RECEIVABLES PURCHASE AGREEMENT
 
dated as of December 10, 2010
 
among
 
ARMSTRONG RECEIVABLES COMPANY LLC,
 
as Seller
 
ARMSTRONG WORLD INDUSTRIES, INC.,
 
as Servicer
 
ATLANTIC ASSET SECURITIZATION LLC,
 
as Conduit Purchaser
 
and
 
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
 
as Administrative Agent,
 
Related Committed Purchaser and LC Bank
 

 

 
 

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TABLE OF CONTENTS
Page

ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES 
1

 
 
Section 1.1
Purchase Facility 
1

 
 
Section 1.2
Making Purchases 
3

 
 
Section 1.3
Purchaser’s Interest Computation 
5

 
 
Section 1.4
Settlement Procedures 
6

 
 
Section 1.5
Fees 
11

 
 
Section 1.6
Payments and Computations, Etc 
11

 
 
Section 1.7
Increased Cost and Reduced Return 
11

 
 
Section 1.8
Requirements of Law 
13

 
 
Section 1.9
Funding Losses 
13

 
 
Section 1.10
Taxes 
13

 
 
Section 1.11
Inability to Determine Euro-Rate 
15

 
 
Section 1.12
Letters of Credit 
16

 
 
Section 1.13
Issuance of Letters of Credit 
16

 
 
Section 1.14
Requirements For Issuance of Letters of Credit 
17

 
 
Section 1.15
Disbursements, Reimbursement 
18

 
 
Section 1.16
Repayment of Participation Advances 
19

 
 
Section 1.17
Documentation 
19

 
 
Section 1.18
Determination to Honor Drawing Request 
20

 
 
Section 1.19
Nature of Participation and Reimbursement Obligations 
20

 
 
Section 1.20
Letter of Credit Amounts 
22

 
 
Section 1.21
Source of Funds 
22

 
 
Section 1.22
Indemnity 
22

 
 
Section 1.23
Liability for Acts and Omissions 
22

 
 
Section 1.24
Termination of Commitments 
24

 
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS 
25

 
 
Section 2.1
Representations and Warranties; Covenants 
25

 
 
Section 2.2
Termination Events 
25

 
 
Section 2.3
LC Wind-Down Events 
25

 
 
Section 2.4
Seller’s Rights upon Termination 
25

 
ARTICLE III
INDEMNIFICATION 
26

 
 
Section 3.1
Indemnities by the Seller 
26

 
 
Section 3.2
Indemnities by the Servicer 
28

 
ARTICLE IV
ADMINISTRATION AND COLLECTIONS 
28

 
 
Section 4.1
Appointment of the Servicer 
28

 
 
Section 4.2
Duties of the Servicer 
29

 
 
Section 4.3
Account Arrangements 
30

 
 
Section 4.4
Enforcement Rights 
31

 
 
Section 4.5
Responsibilities of the Seller 
32

 
 
Section 4.6
Servicing Fee 
33

 
 
Section 4.7
Annual Servicing Report of Independent Public Accountants 
33

 
ARTICLE V
THE AGENTS 
34

 
 
Section 5.1
Appointment and Authorization 
34

 
 
Section 5.2
Delegation of Duties 
34

 
 
Section 5.3
Exculpatory Provisions 
34

 
 
Section 5.4
Reliance by Agents 
35

 
 
Section 5.5
Notice of Termination Events 
35

 
 
Section 5.6
Non-Reliance on Administrative Agent and Other Purchasers
 35

 
 
Section 5.7
Administrative Agents and Affiliates 
36

 
 
Section 5.8
Indemnification 
36

 
 
Section 5.9
Successor Administrative Agent 
36

 
ARTICLE VI
MISCELLANEOUS 
37

 
 
Section 6.1
Amendments, Etc 
37

 
 
Section 6.2
Notices, Etc 
37

 
 
Section 6.3
Successors and Assigns; Participations; Assignments 
38

 
 
Section 6.4
Costs, Expenses and Taxes 
41

 
 
Section 6.5
No Proceedings; Limitation on Payments 
42

 
 
Section 6.6
GOVERNING LAW AND JURISDICTION 
43

 
 
Section 6.7
Confidentiality 
43

 
 
Section 6.8
Execution in Counterparts 
44

 
 
Section 6.9
Survival of Termination 
44

 
 
Section 6.10
WAIVER OF JURY TRIAL 
44

 
 
Section 6.11
Sharing of Recoveries 
44

 
 
Section 6.12
Right of Setoff 
45

 
 
Section 6.13
Entire Agreement 
45

 
 
Section 6.14
Headings 
45

 
 
Section 6.15
Purchasers’ Liabilities 
45

 
 
Section 6.16
Limited Recourse 
45

 

 
i
 

 
 

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TABLE OF CONTENTS
continued
 

 EXHIBIT I Definitions  EXHIBIT II   Conditions of Purchases  EXHIBIT III
Representations and Warranties  EXHIBIT IV  Covenants  EXHIBIT V  Termination
Events     SCHEDULE I  Credit and Collection Policy
SCHEDULE II
Lock-Box Banks and Lock-Box Accounts and Collection Account Banks and Collection
Accounts SCHEDULE III  Trade Names SCHEDULE IV Actions and Proceedings SCHEDULE
V  Special Concentration Limits SCHEDULE VI   Group Commitments SCHEDULE VII  
Account Information     ANNEX A  Form of Servicer Report ANNEX B Form of
Purchase Notice ANNEX C  Form of Assumption Agreement ANNEX D  Form of Paydown
Notice ANNEX E Form of Transfer Supplement ANNEX F Form of Compliance
Certificate ANNEX G Form of Letter of Credit Application

                  

 
ii
 

 

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This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this “Agreement”) is entered into as of December 10,
2010, among ARMSTRONG RECEIVABLES COMPANY LLC, a Delaware limited liability
company, as seller (the “Seller”), ARMSTRONG WORLD INDUSTRIES, INC., a
Pennsylvania corporation (“Armstrong”), as initial servicer (in such capacity,
together with its successors and permitted assigns in such capacity, the
“Servicer”) and collection agent (in such capacity, together with its successors
and permitted assigns in such capacity, the “Collection Agent”), ATLANTIC ASSET
SECURITIZATION LLC, a Delaware limited liability company (“Atlantic”), as
Conduit Purchaser (in such capacity, the “Conduit Purchaser”), and CRÉDIT
AGRICOLE CORPORATE AND INVESTMENT BANK, as Administrative Agent (in such
capacity, the “Administrative Agent”), Related Committed Purchaser for Atlantic
(in such capacity, the “Related Committed Purchaser”), and as issuer of Letters
of Credit (in such capacity, the “LC Bank”).
 
PRELIMINARY STATEMENTS.  Certain terms that are capitalized and used throughout
this Agreement are defined in Exhibit I.  References in the Exhibits hereto to
the “Agreement” refer to this Agreement, as amended, supplemented or otherwise
modified from time to time.
 
WHEREAS, the Seller (i) desires to sell, transfer and assign an undivided
variable percentage interest in a pool of receivables, and the Purchasers desire
to acquire such undivided variable percentage interest, as such percentage
interest shall be adjusted from time to time based upon, in part, reinvestment
payments that are made by such Purchasers and (ii) may, subject to the terms and
conditions hereof, request that the LC Bank issue or cause the issuance of one
or more Letters of Credit.
 
NOW THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
 
ARTICLE I
 
AMOUNTS AND TERMS OF THE PURCHASES
 
Section 1.1 Purchase Facility.
 
(a) The Seller may, from time to time before the Facility Termination Date,
request that:
 
(i) the Conduit Purchaser makes purchases of and reinvestments in undivided
percentage ownership interests with regard to the Purchaser’s Interest, and in
the event that the Conduit Purchaser denies such request, is unable to fund (and
provides notice of such denial or inability to the Seller and the Administrative
Agent) or otherwise does not make such requested purchase or reinvestment, then
the Related Committed Purchasers shall make such purchase or reinvestment to the
extent not made by the Conduit Purchaser in accordance with and subject to the
terms hereof; and
 
(ii) the LC Bank cause the Issuance of Letters of Credit, and in the event that
any such request is made, the LC Bank shall cause such an Issuance in accordance
with and subject to Section 1.17(b) and the other terms hereof
 
(each such purchase, reinvestment or Issuance is referred to herein as a
“Purchase”).  Subject to Section 1.4(b), concerning reinvestments, at no time
will the Conduit Purchaser have any obligation to make a Purchase.
 
Each Related Committed Purchaser severally hereby agrees, on the terms and
subject to the conditions hereof, (x) to make Participation Advances in
connection with any draws under such Letters of Credit equal to such Related
Committed Purchaser’s Commitment Percentage of such draws, and (y) to make
purchases of, and reinvestments in, undivided percentage ownership interests
with regard to the Purchaser’s Interest from the Seller, in each case from time
to time from the date hereof to the Facility Termination Date (based on its
Commitment Percentage).
 
(b) Notwithstanding Section 1.1(a), under no circumstances shall any Purchaser
make any Purchase (including, without limitation, any mandatory deemed Purchases
pursuant to Section 1.1(c)) if, after giving effect to such Purchase:
 
(i) the sum of the aggregate of such Purchaser’s Capital plus such Purchaser’s
ratable share of the LC Participation Amount would exceed  the Commitment set
forth opposite its name on the signature page hereto, as the same may be reduced
from time to time pursuant to Section 1.1(d) (or, in the case of the Conduit
Purchaser, the aggregate of the Conduit Purchaser’s Capital, together with the
Capital and ratable share of the LC Participation Amount of its Related
Committed Purchasers, would exceed the aggregate of the Commitments of its
Related Committed Purchasers),
 
(ii) the Aggregate Capital plus the LC Participation Amount would (after giving
effect to all Purchases on such date) exceed the Purchase Limit, or
 
(iii) the Purchaser’s Interest would exceed 100%.
 
(the conditions set forth in (i)-(iii) above, the “Relevant Conditions”).
 
In addition to the foregoing, under no circumstances shall the LC Bank cause the
Issuance of any Letter of Credit (including, without limitation, any
reinstatement or extension of any Letter of Credit) if, after giving effect to
such Issuance, the sum of the Aggregate Capital plus the LC Participation Amount
exceeds the Purchase Limit.
 
