a party (i) are within
its corporate or organizational powers, as applicable,
(ii) have been duly authorized by all necessary corporate or
organizational action, as applicable, (iii) do not
contravene or constitute a default under (A) any applicable
law, rule or regulation, (B) its or any Subsidiary's
charter, by-laws or operating agreement, as applicable or
(C) any agreement, order or other instrument to which it or
any Subsidiary is a party or its property is subject and
(iv) will not result in any Adverse Claim on any Receivable
or Collection or give cause for the acceleration of any
indebtedness of the Seller, any Crompton Entity or any
Subsidiary.
(c) Conduct of Business. The Seller will perform, and
will cause each Crompton Entity to perform, all actions
necessary to remain duly organized, validly existing and in
good standing in its jurisdiction of organization and to
maintain all requisite authority to conduct its business in
each jurisdiction in which it conducts business.
(d) Binding Effect. Each Transaction Document to
which the Seller or any Crompton Entity is a party
constitutes the legal, valid and binding obligation of such
Person enforceable against that Person in accordance with
its terms, except as limited by bankruptcy, insolvency, or
other similar laws of general application relating to or
affecting the enforcement of creditors' rights generally and
subject to general principles of equity.
(e) Perfection of Ownership Interest. Immediately
preceding its sale of Receivables to the Seller, each
Originator was the owner of, and effectively sold, such
Receivables to the Seller, free and clear of any Adverse
Claim. The Seller owns the Receivables free of any Adverse
Claim other than the interests of the Purchasers (through
the Agent) therein that are created hereby, and each
Purchaser shall at all times have a valid undivided
percentage ownership interest, which shall be a first
priority perfected security interest for purposes of Article
9 of the applicable Uniform Commercial Code, in the
Receivables and Collections (subject to, in the case of
Collections, the limitations on perfection of a security
interest in proceeds set forth in the applicable Uniform
Commercial Code) to the extent of its Purchase Interest then
in effect.
(f) Accuracy of Information. All information
furnished by the Seller, any Crompton Entity or any
Affiliate of any such Person to the Agent or any Purchaser
in connection with any Transaction Document, or any
transaction contemplated thereby, is true and accurate in
all material respects (and is not incomplete by omitting any
information necessary to prevent such information from being
materially misleading), in each case on the date the
statement was made and in light of the circumstances under
which the statements were made or the information was
furnished.
(g) No Actions, Suits. There are no actions, suits or
other proceedings (including matters relating to
environmental liability) pending or threatened against or
affecting the Seller, any Crompton Entity or any Subsidiary,
or any of their respective properties, that (i) if adversely
determined (individually or in the aggregate), may have a
material adverse effect on the financial condition of the
Seller, any Crompton Entity or any Subsidiary or on the
collectibility of the Receivables or (ii) involve any
Transaction Document or any transaction contemplated
thereby. None of the Seller, any Crompton Entity or any
Subsidiary is in default of any contractual obligation or in
violation of any order, rule or regulation of any
Governmental Authority, which default or violation may have
a material adverse effect upon (i) the financial condition
of the Seller, the Crompton Entities and the Subsidiaries
taken as a whole or (ii) the collectibility of the
Receivables.
(h) No Material Adverse Change. Since December 31,
1997, there has been no material adverse change in the
collectibility of the Receivables or the Seller's, any
Crompton Entity's or any Subsidiary's (i) financial
condition or (ii) ability to perform its obligations under
any Transaction Document.
(i) Accuracy of Exhibits; Lock-Box Arrangements. All
information on Exhibits E-G (listing offices and names of
the Seller and each Originator and where they maintain
Records; the Subsidiaries; and Lock Boxes) is true and
complete, subject to any changes permitted by, and notified
to the Agent in accordance with, Article V. The Seller has
delivered a copy of all Lock-Box Agreements to the Agent.
The Seller has not granted any interest in any Lock-Box or
Lock-Box Account to any Person other than the Agent and,
upon delivery to a Lock-Box Bank of the related Lock-Box
Letter, the Agent will have exclusive ownership and control
of the Lock-Box Account at such Lock-Box Bank.
(j) Sales by each Originator. Each sale by each
Originator to the Seller of an interest in Receivables and
their Collections has been made in accordance with the terms
of the applicable Purchase Agreement, including the payment
by the Seller to each Originator of the purchase price
described in such Purchase Agreement. Each such sale has
been made for "reasonably equivalent value" (as such term is
used in Section 548 of the Bankruptcy Code) and not for or
on account of "antecedent debt" (as such term is used in
Section 547 of the Bankruptcy Code) owed by such Originator
to the Seller.
Article V
Covenants
Section 5.1. Covenants of the Seller. The Seller hereby
covenants and agrees to comply with the following covenants and
agreements, unless the Agent (with the consent of the Instructing
Group) shall otherwise consent:
(a) Financial Reporting. The Seller will, and will cause
each Crompton Entity and each Subsidiary to, maintain a system of
accounting established and administered in accordance with GAAP
and will furnish to the Agent and each Purchaser:
(i) Annual Financial Statements. Within 120 days
after each fiscal year of (A) the Parent copies of the
Parent's consolidated annual audited financial statements
(including a consolidated balance sheet, consolidated
statement of income and retained earnings and statement of
cash flows, with related footnotes) certified by independent
certified public accountants of nationally recognized
standing or other firm of independent certified public
accountants satisfactory to the Agent and prepared on a
consolidated basis in conformity with GAAP, and (B) for each
of the Seller and each Originator the annual balance sheet
for such Person (and, additionally for the Seller, an annual
profit and loss statement) certified by a Designated
Financial Officer thereof, in each case prepared on a
consolidated basis in conformity with GAAP as of the close
of such fiscal year for the year then ended;
(ii) Quarterly Financial Statements. Within 60 days
after each (except the last) fiscal quarter of each fiscal
year of (A) the Parent, copies of its unaudited financial
statements (including at least a consolidated balance sheet
as of the close of such quarter and statements of earnings
and sources and applications of funds for the period from
the beginning of the fiscal year to the close of such
quarter) certified by a Designated Financial Officer and
prepared in a manner consistent with the financial
statements described in part (A) of clause (i) of this
Section 5.l(a) and (B) each of the Seller and each
Originator, the quarterly balance sheet for such Person
(and, additionally for the Seller, a profit and loss
statement) for the period from the beginning of such fiscal
year to the close of such quarter, in each case certified by
a Designated Financial Officer thereof and prepared in a
manner consistent with part (B) of clause (i) of
Section 5.1(a);
(iii) Officer's Certificate. Each time financial
statements are furnished pursuant to clause (i) or (ii) of
Section 5.1(a), a compliance certificate (in substantially
the form of Exhibit I) signed by a Designated Financial
Officer, dated the date of such financial statements;
(iv) Public Reports. Promptly upon becoming available,
a copy of each report or proxy statement filed by the Parent
with the Securities Exchange Commission or any securities
exchange;
(v) Crompton Credit Agreement Certificate. A copy of
the financial information, certificates and other
documentation described in Sections 5.01(a) through (h) of
the Crompton Credit Agreement, delivered as and when
required by such Section 5.01; and
(vi) Other Information. With reasonable promptness,
such other information (including non-financial information)
as may be requested by the Agent or any Purchaser (with a
copy of such request to the Agent).
(b) Notices. Immediately upon becoming aware of any of the
following the Seller will notify the Agent and provide a
description of:
(i) Potential Termination Events. The occurrence of
any Potential Termination Event;
(ii) Representations and Warranties. The failure of
any representation or warranty herein to be true (when made
or at any time thereafter) in any material respect;
(iii) Downgrading. The downgrading, withdrawal or
suspension of any rating by any rating agency of any
indebtedness of the Seller;
(iv) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding reasonably
likely to be material to the Seller, any Subsidiary or the
collectibility or quality of the Receivables;
(v) Judgments. The entry of any judgment or decree
against the Seller, any Crompton Entity or any Subsidiary if
the aggregate amount of all judgments then outstanding
against the Seller, the Crompton Entities and the
Subsidiaries exceeds $1,000,000; or
(vi) Changes in Business. Any change in, or proposed
change in, the character of the Seller's or any Originator's
business that could impair the collectibility or quality of
any Receivable.
If the Agent receives such a notice, the Agent shall promptly
give notice thereof to each Purchaser and, until Amsterdam has no
Investment after the Amsterdam Termination Date, to each CP
Dealer and each Rating Agency.
(c) Conduct of Business. The Seller will perform, and will
cause each Crompton Entity and Subsidiary to perform, all actions
necessary to remain duly incorporated, validly existing and in
good standing in its jurisdiction of incorporation and to
maintain all requisite authority to conduct its business in each
jurisdiction in which it conducts business.
(d) Compliance with Laws. The Seller will comply, and will
cause each Crompton Entity and Subsidiary to comply, with all
laws, regulations, judgments and other directions or orders
imposed by any Governmental Authority to which such Person or any
Receivable or Collection may be subject.
(e) Furnishing Information and Inspection of Records. The
Seller will furnish to the Agent and the Purchasers such
information concerning the Receivables as the Agent or a
Purchaser may reasonably request. The Seller will, and will
cause each Originator to, permit, at any time during regular
business hours, the Agent or any Purchaser (or any
representatives thereof), once per year or at any time after the
occurrence of a Termination Event (at the expense of the Seller)
or at any other time (at the expense of the Agent or such
Purchaser (as applicable)) (i) to examine and make copies of all
Records, (ii) to visit the offices and properties of the Seller
for the purpose of examining the Records and (iii) to discuss
matters relating hereto with any of the Seller's or any
Originator's officers, directors, employees or independent public
accountants having knowledge of such matters. Once a year, the
Agent may (at the expense of the Seller provided such expenses
are reasonable in amount) have an independent public accounting
firm conduct an audit of the Records or make test verifications
of the Receivables and Collections.
(f) Keeping Records. (i) The Seller will, and will cause
each Originator to, have and maintain (A) administrative and
operating procedures (including an ability to recreate Records if
originals are destroyed), (B) adequate facilities, personnel and
equipment and (C) all Records and other information necessary or
advisable for collecting the Receivables (including Records
adequate to permit the immediate identification of each new
Receivable and all Collections of, and adjustments to, each
existing Receivable). The Seller will give the Agent prior
notice of any material change in such administrative and
operating procedures.
(ii) The Seller will, (A) at all times from and after
the date hereof, clearly and conspicuously mark its computer
and master data processing books and records with a legend
describing the Agent's and the Purchasers' interest therein
and (B) upon the request of the Agent, so mark each contract
relating to a Receivable and deliver to the Agent all such
contracts (including all multiple originals of such
contracts), with any appropriate endorsement or assignment,
or segregate (from all other receivables then owned or being
serviced by the Seller) the Receivables and all contracts
relating to each Receivable and hold in trust and safely
keep such contracts so legended in separate filing cabinets
or other suitable containers at such locations as the Agent
may specify.
(g) Perfection. (i) The Seller will, and will cause each
Originator to, at its expense, promptly execute and deliver all
instruments and documents and take all action necessary or
requested by the Agent (including the execution and filing of
financing or continuation statements, amendments thereto or
assignments thereof) to enable the Agent to exercise and enforce
all its rights hereunder and to vest and maintain vested in the
Agent a valid, first priority perfected security interest in the
Receivables, the Collections, the Purchase Agreements, and
proceeds thereof free and clear of any Adverse Claim (and a
perfected ownership interest in the Receivables and Collections
to the extent of the Sold Interest). The Agent will be permitted
to authenticate a "record" and to sign and file any continuation
statements, amendments thereto and assignments thereof without
the Seller's signature.
(ii) The Seller will, and will cause each Originator
to, only change its name, identity or corporate structure or
relocate its chief executive office or the Records following
thirty (30) days advance notice to the Agent and the
delivery to the Agent of all financing statements,
instruments and other documents (including direction
letters) requested by the Agent.
(iii) The Seller and each Originator will at all times
maintain its chief executive offices within the jurisdiction
of its organization (other than in the states of Florida,
Maryland and Tennessee) in which Article 9 of the UCC is in
effect. If the Seller or any Originator moves its chief
executive office to a location that imposes Taxes, fees or
other charges to perfect the Agent's and the Purchasers'
interests hereunder or the Seller's interests under the
Purchase Agreements, the Seller will pay all such amounts
and any other costs and expenses incurred in order to
maintain the enforceability of the Transaction Documents,
the Sold Interest and the interests of the Agent and the
Purchasers in the Receivables and Collections.
(h) Performance of Duties. The Seller will perform, and will
cause each Crompton Entity and Subsidiary and the Collection
Agent (if an Affiliate) to perform, its respective duties or
obligations in accordance with the provisions of each of the
Transaction Documents. The Seller (at its expense) will, and
will cause each Crompton Entity to, (i) fully and timely perform
in all material respects all agreements required to be observed
by it in connection with each Receivable, (ii) comply in all
material respects with the Credit and Collection Policy, and
(iii) refrain from any action that may impair the rights of the
Agent or the Purchasers in the Receivables or Collections.
(i) Payments on Receivables, Accounts. The Seller will, and
will cause each Originator to, at all times instruct all Obligors
to deliver payments on the Receivables to a Lock-Box Account. If
any such payments or other Collections are received by the Seller
or any Originator, it shall hold such payments in trust for the
benefit of the Agent and the Purchasers and promptly (but in any
event within two Business Days after receipt and identification
thereof) remit such funds into a Lock-Box Account. The Seller
will cause each Lock-Box Bank to comply with the terms of each
applicable Lock-Box Letter. The Seller will not permit the funds
of any Affiliate to be deposited into any Lock-Box Account. If
such funds are nevertheless deposited into any Lock-Box Account,
the Seller will promptly identify such funds for segregation.
The Seller will not, and will not permit any Collection Agent or
other Person to, commingle Collections or other funds to which
the Agent or any Purchaser is entitled with any other funds. The
Seller shall only add, and shall only permit an Originator to
add, a Lock-Box Bank, Lock-Box, or Lock-Box Account to those
listed on Exhibit G if the Agent has received notice of such
addition, a copy of any new Lock-Box Agreement and an executed
and acknowledged copy of a Lock-Box Letter substantially in the
form of Exhibit H (with such changes as are acceptable to the
Agent) from any new Lock-Box Bank. The Seller shall only
terminate a Lock-Box Bank or Lock-Box, or close a Lock-Box
Account, upon 30 days advance notice to the Agent.
(j) Sales and Adverse Claims Relating to Receivables. Except
as otherwise provided herein, the Seller will not, and will not
permit any Originator to, (by operation of law or otherwise)
dispose of or otherwise transfer, or create or suffer to exist
any Adverse Claim upon, any receivable or any proceed thereof.
(k) Extension or Amendment of Receivables. Except as
otherwise permitted in Section 3.2(b) and then subject to
Section 1.5, the Seller will not, and will not permit each
Originator to, extend, amend, rescind or cancel any Receivable.
(l) Change in Business or Credit and Collection Policy. The
Seller will not, and will not permit any Originator to, make any
material change in the character of its business or in its Credit
and Collection Policy.
(m) Accounting for Sale. Except as provided in Section 9.9,
the Seller will not, and will not permit any Crompton Entity to,
account for, or otherwise treat, the transactions contemplated by
the Transaction Documents other than as a sale of Receivables or
inconsistent with the Agent's ownership interest in the
Receivables and Collections.
Article VI
Indemnification
Section 6.1. Indemnities by the Seller. Without limiting any
other rights any Person may have hereunder or under applicable
law, the Seller hereby indemnifies and holds harmless, on an
after-Tax basis, the Agent and each Purchaser and their
respective officers, directors, agents and employees (each an
"Indemnified Party") from and against any and all damages,
losses, claims, liabilities, penalties, Taxes, costs and expenses
(including attorneys' fees and court costs) (all of the foregoing
collectively, the "Indemnified Losses") at any time imposed on or
incurred by any Indemnified Party arising out of or otherwise
relating to any Transaction Document, the transactions
contemplated thereby or the acquisition of any portion of the
Sold Interest, or any action taken or omitted by any of the
Indemnified Parties (including any action taken by the Agent as
attorney-in-fact for the Seller pursuant to Section 3.5(b)),
whether arising by reason of the acts to be performed by the
Seller hereunder or otherwise, excluding only Indemnified Losses
to the extent (a) a final judgment of a court of competent
jurisdiction holds such Indemnified Losses resulted solely from
gross negligence or willful misconduct of the Indemnified Party
seeking indemnification, (b) solely due to the credit risk of the
Obligor and for which reimbursement would constitute recourse to
the Seller or the Collection Agent for uncollectible Receivables
or (c) such Indemnified Losses include Taxes on, or measured by,
the overall net income of the Agent or any Purchaser computed in
accordance with the Intended Tax Characterization; provided,
however, that nothing contained in this sentence shall limit the
liability of the Seller or the Collection Agent or limit the
recourse of the Agent and each Purchaser to the Seller or the
Collection Agent for any amounts otherwise specifically provided
to be paid by the Seller or the Collection Agent hereunder.
Without limiting the foregoing indemnification, but subject to
the limitations set forth in clauses (a), (b) and (c) of the
previous sentence, the Seller shall indemnify each Indemnified
Party for Indemnified Losses (including losses in respect of
uncollectible Receivables, regardless for these specific matters
whether reimbursement therefor would constitute recourse to the
Seller or the Collection Agent) relating to or resulting from:
(i) any representation or warranty made by the Seller,
any Crompton Entity or the Collection Agent (or any employee
or agent of the Seller, any Crompton Entity or the
Collection Agent) under or in connection with this
Agreement, any Periodic Report or any other information or
report delivered by the Seller, any Crompton Entity or the
Collection Agent pursuant hereto, which shall have been
false or incorrect in any material respect when made or
deemed made;
(ii) the failure by the Seller, any Crompton Entity, or
the Collection Agent to comply with any applicable law, rule
or regulation related to any Receivable, or the
nonconformity of any Receivable with any such applicable
law, rule or regulation;
(iii) the failure of the Seller to vest and maintain
vested in the Agent, for the benefit of the Purchasers, a
perfected ownership or security interest in the Sold
Interest and the property conveyed pursuant to
Section 1.1(e) and Section 1.8, free and clear of any
Adverse Claim;
(iv) any commingling of funds to which the Agent or any
Purchaser is entitled hereunder with any other funds;
(v) any failure of a Lock-Box Bank to comply with the
terms of the applicable Lock-Box Letter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to
the payment of any Receivable, or any other claim resulting
from the sale or lease of goods or the rendering of services
related to such Receivable or the furnishing or failure to
furnish any such goods or services or other similar claim or
defense not arising from the financial inability of any
Obligor to pay undisputed indebtedness;
(vii) any failure of the Seller or any Crompton Entity,
or any Affiliate of any thereof, to perform its duties or
obligations in accordance with the provisions of this
Agreement or any other Transaction Document to which such
Person is a party (as a Collection Agent or otherwise);
(viii) any action taken by the Agent as attorney-in-fact
for the Seller pursuant to Section 3.5(b); or
(ix) any environmental liability claim, products
liability claim or personal injury or property damage suit
or other similar or related claim or action of whatever
sort, arising out of or in connection with any Receivable or
any other suit, claim or action of whatever sort relating to
any of the Transaction Documents.
Section 6.2. Increased Cost and Reduced Return. By way of
clarification, and not of limitation, of Section 6.1, if the
adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration
thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any
Amsterdam Funding Source, the Agent or any Purchaser
(collectively, the "Funding Parties") with any request or
directive (whether or not having the force of law) of any such
Governmental Authority (a "Regulatory Change") (a) subjects any
Funding Party to any charge or withholding on or in connection
with a Funding Agreement or this Agreement (collectively, the
"Funding Documents") or any Receivable, (b) changes the basis of
taxation of payments to any of the Funding Parties of any amounts
payable under any of the Funding Documents (except for changes in
the rate of Tax on the overall net income of such Funding Party),
(c) 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, or any credit extended by, any of the Funding Parties,
(d) has the effect of reducing the rate of return on such Funding
Party's capital to a level below that which such Funding Party
could have achieved but for such adoption, change or compliance
(taking into consideration such Funding Party's policies
concerning capital adequacy) or (e) imposes any other condition,
and the result of any of the foregoing is (x) to impose a cost
on, or increase the cost to, any Funding Party of its commitment
under any Funding Document or of purchasing, maintaining or
funding any interest acquired under any Funding Document, (y) to
reduce the amount of any sum received or receivable by, or to
reduce the rate of return of, any Funding Party under any Funding
Document or (z) to require any payment calculated by reference to
the amount of interests held or amounts received by it hereunder,
then, upon demand by the Agent, the Seller shall pay to the Agent
for the account of the Person such additional amounts as will
compensate the Agent or such Purchaser (or, in the case of
Amsterdam, will enable Amsterdam to compensate any Amsterdam
Funding Source) for such increased cost or reduction. Each
Funding Party agrees that on the occurrence of any event giving
rise to the operation of this Section 6.2 with respect to such
Funding Party, it will, if requested by the Seller, use
reasonable efforts (subject to overall policy considerations of
such Funding Party) to designate another office for any credit
accommodation affected by such event, provided that such
designation is made on such terms that such Funding Party and its
office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise
to the operation of such Section.
Section 6.3. Other Costs and Expenses. Also by way of
clarification, and not of limitation, of Section 6.1, the Seller
shall pay to the Agent on demand all costs and expenses in
connection with (a) the preparation, execution, delivery and
administration (including amendments of any provision) of the
Transaction Documents, (b) the sale of the Sold Interest, (c) the
perfection of the Agent's rights in the Receivables and
Collections, (d) the enforcement by the Agent or the Purchasers
of the obligations of the Seller under the Transaction Documents
or of any Obligor under a Receivable and (e) the maintenance by
the Agent of the Lock-Boxes and Lock-Box Accounts, including
fees, costs and expenses of legal counsel for the Agent and
Amsterdam relating to any of the foregoing or to advising the
Agent, Amsterdam and any Amsterdam Funding Source about its
rights and remedies under any Transaction Document or any related
Funding Agreement and all costs and expenses (including counsel
fees and expenses) of the Agent, each Purchaser and each
Amsterdam Funding Source in connection with the enforcement of
the Transaction Documents or any Funding Agreement and in
connection with the administration of the Transaction Documents
following a Termination Event. The Seller shall reimburse the
Agent and Amsterdam for the cost of the Agent's or Amsterdam's
auditors (which may be employees of such Person) auditing the
books, records and procedures of the Seller. The Seller shall
reimburse Amsterdam for any amounts Amsterdam must pay to any
Amsterdam Funding Source pursuant to any Funding Agreement on
account of any Tax. The Seller shall reimburse Amsterdam on
demand for all other costs and expenses incurred by Amsterdam or
any shareholder of Amsterdam in connection with the Transaction
Documents or the transactions contemplated thereby, including the
cost of auditing Amsterdam's books by certified public
accountants, the cost of the Ratings and the fees and out-of-
pocket expenses of counsel of the Agent, Amsterdam or any
shareholder, or administrator, of Amsterdam for advice relating
to Amsterdam's operation.
Section 6.4. Withholding Taxes. (a) All payments made by the
Seller hereunder shall be made without withholding for or on
account of any present or future taxes (other than overall net
income taxes on the recipient). If any such withholding is so
required, the Seller shall make the withholding, pay the amount
withheld to the appropriate authority before penalties attach
thereto or interest accrues thereon and pay such additional
amount as may be necessary to ensure that the net amount actually
received by each Purchaser and the Agent free and clear of such
taxes (including such taxes on such additional amount) is equal
to the amount that Purchaser or the Agent (as the case may be)
would have received had such withholding not been made. If the
Agent or any Purchaser pays any such taxes, penalties or interest
the Seller shall reimburse the Agent or such Purchaser for that
payment on demand. If the Seller pays any such taxes, penalties
or interest, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Purchaser or
Agent on whose account such withholding was made (with a copy to
the Agent if not the recipient of the original) on or before the
thirtieth day after payment.
(b) Before the first date on which any amount is payable
hereunder for the account of any Purchaser not incorporated under
the laws of the USA such Purchaser shall deliver to the Seller
and the Agent each two (2) duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 (or successor
applicable form) certifying that such Purchaser is entitled to
receive payments hereunder without deduction or withholding of
any United States federal income taxes. Each such Purchaser
shall replace or update such forms when necessary to maintain any
applicable exemption and as requested by the Agent or the Seller.
Section 6.5. Payments and Allocations. If any Person seeks
compensation pursuant to this Article VI, such Person shall
deliver to the Seller and the Agent a certificate setting forth
the amount due to such Person, a description of the circumstance
giving rise thereto and the basis of the calculations of such
amount, which certificate shall be conclusive absent demonstrable
error. The Seller shall pay to the Agent (for the account of
such Person) the amount shown as due on any such certificate
within 10 Business Days after receipt of the notice.
Article VII
Conditions Precedent
Section 7.1. Conditions to Closing. This Agreement shall become
effective on the first date all conditions in this Section 7.1
are satisfied. On or before such date, the Seller shall deliver
to the Agent the following documents in form, substance and
quantity acceptable to the Agent:
(a) A certificate of the Secretary of each of the
Seller and each Crompton Entity certifying (i) the
resolutions of the Seller's and each Crompton Entity's board
of directors approving each Transaction Document to which it
is a party, (ii) the name, signature, and authority of each
officer who executes on the Seller's or any Crompton
Entity's behalf a Transaction Document (on which certificate
the Agent and each Purchaser may conclusively rely until a
revised certificate is received), (iii) the Seller's and
each Crompton Entity's certificate or articles of
incorporation certified by the Secretary of State of its
state of incorporation, (iv) a copy of the Seller's and each
Crompton Entity's by-laws and (v) good standing certificates
issued by the Secretaries of State of each jurisdiction in
which the Seller or any Crompton Entity is incorporated.
(b) All instruments and other documents required, or
deemed desirable by the Agent, to perfect the Agent's first
priority interest in the Receivables and Collections in all
appropriate jurisdictions.
(c) UCC search reports from all jurisdictions the
Agent requests.
(d) Executed copies of (i) all consents and
authorizations necessary in connection with the Transaction
Documents (ii) direction letters executed by the Seller and
each Originator authorizing the Agent to inspect and make
copies from the Seller's and each Originator's books and
records with respect to the Receivables maintained at any
off-site data processing or storage facilities, (iii) all
Lock-Box Letters, (iv) a compliance certificate in the form
of Exhibit I covering the period ending August 31, 1998,
(v) a Periodic Report covering the month ended August 31,
1998, and (vi) each Transaction Document.
(e) Favorable opinions of counsel to the Seller and
each Crompton Entity (and, if requested by Amsterdam, the
Enhancer or any Liquidity Provider and then at the expense
of the Seller) covering such matters as Amsterdam or the
Agent may request.
(f) Such other approvals, opinions or documents as the
Agent or Amsterdam may request.
Section 7.2. Conditions to Each Purchase. The obligation of
each Committed Purchaser to make any Purchase, and the right of
the Seller to request or accept any Purchase, are subject to the
conditions (and each Purchase shall evidence the Seller's
representation and warranty that clauses (a)-(e) of this
Section 7.2 have been satisfied) that on the date of such
Purchase before and after giving effect to the Purchase:
(a) no Potential Termination Event shall then exist or
shall occur as a result of the Purchase;
(b) the Liquidity Termination Date has not occurred;
(c) after giving effect to the application of the
proceeds of such Purchase, (x) the outstanding Matured
Aggregate Investment would not exceed the Aggregate
Commitment and (y) the outstanding Aggregate Investment
would not exceed the Purchase Limit;
(d) the representations and warranties in Section 4.1
are true and correct in all material respects on and as of
such date (except to the extent such representations and
warranties relate solely to an earlier date and then as of
such earlier date); and
(e) each of the Seller and each Crompton Entity is in
full compliance with the Transaction Documents (including
all covenants and agreements in Article V).
Nothing in this Section 7.2 limits the obligations (including
those in Section 2.1) of each Committed Purchaser to Amsterdam.
Article VIII
The Agent
Section 8.1. Appointment and Authorization. Each Purchaser
hereby irrevocably designates and appoints ABN AMRO Bank N.V. as
the "Agent" hereunder and authorizes the Agent to take such
actions and to exercise such powers as are delegated to the Agent
hereby and to exercise such other powers as are reasonably
incidental thereto. The Agent shall hold, in its name, for the
benefit of each Purchaser, the Purchase Interest of the
Purchaser. The Agent shall not have any duties other than those
expressly set forth herein or any fiduciary relationship with any
Purchaser, and no implied obligations or liabilities shall be
read into this Agreement, or otherwise exist, against the Agent.