(c) In the event that the Seller fails to fully reimburse the LC Bank for the
full amount of any drawing under any Letter of Credit on the applicable Drawing
Date (out of its own funds available therefor at such time, out of the LC
Collateral Account, or otherwise) pursuant to Section 1.15 below, and (ii) the
conditions precedent to making a Purchase hereunder (including the Relevant
Conditions) are satisfied, the Seller shall (without the requirement of any
further action on the part of any Person hereunder) be deemed to have requested
a Purchase from the Conduit Purchaser (and delivered the related Purchase
Notice) on such date, pursuant to the terms hereof, in an amount equal to the
amount of such drawing that remains unreimbursed at such time (a “Reimbursement
Purchase”). Subject to the limitations on funding set forth in this Section 1.1
(and the other requirements and conditions herein), the Conduit Purchaser or
Related Committed Purchasers, as applicable, shall fund such Reimbursement
Purchase and deliver the proceeds thereof directly to the Administrative Agent
to be immediately distributed to the LC Bank in satisfaction of the Seller’s
Reimbursement Obligation pursuant to Section 1.15 below.  All such Reimbursement
Purchases shall accrue Discount from the date of such draw.  In the event that
any Letter of Credit expires or is surrendered without being drawn (in whole or
in part) then, in such event, the foregoing commitment to make Reimbursement
Purchases shall expire with respect to such Letter of Credit and the LC
Participation Amount shall automatically reduce by the amount of the Letter of
Credit which is no longer outstanding.
 
(d) The Seller may, upon at least 30 days’ written notice to the Administrative
Agent, reduce the unfunded portion of the Purchase Limit in whole or in part
(but not below the amount which would cause the sum of (x) aggregate Capital of
the Purchasers plus (y) the LC Participation Amount to exceed the aggregate
Commitment of the Purchasers (after giving effect to such reduction); provided
that each partial reduction shall be in the amount of at least $25,000,000 or an
integral multiple in excess thereof and, unless terminated in whole, the
Purchase Limit shall in no event be reduced below $75,000,000.  Any such
reduction shall automatically reduce the Commitments of the Related Committed
Purchasers ratably, based upon the Commitments of each such Related Committed
Purchaser.  The Administrative Agent shall advise the Purchasers of any notice
received by it pursuant to this Section 1.1(d).  In addition to and without
limiting any other requirements for termination, prepayment and/or the funding
of the LC Collateral Account hereunder, no such reduction shall be effective
unless and until the amount on deposit in the LC Collateral Account is at least
equal to the excess of (i) the then-outstanding LC Participation Amount over
(ii) the Purchase Limit as so reduced by such partial reduction.
 
1

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Section 1.2 Making Purchases.
 
(a) Each Purchase with regard to the Purchaser’s Interest hereunder (other than
with respect to any reinvestment, Issuance of a Letter of Credit, or
Reimbursement Purchase) shall be made upon the Seller’s irrevocable written
notice in the form of Annex B (each, a “Purchase Notice”) delivered to the
Administrative Agent in accordance with Section 6.2, which notice must be
received by the Administrative Agent before 11:00 a.m., New York City time, at
least two Business Days prior to the requested Purchase Date.  Each such notice
shall specify: (A) the amount requested to be paid to the Seller (such amount,
which shall not be less than $5,000,000 (or such lesser amount as agreed to by
the Administrative Agent on behalf of the Conduit Purchaser) and shall be in
integral multiples of $1,000,000, (B) the date of such Purchase (which shall be
a Business Day) and (C) a pro forma calculation of the Purchaser’s Interest
after giving effect to the increase in the Aggregate Capital.
 
(b) On the date of each Purchase of undivided percentage ownership interests
with regard to the Purchaser’s Interest hereunder (other than with respect to
any reinvestment, Issuance of a Letter of Credit, or Reimbursement Purchase),
the Conduit Purchaser (or the Administrative Agent on its behalf) or the Related
Committed Purchasers, as applicable, shall, upon satisfaction of the applicable
conditions set forth in Exhibit II, make available to the Seller in same day
funds, at the account specified in Schedule VII (or such other account as may be
so designated in writing by the Seller to the Administrative Agent), an amount
equal to the proceeds of such Purchase.
 
(c) Effective on the date of each Purchase (other than with respect to the
Issuance of a Letter of Credit), the Seller hereby sells and assigns to the
Administrative Agent for the benefit of the Purchasers (ratably, based on each
Purchaser’s Capital) an undivided percentage ownership interest in, to the
extent of the Purchaser’s Interest: (i) each Pool Receivable then existing, (ii)
all Related Security with respect to such Pool Receivables, and (iii) all
Collections with respect to, and other proceeds of, such Pool Receivables and
Related Security.
 
(d) To secure all of the Seller’s obligations (monetary or otherwise) under this
Agreement and the other Transaction Documents to which it is a party, whether
now or hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent, the Seller hereby grants to the Administrative Agent,
for the benefit of the Purchasers and their assigns, a security interest in all
of the Seller’s right, title and interest (including any undivided interest of
the Seller) in, to and under all of the following, whether now or hereafter
owned, existing or arising:
 
(i) all Pool Receivables,
 
(ii) all Related Security with respect to such Pool Receivables,
 
(iii) all Collections with respect to such Pool Receivables,
 
(iv) the Lock-Box Accounts and the Collection Accounts and all amounts on
deposit therein relating to the Pool Receivables, and all certificates and
instruments, if any, from time to time evidencing such Lock-Box Accounts and the
Collection Accounts and amounts on deposit therein relating to the Pool
Receivables,
 
(v) the LC Collateral Account and all amounts on deposit therein, and all
certificates and instruments, if any, from time to time evidencing the LC
Collateral Account and amounts on deposit therein,
 
(vi) all rights (but none of the obligations) of the Seller under the Sale
Agreement,
 
(vii) all proceeds of, and all amounts received or receivable under any or all
of, the foregoing, and
 
(viii) all of its other property (collectively, the “Pool Assets”);
 
provided, that upon receipt by the Seller of the Repurchase Price with respect
to any Pool Receivables in accordance with Section 3.3 of the Sale Agreement,
such Pool Receivable and all Related Security and Collections with respect
thereto immediately shall cease to constitute Pool Assets and the Administrative
Agent shall at the request of the Seller release, assign and convey, as
applicable, to the Seller or its designee, without representation or warranty,
but free and clear of any Adverse Claims, all right, title and interest in such
Pool Asset and all Related Security.
 
The Seller hereby authorizes the Administrative Agent to file financing
statements describing the collateral covered thereby as “all of the debtor’s
personal property or assets” or words to that effect, notwithstanding that such
wording may be broader in scope than the collateral described in this
Agreement.  The Administrative Agent (on behalf of the Purchasers and their
assigns) shall have, with respect to the Pool Assets, and in addition to all the
other rights and remedies available to the Administrative Agent and the
Purchasers, all the rights and remedies of a secured party under any applicable
UCC.
 
(e) The Seller may, with the written consent of the Administrative Agent on
behalf of the Conduit Purchaser and the LC Bank, add additional Persons as
Related Committed Purchasers or cause an existing Related Committed Purchaser to
increase its Commitment in connection with a corresponding increase in the
Purchase Limit; provided, however that the Commitment of any Related Committed
Purchaser may only be increased with the prior written consent of such
Purchaser.  Each new Purchaser shall become a party hereto, by executing and
delivering to the Administrative Agent and the Seller, an Assumption Agreement
in the form of Annex C hereto (which Assumption Agreement shall be executed by
the Conduit Purchaser, the LC Bank and the Administrative Agent).
 
(f) Each Related Committed Purchaser’s obligations hereunder shall be several,
but the failure of any Related Committed Purchaser to make a payment in
connection with any Purchase hereunder, or Participation Advance hereunder, as
the case may be, shall not relieve any other Related Committed Purchaser of its
obligation hereunder to make payment for any such Purchase or such Participation
Advance.  Further, in the event any Related Committed Purchaser fails to satisfy
its obligation to make a Purchase or Participation Advance as required
hereunder, upon receipt of notice of such failure from the Administrative Agent,
subject to the limitations set forth herein, the non-defaulting Related
Committed Purchasers shall fund the defaulting Related Committed Purchaser’s
Commitment Percentage of the related Purchase or Participation Advance (net of
any amounts funded by such defaulting Related Committed Purchaser in respect of
such Purchase or Participation Advance) pro rata in proportion to their relative
Commitment Percentages (determined without regard to the Commitment Percentage
of the defaulting Related Committed Purchaser), up to the amount that would
cause the sum of such Related Committed Purchaser’s Capital plus its ratable
share of the LC Participation Amount to equal its Commitment hereunder.
 
Section 1.3 Purchaser’s Interest Computation.  The Purchaser’s Interest shall
initially be computed on the date of the initial Purchase hereunder. Thereafter,
until the Facility Termination Date, such Purchaser’s Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than an Amortization Day. From and after the occurrence of any Amortization Day,
the Purchaser’s Interest shall (until the event(s) giving rise to such
Amortization Day are cured or are waived by the Administrative Agent in
accordance with Section 2.2) be deemed to be 100%. The Purchaser’s Interest
shall become zero when (a) the Aggregate Capital has been reduced to zero and
all Aggregate Discount thereon shall have been paid in full, (b) the LC
Participation Amount has been Cash Collateralized in full or all Letters of
Credit shall have expired or been cancelled, and (c) all other amounts owed by
the Seller and the Servicer hereunder to the Purchasers, the LC Bank, the
Servicer, the Administrative Agent and any other Indemnified Party or Affected
Person are paid in full.  Notwithstanding the foregoing, nothing in this Section
1.3 shall be construed to require the Seller, the Servicer or any Affiliate
thereof to make actual computations on a daily basis or to deliver to the
Purchasers or the Administrative Agent a writing setting forth any computation,
recomputation or deemed recomputation effected under this Section 1.3, except as
expressly required pursuant to this Agreement.
 
2

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     Section 1.4 Settlement Procedures.
 
(a) The collection of the Pool Receivables shall be administered by the Servicer
in accordance with this Agreement and the Intercreditor Agreement. The Seller
shall provide to the Servicer on a timely basis all information needed for such
administration, including notice of the occurrence of any Amortization Day and
current computations of the Purchaser’s Interest.
 