The Agent does not assume, nor shall it be deemed to have
assumed, any obligation to, or relationship of trust or agency
with, the Seller. Notwithstanding any provision of this
Agreement or any other Transaction Document, in no event shall
the Agent ever be required to take any action which exposes the
Agent to personal liability or which is contrary to the provision
of any Transaction Document or applicable law.
Section 8.2. Delegation of Duties. The Agent may execute any of
its duties through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 8.3. Exculpatory Provisions. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable
for any action taken or omitted (i) with the consent or at the
direction of the Instructing Group or (ii) in the absence of such
Person's gross negligence or willful misconduct. The Agent shall
not be responsible to any Purchaser or other Person for (i) any
recitals, representations, warranties or other statements made by
the Seller, any Crompton Entity or any of their Affiliates,
(ii) the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any Transaction Document,
(iii) any failure of the Seller, any Crompton Entity or any of
their Affiliates to perform any obligation or (iv) the
satisfaction of any condition specified in Article VII. The
Agent shall not have any obligation to any Purchaser to ascertain
or inquire about the observance or performance of any agreement
contained in any Transaction Document or to inspect the
properties, books or records of the Seller, any Crompton Entity
or any of their Affiliates.
Section 8.4. Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon
any document, other writing or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the
proper Person and upon advice and statements of legal counsel
(including counsel to the Seller), independent accountants and
other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any
action under any Transaction Document unless it shall first
receive such advice or concurrence of the Purchasers, and
assurance of its indemnification, as it deems appropriate.
Section 8.5. Assumed Payments. Unless the Agent shall have
received notice from the applicable Purchaser before the date of
any Put or of any Incremental Purchase that such Purchaser will
not make available to the Agent the amount it is scheduled to
remit as part of such Put or Incremental Purchase, the Agent may
assume such Purchaser has made such amount available to the Agent
when due (an "Assumed Payment") and, in reliance upon such
assumption, the Agent may (but shall have no obligation to) make
available such amount to the appropriate Person. If and to the
extent that any Purchaser shall not have made its Assumed Payment
available to the Agent, such Purchaser (and the Seller in the
case of any Incremental Purchase) hereby agrees to pay the Agent
forthwith on demand such unpaid portion of such Assumed Payment
up to the amount of funds actually paid by the Agent, together
with interest thereon for each day from the date of such payment
by the Agent until the date the requisite amount is repaid to the
Agent, at a rate per annum equal to the Federal Funds Rate plus
2%.
Section 8.6. Notice of Termination Events. The Agent shall not
be deemed to have knowledge or notice of the occurrence of any
Potential Termination Event unless the Agent has received notice
from any Purchaser or the Seller stating that a Potential
Termination Event has occurred hereunder and describing such
Potential Termination Event. The Agent shall take such action
concerning a Potential Termination Event as may be directed by
the Instructing Group (or, if required for such action, all of
the Purchasers), but until the Agent receives such directions,
the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, as the Agent deems advisable
and in the best interests of the Purchasers.
Section 8.7. Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it
and that no act by the Agent hereafter taken, including any
review of the affairs of the Seller or any Crompton Entity, shall
be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that,
independently and without reliance upon the Agent or any other
Purchaser and based on such documents and information as it has
deemed appropriate, it has made and will continue to make its own
appraisal of and investigation into the business, operations,
property, prospects, financial and other conditions and
creditworthiness of the Seller, the Crompton Entities, and the
Receivables and its own decision to enter into this Agreement and
to take, or omit, action under any Transaction Document. The
Agent shall deliver each month to any Purchaser that so requests
a copy of the Periodic Report(s) received covering the preceding
calendar month. Except for items specifically required to be
delivered hereunder, the Agent shall not have any duty or
responsibility to provide any Purchaser with any information
concerning the Seller, any Crompton Entity or any of their
Affiliates that comes into the possession of the Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
Section 8.8. Agent and Affiliates. The Agent and its Affiliates
may extend credit to, accept deposits from and generally engage
in any kind of business with the Seller, any Crompton Entity or
any of their Affiliates and, in its roles as a Liquidity Provider
and the Enhancer, ABN AMRO may exercise or refrain from
exercising its rights and powers as if it were not the Agent.
The parties acknowledge that ABN AMRO acts as agent for Amsterdam
and subagent for Amsterdam's management company in various
capacities, as well as providing credit facilities and other
support for Amsterdam not contained in the Transaction Documents.
Section 8.9. Indemnification. Each Committed Purchaser shall
indemnify and hold harmless the Agent and its officers,
directors, employees, representatives and agents (to the extent
not reimbursed by the Seller or any Crompton Entity and without
limiting the obligation of the Seller or any Crompton Entity to
do so), ratably in accordance with its Ratable Share from and
against any and all liabilities, obligations, losses, damages,
penalties, judgments, settlements, costs, expenses and
disbursements of any kind whatsoever (including in connection
with any investigative or threatened proceeding, whether or not
the Agent or such Person shall be designated a party thereto)
that may at any time be imposed on, incurred by or asserted
against the Agent or such Person as a result of, or related to,
any of the transactions contemplated by the Transaction Documents
or the execution, delivery or performance of the Transaction
Documents or any other document furnished in connection therewith
(but excluding any such liabilities, obligations, losses,
damages, penalties, judgments, settlements, costs, expenses or
disbursements resulting solely from the gross negligence or
willful misconduct of the Agent or such Person as finally
determined by a court of competent jurisdiction).
Section 8.10. Successor Agent. The Agent may, upon at least five
(5) days notice to the Seller and each Purchaser, resign as
Agent. Such resignation shall not become effective until a
successor agent is appointed by an Instructing Group and has
accepted such appointment. Upon such acceptance of its
appointment as Agent hereunder by a successor Agent, such
successor Agent shall succeed to and become vested with all the
rights and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the
Transaction Documents. After any retiring Agent's resignation
hereunder, the provisions of Article VI and this Article VIII
shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Agent.
Article IX
Miscellaneous
Section 9.1. Termination. Amsterdam shall cease to be a party
hereto when the Amsterdam Termination Date has occurred,
Amsterdam holds no Investment and all amounts payable to it
hereunder have been indefeasibly paid in full. This Agreement
shall terminate following the Liquidity Termination Date when no
Investment is held by a Purchaser and all other amounts payable
hereunder have been indefeasibly paid in full, but the rights and
remedies of the Agent and each Purchaser concerning any
representation, warranty or covenant made, or deemed to be made,
by the Seller and under Article VI and Section 8.9 shall survive
such termination.
Section 9.2. Notices. Unless otherwise specified, all notices
and other communications hereunder shall be in writing (including
by telecopier or other facsimile communication), given to the
appropriate Person at its address or telecopy number set forth on
the signature pages hereof or at such other address or telecopy
number as such Person may specify, and effective when received at
the address specified by such Person. Each party hereto,
however, authorizes the Agent to act on telephone notices of
Purchases, Puts, and Discount Rate and Tranche Period selections
from any person the Agent in good faith believes to be acting on
behalf of the relevant party and, at the Agent's option, to tape
record any such telephone conversation. Each party hereto agrees
to deliver promptly to the Agent a confirmation of each telephone
notice given or received by such party (signed by an authorized
officer of such party), but the absence of such confirmation
shall not affect the validity of the telephone notice. The
Agent's records of all such conversations shall be deemed correct
and, if the confirmation of a conversation differs in any
material respect from the action taken by the Agent, the records
of the Agent shall govern absent manifest error. The number of
days for any advance notice required hereunder may be waived
(orally or in writing) by the Person receiving such notice and,
in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
Section 9.3. Payments and Computations. Notwithstanding
anything herein to the contrary, any amounts to be paid or
transferred by the Seller or the Collection Agent to, or for the
benefit of, any Purchaser or any other Person shall be paid or
transferred to the Agent (for the benefit of such Purchaser or
other Person). The Agent shall promptly (and, if reasonably
practicable, on the day it receives such amounts) forward each
such amount to the Person entitled thereto and such Person shall
apply the amount in accordance herewith. All amounts to be paid
or deposited hereunder shall be paid or transferred on the day
when due in immediately available Dollars (and, if due from the
Seller or Collection Agent, by 11:00 a.m. (Chicago time), with
amounts received after such time being deemed paid on the
Business Day following such receipt). The Seller hereby
authorizes the Agent to debit the Seller Account for application
to any amounts owed by the Seller hereunder. The Seller shall,
to the extent permitted by law, pay to the Agent upon demand, for
the account of the applicable Person, interest on all amounts not
paid or transferred by the Seller or the Collection Agent when
due hereunder at a rate equal to the Prime Rate plus 2%,
calculated from the date any such amount became due until the
date paid in full. Any payment or other transfer of funds
scheduled to be made on a day that is not a Business Day shall be
made on the next Business Day, and any Discount Rate or interest
rate accruing on such amount to be paid or transferred shall
continue to accrue to such next Business Day. All computations
of interest, fees, and Discount shall be calculated for the
actual days elapsed based on a 360 day year.
Section 9.4. Sharing of Recoveries. Each Purchaser agrees that
if it receives any recovery, through set-off, judicial action or
otherwise, on any amount payable or recoverable hereunder in a
greater proportion than should have been received hereunder or
otherwise inconsistent with the provisions hereof, then the
recipient of such recovery shall purchase for cash an interest in
amounts owing to the other Purchasers (as return of Investment or
otherwise), without representation or warranty except for the
representation and warranty that such interest is being sold by
each such other Purchaser free and clear of any Adverse Claim
created or granted by such other Purchaser, in the amount
necessary to create proportional participation by the Purchasers
in such recovery (as if such recovery were distributed pursuant
to Section 2.3). If all or any portion of such amount is
thereafter recovered from the recipient, such purchase shall be
rescinded and the purchase price restored to the extent of such
recovery, but without interest.
Section 9.5. Right of Setoff. During a Termination Event, each
Purchaser is hereby authorized (in addition to any other rights
it may have) to setoff, appropriate and apply (without
presentment, demand, protest or other notice which are hereby
expressly waived) any deposits and any other indebtedness held or
owing by such Purchaser (including by any branches or agencies of
such Purchaser) to, or for the account of, the Seller against
amounts owing by the Seller hereunder (even if contingent or
unmatured).
Section 9.6. Amendments. Except as otherwise expressly provided
herein, no amendment or waiver hereof shall be effective unless
signed by the Seller and the Instructing Group. In addition, no
amendment hereof shall, without the consent of (a) all the
Liquidity Providers, (i) extend the Liquidity Termination Date or
the date of any payment or transfer of Collections by the Seller
to the Collection Agent or by the Collection Agent to the Agent,
(ii) reduce the rate or extend the time of payment of Discount
for any Eurodollar Tranche or Prime Tranche, (iii) reduce or
extend the time of payment of any fee payable to the Liquidity
Providers, (iv) except as provided herein, release, transfer or
modify any Committed Purchaser's Purchase Interest or change any
Commitment, (v) amend the definition of Required Liquidity
Providers, Instructing Group, Termination Event or Section 1.1,
1.2, 1.5, 1.7(a), 2.1, 2.2, 2.3, 7.2 or 9.6, Article VI, or any
obligation of any Crompton Entity thereunder, (vi) consent to the
assignment or transfer by the Seller or any Originator of any
interest in the Receivables other than transfers under the
Transaction Documents or permit any Crompton Entity to transfer
any of its obligations under any Transaction Document except as
expressly contemplated by the terms of the Transaction Documents,
or (vii) amend any defined term relevant to the restrictions in
clauses (i) through (vi) in a manner which would circumvent the
intention of such restrictions or (b) the Agent, amend any
provision hereof if the effect thereof is to affect the
indemnities to, or the rights or duties of, the Agent or to
reduce any fee payable for the Agent's own account.
Notwithstanding the foregoing, the amount of any fee or other
payment due and payable from the Seller to the Agent (for its own
account), Amsterdam or the Enhancer may be changed or otherwise
adjusted solely with the consent of the Seller and the party to
which such payment is payable. Any amendment hereof shall apply
to each Purchaser equally and shall be binding upon the Seller,
the Purchasers and the Agent.
Section 9.7. Waivers. No failure or delay of the Agent or any
Purchaser in exercising any power, right, privilege or remedy
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right, privilege or remedy
preclude any other or further exercise thereof or the exercise of
any other power, right, privilege or remedy. Any waiver hereof
shall be effective only in the specific instance and for the
specific purpose for which such waiver was given. After any
waiver, the Seller, the Purchasers and the Agent shall be
restored to their former position and rights and any Potential
Termination Event waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to (or impair any
right consequent upon) any subsequent or other Potential
Termination Event. Any additional Discount that has accrued
after a Termination Event before the execution of a waiver
thereof, solely as a result of the occurrence of such Termination
Event, may be waived by the Agent at the direction of the
Purchaser entitled thereto or, in the case of Discount owing to
the Liquidity Providers, of the Required Liquidity Providers.
Section 9.8. Successors and Assigns; Participations;
Assignments.
(a) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Except as otherwise provided
herein, the Seller may not assign or transfer any of its rights
or delegate any of its duties without the prior consent of the
Agent and the Purchasers.
(b) Participations. Any Purchaser may sell to one or more
Persons (each a "Participant") participating interests in the
interests of such Purchaser hereunder. Such Purchaser shall
remain solely responsible for performing its obligations
hereunder, and the Seller and the Agent shall continue to deal
solely and directly with such Purchaser in connection with such
Purchaser's rights and obligations hereunder. Each Participant
shall be entitled to the benefits of Article VI and shall have
the right of setoff through its participation in amounts owing
hereunder to the same extent as if it were a Purchaser hereunder,
which right of setoff is subject to such Participant's obligation
to share with the Purchasers as provided in Section 9.4. A
Purchaser shall not agree with a Participant to restrict such
Purchaser's right to agree to any amendment hereto, except
amendments described in clause (a) of Section 9.6.
(c) Assignments by Liquidity Providers. Any Liquidity
Provider may assign to one or more Persons ("Purchasing Liquidity
Providers"), acceptable to the Agent in its sole discretion, any
portion of its Commitment as a Liquidity Provider and Purchase
Interest pursuant to a supplement hereto (a "Transfer
Supplement") in form satisfactory to the Agent executed by each
such Purchasing Liquidity Provider, such selling Liquidity
Provider and the Agent. Any such assignment by a Liquidity
Provider must be for an amount of at least Five Million Dollars.
Each Purchasing Liquidity Provider shall pay a fee of Three
Thousand Dollars to the Agent. Any partial assignment shall be
an assignment of an identical percentage of such selling
Liquidity Provider's Investment and its Commitment as a Liquidity
Provider. Upon the execution and delivery to the Agent of the
Transfer Supplement and payment by the Purchasing Liquidity
Provider to the selling Liquidity Provider of the agreed purchase
price, such selling Liquidity Provider shall be released from its
obligations hereunder to the extent of such assignment and such
Purchasing Liquidity Provider shall for all purposes be a
Liquidity Provider party hereto and shall have all the rights and
obligations of a Liquidity Provider hereunder to the same extent
as if it were an original party hereto with a Commitment as a
Liquidity Provider, an Investment and any related Assigned
Amsterdam Settlement described in the Transfer Supplement.
(d) Replaceable Liquidity Providers. If any Liquidity
Provider (a "Replaceable Liquidity Provider") shall (i) petition
the Seller for any amounts under Section 6.2 or (ii) cease to
have a short-term debt rating of "A-1" by S&P and "P-1" by
Moody's, the Seller or Amsterdam may designate a replacement
financial institution (a "Replacement Liquidity Provider")
acceptable to the Agent, in its sole discretion, to which such
Replaceable Liquidity Provider shall, subject to its receipt of
an amount equal to its Investment, any related Assigned Amsterdam
Settlement, and accrued Discount and fees thereon and all amounts
payable under Section 6.2, promptly assign all of its rights,
obligations and Liquidity Provider Commitment hereunder, together
with all of its Purchase Interest, and any related Assigned
Amsterdam Settlement, to the Replacement Liquidity Provider in
accordance with Section 9.8(c).
(e) Assignment by Amsterdam. Each party hereto agrees and
consents (i) to Amsterdam's assignment, participation, grant of
security interests in or other transfers of any portion of, or
any of its beneficial interest in, the Amsterdam Purchase
Interest and the Amsterdam Settlement and (ii) to the complete
assignment by Amsterdam of all of its rights and obligations
hereunder to ABN AMRO or any other Person, and upon such
assignment Amsterdam shall be released from all obligations and
duties hereunder; provided, however, that Amsterdam may not,
without the prior consent of the Required Liquidity Providers and
the Enhancer, transfer any of its rights under Section 2.1 to
cause the Liquidity Providers or the Enhancer to purchase the
Amsterdam Purchase Interest and the Amsterdam Settlement unless
the assignee (i) is a corporation whose principal business is the
purchase of assets similar to the Receivables, (ii) has ABN AMRO
as its administrative agent and (iii) issues commercial paper
with credit ratings substantially comparable to the Ratings.
Amsterdam shall promptly notify each party hereto of any such
assignment. Upon such an assignment of any portion of
Amsterdam's Purchase Interest and the Amsterdam Settlement, the
assignee shall have all of the rights of Amsterdam hereunder
relate to such Amsterdam Purchase Interest and Amsterdam
Settlement.
(f) Opinions of Counsel. If required by the Agent or to
maintain the Ratings, each Transfer Supplement must be
accompanied by an opinion of counsel of the assignee as to such
matters as the Agent may reasonably request.
Section 9.9. Intended Tax Characterization. It is the intention
of the parties hereto that, for the purposes of all Taxes, the
transactions contemplated hereby shall be treated as a loan by
the Purchasers (through the Agent) to the Seller that is secured
by the Receivables (the "Intended Tax Characterization"). The
parties hereto agree to report and otherwise to act for the
purposes of all Taxes in a manner consistent with the Intended
Tax Characterization. As provided in Section 5.1(g), the Seller
hereby grants to the Agent, for the ratable benefit of the
Purchasers, a security interest in all Receivables and
Collections to secure the payment of all amounts other than
Investment owing hereunder and (to the extent of the Sold
Interest) to secure the repayment of all Investment.
Section 9.10. Waiver of Confidentiality. The Seller hereby
consents to the disclosure of any nonpublic information relating
to the Seller, any Affiliate, or the Transaction Documents among
the Agent and the Purchasers and by the Agent or the Purchasers
to (i) any officers, directors, members, managers, employees or
outside accountants, auditors or attorneys thereof, (ii) any
prospective or actual assignee or participant, (iii) any rating
agency, surety, guarantor or credit or liquidity enhancer to the
Agent or any Purchaser, (iv) any entity organized to purchase, or
make loans secured by, financial assets for which ABN AMRO
provides managerial services or acts as an administrative agent,
(v) Amsterdam's administrator, management company, referral
agents, issuing agents or depositaries or CP Dealers and
(vi) Governmental Authorities with appropriate jurisdiction.
Section 9.11. Confidentiality of Agreement. Unless otherwise
consented to by the Agent, the Seller hereby will not disclose
the contents of any Transaction Document, or any other
confidential or proprietary information furnished by the Agent or
any Purchaser, to any Person other than to (i) its auditors and
attorneys, Affiliates, officers, directors, members, managers,
employees, outside accountants or as required by applicable law
or (ii) Governmental Authorities with appropriate jurisdiction.
Section 9.12. Agreement Not to Petition. Each party hereto
agrees, for the benefit of the holders of the privately or
publicly placed indebtedness for borrowed money for Amsterdam,
not, prior to the date which is one (1) year and one (1) day
after the payment in full of all such indebtedness, to acquiesce,
petition or otherwise, directly or indirectly, invoke, or cause
Amsterdam to invoke, the process of any Governmental Authority
for the purpose of (a) commencing or sustaining a case against
Amsterdam under any federal or state bankruptcy, insolvency or
similar law (including the Federal Bankruptcy Code), (b)
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official for Amsterdam, or any
substantial part of its property, or (c) ordering the winding up
or liquidation of the affairs of Amsterdam.
Section 9.13. Excess Funds. Other than amounts payable under
Section 9.4, Amsterdam shall be required to make payment of the
amounts required to be paid pursuant hereto only if Amsterdam has
Excess Funds (as defined below). If Amsterdam does not have
Excess Funds, the excess of the amount due hereunder (other than
pursuant to Section 9.4) over the amount paid shall not
constitute a "claim" (as defined in Section 101(5) of the Federal
Bankruptcy Code) against Amsterdam until such time as Amsterdam
has Excess Funds. If Amsterdam does not have sufficient Excess
Funds to make any payment due hereunder (other than pursuant to
Section 9.4), then Amsterdam may pay a lesser amount and make
additional payments that in the aggregate equal the amount of
deficiency as soon as possible thereafter. The term "Excess
Funds" means the excess of (a) the aggregate projected value of
Amsterdam's assets and other property (including cash and cash
equivalents), over (b) the sum of (i) the sum of all scheduled
payments of principal, interest and other amounts payable on
publicly or privately placed indebtedness of Amsterdam for
borrowed money, plus (ii) the sum of all other liabilities,
indebtedness and other obligations of Amsterdam for borrowed
money or owed to any credit or liquidity provider, together with
all unpaid interest then accrued thereon, plus (iii) all taxes
payable by Amsterdam to the Internal Revenue Service, plus (iv)
all other indebtedness, liabilities and obligations of Amsterdam
then due and payable, but the amount of any liability,
indebtedness or obligation of Amsterdam shall not exceed the
projected value of the assets to which recourse for such
liability, indebtedness or obligation is limited. Excess Funds
shall be calculated once each Business Day.
Section 9.14. No Recourse. The obligations of Amsterdam, its
management company, its administrator and its referral agents
(each a "Program Administrator") under any Transaction Document
or other document (each, a "Program Document") to which a Program
Administrator is a party are solely the corporate obligations of
such Program Administrator and no recourse shall be had for such
obligations against any Affiliate, director, officer, member,
manager, employee, attorney or agent of any Program
Administrator.
Section 9.15. Limitation of Liability. No Person shall make a
claim against the Agent or any Purchaser (or their respective
Affiliates, directors, officers, members, managers, employees,
attorneys or agents) for any special, indirect, consequential or
punitive damages under any claim for breach of contract or other
theory of liability in connection with the Transaction Documents
or the transactions contemplated thereby, and the Seller (for
itself, the Collection Agent and all other Persons claiming by or
through the Seller) hereby waives any claim for any such damages.
Section 9.16. Headings; Counterparts. Article and Section
Headings in this Agreement are for reference only and shall not
affect the construction of this Agreement. This Agreement may be
executed by different parties on any number of counterparts, each
of which shall constitute an original and all of which, taken
together, shall constitute one and the same agreement.
Section 9.17. Cumulative Rights and Severability. All rights and
remedies of the Purchasers and Agent hereunder shall be
cumulative and non-exclusive of any rights or remedies such
Persons have under law or otherwise. Any provision hereof that
is prohibited or unenforceable in any jurisdiction shall, in such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof and without affecting such provision in any other
jurisdiction.
Section 9.18. Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with,
the internal laws (and not the law of conflicts) of the State of
New York. The Seller hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in
New York, New York for purposes of all legal proceedings arising
out of, or relating to, the Transaction Documents or the
transactions contemplated thereby. The Seller hereby irrevocably
waives, to the fullest extent permitted by law, any objection it
may now or hereafter have to the venue of any such proceeding and
any claim that any such proceeding has been brought in an
inconvenient forum. Nothing in this Section 9.18 shall affect
the right of the Agent or any Purchaser to bring any action or
proceeding against the Seller or its property in the courts of
other jurisdictions.
Section 9.19. Waiver of Trial by Jury. To the extent permitted
by applicable law, each party hereto irrevocably waives all right
of trial by jury in any action, proceeding or counterclaim
arising out of, or in connection with, any transaction document
or any matter arising thereunder.
Section 9.20. Entire Agreement. The Transaction Documents
constitute the entire understanding of the parties thereto
concerning the subject matter thereof. Any previous or
contemporaneous agreements, whether written or oral, concerning
such matters are superseded thereby.
In Witness Whereof, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized
officers as of the date hereof.
ABN AMRO Bank N.V., ABN AMRO Bank N.V., as the
as the Agent Enhancer
By: By:
Title: Title:
By: By:
Title: Title:
Address: Structured Finance, Address: Structured Finance,
Asset Securitization Asset Securitization
135 South LaSalle Street 135 South LaSalle Street
Chicago, Illinois 60674-9135 Chicago, Illinois 60674-9135
Attention: Purchaser Agent- Attention:Enhancer-
Amsterdam Amsterdam
Telephone: (312) 904-6263 Telephone: (312) 904-6263
Telecopy: (312) 904-6376 Telecopy: (312) 904-6376
ABN AMRO Bank N.V., Amsterdam Funding Corporation
as a Liquidity Provider
By: By:
Title: Title:
By: Address:c/o Global Securitization
Services, LLC
Title: 400 West Main Street, Suite 338
Address: Structured Finance, New York, New York 11702
Asset Securitization Attention: Andrew Stidd
135 South LaSalle Street
Chicago, Illinois 60674-9135 Telephone: (631) 587-4700
Attention: Administrator - Telecopy: (212) 302-8767
Amsterdam
Telephone: (312) 904-6263
Telecopy: (312) 904-6376
with a copy to:
ABN AMRO Bank N.V.
Address: Structured Finance,
Asset Securitization
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attention: Administrator -
Amsterdam
Telephone: (312) 904-6263
Telecopy: (312) 904-6376
Crompton & Knowles Receivables Crompton Corporation,
Corporation, as Seller as Initial Collection Agent
By: By:
Title: Title:
Address: One American Lane Address: One American Lane
Greenwich, Connecticut 06831 Greenwich, Connecticut 06831
Atten: Robert A. Marchitello Atten: Robert A. Marchitello
Telephone: (203) 552-3150 Telephone: (203) 552-3150
Telecopy: (203) 552-2868 Telecopy: (203) 552-2868
Notices sent to: Notices sent to:
One American Lane One American Lane
Greenwich, Connecticut 06831 Greenwich, Connecticut 06831
Atten: Robert A. Marchitello Atten: Robert A. Marchitello
With a copy to: With a copy to:
Crompton Corporation Crompton Corporation
Benson Road Benson Road
Middlebury, Conneticut 06749 Middlebury, Connecticut 06749
Schedule I
Definitions
The following terms have the meanings set forth, or referred
to, below:
"ABN AMRO" means ABN AMRO Bank N.V. in its individual
capacity and not in its capacity as the Agent.
"Adverse Claim" means, for any asset or property of a
Person, a lien, security interest, charge, mortgage, pledge,
hypothecation, assignment or encumbrance, or any other right or
claim, in, of or on such asset or property in favor of any other
Person, except (i) those in favor of the Agent and (ii) liens for
taxes, assessments or charges of any Governmental Authority
(other than Tax or ERISA liens) and liens of landlords, carriers,
warehousemen, mechanics and materialmen imposed by law in the
ordinary course of business, in each case (a) for amounts not yet
due or (b) which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with
GAAP.
"Affiliate" means, for any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with such Person. For purposes of this
definition, "control" means the power, directly or indirectly, to
cause the direction of the management and policies of a Person.
"Agent" is defined in the first paragraph hereof.
"Agent's Account" means the account designated to the Seller
and the Purchasers by the Agent.
"Aggregate Commitment" means $204,000,000, as such amount
may be reduced pursuant to Section 1.6.
"Aggregate Investment" means the sum of the Investments of
all Purchasers.
"Aggregate Reserve" means, at any time at which such amount
is calculated, the sum of the Loss Reserve, Dilution Reserve and
Discount Reserve.
"Allocated Commercial Paper" means commercial paper notes
issued by Amsterdam for a tenor and in an amount specifically
requested by any Person in connection with a Receivable Purchase
Facility.
"Amsterdam" is defined in the first paragraph hereof.
"Amsterdam Funding Source" means any insurance company, bank
or other financial institution providing liquidity, back-up
purchase or credit support for Amsterdam.
"Amsterdam Settlement" means the sum of all claims and
rights to payment pursuant to Section 1.5 or 1.7 or any other
provision owed to Amsterdam (or owed to the Agent or the
Collection Agent for the benefit of Amsterdam) by the Seller
that, if paid, would be applied to reduce Amsterdam's Investment.
"Amsterdam Termination Date" means the earliest of (a) the
Business Day designated by Amsterdam at any time to the Seller
and (c) the Liquidity Termination Date.
"Assigned Amsterdam Settlement" means, for each Committed
Purchaser for any Put, the product of such Purchaser's Purchased
Percentage and the amount of the Amsterdam Settlement being
transferred pursuant to such Put.
"Bankruptcy Event" means, for any Person, that (a) such
Person makes a general assignment for the benefit of creditors or
any proceeding is instituted by or against such Person seeking to
adjudicate it bankrupt or insolvent, or seeking the liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of
a receiver, trustee or other similar official for it or any
substantial part of its property or (b) such Person takes any
corporate action to authorize any such action.