(b) The Servicer shall, on each Business Day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or Servicer or are
deposited into the Lock-Box Accounts, deposit all such Collections into a
Collection Account and allocate such Collections in the following order of
priority:
 
(i) The Servicer shall set aside and hold in trust (by book entry or otherwise
or, if so requested by the Administrative Agent, segregated in a separate
account approved by the Administrative Agent) for the benefit of each Purchaser
(or, in the case of amounts described in clause (A), the Servicer), out of such
Collections, the following amounts in the following order of priority:
 
(A)  
first, an amount equal to the excess of (x) the amount of any Servicing Fee that
has accrued through such day and that remains unpaid over (y) the amount of
Collections that have previously been set aside in order to pay such accrued and
unpaid Servicing Fee;

 
(B)  
second, ratably, (i) an amount equal to the excess of (x) the amount of any
Aggregate Discount that has accrued through such day and that remains unpaid
over (y) the amount of Collections that have previously been set aside in order
to pay such accrued and unpaid Aggregate Discount, and (ii) an amount equal to
the excess of (x) the amount of any LC Fee that has accrued through such day and
that remains unpaid over (y) the amount of Collections that have previously been
set aside in order to pay such accrued and unpaid LC Fee;

 
(C)  
third, an amount equal to the excess of (x) the amount of any Yield Protection
Fees that have accrued through such day and that remain unpaid over (y) the
amount of Collections that have previously been set aside in order to pay such
accrued and unpaid Yield Protection Fee; and

 
(D)  
fourth, an amount equal to the excess of (x) the amount of any Fee Letter Fees
(other than the LC Fee) that have accrued through such day and that remain
unpaid over (y) the amount of Collections that have previously been set aside in
order to pay such accrued and unpaid Fee Letter Fees (other than the LC Fee).

 
(ii) If such day is an Amortization Day, the Servicer shall allocate, set aside,
segregate and hold in trust (by book entry or otherwise or, if so requested by
the Administrative Agent, segregated in a separate account approved by the
Administrative Agent) for the benefit of the Purchasers, all remaining
Collections.
 
(iii) In the event that (a) any Conduit Purchaser has delivered a notice (a
“Declining Notice”) to the Administrative Agent and the Servicer stating that it
no longer wishes Collections with respect to any Portion of Capital funded or
maintained by it to be reinvested pursuant to this Section 1.4(b) (a “Declining
Purchaser”) and there is any outstanding Capital with respect to such Conduit
Purchaser, or (b) the Scheduled Termination Date with respect to any Related
Committed Purchaser has occurred (an “Exiting Purchaser”, and such Scheduled
Termination Date, the “Exit Date”) and there is any outstanding Capital with
respect to such Related Committed Purchaser, the Servicer shall allocate, set
aside, segregate and hold in trust (by book entry or otherwise or, if so
requested by the Administrative Agent, segregated in a separate account approved
by the Administrative Agent) for the benefit of such Declining Purchaser or
Exiting Purchaser, as applicable, all of such Purchaser’s ratable share of
remaining Collections (based on the portion of the Aggregate Capital
attributable to such Purchaser, provided, that solely for purposes of this
subclause (iii), a Declining Purchaser’s Capital shall be deemed to remain
constant from the date a Declining Notice is delivered the Administrative Agent
and the Servicer, and an Exiting Purchaser’s Capital shall be deemed to remain
constant from its Scheduled Termination Date, in each case until the date on
which sufficient amounts have been set aside for the benefit of such Declining
Purchaser or Exiting Purchaser, as applicable, in order to reduce such
Purchaser’s Capital to zero) up to the amount necessary to reduce such
Purchaser’s Capital to zero on the next Settlement Date; provided that, in the
event that any such Collections are so set aside for the benefit of a Declining
Purchaser or Exiting Purchaser and, prior to the distribution of such
Collections to such Declining Purchaser or Exiting Purchaser on the related
Settlement Date, such Purchaser ceases to be a Declining Purchaser or Exiting
Purchaser, as applicable, such Collections shall be reinvested pursuant to
subclause (iv) below.
 
(iv) Subject to Section 1.4(f), any remaining Collections shall be remitted to
the Seller, on behalf of each Purchaser (ratably, according to each Purchaser’s
Capital).  Such remainder shall, to the extent representing a return of the
Aggregate Capital, be reinvested automatically in Pool Receivables, and in the
Related Security, Collections and other proceeds with respect thereto; provided,
however, that if the Purchaser’s Interest would exceed 100% after giving effect
to any such reinvestment, then the Servicer shall instead set aside and hold in
trust for the benefit of the Purchasers (by book entry or otherwise or, if so
requested by the Administrative Agent, segregated in a separate account approved
by the Administrative Agent) the portion of such Collections that shall equal
the amount necessary to reduce the Purchaser’s Interest to 100%.
 
(c) On each Settlement Date, the Servicer shall, in accordance with the
priorities set forth in Section 1.4(d) below, allocate the Collections that have
been retained pursuant to clause (b), (f) and (g) of Section 1.4 during the
Settlement Period relating to such Settlement Date, and any such Collections
that are allocated to a Purchaser in accordance therewith shall (i) be deposited
on such Settlement Date into such Purchaser’s account (as specified in Schedule
VII, as such Schedule VII may be modified from time to time by the
Administrative Agent by reasonable notice to the Seller and the Servicer), or
(ii) be paid to the Administrative Agent in accordance with Section 1.5, as
applicable.  Notwithstanding the foregoing, if such day is not an Amortization
Day and the Administrative Agent has not notified the Servicer that such right
is revoked, the Servicer may pay itself the portion of the Collections set aside
pursuant to subclause (b)(i)(A).  Within two Business Days of the last day of
each Yield Period, the Administrative Agent will notify the Servicer of the
amount of the Discount accrued with respect to each such Portion of Capital
during such related Yield Period or portion thereof.
 
(d) On each Settlement Date, the Servicer shall distribute the amounts described
in Section 1.4(c) as follows:
 
(i) The amounts retained pursuant to Sections 1.4(b)(i) during the related
Settlement Period shall be distributed in the following order of priority:
 
(A)  
first, if the Servicer has set aside amounts pursuant to subclause (b)(i)(A)
above and has not paid itself such amounts pursuant to clause (c) above, to the
Servicer’s own account in payment of any accrued and unpaid Servicing Fees owing
to the Servicer as of the last day of the related Settlement Period;

 
(B)  
second, ratably, (x) to each Purchaser pro rata (based on the Discount owing to
the Purchasers on such Settlement Date), the Discount that accrued on such
Purchaser’s Portions of Capital prior to or during the related Settlement Period
and that remains unpaid as of such Settlement Date, and (y) to the LC Bank, any
LC Fee that accrued prior to or during the related Settlement Period and that
remains unpaid as of such Settlement Date;

 
(C)  
third, to each Purchaser pro rata (based on the Yield Protection Fees owing to
the Purchasers on such Settlement Date), the Yield Protection Fees that accrued
with respect to such Purchaser prior to or during the related Settlement Period
and that remain unpaid as of such Settlement Date; and

 
(D)  
fourth, to each Purchaser and the Administrative Agent pro rata (based on the
Fee Letter Fees (other than the LC Fee) owing to the Purchasers and the
Administrative Agent on such Settlement Date), the Fee Letter Fees (other than
the LC Fee) that accrued prior to or during the related Settlement Period and
that remain unpaid as of such Settlement Date; and

 
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(ii) Any amounts that were set aside during the related Settlement Period
pursuant to subclause (b)(ii) or the proviso in clause (b)(iv) shall be
distributed in the following order of priority:
 
(A)  
first, to the LC Collateral Account for the benefit of the Administrative Agent
(for the benefit of the LC Bank and the Related Committed Purchasers), (x) if
such distribution occurs on an Amortization Day, the amount necessary to cause
the LC Participation Adjusted Amount to equal zero, and (y) otherwise, the
lesser of (I) the amount necessary to cause the LC Participation Adjusted Amount
to equal zero and (II) the amount necessary to reduce the Purchaser’s Interest
to 100% (after giving effect to such distribution to the LC Collateral Account);

 
(B)  
second, to the Purchasers pro rata (based upon the outstanding Capital with
respect to each such Purchaser) as payment in respect of outstanding Capital,
(x) if such distribution occurs on an Amortization Day, the amount necessary to
reduce such Purchasers’ Capital to zero and (y) otherwise, the lesser of (I) the
amount necessary to reduce such Purchasers’ Capital to zero and (II) the amount
necessary to reduce the Purchaser’s Interest to 100% (after giving effect to the
distribution of such amount to the Purchasers and any distributions in the
subclauses above);

 
(C)  
third, to the Purchasers, the Administrative Agent and any other Indemnified
Party or Affected Person pro rata (based on the amounts payable to each such
Person pursuant this clause third), any other amounts owed to such Persons by
the Seller hereunder; and

 
(D)  
fourth, any remaining Collections shall be paid to the Seller for its own
account.

 
(iii) Any amounts that have been set aside during the related Settlement Period
pursuant to subclause (b)(iii) for the benefit of any Exiting Purchaser or
Declining Purchaser and that remain available to be paid to such Existing
Purchaser or Declining Purchaser shall be distributed to such Exiting Purchaser
or Declining Purchaser.
 
(iv) Any remaining Collections shall be paid to the Seller for its own account.
 
(e) For the purposes of this Section 1.4:
 
(i) in the event that any Net Reduction Amount is paid in cash by any Originator
pursuant to Section 3.3 of the Sale Agreement, the Seller shall be deemed to
have received on such day a Collection of such Pool Receivable in the amount of
such Net Reduction Amount and shall promptly (and in any event within three
Business Days) pay such Net Reduction Amount to a Collection Account (or as
otherwise directed by the Administrative Agent at such time) for the benefit of
the Purchasers and their assigns and for application pursuant to Section 1.4;
 
(ii) in the event that any Repurchase Price is paid in cash by any Originator
pursuant to Section 3.3 of the Sale Agreement in respect of any Pool Receivable,
the Seller shall be deemed to have received on the date of such payment a
Collection in respect of such Pool Receivable in the amount of such payment and
shall promptly (and in any event within two Business Days of receipt thereof)
deposit such amounts into the Collection Account for the benefit of the
Purchasers and their assigns and for application pursuant to this Section 1.4
(Collections deemed to have been received pursuant to subclause (i) or (ii) of
this clause (e) are hereinafter sometimes referred to as “Deemed Collections”);
 
(iii) except as provided in clause (i) or (ii) above or as otherwise required by
applicable law or the relevant Contract, all Collections received from an
Obligor of any Pool Receivable shall be applied to the Pool Receivables of such
Obligor in the order of the age of such Pool Receivables, starting with the
oldest such Pool Receivable, unless such Obligor designates in writing its
payment for application to specific Pool Receivables; and
 
(iv) if and to the extent the Administrative Agent or any Purchaser shall be
required for any reason to pay over to an Obligor (or any trustee, receiver,
custodian or similar official in any Insolvency Proceeding) any amount received
by it hereunder and pays over such amount, such amount shall be deemed not to
have been so received by such Person but rather to have been retained by the
Seller and, accordingly, such Person shall have a claim against the Seller for
such amount, payable when and to the extent that any distribution from or on
behalf of such Obligor is made in respect thereof.
 