"Break Funding Costs" means for any Pool Funded Purchase
Interest amounts payable to Amsterdam under the applicable
Receivables Purchase Facility in connection with any prepayment
or amortization if amounts payable thereunder in excess of the
amount of the investment or loan prepaid or amortized and accrued
and unpaid interest or discount thereon.
"Business Day" means any day other than (a) a Saturday,
Sunday or other day on which banks in the States of New York,
Connecticut or Illinois are authorized or required to close, (b)
a holiday on the Federal Reserve calendar and, (c) solely for
matters relating to a Eurodollar Tranche, a day on which dealings
in Dollars are not carried on in the London interbank market.
"Charge-Off" means any Receivable that has or should have
been (in accordance with the Credit and Collection Policy)
charged off or written off by the Seller.
"Collection" means any amount paid, or deemed paid, on a
Receivable, including from the proceeds of collateral securing,
or any guaranty of, such Receivable or by the Seller under
Section 1.5(b).
"Collection Agent" is defined in Section 3.1(a).
"Collection Agent Replacement Event" means the occurrence of
any one or more of the following:
(a) any failure by the Collection Agent to make any
payment, transfer or deposit required by any Transaction
Document to be made by it which failure continues unremedied
for one Business Day;
(b) failure on the part of the Collection Agent to
observe or perform any covenant or agreement contained in
Sections 3.2 or 3.3 of this Agreement;
(c) failure on the part of the Collection Agent to
observe or perform any other covenant or agreement set forth
in this Agreement or any other Transaction Document, which
failure has a material adverse effect on any Purchaser and
continues unremedied for a period of 30 days after the
earlier of (i) the date on which written notice of the
failure, requiring the same to be remedied, shall have been
given to the Collection Agent by any Purchaser, or to and
(ii) the date on which the Collection Agent became aware of
such failure;
(d) the Daily Report shall fail to have been correct
in any material respect when made or delivered or shall not
have been delivered when required under the terms hereof;
(e) the Monthly Report shall fail to have been correct
in any material respect when made or delivered, or shall not
have been delivered when required under the terms hereof,
and such condition continues unremedied for a period of
three Business Days;
(f) any written representation, warranty,
certification or statement made by the Collection Agent in,
or pursuant to, any Transaction Document proves to have been
incorrect in any material adverse respect when made; or
(g) the Collection Agent suffers a Bankruptcy Event.
"Collection Agent Fee" is defined in Section 3.6.
"Commitment" means, for each Committed Purchaser, the amount
set forth on Schedule II, as adjusted in accordance with Sections
1.6 and 9.8.
"Committed Purchasers" is defined in Section 1.1(b).
"Concentration Limit" means (i) with respect to Obligors
with senior unsecured long-term indebtedness rated A- (or higher)
by S&P or A3 (or higher) by Moody's, an amount not to exceed 5%
of the Eligible Receivables Balance, and (ii) with respect to all
other Obligors, an amount not to exceed 3% of the Eligible
Receivables Balance.
"CP Dealer" means, at any time, each Person Amsterdam then
engages as a placement agent or commercial paper dealer.
"CP Rate" means, for any CP Tranche Period, a rate per annum
equal to (a) the weighted average of the rates at which
commercial paper notes having a term equal to such CP Tranche
Period may be sold by any CP Dealer selected by Amsterdam, as
agreed between each such CP Dealer and Amsterdam, plus (b) on or
after the occurrence of a Termination Event, 2%. If such rate is
a discount rate, the CP Rate shall be the rate resulting from
Amsterdam's converting such discount rate to an interest-bearing
equivalent rate. If Amsterdam determines that due to disruptions
in the commercial paper market that it is unable to issue
commercial paper, then the CP Rate shall be the Prime Rate for so
long as such condition shall continue. The CP Rate shall include
all costs and expenses to Amsterdam of issuing the related
commercial paper notes, including all dealer commissions and note
issuance costs in connection therewith.
"Credit and Collection Policy" means the Seller's credit and
collection policy and practices relating to Receivables attached
hereto as Exhibit J.
"Crompton Credit Agreement" means that certain Five Year
Credit Agreement, dated as of October 28, 1999, among CK Witco
Corporation (now known as Crompton Corporation), the Eligible
Subsidiaries referred to therein, the Banks listed therein, The
Chase Manhattan Bank, as Syndication Agent, Citibank N.A., as
Administrative Agent, and Bank of America and Deutsche Bank
Securities Inc., as Co-Documentation Agents, as such may be
amended, modified or supplemented from time to time in accordance
with the terms thereof.
"Crompton Entity" means the Parent and each Originator.
"Deemed Collections" is defined in Section 1.5(c).
"Default Ratio" means, at any time, the ratio of (a) the
then aggregate outstanding balance of all Defaulted Receivables
(minus Charge-Offs) to (b) the then aggregate outstanding balance
of all Receivables (minus Charge-Offs).
"Defaulted Receivable" means any Receivable (a) on which any
amount is unpaid more than (i) for Davis-Standard Corporation, 90
days past its original invoice date and (ii) for all other
Originators, 90 days past its original due date, or (b) the
Obligor on which has suffered a Bankruptcy Event.
"Delinquency Ratio" means, at any time, the ratio of (a) the
then aggregate outstanding balance of all Delinquent Receivables
to (b) the then aggregate outstanding balance of all Receivables.
"Delinquent Receivable" means any Receivable (other than a
Charge-Off or Defaulted Receivable) on which any amount is unpaid
more than (i) for Davis Standard Corporation, 31-90 days past its
original invoice date and (ii) for all other Originators, 31-90
days past its original due date.
"Designated Financial Officer" means each of Chief Financial
Officer, Treasurer and Assistant Treasurer.
"Dilution Ratio" means, for any period, the ratio computed
by dividing (a) the aggregate amount of payments owed by the
Seller pursuant to the first sentence of Section 1.5(b) during
such period by (b) the aggregate amount of Collections received
during such period.
"Dilution Reserve" means, at any time prior to the
occurrence of a Dilution Reserve Trigger Event, 0, and upon the
occurrence of a Dilution Reserve Trigger Event, 3 times the
highest Dilution Ratio (expressed as a decimal) as of the last
day of each of the last twelve calendar months.
"Dilution Reserve Trigger Event" shall mean at any time
either (A) the Parent's long-term unsecured, unsubordinated
indebtedness is rated less than "BBB-" by S&P or "Baa3" by
Moody's (or S&P or Moody's has withdrawn or suspended such
rating) and the Seller has not provided the Agent with written
notice (which notice may only be given once during the term of
this Agreement) within two Business Days of such downgrade or
withdrawal that it agrees to pay the increased fees provided for
in the Fee Letter or (B) the Parent's long-term unsecured,
unsubordinated indebtedness is rated less than "BBB-" by S&P and
"Baa3" by Moody's (or S&P or Moody's has withdrawn or suspended
such rating).
"Discount" means, for any Tranche Period, (a) the product of
(i) the Discount Rate for such Tranche Period, (ii) the total
amount of Investment allocated to the Tranche Period, and (iii)
the number of days elapsed during the Tranche Period divided by
(b) 360 days.
"Discount Period" means, with respect to any Settlement Date
or the Liquidity Termination Date, the period from and including
the preceding Settlement Date (or if none, the date that the
first Incremental Purchase is made hereunder) to but not
including such Settlement Date or Liquidity Termination Date, as
applicable.
"Discount Rate" means, for any Tranche Period, the CP Rate,
the Eurodollar Rate or the Prime Rate, as applicable.
"Discount Reserve" means, at any time, the product of
(a) 1.5 multiplied by (b) the rate announced by ABN AMRO as its
"Prime Rate" (which may not be its best or lowest rate) plus 100
basis points (1.00%) multiplied by (c) Aggregate Investment
multiplied by (d) a fraction, the numerator of which is the
average Turnover Rate as of the last day of the last three
calendar months and the denominator of which is 360.
"Dollar" and "$" means lawful currency of the United States
of America.
"Early Payment Fee" means, if any Investment of a Purchaser
allocated (or, in the case of a requested Purchase not made by
the Committed Purchasers for any reason other than their default,
scheduled to be allocated) to a Tranche Period for a CP Tranche
or Eurodollar Tranche is reduced or terminated before the last
day of such Tranche Period (the amount of Investment so reduced
or terminated being referred to as the "Prepaid Amount"), the
cost to the relevant Purchaser of terminating or reducing such
Tranche, which (a) for a CP Tranche means any compensation
payable in prepaying the related commercial paper or, if not
prepaid, any shortfall between the amount that will be available
to Amsterdam on the maturity date of the related commercial paper
from reinvesting the Prepaid Amount in Permitted Investments and
the Face Amount of such commercial paper and (b) for a Eurodollar
Tranche will be determined based on the difference between the
LIBOR applicable to such Tranche and the LIBOR applicable for a
period equal to the remaining maturity of the Tranche on the date
the Prepaid Amount is received.
"Eligible Receivable" means, at any time, any Receivable:
(i) the Obligor of which (a) is a resident of, or organized
under the laws of, or with its chief executive office in, the
USA; provided, however, that not more than 10% of Eligible
Receivables at any time may consist of Receivables the Obligor of
which is not a resident of, or organized under the laws of, or
with its chief executive office in, the USA (each, a "Foreign
Receivable") if the applicable Originator is the account party to
a letter of credit or letters of credit issued by a financial
institution acceptable to the Agent naming the Collection Agent
(or a permitted sub-collection agent) as beneficiary in a face
amount not less than the aggregate invoiced amount of Foreign
Receivables of such Originator and in form and substance
satisfactory to the Agent; (b) is not an Affiliate of any
Crompton Entity; (c) is not a government or a governmental
subdivision or agency; (d) has not suffered a Bankruptcy Event;
(e) is a customer of the Originator in good standing; and (f) is
not the Obligor of Receivables 25% or more of which are Defaulted
Receivables;
(ii) which is stated to be due and payable within 90 days
after the invoice therefor; provided, however, that not more than
10% of Eligible Receivables at any time may consist of
Receivables which are stated to be due and payable within 91 to
360 days after invoice therefor;
(iii) which is not a Defaulted Receivable or a Charge-Off;
(iv) which is an "account" within the meaning of
Section 9-102(a) of the UCC of all applicable jurisdictions;
(v) which is denominated and payable only in Dollars in the
USA and is non-interest bearing; provided that a Receivable shall
not be deemed to be interest bearing solely as a result of the
Seller's lawful imposition of an interest or other charge on any
Receivable that remains unpaid for some specified period of time;
(vi) which arises under a contract that 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 (other than, prior
to the occurrence of the Receivable Setoff Downgrade Event, a
Receivable Setoff), counterclaim, defense or other Adverse Claim,
and is not an executory contract or unexpired lease within the
meaning of Section 365 of the Bankruptcy Code;
(vii) which arises under a contract that (a) contains an
obligation to pay a specified sum of money and is subject to no
contingencies and (b) does not contain a confidentiality
provision that purports to restrict any Purchaser's exercise of
rights under this Agreement, including, without limitation, the
right to review such contract;
(viii) which does not, in whole or in part, contravene any law,
rule or regulation applicable thereto (including, without
limitation, those relating to usury, truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy); and
(ix) which satisfies all applicable requirements of the Credit
and Collection Policy and was generated in the ordinary course of
each Originator's business from the sale of goods or provision of
services to a related Obligor solely by each Originator.
"Eligible Receivables Balance" means, at any time, (a) the
aggregate outstanding principal balance of all Eligible
Receivables less (b)(1) the portion of the aggregate outstanding
principal balance of Eligible Receivables which exceed the
Concentration Limit plus (2) the aggregate principal amount of
all Receivable Setoffs in excess of 5% of the Eligible
Receivables Balance.
"Enhancer" is defined in the first paragraph hereof.
"Enhancer Commitment Percentage" means 10%.
"Eurodollar Rate" means, for any Tranche Period for a
Eurodollar Tranche, the sum of (a) LIBOR for such Tranche Period
divided by 1 minus the "Reserve Requirement" plus (b)(i) for
Investment of a Liquidity Provider, the amount specified in the
Fee Letter, or, (ii) for Investment of the Enhancer, the amount
specified in the Fee Letter plus (c) on or after the occurrence
of a Termination Event, the amount specified in the Fee Letter;
where "Reserve Requirement" means, for any Tranche Period for a
Eurodollar Tranche, the maximum reserve requirement imposed
during such Tranche Period on "eurocurrency liabilities" as
currently defined in Regulation D of the Board of Governors of
the Federal Reserve System.
"Face Amount" means the face amount of any Amsterdam
commercial paper issued on a discount basis or, if not issued on
a discount basis, the principal amount of such note and interest
scheduled to accrue thereon to its stated maturity.
"Federal Funds Rate" means for any day the greater of
(i) the average rate per annum as determined by ABN AMRO at which
overnight Federal funds are offered to ABN AMRO for such day by
major banks in the interbank market, and (ii) if ABN AMRO is
borrowing overnight funds from a Federal Reserve Bank that day,
the average rate per annum at which such overnight borrowings are
made on that day. Each determination of the Federal Funds Rate
by ABN AMRO shall be conclusive and binding on the Seller except
in the case of manifest error.
"Fee Letter" means the letter agreement dated as of the date
hereof among the Seller, the Liquidity Providers, the Agent,
Amsterdam and the Enhancer.
"Funding Agreement" means any agreement or instrument
executed by Amsterdam and executed by or in favor of any
Amsterdam Funding Source or executed by any Amsterdam Funding
Source at the request of Amsterdam (including the Program LOC).
"Funding Charges" means, for each day, the sum of (i)
discount accrued on Pooled Commercial Paper on such day, plus
(ii) any and all accrued commissions in respect of placement
agents and commercial paper dealers in respect of such Pooled
Commercial Paper for such day, plus (iii) issuing and paying
agents' fees incurred on such Pooled Commercial Paper for such
day, plus (iv) other costs associated with funding small or odd-
lot amounts with respect to all Receivable Purchase Facilities
which are funded by Pooled Commercial Paper for such day, minus
(v) any accrual of income net of expenses received on such day
from investment of collections received under all Receivable
Purchase Facilities funded with Pooled Commercial Paper, minus
(vi) any payment received on such day net of expenses in respect
of Break Funding Costs related to the prepayment of any Purchase
Interests held by Amsterdam pursuant to the terms of any
Receivable Purchase Facilities funded substantially with Pooled
Commercial Paper.
"GAAP" means generally accepted accounting principles in the
USA, applied on a consistent basis.
"Governmental Authority" means any (a) Federal, state,
municipal or other governmental entity, board, bureau, agency or
instrumentality, (b) administrative or regulatory authority
(including any central bank or similar authority) or (c) court,
judicial authority or arbitrator, in each case, whether foreign
or domestic.
"Incremental Purchase" is defined in Section 1.1(b).
"Initial Collection Agent" is defined in the first paragraph
hereof.
"Instructing Group" means the Required Liquidity Providers,
the Enhancer and, unless the Amsterdam Termination Date has
occurred and Amsterdam has no Investment, Amsterdam.
"Intended Tax Characterization" is defined in Section 9.9.
"Interim Liquidation" means any time before the Liquidity
Termination Date during which no Reinvestment Purchases are made
by any Purchaser, as established pursuant to Section 1.2.
"Investment" means, for each Purchaser, (a) the sum of
(i) all Incremental Purchases by such Purchaser and (ii) the
aggregate amount of any payments or exchanges made by, or on
behalf of, such Purchaser to any other Purchaser under Article II
minus (b) all Collections, amounts received from other Purchasers
under Article II, and other amounts received or exchanged and, in
each case, applied by the Agent or such Purchaser to reduce such
Purchaser's Investment. A Purchaser's Investment shall be
restored to the extent any amounts so received or exchanged and
applied are rescinded or must be returned for any reason.
"LIBOR" means, for any Tranche Period for a Eurodollar
Tranche or other time period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth
of a percentage point) for deposits in Dollars for a period equal
to such Tranche Period or other period, which appears on Page
3750 of the Telerate Service (or any successor page or successor
service that displays the British Bankers' Association Interest
Settlement Rates for Dollar deposits) as of 11:00 a.m. (London,
England time) two Business Days before the commencement of such
Tranche Period or other period. If for any Tranche Period for a
Eurodollar Tranche no such displayed rate is available (or, for
any other period, if such displayed rate is not available or the
need to calculate LIBOR is not notified to the Agent at least 3
Business Days before the commencement of the period for which it
is to be determined), the Agent shall determine such rate based
on the rates ABN AMRO is offered deposits of such duration in the
London interbank market.
"Limited Guaranty" means the Limited Guaranty, dated the
date hereof, from the Parent in favor of the Agent.
"Liquidation Period" means, for Amsterdam only, all times
when Amsterdam is not making Reinvestment Purchases pursuant to
Section 1.1(d) and, for all Purchasers, all times (x) during an
Interim Liquidation and (y) on and after the Liquidity
Termination Date.
"Liquidity Providers" is defined in the first paragraph
hereof.
"Liquidity Termination Date" means the earliest of (a) the
date of the occurrence of a Termination Event described in clause
(e) of the definition of Termination Event, (b) the date
designated by the Agent to the Seller at any time after the
occurrence of any other Termination Event, (c) the Business Day
designated by the Seller with no less than five (5) Business Days
prior notice to the Agent and (d) January 17, 2003.
"Lock-Box" means each post office box or bank box listed on
Exhibit G, as revised pursuant to Section 5.1(i).
"Lock-Box Account" means each account maintained by the
Collection Agent at a Lock-Box Bank for the purpose of receiving
or concentrating Collections.
"Lock-Box Agreement" means each agreement between the
Collection Agent and a Lock-Box Bank concerning a Lock-Box
Account.
"Lock-Box Bank" means each bank listed on Exhibit G, as
revised pursuant to Section 5.1(i).
"Lock-Box Letter" means a letter in substantially the form
of Exhibit H (or otherwise acceptable to the Agent) from the
Seller and the Collection Agent to each Lock-Box Bank,
acknowledged and accepted by such Lock-Box Bank and the Agent.
"Loss Reserve" means, at any time, the product of (i) the
greatest of (a) 12.0%, (b) 0.75 times the highest three month
rolling average Delinquency Ratio (expressed as a decimal) as of
the last day of each of the last twelve calendar months and (c)
0.75 times the highest three month rolling average Default Ratio
(expressed as a decimal) as of the last day of each of the last
twelve calendar months multiplied by (ii) the Eligible
Receivables Balance.
"Loss-to-Liquidation Ratio" means, for any period, the ratio
of the outstanding balance of Charge-Offs to the aggregate amount
of Collections during such period.
"Matured Aggregate Investment" means, at any time, the
Matured Value of Amsterdam's Investment plus the total
Investments of all other Purchasers then outstanding.
"Matured Value" means, of any Investment, the sum of such
Investment and all unpaid Discount, fees and other amounts
scheduled to become due (whether or not then due) on such
Investment during all Tranche Periods to which any portion of
such Investment has been allocated.
"Maximum Incremental Purchase Amount" means, at any time,
the lesser of (a) the difference between the Purchase Limit and
the Aggregate Investment then outstanding and (b) the difference
between the Aggregate Commitment and the Matured Aggregate
Investment then outstanding.
"Moody's" means Moody's Investors Service, Inc.
"Obligor" means, for any Receivable, each Person obligated
to pay such Receivable and each guarantor of such obligation.
"Originators" means each of Crompton Sales Company, Inc.,
Davis Standard Corporation and Crompton Corporation.
"Parent" means Crompton Corporation, a Delaware corporation.
"Periodic Report" is defined in Section 3.3.
"Permitted Investments" means (a) evidences of indebtedness,
maturing within thirty (30) days after the date of purchase
thereof, issued by, or guaranteed by the full faith and credit
of, the federal government of the USA, (b) repurchase agreements
with banking institutions or broker-dealers the short-term
unsecured obligations of which is rated at least "A-1" (or the
equivalent) by S&P and at least "P-1" (or the equivalent) by
Moody's registered under the Securities Exchange Act of 1934
which are fully secured by obligations of the kind specified in
clause (a), (c) money market funds (i) rated not lower than the
highest rating category from Moody's and "AAA m" or "AAAm-g,"
from S&P or (ii) which are otherwise acceptable to the Rating
Agencies or (d) commercial paper issued by any corporation
incorporated under the laws of the USA and rated at least "A-1"
(or the equivalent) by S&P and at least "P-1" (or the equivalent)
by Moody's.
"Person" means an individual, partnership, corporation,
association, joint venture, Governmental Authority or other
entity of any kind.
"Pool Funded Purchase Interest" means each investment or
loan of Amsterdam under a Receivables Purchase Facility funded
with Pooled Commercial Paper.
"Pooled Allocation" means, for each Pool Funded Purchase
Interest, an amount each day equal to the product of (i) the
Pooled Percentage Share of such Purchase Interest on such day
multiplied by (ii) the aggregate amount of Funding Charges for
such day.
"Pooled Commercial Paper" means commercial paper notes of
Amsterdam except (A) Allocated Commercial Paper, and (B)
Specially Pooled Paper.
"Pooled Percentage Share" means, for each Pool Funded
Purchase Interest, a fraction (expressed as a percentage) the
numerator of which is equal to the Investment associated with
such Pool Funded Purchase Interest and the denominator of which
is equal to the aggregate amount of all outstanding investment
(or comparable terms used in any Receivable Purchase Facility)
held by Amsterdam which is funded substantially with Pooled
Commercial Paper.
"Potential Termination Event" means any Termination Event or
any event or condition that with the lapse of time or giving of
notice, or both, would constitute a Termination Event.
"Prime Rate" means, for any period, the daily average
during such period of (a) the greater of (i) the floating
commercial loan rate per annum of ABN AMRO (which rate is a
reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer by ABN AMRO) announced
from time to time as its prime rate or equivalent for Dollar
loans in the USA, changing as and when said rate changes and (ii)
the Federal Funds Rate plus 0.75% plus (b) on or after the
occurrence of a Termination Event, the amount set forth in the
Fee Letter.
"Program LOC" means that certain amended and restated
irrevocable transferable letter of credit No. S550115, dated
November 3, 1995, issued by the Enhancer at the request of
Amsterdam, and each letter of credit issued in substitution or
replacement therefor.
"Program Unreimbursed Draw Amount" means the sum of all
draws under the Program LOC in connection with this Transaction
which have not been reimbursed (whether through the payment of
cash or the exchange of assets), together with all interest
thereon and all other amounts, if any, payable in connection
therewith.
"Purchase" is defined in Section 1.1(a).
"Purchase Agreement" means the Receivables Purchase
Agreement dated as of the date hereof among the Seller and each
Originator.
"Purchase Amount" is defined in Section 1.1(c).
"Purchase Date" is defined in Section 1.1(c).
"Purchase Interest" means, for a Purchaser, the percentage
ownership interest in the Receivables and Collections held by
such Purchaser, calculated when and as described in
Section 1.1(a); provided, however, that (except for purposes of
computing a Purchase Interest or the Sold Interest in Section 1.5
or 1.7) at any time the Sold Interest would otherwise exceed 100%
each Purchaser then holding any Investment shall have its
Purchase Interest reduced by multiplying such Purchase Interest
by a fraction equal to 100% divided by the Sold Interest
otherwise then in effect, so that the Sold Interest is thereby
reduced to 100%.
"Purchase Limit" means $200,000,000.
"Purchase Price" means, for each Committed Purchaser for any
Put, such Purchaser's Purchased Percentage for such Put
multiplied by the sum of (a) (i) for the Enhancer, the amount of
Amsterdam's Investment being transferred pursuant to such Put
(the "Put Investment") and (ii) for each Liquidity Provider, the
lesser of (A), the Put Investment and (B) the sum of (I) the
product of (1) the amount of Amsterdam Investment being
transferred pursuant to such Put divided by the Amsterdam
Investment (before giving effect to such Put), (2) Amsterdam's
Purchase Interest at such time, (3) the Eligible Receivables
Balance as most recently calculated, provided, however, that
Collections used to reduce such most recently computed Eligible
Receivables Balance but not yet received by the Agent shall be
added back to the Eligible Receivables Balance, and (II) the
amount of Amsterdam Settlement being transferred pursuant to such
Put plus (b) (i) all unpaid Discount owed to Amsterdam (whether
or not then due) to the end of each applicable Tranche Period to
which any Investment being Put has been allocated, (ii) all
accrued but unpaid fees (whether or not then due) payable to
Amsterdam in connection herewith at the time of such purchase and
(iii) all accrued and unpaid costs, expenses and indemnities due
to Amsterdam from the Seller in connection herewith. Amsterdam
shall calculate the Purchase Price on the date of such Put based
on the information then available to it, and, regardless of
whether such information is complete, such calculation shall be
conclusive and binding absent manifest error; provided, however,
that if such purchase occurs due to the occurrence of a
Termination Event, the Purchase Price shall be determined as of
the date such Termination Event first occurred (without regard to
any grace periods), adjusted to reflect amounts received by
Amsterdam. In making any such calculation, Amsterdam shall be
entitled to rely on information provided to it by the Seller
without any obligation to investigate the accuracy or
completeness of such information.
"Purchased Percentage" means, for any Put, for each
Committed Purchaser, its Ratable Share or such lesser percentage
as is necessary to prevent the Purchase Price of such Purchaser
from exceeding its Unused Commitment (unless, in the case of the
Enhancer, it elects not to reduce its Purchased Percentage in
whole or in part).
"Purchasers" means the Liquidity Providers, the Enhancer and
Amsterdam.
"Put" is defined in Section 2.l(a).
"Ratable Share" means, for each Committed Purchaser, such
Purchaser's Commitment divided by the Aggregate Commitment. If,
however, on the date any Incremental Purchase or payment for any
Put is to be made by the Committed Purchasers, the Enhancer has
outstanding Investment plus Program Unreimbursed Draw Amount in
excess of its Ratable Share of the outstanding Investment and
Program Unreimbursed Draw Amount of all Committed Purchasers,
then for purposes of such Incremental Purchase or Put the Ratable
Share of each Committed Purchaser shall be replaced with a
percentage equal for each Committed Purchaser to (a) its
Commitment minus its Investment and Program Unreimbursed Draw
Amount before such Purchase or Put (its "Existing Investment")
divided by (b) the Aggregate Commitment minus the sum of the
Existing Investments of all Committed Purchasers.
"Rating Agency" means Moody's, S&P and any other rating
agency Amsterdam chooses to rate its commercial paper notes.
"Ratings" means the ratings by the Rating Agencies of the
indebtedness for borrowed money of Amsterdam.
"Receivable" means each obligation of an Obligor to pay for
merchandise sold or services rendered by any Originator and
includes such Originator's rights to payment of any interest or
finance charges and in the merchandise (including returned goods)
and contracts relating to such Receivable, all security
interests, guaranties and property securing or supporting payment
of such Receivable, all Records and all proceeds of the
foregoing. During any Interim Liquidation and on and after the
Liquidity Termination Date, the term "Receivable" shall only
include receivables existing on the date such Interim Liquidation
commenced or Liquidity Termination Date occurred, as applicable.
Deemed Collections shall reduce the outstanding balance of
Receivables hereunder, so that any Receivable that has its
outstanding balance deemed collected shall cease to be a
Receivable hereunder after (x) the Collection Agent receives
payment of such Deemed Collections under Section 1.5(b) or (y) if
such Deemed Collection is received before the Liquidity
Termination Date, an adjustment to the Sold Interest permitted by
Section 1.5(c) is made.
"Receivable Purchase Facility" means any receivables
purchase agreement, loan agreement or other similar contractual
arrangement to which Amsterdam is a party relating to the
transfer, purchase or financing of receivables or other assets.
"Receivable Setoff" means the reduction of any Receivable of
an Obligor by any amount owing by the Seller to such Obligor
other than a reduction resulting from the creditworthiness of
such Obligor.
"Receivable Setoff Downgrade Event" shall mean at any time
the Parent's long-term unsecured, unsubordinated indebtedness is
rated less than "BBB-" by S&P or "Baa3" by Moody's (or S&P or
Moody's has withdrawn or suspended such rating).
"Records" means, for any Receivable, all contracts, books,
records and other documents or information (including computer
programs, tapes, disks, software and related property and rights)
relating to such Receivable or the related Obligor.
"Reinvestment Purchase" is defined in Section 1.1(b).
"Required Liquidity Providers" means Liquidity Providers
having Liquidity Provider Commitments in excess of 66-2/3% of the
Commitment of all Liquidity Providers.
"Reserve Percentage" means, at any time, the quotient
obtained by dividing (a) the Aggregate Reserve by (b) the
Eligible Receivables Balance.
"Seller" is defined in the first paragraph hereof.
"Seller Account" means the Seller's account number 035-1-
084215 at The Chase Manhattan Bank, New York, New York or such
other account designated by the Seller to the Agent with at least
ten (10) days prior notice.