(f) If at any time the Seller shall wish to cause the reduction of Aggregate
Capital (but not to commence the liquidation, or reduction to zero, of the
entire Aggregate Capital), the Seller may do so as follows:
 
(i) the Seller shall give the Administrative Agent and the Servicer written
notice in substantially the form of Annex D (each, a “Paydown Notice”) at least
two Business Days prior to the date of such reduction, which notice shall
include the amount of such proposed reduction and the proposed date on which
such reduction will commence;
 
(ii) on the proposed date of commencement of such reduction and on each day
thereafter, the Servicer shall retain (as directed by the Seller) (i) all or a
portion of the Collections that would otherwise be available to be reinvested
pursuant to the terms hereof and (ii) any other amounts that do not constitute
Collections that the Seller allocates for such purpose until the aggregate
amount so retained is equal to the desired amount of reduction; and
 
(iii) the Servicer shall hold such Collections and other amounts in trust for
the benefit of each Purchaser, and on the next Settlement Date (or such other
date as agreed to by the Administrative Agent) such Collections and other
amounts shall be paid ratably (based on the Capital of each Purchaser on such
Settlement Date) to each Purchaser in order to reduce the Aggregate
Capital.  Any such Collections that are so allocated to a Purchaser shall be
deposited into such Purchaser’s account, as specified in Schedule VII hereto (as
such Schedule VII may be modified from time to time by the Administrative Agent
by reasonable notice to the Seller and the Servicer),
 
provided, that the amount of any such reduction shall be not less than
$5,000,000 and shall be an integral multiple of $1,000,000, and the entire
Aggregate Capital after giving effect to such reduction shall be not less than
$5,000,000 (unless the Aggregate Capital shall have been reduced to zero).
 
(g) If on any day the LC Collateral Amount exceeds the sum of the LC
Participation Amount and the amount of any outstanding Participation Advances
(including any Discount accrued thereon) (the “LC Obligations”), the Servicer
shall, on the written request of the Seller (which request shall be copied to
the Administrative Agent), on the next Settlement Date withdraw funds on deposit
in the LC Collateral Account up to an amount necessary to reduce the LC
Collateral Amount to equal the LC Obligations, and allocate such funds pursuant
to Section 1.4(d) on such Settlement Date as Collections hereunder.
 
Section 1.5 Fees.  The Seller shall pay to the Administrative Agent for the
benefit of the applicable Purchasers, in accordance with the provisions set
forth in Section 1.4(d), certain fees (the “Fee Letter Fees”) in the amounts and
on the dates set forth in one or more letters, dated the Closing Date, each such
letter (as amended, restated, supplemented or otherwise modified from time to
time, a “Fee Letter”) among the Servicer, the Seller, and the Administrative
Agent.
 
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       Section 1.6 Payments and Computations, Etc.
 
(a) All amounts to be paid or deposited by the Seller or the Servicer hereunder
or under any other Transaction Document shall be made without reduction for
offset or counterclaim and shall be paid or deposited no later than noon (New
York City time) on the day when due in same day funds to the account or accounts
listed on Schedule VII (as such Schedule VII may be modified from time to time
by the Administrative Agent by reasonable notice to the Seller and the
Servicer).  All amounts received after noon (New York City time) will be deemed
to have been received on the next Business Day.
 
(b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to 2.0% per annum above the Base Rate, payable on demand and, in the case
of the Seller, in accordance with Section 1.4.
 
(c) All computations of interest under clause (b) and all computations of
Discount, Fee Letter Fees, Servicing Fees, Yield Protection Fees and other
amounts hereunder shall be made on the basis of a year of 360 (or 365 or 366, as
applicable, with respect to Discount or other amounts calculated by reference to
the Base Rate) days for the actual number of days elapsed. Whenever any payment
or deposit to be made hereunder shall be due on a day other than a Business Day,
such payment or deposit shall be made on the next Business Day and such
extension of time shall be included in the computation of such payment or
deposit.
 
Section 1.7 Increased Cost and Reduced Return.
 
(a) If, after the date hereof, the Administrative Agent, any Purchaser,
Liquidity Provider or Program Support Provider or any of their respective
Affiliates (each an “Affected Person”) reasonably determines that the existence
of or compliance with (i) FAS 166/167, (ii) any law, rule, regulation, generally
accepted accounting principle or any change therein or in the interpretation or
application thereof, or (iii) any request, guideline or directive from any
central bank or other Governmental Authority (whether or not having the force of
law) issued or adopted or occurring after the date hereof affects or would
affect the amount of capital required or expected to be maintained by such
Affected Person, and such Affected Person reasonably determines that the
increase in the amount of such capital is attributable to the existence of any
commitment to make purchases of (or otherwise to maintain the investment in)
Pool Receivables or issue any Letter of Credit or any related liquidity
facility, credit enhancement facility or other commitments of the same type,
then, upon demand by such Affected Person (with a copy to the Administrative
Agent), the Seller shall pay to the Administrative Agent, for the account of
such Affected Person, from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such Affected Person for both
increased costs and maintenance of bargained for yield in the light of such
circumstances, to the extent that such Affected Person reasonably determines
such increase in capital to be allocable to the existence of any of such
commitments.  A certificate (including the certificate contemplated in Section
1.7(c), an “Increased Costs Certificate”) as to such amounts submitted to the
Seller and the Administrative Agent by such Affected Person shall be conclusive
and binding for all purposes, absent manifest error.
 
    (b) If, after the date hereof, due to either: (i) FAS 166/167, (ii) the
introduction of or any change in or in the interpretation of any law, regulation
or rule or (iii) compliance with any guideline or request from any central bank
or other Governmental Authority (whether or not having the force of law) issued
or adopted or occurring after the date hereof, there shall be any increase in
the cost to any Affected Person of agreeing to purchase or purchasing, or
maintaining the ownership of, the Purchaser’s Interest (or its portion thereof)
in respect of which Discount is computed by reference to the Euro-Rate, then,
upon demand by such Affected Person, the Seller shall promptly pay to such
Affected Person, from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such Affected Person for both
increased costs and maintenance of bargained for yield.  A certificate
(including the certificate contemplated in Section 1.7(c), a “Euro-Dollar
Certificate”) as to such amounts submitted to the Seller and the Administrative
Agent by such Affected Person shall be conclusive and binding for all purposes,
absent manifest error.
 
(c) Within a reasonable time after any Affected Person has actual knowledge that
it is subject to increased capital requirements or incurs other increased costs
pursuant to this Section 1.7, such Affected Person shall notify the Servicer of
such fact by submitting a certificate specifying the applicable law, regulation,
guideline or request causing such increased costs, the amount of compensation
requested, and the basis of the calculation thereof.
 
(d) For the avoidance of doubt, (i) any increase in cost and/or reduction in
yield caused by regulatory capital allocation adjustments due to Statements of
Financial Accounting Standards Nos. 166 and 167 (or any future statements or
interpretations issued by the Financial Accounting Standards Board or any
successor thereto) (collectively, “FAS 166/167”), or (ii) any interpretation by
the Financial Accounting Standards Board, or any other change in foreign or
domestic generally accepted accounting principles, that would require the
consolidation of some or all of the assets and liabilities of any Conduit
Purchaser with those of any of Crédit Agricole, the Administrative Agent, any
Conduit, any bank, any entity that enters into a commitment to purchase any
interest in the Purchaser’s Interest or any entity that provides liquidity or
credit enhancement, shall be covered by this Section 1.7.
 
(e) The Seller shall not be under any obligation to compensate any Affected
Person under this Section 1.07 with respect to any such increased costs that
arose during any period during the date that is prior to 180 days prior to such
Affected Person’s increased Costs Certificate being delivered to the Seller,
provided that the foregoing limitation shall not apply to any increased costs
arising out of the retroactive application of any Change in Law within such
180-day period.
 
Section 1.8 Requirements of Law.  If, after the date hereof, any Affected Person
determines that the existence of or compliance with (a) the introduction of or
any change in or in the interpretation of any law, regulation, rule or generally
accepted accounting principle or (b) any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law)
made or issued after the date of this Agreement:
 
(i)           does or shall subject such Affected Person to any increase in the
Purchaser’s Interest (or its portion thereof) or in the amount of Capital
relating thereto,
 
(ii)           does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, Purchases, advances
or loans by, or other credit extended by, or any other acquisition of funds by,
any office of such Affected Person that are not otherwise included in the
determination of the Euro-Rate or the Base Rate hereunder,
 
and the result of any of the foregoing is: (1) to increase the cost to such
Affected Person of agreeing to purchase or purchasing or maintaining the
ownership of undivided percentage ownership interests with regard to, or issuing
any Letter of Credit in respect of, the Purchaser’s Interest (or interests
therein) or any Portion of Capital, or (2) to reduce any amount receivable
hereunder (whether directly or indirectly), then, in any such case, upon demand
by such Affected Person, the Seller shall promptly pay to such Affected Person
additional amounts necessary to compensate such Affected Person for such
additional cost or reduced amount receivable.  All such amounts shall be payable
on demand.
 
Section 1.9 Funding Losses.  The Seller shall compensate each Affected Person,
upon written request by such Person, for all losses, expenses and liabilities
(including any interest paid by such Affected Person to lenders of funds
borrowed by it to fund or maintain any Portion of Capital hereunder at an
interest rate determined by reference to the Euro-Rate, less amounts earned on
reinvestment of such funds, and any loss sustained by such Person in connection
with the re-employment of such funds), which such Affected Person may sustain
with respect to funding or maintaining such Portion of Capital at the Euro-Rate
if, for any reason, after the applicable request by the Seller to fund or
maintain such Portion of Capital at an interest rate determined by reference to
the Euro-Rate, such funding or maintenance does not occur on a date specified
therefor.
 