"Settlement Date" means the 20th day of each calendar month.
"Sold Interest" is defined in Section 1.1(a).
"Special Transaction Subaccount" means the special
transaction subaccount established for this Agreement pursuant to
Amsterdam's depositary agreement.
"Specially Pooled Paper" means the aggregate of all
commercial paper notes of Amsterdam issued in connection with
receivables purchase facilities designated from time to time by
the Agent (in its sole discretion). Specially Pooled Paper will
not include Pooled Commercial Paper or Allocated Commercial Paper
at any time.
"S&P" means Standard & Poor's Ratings Group.
"Subordinated Notes" means each buyer note issued by the
Seller to the applicable Originator under the Purchase Agreement.
"Subsidiary" means any Person of which at least a majority
of the voting stock (or equivalent equity interests) is owned or
controlled by the Seller or any Crompton Entity or by one or more
other Subsidiaries of the Seller or such Crompton Entity. The
Subsidiaries of the Parent on the date hereof are listed on
Exhibit F.
"Taxes" means all taxes, charges, fees, levies or other
assessments (including income, gross receipts, profits,
withholding, excise, property, sales, use, license, occupation
and franchise taxes and including any related interest, penalties
or other additions) imposed by any jurisdiction or taxing
authority (whether foreign or domestic).
"Termination Date" means (a) for Amsterdam, the Amsterdam
Termination Date, (b) for the Liquidity Providers, the Liquidity
Termination Date and (c) for the Enhancer, the earlier of (i) the
third (3rd) Business Day following the Liquidity Termination Date
and (ii) January 17, 2003.
"Termination Event" means the occurrence of any one or more
of the following:
(a) any representation, warranty, certification or statement
made by the Seller or any Crompton Entity in, or pursuant to, any
Transaction Document proves to have been incorrect in any
material respect when made; or
(b) the Collection Agent, any Crompton Entity or the Seller
fails to make any payment or other transfer of funds hereunder
when due (including any payments under Section 1.5(a)); or
(c) the Seller fails to observe or perform any covenant or
agreement contained in Sections 3.3, 5.1(b), 5.1(e), 5.1(g),
5.1(i), or 5.1(j) of this Agreement or any Originator fails to
perform any covenant or agreement in Sections 6.1(d), 6.1(f),
6.1(i), 6.1(j), 6.1(k), 6.2(b) or 6.3 of each Purchase Agreement;
or
(d) the Seller or the Collection Agent (or any sub-collection
agent) fails to observe or perform any other term, covenant or
agreement under any Transaction Document, and such failure
remains unremedied for thirty days; or
(e) the Seller, any Originator or any Subsidiary suffers a
Bankruptcy Event; or
(f) the average of the Delinquency Ratios as of the end of
each of the most recent three calendar months exceeds 20.0%, the
average of the Default Ratios as of the end of each of the most
recent three calendar months exceeds 20.0%, the Dilution Ratio at
the end of any calendar month measured for the three month
calendar period then ending exceeds 7.5% prior to the occurrence
of a Receivable Setoff Downgrade Event and 5.0% after the
occurrence of a Receivable Setoff Downgrade Event or the Loss-to-
Liquidation Ratio at the end of any calendar month measured for
the three month calendar period then ending exceeds 1.0%; or
(g) (i) the Seller, any Crompton Entity or any Affiliate,
directly or indirectly, disaffirms or contests the validity or
enforceability of any Transaction Document or (ii) any
Transaction Document fails to be the enforceable obligation of
the Seller or any Affiliate party thereto; or
(h) the Seller or any Subsidiary (A) generally does not pay
its debts as such debts become due or admits in writing its
inability to pay its debts generally or (B) fails to pay any of
its indebtedness (except in aggregate principal amount of less
than $1,000,000) or defaults in the performance of any provision
of any agreement under which such indebtedness was created or is
governed and such default permits such indebtedness to be
declared due and payable or to be required to be prepaid before
the scheduled maturity thereof; or
(i) any event occurs or condition exists which constitutes
a default or an event of default under the Crompton Credit
Agreement; or
(j) the average of the Turnover Rates for each of the most
recent three calendar months exceeds 90 days; or
(k) a Collection Agent Replacement Event has occurred and is
continuing with respect to the Initial Collection Agent;
(l) the Parent shall fail to own and control, directly or
indirectly, (i) 100% of the outstanding voting stock of the
Seller and each Originator; or
(m) the long-term, unsecured, unsubordinated indebtedness of
the Parent is rated less than "BB+" by S&P or "Ba1" by Moody's
(or S&P or Moody's has withdrawn or suspended such rating).
Notwithstanding the foregoing, a failure of a representation or
warranty or breach of any covenant described in clause (a), (c)
or (d) above related to a Receivable shall not constitute a
Termination Event if the Seller has been deemed to have collected
such Receivable pursuant to Section 1.5(b) or, before the
Liquidity Termination Date, has adjusted the Sold Interest as
provided in Section 1.5(c) so that such Receivable is no longer
considered to be outstanding.
"Tranche" means a portion of the Investment of Amsterdam or
of the Committed Purchasers allocated to a Tranche Period
pursuant to Section 1.3. A Tranche is a (i) CP Tranche, (ii)
Eurodollar Tranche or (iii) Prime Tranche depending whether
Discount accrues during its Tranche Period based on a (i) CP
Rate, (ii) Eurodollar Rate, or (iii) Prime Rate.
"Tranche Period" means a period of days ending on a Business
Day selected pursuant to Section 1.3, which (i) for a CP Tranche
shall not exceed 270 days, (ii) for a LIBOR Tranche shall not
exceed 180 days, and (iii) for a Prime Tranche shall not be less
than 2 days and shall not exceed 30 days.
"Transaction Documents" means this Agreement, the Fee
Letter, the Limited Guaranty, the Purchase Agreements, the
Subordinated Notes, and all other documents, instruments and
agreements executed or furnished in connection herewith and
therewith.
"Transfer Supplement" is defined in Section 9.8.
"Turnover Rate" means, for any period for which it is
calculated, the product, expressed in days, of (A) (1) the
outstanding balance of all Receivables at the beginning of such
period divided by (2) the average daily Collections (other than
Deemed Collections) during such period multiplied by (B) 30.
"UCC" means, for any state, the Uniform Commercial Code as
in effect in such state.
"USA" means the United States of America (including all
states and political subdivisions thereof).
"Unused Aggregate Commitment" means, at any time, the
difference between the Aggregate Commitment then in effect and
the outstanding Matured Aggregate Investment.
"Unused Commitment" means, for any Committed Purchaser at
any time, the difference between its Commitment and its
Investment then outstanding.
The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms. Unless
otherwise inconsistent with the terms of this Agreement, all
accounting terms used herein shall be interpreted, and all
accounting determinations hereunder shall be made, in accordance
with GAAP. Amounts to be calculated hereunder shall be
continuously recalculated at the time any information relevant to
such calculation changes.
Schedule II
Liquidity Providers and Commitments of Committed Purchasers
Name of Liquidity Provider Commitment
ABN AMRO Bank N.V. $183,600,000
Enhancer
ABN AMRO Bank N.V. $20,400,000
Exhibit A
to
Receivables Sale Agreement
Form of Incremental Purchase Request
______________, 200_
ABN AMRO Bank N.V., as Agent
Asset Securitization, Structured Finance
Suite 725
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attn: Purchaser Agent-Amsterdam
Re: Amended and Restated Receivables Sale Agreement
dated as of January 18, 2002 (as amended or restated
from time to time, the "Sale Agreement") among Crompton
& Knowles Receivables Corporation, as Seller, Crompton
Corporation, as Initial Collection Agent,
ABN AMRO Bank N.V., as Agent,
and the Purchasers thereunder
Ladies and Gentlemen:
The undersigned Seller under the above-referenced Sale
Agreement hereby confirms its has requested an Incremental
Purchase of $___________ by Amsterdam under the Sale Agreement.
[In the event Amsterdam is unable or unwilling to make the
requested Incremental Purchase, the Seller hereby requests an
Incremental Purchase of $___________ by the Committed Purchasers
under the Sale Agreement at the [Eurodollar Rate with a Tranche
Period of _____ months.] [Prime Rate]].
Attached hereto as Schedule I is information relating to the
proposed Incremental Purchase required by the Sale Agreement. If
on the date of this Incremental Purchase Request ("Notice"), an
Interim Liquidation is in effect, this Notice revokes our request
for such Interim Liquidation so that Reinvestment Purchases shall
immediately commence in accordance with Section 1.1(d) of the
Sale Agreement.
The Seller hereby certifies that both before and after
giving effect to [each of] the proposed Incremental Purchase[s]
contemplated hereby and the use of the proceeds therefrom, all of
the requirements of Section 7.2 of the Sale Agreement have been
satisfied.
Very truly yours,
Crompton & Knowles Receivables
Corporation
By
Title
Schedule I
to
Incremental Purchase Requests
Summary of Information Relating to Proposed Sale(s)
1. Dates, Amounts, Purchaser(s), Proposed Tranche Periods
A1 Date of Notice
A2 Measurement Date (the last
Business Day of the preceding
calendar month or the preceding
Business Day, as applicable)
A3 Proposed Purchase Dates
(each of which is a
Business Day)
A4 Respective Proposed
Incremental Purchase on
each such Purchase Date $_____ $____ $_____ $____
(each Incremental (A4A) (A4B) (A4C) (A4D)
Purchase must be in a
minimum amount of
$1,000,000 and multiples
thereof, or, if less, an
amount equal to the
Maximum Incremental
Purchase Amount)
A5 Proposed Allocation
among Purchasers
Amsterdam $___ $___ $____ $_____
Liquidity
Providers $___ $___ $____ $_____
Enhancer $___ $____ $____ $_____
A6 Tranche Period
and, for Committed
Purchasers, Tranche Rate(s)
Starting Date
Ending Date
Number of Days
Prime or Eurodollar
(for Committed
Purchasers only)
Each proposed Purchase Date must be a Business Day and must
occur no later than two weeks after the Measurement Date set
forth above. The choice of Measurement Date is a risk
undertaken by the Seller. If a selected Measurement Date is
not the applicable Purchase Date, the Seller's choice and
disclosure of such date shall not in any manner diminish or
waive the obligation of the Seller to assure the Purchasers
that, after giving effect to the proposed Purchase, the
actual Sold Interest as of the date of such proposed
Purchase does not exceed 100%.
Exhibit B
to
Receivables Sale Agreement
Form of Notification of Assignment from Amsterdam
to the Committed Purchasers
______________, 200__
Crompton & Knowles
Receivables Corporation
_____________________
_____________________
ABN AMRO Bank N.V., as Agent
Asset Securitization, Structured Finance
Suite 725
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attn: Enhancer-Amsterdam
[Insert Name and Address of each
Liquidity Provider]
Re: Amended and Restated Receivables Sale Agreement
dated as of January 18, 2002 (as amended or restated
from time to time, the "Sale Agreement") among Crompton
& Knowles Receivables Corporation, as Seller, Crompton
Corporation, as Initial Collection Agent, ABN AMRO Bank
N.V., as Agent, and the Purchasers thereunder
Ladies and Gentlemen:
The Agent under the above-referenced Sale Agreement hereby
notifies each of you that Amsterdam has notified the Agent
pursuant to Section 2.1(a) of the Sale Agreement that it will
sell to the Committed Purchasers on ____________ (the "Put Date")
____% of Amsterdam's Investment and related Amsterdam Settlement
(the "Assigned Interest"). In accordance with the terms of the
Sale Agreement, each Liquidity Provider and the Enhancer must
purchase from Amsterdam on the Put Date its respective Purchase
Percentage of the Assigned Interest by paying its Purchase Price
therefor described on Schedule I hereto. As further provided in
Section 2.1 of the Sale Agreement, upon payment by a Committed
Purchaser of its Purchase Price to the Agent, effective as of the
Put Date the assignment by Amsterdam to such Committed Purchaser
of its Purchased Percentage of the Assigned Interest shall be
complete, subject to the purchase of any additional portion of
the Assigned Interest pursuant to Section 2.1(b) upon the failure
of a Liquidity Provider to pay its Purchase Price.
In accordance with the Sale Agreement, Amsterdam's
acceptance of the Purchase Price payable by each Committed
Purchaser constitutes its representation and warranty that it is
the legal and beneficial owner of the Assigned Interest free and
clear of any Adverse Claim created by Amsterdam and that on the
Put Date it is not subject to any bankruptcy, insolvency or
similar proceeding described in Section 2.1(e) of the Sale
Agreement.
Very truly yours,
ABN AMRO Bank N.V., as Agent
By
Name
Title
By
Name
Title
Schedule I
to
Notification of Assignment
Dated ___________, 200__
I. Percentage of Amsterdam Investment and related Amsterdam
Settlement assigned: ___%
II. Information for each Committed Purchaser.
Purchaser Purchased Percentage Purchase Price
III. Information for Seller.
A. Aggregate Amsterdam Investment Assigned:$______________.
B. Aggregate Amsterdam Settlement Assigned:$______________.
C. Aggregate amounts allocated to clause (b) of the
definition of Purchase Price: $___________.
Exhibit C
to
Receivables Sale Agreement
Form of Notification of Assignment to Amsterdam
From the Committed Purchasers
______________, 200__
Crompton & Knowles
Receivables Corporation
_______________________
_______________________
ABN AMRO Bank N.V., as Agent
Asset Securitization, Structured Finance
Suite 725
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attn: Enhancer-Amsterdam
[Insert Name and Address of each
Liquidity Provider]
Re: Amended and Restated Receivables Sale Agreement
dated as of January 18, 2002
(as amended or restated from time to time, the "Sale
Agreement") among Crompton & Knowles Receivables Corporation, as
Seller, Crompton Corporation, as Initial Collection Agent,
ABN AMRO Bank N.V., as Agent, and the Purchasers
thereunder
Ladies and Gentlemen:
The Agent under the above-referenced Sale Agreement hereby
notifies each of you that Amsterdam has notified the Agent
pursuant to Section 2.2 of the Sale Agreement that it will
purchase from the Committed Purchasers on ____________ (the
"Purchase Date") that portion of the Committed Purchasers'
Investments identified on Schedule I hereto (the "Assigned
Interest"). As further provided in Section 2.2 of the Sale
Agreement, upon payment by Amsterdam to the Agent of the purchase
price of such Investments described on Schedule I hereto,
effective as of the Purchase Date the assignment by the Committed
Purchasers to Amsterdam of the Assigned Interest shall be
complete and all payments thereon under the Sale Agreement shall
be made to Amsterdam.