Section 1.10 Taxes.  The Seller agrees that:
 
(a) Any and all payments by the Seller under this Agreement and any other
Transaction Document shall be made free and clear of and without deduction for
any Taxes, except to the extent such Taxes are imposed by law.  In the event
that any Taxes are imposed by law and required to be withheld from any payment
required to be made by the Seller to any Affected Person under any Transaction
Document, then:
 
(i) if such Taxes are Taxes other than Excluded Taxes (all such Taxes other than
Excluded Taxes shall hereinafter be referred to as “Indemnified Taxes”), the
amount of such payment shall be increased as may be necessary such that such
payment is made, after withholding or deduction for or on account of such Taxes,
in an amount that is not less than the amount provided for herein or in such
other Transaction Document; and
 
(ii) the Seller shall withhold the full amount of such Taxes from such payment
(as increased pursuant to clause (a)(i)) and shall pay such amount to the
Governmental Authority imposing such Taxes to the extent required by applicable
law.
 
 
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        (b) In addition, the Seller shall pay any and all Other Taxes imposed to
the relevant Governmental Authority imposing such Other Taxes in accordance with
applicable law.
 
(c) Whenever any Indemnified Taxes are paid by the Seller, as promptly as
reasonably practicable thereafter, the Seller shall send to the Administrative
Agent for its own account or for the account of any Affected Person, as the case
may be, a certified copy of an original official receipt showing payment thereof
or such other evidence of such payment as may be available to the Seller and
acceptable to the taxing authorities having jurisdiction over such Person.  If
the Seller fails to pay any Indemnified Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Seller shall indemnify the
Administrative Agent and/or any other Affected Person, as applicable, for any
incremental Taxes, interest or penalties that may become payable by such party
as a result of any such failure
 
(d) The Seller shall indemnify each Affected Person, within ten days after
written demand therefor, for the full amount of any Indemnified Taxes levied,
imposed or assessed on (and whether or not paid directly by) such Affected
Person on or with respect to any payment by or on account of any obligation of
the Seller hereunder (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 1.10) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  None of Sections 1.7, 3.1, 3.2
or 6.4 shall apply to Taxes, which shall be governed exclusively by this Section
1.10.
 
(e) If an Affected Person determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Seller, it shall pay over such refund to the Seller (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Seller under this Section 1.10 with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of such Affected Person
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund net of any applicable Taxes payable in
respect of such interest); provided, that the Seller, upon the request of such
Affected Person, agrees to repay the amount paid over to the Seller (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to such Affected Person in the event such Affected Person is required
to repay such refund to such Governmental Authority.  This Section 1.10 shall
not be construed to require any Affected Person to make available its tax
returns (or any other information relating to its Taxes that it deems
confidential) to the Seller or any other Person.
 
(f) If an Affected Person requests indemnification or repayment under this
Section 1.10, a certificate describing in reasonable detail such amounts and the
basis for such Affected Person’s demand for such amounts shall be submitted to
the Seller and the Administrative Agent by such Affected Person and shall be
conclusive and binding for all purposes, absent manifest error.
 
(g) To the extent legally entitled, each Affected Person shall, immediately upon
becoming a party hereto, and thereafter upon the reasonable request of the
Seller, furnish to the Seller a duly executed and completed copy of Internal
Revenue Service Form W-9, W-8 BEN, W-8 ECI or W-8 IMY, or successor forms (as
applicable), and such other forms, certificates, statements or documents
reasonably requested by Seller as evidence of such Affected Person’s exemption
from the withholding of United States tax with respect thereto.  Each Affected
Person promptly shall notify the Seller of any change in circumstance which
would modify or render invalid any claimed exemption from withholding after such
Affected Person’s knowledge thereof.
 
(h) Upon the written request of the Seller, any Affected Person claiming or
which would be entitled to claim a right to receive payment under this Section
1.10 shall use reasonable efforts to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Affected Person, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to this Section 1.10 in the future and (ii) would not
subject such Affected Person to any unreimbursed cost or expense and the
effectuation of such assignment would not otherwise be disadvantageous to such
Affected Person.  The Seller hereby agrees to pay all reasonable costs and
expenses incurred by any Affected Person in connection with any such designation
or assignment.
 
(i) The Seller, each Affected Person and each Participant acknowledge and agree
that it is their mutual intent that, solely for U.S. federal and all applicable
state and local income and franchise Tax purposes, the acquisition of an
interest in the Receivables Pool pursuant to this Agreement shall be treated as
debt financing provided to the Seller secured by the Receivables Pool.  Further,
each of the Seller, each Affected Person and each Participant (respectively)
covenants to the Seller and every other Affected Person and Participant to
adhere to, and take no action inconsistent with, the aforementioned treatment
for U.S. federal and all applicable state and local income and franchise Tax
purposes in all Tax filings, reports and returns and otherwise, except (and
solely to the extent) otherwise required by applicable law.
 
Section 1.11 Inability to Determine Euro-Rate.
 
(a) If the Administrative Agent (or any Purchaser) determines before the first
day of any Yield Period (which determination shall be final and conclusive)
that, by reason of circumstances affecting the interbank eurodollar market
generally (i) deposits in dollars (in the relevant amounts for such Yield
Period) are not being offered to banks in the interbank eurodollar market for
such Yield Period, (ii) adequate means do not exist for ascertaining the
Euro-Rate for such Yield Period or (iii) the Euro-Rate does not accurately
reflect the cost to any Purchaser (as determined by the related Purchaser) of
maintaining any Portion of Capital during such Yield Period, then the
Administrative Agent shall give notice thereof to the Seller. Thereafter, until
the Administrative Agent or such Purchaser notifies the Seller that the
circumstances giving rise to such suspension no longer exist, (a) no Portion of
Capital shall be funded by the affected Purchaser(s) at the Alternate Rate
determined by reference to the Euro-Rate and (b) the Discount for any
outstanding Portions of Capital then funded by the affected Purchaser(s) at the
Alternate Rate determined by reference to the Euro-Rate shall, on the last day
of the then current Yield Period, be converted to the Alternate Rate determined
by reference to the Base Rate.
 
(b) If, on or before the first day of any Yield Period, the Administrative Agent
shall have been notified by any Affected Person that such Affected Person has
determined (which determination shall be final and conclusive) that, any
enactment, promulgation or adoption of or any change in any applicable law, rule
or regulation, or any change in the interpretation or administration thereof by
a governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Person with any
guideline, request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall make it unlawful or
impossible for such Person to fund or maintain any Portion of Capital at the
Alternate Rate and based upon the Euro-Rate, the Administrative Agent shall
notify the Seller thereof. Upon receipt of such notice, until the Administrative
Agent notifies the Seller that the circumstances giving rise to such
determination no longer apply, (a) no Portion of Capital in respect of such
Affected Person shall be funded at the Alternate Rate determined by reference to
the Euro-Rate and (b) the Discount for any outstanding Portions of Capital then
funded at the Alternate Rate determined by reference to the Euro-Rate shall be
converted to the Alternate Rate determined by reference to the Base Rate either
(i) on the last day of the then current Yield Period if such Person may lawfully
continue to maintain such Portion of Capital at the Alternate Rate determined by
reference to the Euro-Rate to such day, or (ii) immediately, if such Person may
not lawfully continue to maintain such Portion of Capital at the Alternate Rate
determined by reference to the Euro-Rate to such day.
 
Section 1.12 Letters of Credit.
 
Subject to the terms and conditions hereof, the LC Bank shall issue or cause the
Issuance of Letters of Credit at the direction of the Seller (and, if
applicable, on behalf of any Originator, Armstrong or other Affiliate of
Armstrong in favor of such beneficiaries as such Person may elect); provided,
however, that the LC Bank will not be required to issue or cause the Issuance of
any Letters of Credit in the event that, after giving effect to such Issuance,
(x) the sum of the Aggregate Capital plus the LC Participation Amount would
exceed the Purchase Limit, or (y) the Purchaser’s Interest would exceed
100%.  All amounts drawn upon Letters of Credit shall accrue Discount.  The LC
Participation Amount shall not accrue Discount.
 
Section 1.13 Issuance of Letters of Credit.
 
(a) In the case of the Initial Letter of Credit, the Seller shall be deemed to
have requested the Issuance of the Initial Letter of Credit without any further
action on the Closing Date, and, subject to Section 1.17(b) and the other terms
hereof, the LC Bank shall cause such Issuance on the date of the issuance of the
Jackson County Bonds.  In the case of any subsequent Letter of Credit, the
Seller may request that the LC Bank issue a Letter of Credit by delivering to
the Administrative Agent, at or prior to 11:00 a.m., New York time, on the
second Business Day prior to the date of such requested Issuance, (i) the LC
Bank’s form of Letter of Credit Application (the “Letter of Credit
Application”), substantially in the form of Annex G attached hereto, completed
to the satisfaction of the Administrative Agent and the LC Bank, and (ii) a
Purchase Notice, in the form of Annex B attached hereto, along with (iii) such
other certificates, documents and other papers and information as the
Administrative Agent may reasonably request.  The Seller also has the right to
give instructions and make agreements with respect to any Letter of Credit
Application and the disposition of documents, and to agree with the
Administrative Agent upon any amendment, extension or renewal of any Letter of
Credit.
 
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(b) Each Letter of Credit shall, among other things:
 
(i) provide for the payment of sight drafts or other written demands for payment
when presented for honor thereunder in accordance with the terms thereof and
when accompanied by the documents described therein,
 
(ii) permit the LC Bank to give notice to the beneficiary of such Letter of
Credit of the occurrence of any LC Wind-Down Event and instruct such beneficiary
to draw the full available amount under such Letter of Credit within a period of
time specified in such Letter of Credit, and
 
(iii) have an expiry date not later than seven (7) days prior to the Facility
Termination Date the in effect.  Each Letter of Credit shall be subject either
to (x) the Uniform Customs and Practice for Documentary Credits (2007 Revision),
International Chamber of Commerce Publication No. 600, and any amendments or
revisions thereof adhered to by the LC Bank, or (y) the International Standby
Practices (ISP98-International Chamber of Commerce Publication Number 590), and
any amendments or revisions thereof adhered to by the LC Bank, as determined by
the LC Bank.
 
(c) The Administrative Agent shall promptly notify the LC Bank, at its address
for notices hereunder, and each Related Committed Purchaser of the request by
the Seller for a Letter of Credit hereunder, and shall provide the LC Bank with
the Letter of Credit Application delivered to the Administrative Agent by the
Seller pursuant to clause (a) above by the close of business on the day
received, or if received on a day that is not a Business Day or on any Business
Day after 11:00 a.m., New York time, on such day, on the next Business Day.
 
Section 1.14 Requirements For Issuance of Letters of Credit.
 
(a) The Seller shall authorize and direct the LC Bank to name the Seller as the
“Applicant” or “Account Party” of each Letter of Credit, provided, that any such
Letter of Credit may indicate that it is issued “at the request of” any
Originator or Affiliate of an Originator designated by the Seller.
 