In accordance with the Sale Agreement, each Committed
Purchaser's acceptance of the portion purchase price payable to
it described on Schedule I hereto constitutes its representation
and warranty that it is the legal and beneficial owner of the
portion of the Assigned Interest related to its Purchase Interest
identified on Schedule I free and clear of any Adverse Claim
created or granted by it and that on the Purchase Date it is not
subject to a Bankruptcy Event.
Very truly yours,
ABN AMRO Bank N.V., as Agent
By
Name
Title
By
Name
Title
Schedule I
to
Notification of Assignment
Dated ___________, 200__
I. Amount of Committed Purchaser Investment Assigned:
$____________
II. Information for each Committed Purchaser.
Purchaser Purchase Interest Purchase Price*
III. Information for Seller.
Aggregate amounts of purchase price in excess of amount of
Investment assigned: $_______________.
Exhibit D-1
Form of Periodic Report
Exhibit D-2
Form of Daily Report
Exhibit E
Addresses and Names of Seller and Originators
1. Locations. (a) The chief executive office of the Seller
and each Originator are located at the following address:
Crompton & Knowles Receivables Corporation
Benson Road
Middlebury, Connecticut 06749
Crompton Corporation
One American Lane
Greenwich, Connecticut 06831-2559
Davis Standard Corporation
1 Extrusion Drive
Pawcatuck, Connecticut 06379
Crompton Sales Company, Inc.
One American Lane
Greenwich, Connecticut 06831-2559
No such address was different at any time since July 1, 2001
(b) The following are all the locations where the Seller and
each Originator directly or through its agents maintain any
Records:
One American Lane
Greenwich, Connecticut 06831-2559
World Headquarters
Benson Road
Middlebury, Connecticut 06749
2. Names. The following is a list of all names (including
trade names or similar appellations) used by the Seller and each
Originator or any of its divisions or other business units:
None.
3. Jurisdiction of Organization and Organizational
Identification Number
Exhibit F
Subsidiaries
Exhibit G
Lock Boxes and Lock-Box Banks
Bank Lock-Box Number Collection Account
Citibank 7247-8429 and 2049 4049-8376
4055-5094
Fleet Bank 30586 058-8001
Mellon Bank, N.A. 360-313 014-3626
010-642 005-3575
Exhibit H
to Receivables Sale Agreement
Form of Lock Box Letter
[Name of Lock Box Bank]
Ladies and Gentlemen:
Reference is made to the lock-box numbers _______________ in
__________ and the associated the lock-box demand deposit account
number ____________ maintained with you (such lock-boxes and
associated lock-box demand deposit account, collectively, the
"Accounts"), each in the name of [Name of Originator] ("[___]").
[___] hereby confirms it has sold all Receivables (as defined
below) to Crompton & Knowles Receivables Corporation (the
"Seller").
In connection with the Amended and Restated Receivables Sale
Agreement, dated as of January 18, 2002 (as amended, supplemented
or otherwise modified from time to time, the "Receivables Sale
Agreement"), among the Seller, Amsterdam Funding Corporation
("Amsterdam"), the financial institutions from time to time party
thereto (collectively, the "Liquidity Providers"), ABN AMRO Bank
N.V., as provider of the program letter of credit (the
"Enhancer"), and ABN AMRO Bank N.V., as agent (the "Agent") for
Amsterdam, the Liquidity Providers and the Enhancer
(collectively, the "Purchasers"), the Seller has assigned to the
Agent for the benefit of the Purchasers an undivided percentage
interest in the accounts, chattel paper, instruments or general
intangibles (collectively, the "Receivables") under which
payments are or may hereafter be made to the Accounts, and has
granted to the Agent for the benefit of the Purchasers a security
interest in its retained interest in such Receivables. As is the
customary practice in this type of transaction, we hereby request
that you execute this letter agreement. All references herein to
"we" and "us" refer to [_____] and the Seller, jointly and
severally. Your execution hereof is a condition precedent to our
continued maintenance of the Accounts with you.
We hereby transfer exclusive dominion and control of the
Accounts to the Agent, subject only to the condition subsequent
that the Agent shall have given you notice that a "Termination
Event" has occurred and is continuing under the Receivables Sale
Agreement and of its election to assume such dominion and
control, which notice shall be in substantially the form attached
hereto as Annex A (the "Agent's Notice").
At all times prior to the receipt of the Agent's Notice
described above, all payments to be made by you out of, or in
connection with the Accounts, are to be made in accordance with
the instructions of the Seller or its agent.
We hereby irrevocably instruct you, at all times from and
after the date of your receipt of the Agent's Notice as described
above, to make all payments to be made by you out of, or in
connection with, the Accounts directly to the Agent, at its
address set forth below its signature hereto or as the Agent
otherwise notifies you, or otherwise in accordance with the
instructions of the Agent.
We also hereby notify you that, at all times from and after
the date of your receipt of the Agent's Notice as described
above, the Agent shall be irrevocably entitled to exercise in our
place and stead any and all rights in connection with the
Accounts, including, without limitation, (a) the right to specify
when payments are to be made out of, or in connection with, the
Accounts and (b) the right to require preparation of duplicate
monthly bank statements on the Accounts for the Agent's audit
purposes and mailing of such statements directly to an address
specified by the Agent. At all times from and after the date of
your receipt of the Agent's Notice, neither we nor any of our
affiliates shall be given any access to the Accounts.
The Agent's Notice may be personally served or sent by
telex, facsimile or U.S. mail, certified return receipt
requested, to the address, telex or facsimile number set forth
under your signature to this letter agreement (or to such other
address, telex or facsimile number as to which you shall notify
the Agent in writing). If the Agent's Notice is given by telex
or facsimile, it will be deemed to have been received when the
Agent's Notice is sent and the answerback is received (in the
case of telex) or receipt is confirmed by telephone or other
electronic means (in the case of facsimile). All other notices
will be deemed to have been received when actually received or,
in the case of personal delivery, delivered.
By executing this letter agreement, you acknowledge the
existence of the Agent's right to dominion and control of the
Accounts and its ownership of and security interest in the
amounts from time to time on deposit therein and agree that from
the date hereof the Accounts shall be maintained by you for the
benefit of, and amounts from time to time therein held by you as
agent for, the Agent on the terms provided herein. The Accounts
are to be entitled "Crompton & Knowles Receivables Corporation
and ABN AMRO Bank N.V., as Agent for the Purchasers" with the
subline ["Name of Originator"]. Except as otherwise provided in
this letter agreement, payments to the Accounts are to be
processed in accordance with the standard procedures currently in
effect. All service charges and fees in connection with the
Accounts shall continue to be payable by us under the
arrangements currently in effect.
By executing this letter agreement, you (a) irrevocably
waive and agree not to assert, claim or endeavor to exercise, (b)
irrevocably bar and estop yourself from asserting, claiming or
exercising and (c) acknowledge that you have not heretofore
received a notice, writ, order or other form of legal process
from any other party asserting, claiming or exercising, any right
of set-off, banker's lien or other purported form of claim with
respect to the accounts or any funds from time to time therein.
Except for your right to payment of your service charge and fees
and to make deductions for returned items, you shall have no
rights in the Accounts or funds therein, except deductions for
service charges, fees and returned or misplaced items. To the
extent you may ever have any additional rights, you hereby
expressly subordinate all such rights to all rights of the Agent.
You may terminate this letter agreement by cancelling the
Accounts maintained with you, which cancellation and termination
shall become effective only upon thirty (30) days prior written
notice thereof from you to the Agent in the absence of fraud or
abuse. Incoming mail addressed to the Accounts (including,
without limitation, any direct funds transfer to the Accounts)
received after such cancellation shall be forwarded in accordance
with the Agent's instructions. This letter agreement may also be
terminated upon written notice to you by the Agent stating that
the Receivables Sale Agreement is no longer in effect. Except as
otherwise provided in this paragraph, this letter agreement may
not be terminated without the prior written consent of the Agent.
This letter agreement contains the entire agreement between
the parties with respect to the subject matter hereof, and may
not be altered, modified or amended in any respect, nor may any
right, power or privilege of any party hereunder be waived or
released or discharged, except upon execution by you, us and the
Agent of a written instrument so providing. The terms and
conditions of any agreement between us and you (a "Lock-Box
Service Agreement") (whether now existing or executed hereafter)
with respect to the lock-box arrangements, to the extent not
inconsistent with this letter agreement, will remain in effect
between you and us. In the event that any provision in this
letter agreement is in conflict with, or inconsistent with, any
provision of any such Lock-Box Service Agreement, this letter
agreement will exclusively govern and control. Each party agrees
to take all actions reasonably requested by any other party to
carry out the purposes of this letter agreement or to preserve
and protect the rights of each party hereunder.
[___] agrees to indemnify, defend and hold harmless you and
your affiliates, directors, officers, employees, agents,
successors and assigns (each, an "Indemnitee") from and against
any and all liabilities, losses, claims, damages, demands, costs
and expenses of every kind (including but not limited to costs
incurred as a result of items being deposited in the Account and
being unpaid for any reason, reasonable attorney's fees and the
reasonable charges of your in-house counsel) incurred or
sustained by any Indemnitee arising out of your performance of
the services contemplated by this Lock-Box Letter, except to the
extent such liabilities, losses, claims, damages, demands, costs
and expenses are the direct result of your gross negligence or
willful misconduct. The provisions of this paragraph shall
survive the termination of this Lock-Box Letter.
In the event [___] becomes subject to a voluntary or
involuntary proceeding under the United States Bankruptcy Code,
or if you are otherwise served with legal process which you in
good faith believe affects funds in the Account you may suspend
disbursements from the Account otherwise required by the terms
hereof until such time as you receive an appropriate court order
or other assurances satisfactory to you establishing that the
funds may continue to be disbursed according to the instructions
contained in this Lock-Box Letter.
This letter agreement and the rights and obligations of the
parties hereunder will be governed by and construed and
interpreted in accordance with the laws of the state of New York.
This letter agreement may be executed in any number of
counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument.
Please indicate your agreement to the terms of this letter
agreement by signing in the space provided below. This letter
agreement will become effective immediately upon execution of a
counterpart of this letter agreement by all parties hereto.
Very truly yours,
[Name of Originator]
By:
Title:
Crompton & Knowles Receivables
Corporation
By:
Title:
Accepted and confirmed as of
the date first written above:
By: ABN AMRO Bank N.V., as Agent
By:___________________________
Title:__________________________
By:____________________________
Title:___________________________
Address of notice:
ABN AMRO Bank N.V.
Structured Finance, Asset Securitization
135 South LaSalle Street
Chicago, Illinois 60674
Attention: Purchaser Agent-Amsterdam
Telephone Number: (312) 904-6263
Telecopy Number: (312) 904-6376
Acknowledged and agreed to as of the date first written above:
[Name of Bank]
By:___________________________
Title:__________________________
Address for notice:
_______________________________
_______________________________
_______________________________
Annex A to
Lock-Box Letter
[Name of Bank]
Re: Crompton & Knowles Receivables Corporation
Lock Box Numbers ______________
Lock-Box Account Number ____________
Ladies and Gentlemen:
Reference is made to the letter agreement dated
_________________ (the "Letter Agreement") among [Name of
Originator], Crompton & Knowles Receivables Corporation, the
undersigned, as Agent, and you concerning the above-described
lock-boxes and lock-box account (collectively, the "Accounts").
We hereby give you notice that a "Termination Event" has occurred
and is continuing under the Receivables Sale Agreement (as
defined in the Letter Agreement) and of our assumption of
dominion and control of the Accounts as provided in the Letter
Agreement.
We hereby instruct you not to permit any other party to have
access to the Accounts and to make all payments to be made by you
out of or in connection with the Accounts directly to the
undersigned upon our instructions, at our address set forth
above.
Very truly yours,
ABN AMRO Bank N.V.
By:
Title:
By:
Title:
cc: Crompton & Knowles Receivables Corporation
Exhibit I
To Receivables Sale Agreement
Compliance Certificate
To: ABN AMRO Bank N.V., as Agent, and
each Purchaser
This Compliance Certificate is furnished pursuant to Section
5.1(a)(iii) of the Amended and Restated Receivables Sale
Agreement, dated as of January 18, 2002 (as amended, supplemented
or otherwise modified through the date hereof, the "Sale
Agreement"), among Crompton & Knowles Receivables Corporation
(the "Seller"), Crompton Corporation (the "Initial Collection
Agent"), the liquidity providers from time to time party thereto
(collectively, the "Liquidity Providers"), Amsterdam Funding
Corporation ("Amsterdam") and ABN AMRO Bank N.V., as the provider
of the program letter of credit (the "Enhancer" and together with
the Liquidity Providers and Amsterdam, the "Purchasers"), and ABN
AMRO Bank N.V. as agent for the Purchasers (in such capacity, the
"Agent"). Terms used in this Compliance Certificate and not
otherwise defined herein shall have the respective meanings
ascribed thereto in the Sale Agreement.
The undersigned hereby represents, warrants, certifies and
confirms that:
1. The undersigned is a duly elected Designated
Financial Officer of the undersigned.
2. Attached hereto is a copy of the financial
statements described in Section 5.1(a)(i) or 5.1(a)(ii) of
the Sale Agreement.
3. The undersigned has reviewed the terms of the
Transaction Documents and has made, or caused to be made
under his/her supervision, a detailed review of the
transactions and the conditions of the Seller and each
Originator during and at the end of the accounting period
covered by the attached financial statements.
4. The examinations described in paragraph 3 hereof
did not disclose, and the undersigned has no knowledge of,
the existence of any condition or event which constitutes a
Potential Termination Event, during or at the end of the
accounting period covered by the attached financial
statements or as of the date of this Compliance Certificate,
except as set forth below.
5. Based on the examinations described in paragraph 3
hereof, the undersigned confirms that the representations
and warranties contained in Article IV of the Sale Agreement
are true and correct as though made on the date hereof,
except as set forth below.
Described below are the exceptions, if any, to paragraphs 4
and 5 listing, in detail, the nature of the condition or event,
the period during which it has existed and the action the
undersigned has taken, is taking or proposes to take with respect
to each such condition or event:
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements
delivered with this Compliance Certificate in support hereof, are
made and delivered this ____ day of ___________, 200__.
[Name of Seller or Originator]
By:
Designated Financial Officer
Exhibit J
Credit and Collection Policy
_______________________________
* calculated in accordance with Section 2.2.