(b) In the case of any Letter of Credit that by its terms (i) is subject to
reinstatement or (ii) may be automatically extended on the failure of the
related LC Bank to provide specific notice or instruction not to so extend, any
such reinstatement or extension shall be deemed an Issuance hereunder, and shall
accordingly be subject to the satisfaction of the conditions precedent set forth
in Section 1.12, Section 2 of Exhibit II (other than clause 2(a)) and any other
provisions herein governing the Issuance of Letters of Credit.  The LC Bank
shall not enter into a Letter of Credit described in the previous sentence
unless such Letter of Credit permits the LC Bank to refuse to (i) reinstate such
Letter of Credit if any of the conditions precedent to an Issuance of a Letter
of Credit hereunder are not met at the time of such reinstatement, or (ii)
extend such Letter of Credit if any of the conditions precedent to an Issuance
of a Letter of Credit hereunder are not met on the date of such extension or
such extension would cause the expiry date of such Letter of Credit to be later
than seven (7) days prior to the Facility Termination Date in effect on the date
of such extension.  In the event that LC Bank refuses to reinstate or extend a
Letter of Credit pursuant to this clause (b), the LC Bank shall be entitled to
provide any notices of such decision as set forth in such Letter of Credit, and
to instruct the beneficiary to draw on such Letter of Credit to the extent set
forth in such Letter of Credit.
 
Section 1.15 Disbursements, Reimbursement.
 
(a) In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, the LC Bank will promptly notify the
Administrative Agent, each Related Committed Purchaser and the Seller of such
request.  Provided that it shall have received such notice, the Seller shall
reimburse the LC Bank at or prior to 11:00 a.m., New York time, on the date that
such drawing occurs (each such date, a “Drawing Date”) in an amount equal to the
amount paid by the LC Bank under such Letter of Credit in respect of such
drawing (such obligation to reimburse the LC Bank shall sometimes be referred to
as a “Reimbursement Obligation”).  The Seller shall be entitled to direct the
Administrative Agent to apply any funds on deposit in the LC Collateral Account
to satisfy its Reimbursement Obligation pursuant to this clause (a).  The
failure of the Seller to satisfy a Reimbursement Obligation at or prior to the
time specified above shall not give rise to a Termination Event hereunder,
provided, that in the event of such failure, the Seller shall have an absolute
obligation, secured by all of the Pool Assets, to reimburse each Related
Committed Purchaser that makes a Participation Advance to the LC Bank as set
forth in clause (c) below.
 
(b) In the event the Seller fails to satisfy any Reimbursement Obligation at or
prior to 11:00 a.m., New York time, on the Drawing Date, the LC Bank promptly
will notify each Purchaser thereof, and the Seller shall be deemed to have
requested that a Reimbursement Purchase be made by the Conduit Purchaser or
Related Committed Purchasers, as applicable, pursuant to Section 1.1(c), to be
disbursed on the Drawing Date under such Letter of Credit, subject to the
satisfaction of the applicable conditions set forth in Exhibit II.  Any notice
given by the LC Bank pursuant to this Section may be oral if immediately
confirmed in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.
 
Upon the receipt of any notice given pursuant to this clause (b), the Conduit
Purchaser (or the Administrative Agent on its behalf) or the Related Committed
Purchasers, as applicable, shall, upon satisfaction of the applicable conditions
set forth in Exhibit II, make available to the LC Bank in immediately available
funds an amount equal to its Commitment Percentage of the amount of the unpaid
Reimbursement Obligation, whereupon the Conduit Purchaser or Related Committed
Purchasers, as applicable, shall be deemed to have made a Reimbursement Purchase
in that amount.
 
(c) If, because the conditions precedent for Purchases set forth in Exhibit II
are not met or for any other reason, neither the Conduit Purchaser nor the
Related Committed Purchasers make the Reimbursement Purchase pursuant to clause
(b),  the LC Bank will promptly notify each Related Committed Purchaser of such
failure.  Any notice given by the LC Bank pursuant to this Section may be oral
if immediately confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
 
Upon the receipt of any notice given pursuant to this clause (c), each Related
Committed Purchaser shall make an advance (a “Participation Advance”) in
exchange for a participation interest in the related Letter of Credit by making
available to the LC Bank an amount in immediately available funds equal to its
Commitment Percentage multiplied by the amount of such drawing.  Each Related
Committed Purchaser’s Commitment to make Participation Advances shall continue
until the last to occur of any of the following events: (A) the LC Bank ceases
to be obligated to issue or cause to be issued Letters of Credit hereunder; (B)
no Letter of Credit issued hereunder remains outstanding and uncancelled; and
(C) all Persons (other than the Seller) have been fully reimbursed for all
payments made under or relating to Letters of Credit.
 
Upon the funding of a Participation Advance by any Related Committed Purchaser,
the Seller shall have an obligation to reimburse the Related Committed Purchaser
for the amount of such Advance, plus any accrued Discount as set forth herein,
and the Seller’s obligation to reimburse the LC Bank shall be correspondingly
reduced by the amount of such Participation Advance.
 
Section 1.16 Repayment of Participation Advances.
 
(a) Upon (and only upon) receipt by the LC Bank for its account of immediately
available funds from or for the account of the Seller in reimbursement of any
draws under a Letter of Credit with respect to which any Related Committed
Purchaser has made a Participation Advance to the LC Bank, the LC Bank will pay
to each Related Committed Purchaser its ratable allocation of such funds (based
on the outstanding Capital of such Related Committed Purchasers and the LC
Bank), in the same funds as those received by the LC Bank; it being understood
that the LC Bank shall retain a ratable amount of such funds that were not the
subject of any Participation Advance in respect of such Letter of Credit by any
Related Committed Purchaser.
 
(b) If the LC Bank is required at any time to return to the Seller, or to a
trustee, receiver, liquidator, custodian, or any official in any insolvency
proceeding, any portion of the payments made by the Seller to the LC Bank
pursuant to this Agreement in reimbursement of a payment made under the Letter
of Credit or interest or fee thereon, each Related Committed Purchaser shall, on
demand of the LC Bank, forthwith return to the LC Bank the amount of its
Commitment Percentage of any amounts so returned by the LC Bank pursuant to
clause (a) above, plus interest at the Federal Funds Rate.
 
 
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Section 1.17 Documentation.
 
(a) The Seller agrees to be bound by the terms of the Letter of Credit
Application, by the LC Bank’s reasonable interpretations of any Letter of Credit
issued for the Seller, and by the LC Bank’s written regulations and customary
practices relating to letters of credit, notwithstanding that the LC Bank’s
interpretation of such regulations and practices may be different from the
Seller’s own.  In the event of a conflict between the Letter of Credit
Application and this Agreement, this Agreement shall govern.  The LC Bank shall
not be liable for any error, negligence and/or mistakes, whether of omission or
commission, in following the Seller’s instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto, other
than in the case of gross negligence or willful misconduct by the LC Bank.
 
      (b) Notwithstanding any other provision herein or in any other Transaction
Document, the LC Bank shall be under no obligation to issue any Letter of Credit
that the Seller has requested be issued in a form to which the LC Bank has not
agreed in good faith and in its sole discretion.
 
Section 1.18 Determination to Honor Drawing Request.
 
In determining whether to honor any request for drawing under any Letter of
Credit by the beneficiary thereof, the LC Bank shall be responsible only to
determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit, and that any other drawing
condition appearing on the face of such Letter of Credit has been satisfied in
the manner so set forth (the delivery of such documents and the satisfaction of
such conditions precedent, the “Applicable Conditions”).  Notwithstanding
anything to the contrary herein or in any other Transaction Document, there
shall be no conditions precedent to any such drawing other than the Applicable
Conditions.
 
Section 1.19 Nature of Participation and Reimbursement Obligations.
 
Notwithstanding anything to the contrary herein or in any other Transaction
Document, each Related Committed Purchaser’s obligation in accordance with this
Agreement to make Participation Advances as a result of a drawing under a Letter
of Credit, and the obligations of the Seller to reimburse the LC Bank (or to
reimburse any Purchaser that reimburses the LC Bank) upon a draw under a Letter
of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Article I under all
circumstances, including without limitation the following circumstances:
 
(i) any set-off, counterclaim, recoupment, defense or other right which such
Related Committed Purchaser may have against the LC Bank, the Administrative
Agent, any other Purchaser, the Seller or any other Person for any reason
whatsoever;
 
(ii) the failure of the Seller or any other Person to comply with any conditions
set forth in this Agreement, including without limitation the conditions for the
making of a purchase, reinvestments, requests for Letters of Credit or
otherwise, it being acknowledged that such conditions are not required for the
making of Participation Advances hereunder;
 
(iii) any lack of validity or enforceability of any Letter of Credit;
 
(iv) any claim of breach of warranty that might be made by the Seller, the LC
Bank or any Related Committed Purchaser against the beneficiary of a Letter of
Credit, or the existence of any claim, set-off, defense or other right which the
Seller, the LC Bank or any Related Committed Purchaser may have at any time
against a beneficiary, any successor beneficiary or any transferee of any Letter
of Credit or the proceeds thereof (or any Persons for whom any such transferee
may be acting), the LC Bank, any Related Committed Purchaser, any other
Purchaser or any other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including any
underlying transaction between the Seller or any Subsidiaries of the Seller or
any Affiliates of the Seller and the beneficiary for which any Letter of Credit
was procured);
 
(v) the lack of power or authority of any signer of, or lack of validity,
sufficiency, accuracy, enforceability or genuineness of, any draft, demand,
instrument, certificate or other document presented under any Letter of Credit,
or any such draft, demand, instrument, certificate or other document proving to
be forged, fraudulent, invalid, defective or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, even if the
Administrative Agent or the LC Bank has been notified thereof;
 
(vi) payment by the LC Bank under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit other than as a result of the gross negligence or
willful misconduct of the LC Bank;
 
(vii) the solvency of, or any acts or omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any transaction or
obligation relating to a Letter of Credit, or the existence, nature, quality,
quantity, condition, value or other characteristic of any property or services
relating to a Letter of Credit;
 
(viii) any failure by the LC Bank or any of the LC Bank’s Affiliates to issue
any Letter of Credit in the form requested by the Seller, unless the LC Bank has
received written notice from the Seller of such failure within three Business
Days after the LC Bank shall have furnished the Seller a copy of such Letter of
Credit and such error is material and no drawing has been made thereon prior to
receipt of such notice;
 
(ix) any Material Adverse Effect on the Seller, any Originator or any Affiliates
thereof;
 
(x) any breach of this Agreement or any Transaction Document by any party
thereto;
 
(xi) the occurrence or continuance of an Insolvency Proceeding with respect to
the Seller, any Originator or any Affiliate thereof;
 
(xii) the fact that a Termination Event or an Incipient Termination Event shall
have occurred and be continuing;
 
(xiii) the fact that this Agreement or the obligations of Seller or Servicer
hereunder shall have been terminated; and
 
(xiv) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.
 
Section 1.20 Letter of Credit Amounts.
 
Unless otherwise specified herein, the amount of a Letter of Credit at any time
shall be deemed to be the stated amount of such Letter of Credit in effect at
such time; provided, however, that with respect to any Letter of Credit that, by
its terms or the terms of any LC Issuer Document related thereto, provides for
one or more automatic increases in the stated amount thereof, the amount of such
Letter of Credit shall be deemed to be the maximum stated amount of such Letter
of Credit after giving effect to all such increases, whether or not such maximum
stated amount is in effect at such time.
 
Section 1.21 Source of Funds.
 
All payments made by the LC Bank pursuant to any Letter of Credit shall be made
from funds of the LC Bank, and not from the funds of any other Person.
 
 
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Section 1.22 Indemnity.
 
In addition to other amounts payable hereunder, the Seller hereby agrees to
protect, indemnify, pay and save harmless the Administrative Agent, the LC Bank,
each Related Committed Purchaser and any of the LC Bank’s Affiliates that have
issued a Letter of Credit (provided, that the Issuance of a Letter of Credit by
an Affiliate of the LC Bank shall not limit the obligations of the LC Bank
hereunder) from and against any and all claims, demands, liabilities, damages,
taxes, penalties, interest, judgments, losses, costs, charges and expenses
(including Attorney Costs) that the Administrative Agent, the LC Bank, any
Related Committed Purchaser or any of their respective Affiliates may incur or
be subject to as a consequence, direct or indirect, of the Issuance of any
Letter of Credit, unless resulting from (a) the gross negligence or willful
misconduct of the party to be indemnified or (b) the wrongful dishonor by the LC
Bank of a proper demand for payment made under any Letter of Credit, except if
such dishonor resulted from any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto Governmental Authority (all such
acts or omissions herein called “Governmental Acts”).
 
Section 1.23 Liability for Acts and Omissions.
 
As between the Seller, on the one hand, and the Administrative Agent, the LC
Bank and the Purchasers, on the other, the Seller assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, none of the Administrative Agent, the LC Bank or any Purchaser
shall be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for an Issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged (even if the LC Bank shall have been notified
thereof); (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (iii) the failure of the
beneficiary of any such Letter of Credit, or any other party to which such
Letter of Credit may be transferred, to comply fully with any conditions
required in order to draw upon such Letter of Credit or any other claim of the
Seller against any beneficiary of such Letter of Credit, or any such transferee,
or any dispute between or among the Seller and any beneficiary of any Letter of
Credit or any such transferee; (iv) errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the
Administrative Agent, the LC Bank and the Purchasers, including any Governmental
Acts; and none of the above shall affect or impair, or prevent the vesting of,
any of the LC Bank’s rights or powers hereunder. Nothing in the preceding
sentence shall relieve the LC Bank from liability for its gross negligence or
willful misconduct, as determined by a final non-appealable judgment of a court
of competent jurisdiction, in connection with actions or omissions described in
such clauses (i) through (viii) of such sentence.  In no event shall the
Administrative Agent, the LC Bank, the Purchasers or their respective Affiliates
be liable to the Seller or any other Person for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including
without limitation attorneys’ fees), or for any damages resulting from any
change in the value of any property relating to a Letter of Credit.
 
Without limiting the generality of the foregoing, the Administrative Agent, the
LC Bank and the Purchasers and each of their respective Affiliates (i) may rely
on any written communication believed in good faith by such Person to have been
authorized or given by or on behalf of the applicant for a Letter of Credit;
(ii) may honor any presentation if the documents presented appear on their face
to comply with the terms and conditions of the relevant Letter of Credit; (iii)
may honor a previously dishonored presentation under a Letter of Credit, whether
such dishonor was pursuant to a court order, to settle or compromise any claim
of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to
the same extent as if such presentation had initially been honored, together
with any interest paid by the LC Bank or its Affiliates; (iv) may honor any
drawing that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being delivered separately), and shall not be liable
for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit; (v) may pay any paying or
negotiating bank claiming that it rightfully honored under the laws or practices
of the place where such bank is located; and (vi) may settle or adjust any claim
or demand made on the Administrative Agent, the LC Bank, the Purchasers or their
respective Affiliates, in any way related to any order issued at the applicant’s
request to an air carrier, a letter of guarantee or of indemnity issued to a
carrier or any similar document (each an “Order”), and honor any drawing in
connection with any Letter of Credit that is the subject of such Order,
notwithstanding that any drafts or other documents presented in connection with
such Letter of Credit fail to conform in any way with such Letter of Credit.
 
In furtherance and not in limitation of the specific provisions set forth above,
any action taken or omitted by the LC Bank under or in connection with the
Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put the LC Bank under
any resulting liability to the Seller, any Related Committed Purchaser or any
other Person, unless such LC Bank shall have acted with gross negligence or
willful misconduct, as determined by a final non-appealable judgment of a court
of competent jurisdiction,.
 
Section 1.24 Termination of Commitments.
 
(a) The Seller may advise the Administrative Agent in writing of its desire to
extend the Scheduled Commitment Termination Date with respect to any Related
Committed Purchaser, provided such request is made not less than 90 days prior
to the then-current Scheduled Commitment Termination Date with respect to such
Purchaser.  Each Purchaser may accept or decline such a request in its sole
discretion and on such terms as it may elect, and other than as set forth in
clause (c), the failure of one or more Purchasers to accept the Seller’s request
to extend the Scheduled Commitment Termination Date shall not affect the right
of the other Purchasers to accept such request.  The Administrative Agent shall
notify each Purchaser of each other Purchaser’s decision to extend or not extend
the Scheduled Termination Date, such that each Purchaser shall be entitled to
know the aggregate Commitment of the extending Purchasers prior to confirming
its decision to extend or decline to extend under this Section 1.24.
 
(b) In the event that any Purchasers are agreeable to such extension, the
Administrative Agent shall so notify the Seller in writing not less than 60 days
prior to the then-current Scheduled Commitment Termination Date of such
extending Purchasers, and the Seller, the Administrative Agent and such
extending Purchasers shall enter into such documents as such parties may deem
necessary or appropriate to reflect such extension.  All reasonable costs and
expenses incurred by the accepting Purchasers and the Administrative Agent in
connection with such extension (including reasonable Attorneys’ Costs) shall be
paid by the Seller.
 
In the event any Purchaser declines the request for such extension, such Exiting
Purchaser shall so notify the Administrative Agent and the Administrative Agent
shall so notify the Seller of such determination; provided, a Purchaser shall be
deemed to have refused to grant the requested extension in the event the
Administrative Agent fails to affirmatively notify the Seller, in writing, of
such Purchaser’s agreement to accept the requested extension.
 
(c) If any such Purchaser does not accept such extension request, then the
Purchase Limit shall be reduced by an amount equal to the Commitment of each
Exiting Purchaser, and each extending Purchaser’s Commitment Percentage shall be
recalculated, effective as of the Scheduled Commitment Termination Date of the
Exiting Purchasers, giving effect to the removal of such Exiting Purchaser’s
from such calculation.
 
On the Scheduled Commitment Termination Date with respect to any Purchaser, in
the event that the aggregate Commitment of the extending Purchasers is less than
the sum of (i) the aggregate Capital plus (ii) the LC Participation Amount, then
notwithstanding that any Purchaser wishes to extend its Commitment hereunder,
the Scheduled Facility Termination Date for each Purchaser shall occur on the
date previously set therefor without giving effect to any extension thereof
pursuant to this Section 1.24.
 
 
 
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ARTICLE II
 
REPRESENTATIONS AND WARRANTIES; COVENANTS;
 
TERMINATION EVENTS
 
Section 2.1 Representations and Warranties; Covenants.  Each of the Seller, the
Performance Guarantor and the Servicer hereby makes the representations and
warranties, and hereby agrees to perform and observe the covenants, applicable
to it set forth in Exhibits III and IV, respectively.
 
Section 2.2 Termination Events.  If any of the Termination Events set forth in
Exhibit V shall occur, the Administrative Agent may (with the consent of the
Majority Purchasers) or shall (at the direction of the Majority Purchasers), by
notice to the Seller, declare the Facility Termination Date to have occurred (in
which case the Facility Termination Date shall be deemed to have occurred);
provided, that the Facility Termination Date shall occur automatically upon the
occurrence of any event (without any requirement for the passage of time or the
giving of notice) described in paragraph (g) of Exhibit V. Upon the occurrence
of the Facility Termination Date, the Administrative Agent and each Purchaser
shall have, in addition to the rights and remedies that they may have under this
Agreement, all other rights and remedies provided after default under the UCC
and under other applicable law, which rights and remedies shall be cumulative.
 
Section 2.3 LC Wind-Down Events.  If any LC Wind-Down Event shall occur, the LC
Bank shall be entitled to provide any notices of such occurrence as set forth in
any Letter of Credit then in effect, and to instruct the related beneficiary to
draw on such Letter of Credit.
 
Section 2.4 Seller’s Rights upon Termination.  Upon the first date occurring
after the Facility Termination Date when the Aggregate Capital and Aggregate
Discount and all other amounts due and owing from the Seller to the Purchasers,
the Administrative Agent, the Servicer and each other Affected Person under this
Agreement and each of the other Transaction Documents shall have been paid in
full, the Administrative Agent (on behalf of the Purchasers) shall release,
assign and convey, as applicable, to the Seller or its designee, without
representation or warranty, but free and clear of any Adverse Claims, all right,
title and interest in the Pool Receivables, as applicable, and all other Pool
Assets.  The Administrative Agent, at the expense of the Seller, shall
authorize, execute and deliver, as applicable, proper financing statements and
all other instruments and documents as are prepared and requested by the Seller
which are necessary to vest in the Seller all right, title and interest in the
Pool Receivables and other Pool Assets free and clear of any Adverse Claim.
 
ARTICLE III
 
INDEMNIFICATION
 
Section 3.1 Indemnities by the Seller.  Without limiting any other rights any
such Person may have hereunder or under applicable law, the Seller hereby
indemnifies and holds harmless, on an after-tax basis, the Administrative Agent,
each Liquidity Provider, each Program Support Provider and each Purchaser and
their respective Affiliates, employees, officers, directors, agents, counsel,
successors, transferees or assigns (each an “Indemnified Party”) from and
against any and all damages, losses, claims, liabilities, penalties, taxes, and
related costs and expenses (including Attorney Costs) (all of the foregoing
collectively, the “Indemnified Amounts”) 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, the use of proceeds of
purchases or reinvestments, or the acquisition of any portion of the Purchaser’s
Interest, or any action taken or omitted by any of the Indemnified Parties
(including any action taken by the Administrative Agent as attorney-in-fact for
the Seller or any Originator hereunder or under any other Transaction Document),
whether arising by reason of the acts to be performed by the Seller hereunder or
otherwise, excluding only Indemnified Amounts to the extent (a) a resulting from
the gross negligence or willful misconduct of the Indemnified Party seeking
indemnification, (b) due to the credit risk of the Obligor and for which
reimbursement would constitute recourse to any Originator, the Seller or the
Servicer for uncollectible Receivables or (c) such Indemnified Amounts include
taxes imposed or based on, or measured by, the gross or net income or receipts
of such Indemnified Party by the jurisdiction under the laws of which such
Indemnified Party is organized (or any political subdivision thereof); provided,
however, that nothing contained in this sentence shall limit the liability of
the Seller or the Servicer or limit the recourse of any Indemnified Party to the
Seller or the Servicer for any amounts otherwise specifically provided to be
paid by the Seller or the Servicer 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 pay on demand to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party for Indemnified Amounts (including losses in respect of uncollectible
Receivables, regardless, for purposes of these specific matters, whether
reimbursement therefor would constitute recourse to the Seller) relating to or
resulting from:
 
(i) the failure of any Pool Receivable included in the calculation of the Net
Receivables Pool Balance as an Eligible Receivable to be an Eligible Receivable,
the failure of any information contained in any Servicer Report to be true and
correct, or the failure of any other information provided to any Purchaser or
the Administrative Agent with respect to the Pool Receivables or this Agreement
to be true and correct
 
(ii) the failure of any representation or warranty or statement made or deemed
made by the Seller (or any employee, officer or agent of the Seller) under or in
connection with this Agreement, any other Transaction Document any Servicer
Report or any other information or report delivered by or on behalf of the
Seller pursuant hereto to have been true and correct as of the date made or
deemed made in all respects;
 
(iii) the failure by the Seller to comply with any applicable law, rule or
regulation with respect to any Receivable or the related Contract, or the
nonconformity of any Receivable or related Contract with any such applicable
law, rule or regulation;
 
(iv) the failure to vest and maintain vested in the Administrative Agent, for
the benefit of the Purchasers, (A) a valid and enforceable perfected undivided
percentage ownership interest, to the extent of the Purchaser’s Interest, in the
Receivables in, or purporting to be in, the Receivables Pool and the other Pool
Assets, or (B) a first-priority perfected security interest in the Pool
Receivables and the other related property conveyed hereunder, free and clear of
any Adverse Claim;
 
(v) any commingling of funds to which the Administrative Agent or any Purchaser
is entitled hereunder with any other funds prior to any distribution pursuant to
this Agreement;
 
(vi) the failure to have filed, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool and the other Pool Assets, whether at
the time of any Purchase or at any subsequent time;
 
(vii) any failure of a Lock-Box Bank or Collection Account Bank to comply with
the terms of the applicable Lock-Box Agreement, Collection Account Agreement or
Intercreditor Agreement;
 
(viii) any dispute, claim, offset or defense (other than discharge in bankruptcy
of the Obligor) of the Obligor to the payment of any Receivable (including a
defense based on such Receivable or Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale 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 relating to collection activities (if such
collection activities were performed by the Seller or any of its Affiliates
acting as the Servicer or by any agent or independent contractor retained by the
Seller or any of its Affiliates) with respect to such Receivable) or other
similar claim or defense not arising from the financial inability of any Obligor
to pay undisputed indebtedness;
 
(ix) any failure of the Seller (or the Servicer), to perform its duties or
obligations in accordance with the provisions of this Agreement or any other
Transaction Document to which it is a party;
 
 
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(x) any products liability or other claim, investigation, litigation or
proceeding arising out of or in connection with merchandise, insurance or
services that are the subject of any Contract;
 
(xi) any investigation, litigation or proceeding related to this Agreement or
the use of proceeds of Purchases or the ownership of interests in the Pool
Receivables or the Related Security or Contract with respect to any Pool
Receivable;
 
(xii) any action taken by the Administrative Agent as attorney-in-fact for the
Seller or any Originator pursuant to this Agreement or any other Transaction
Document;
 
(xiii) any reduction in Capital as a result of the distribution of Collections
pursuant to Section 1.4(d), if all or a portion of such distributions shall
thereafter be rescinded or otherwise must be returned for any reason;
 
(xiv) 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 3.2 Indemnities by the Servicer.  Without limiting any other rights that
any Indemnified Party may have hereunder or under applicable law, the Servicer
hereby agrees to indemnify each Indemnified Party from and against any and all
Indemnified Amounts arising out of or resulting from (whether directly or
indirectly): (a) the failure of any information contained in a Servicer Report
to be true and correct in any material respect, or the failure of any other
information provided to such Indemnified Party in connection with this Agreement
and the other Transaction Documents by, or on behalf of, the Servicer to be true
and correct in any material respect, (b) the failure of any representation,
warranty or statement made or deemed made by the Servicer (or any of its
officers) under or in connection with this Agreement or any other Transaction
Document to which it is a party to have been true and correct in all material
respects as of the date made or deemed made, (c) the failure by the Servicer to
comply with any applicable law, rule or regulation with respect to any Pool
Receivable or the related Contract, (d) any dispute, claim, offset or defense of
the Obligor to the payment of any Receivable in, or purporting to be in, the
Receivables Pool resulting from or related to the collection activities of the
Servicer with respect to such Receivable, (e) the commingling of Collections at
any time with any other funds, or (f) any failure of the Servicer to perform its
duties or obligations in accordance with the provisions hereof or any other
Transaction Document to which it is a party; provided, that in no event shall
the Servicer be required to indemnify any Indemnified Party in respect of
Indemnified Amounts resulting from the gross negligence or willful misconduct of
the Indemnified Party seeking indemnification; and provided, further, that no
Indemnified Party shall be entitled to be indemnified for the same Indemnified
Amounts by each of the Seller and the Servicer.  Indemnification pursuant to
this Section shall be payable directly by the Servicer and shall not be payable
from the Pool Receivables or the other Pool Assets.
 
ARTICLE IV
 
ADMINISTRATION AND COLLECTIONS
 
Section 4.1 Appointment of the Servicer.
 
(a) The servicing, administering and collection of the Pool Receivables shall be
conducted by the Person so designated from time to time as the Servicer in
accordance with this Section. Until the Administrative Agent gives notice to
Armstrong (in accordance with this Section 4.1) of the designation of a new
Servicer, Armstrong is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms hereof. Upon the
occurrence and during the continuation of a Termination Event, the
Administrative Agent may (with the consent of the Majority Purchasers) or shall
(at the direction of the Majority Purchasers) designate as Servicer any Person
(including itself) to succeed Armstrong or any successor Servicer, on the
condition in each case that any such Person so designated shall have agreed in
writing to perform the duties and obligations of the Servicer pursuant to the
terms hereof and under the terms of the Intercreditor Agreement.
 
(b) Upon the designation of a successor Servicer as set forth in clause (a),
Armstrong (or any successor Servicer being terminated) agrees that it will
terminate its activities as Servicer hereunder in a manner that the
Administrative Agent reasonably determines will facilitate the transition of the
performance of such activities to the new Servicer, and Armstrong (or any
successor Servicer being terminated) shall cooperate with and assist such new
Servicer. Such cooperation shall include access to and transfer of related
records (including all Contracts) and taking all commercially reasonable steps
to transfer to the new Servicer all licenses, hardware or software necessary or
desirable to collect the Pool Receivables and the Related Security.
 
(c) Armstrong acknowledges that, in making their decision to execute and deliver
this Agreement, the Administrative Agent and each Purchaser have relied on
Armstrong’s agreement to act as Servicer hereunder. Accordingly, Armstrong
agrees that it will not voluntarily resign as Servicer.
 
(d) The Servicer may delegate its duties and obligations hereunder to any
subservicer (each a “Sub-Servicer”); provided, that, in connection with each
such delegation: (i) such Sub-Servicer shall agree in writing to perform the
delegated duties and obligations of the Servicer pursuant to the terms hereof,
(ii) the Servicer shall remain primarily liable for the performance of the
duties and obligations so delegated, (iii) the Seller, the Administrative Agent
and each Purchaser shall have the right to look solely to the Servicer for such
performance, and (iv) the terms of any agreement with any Sub-Servicer shall
provide that the Administrative Agent may terminate such agreement upon the
termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide
appropriate notice to each such Sub-Servicer); provided, however, that if any
such delegation is to any Person other than an Affiliate of Armstrong, the
Administrative Agent and the Majority Purchasers shall have consented in writing
in advance to such delegation.
 
Section 4.2 Duties of the Servicer.
 
(a) The Servicer shall take or cause to be taken all such action as may be
necessary or advisable to service, administer and collect each Pool Receivable
(i) in accordance with this Agreement and all applicable laws, rules and
regulations, (ii) with reasonable care and diligence, and (iii) in accordance
with the Credit and Collection Policies (to the extent consistent with
Applicable Law). The Servicer shall set aside, for the account of each
Purchaser, the amount of the Collections to which each such Purchaser is
entitled in accordance with Article I.  The Servicer may extend or adjust the
terms or Maturity of any Pool Receivable as set forth in clause 2(g) of Exhibit
IV; provided, however, that, for purposes of this Agreement, (i) such action
shall not change the number of days such Pool Receivable has remained unpaid
from the date of the original due date related to such Pool Receivable, and (ii)
such extension or adjustment shall not alter the status of such Pool Receivable
as a Delinquent Receivable or a Defaulted Receivable or limit the rights of the
Administrative Agent or any Purchaser under this Agreement with respect to such
Pool Receivable.  The Seller shall deliver to the Servicer and the Servicer
shall hold for the benefit of the Seller and the Administrative Agent
(individually and for the benefit of each Purchaser) all records and documents
(including computer tapes or disks) with respect to each Pool
Receivable.  Notwithstanding anything to the contrary contained herein, the
Administrative Agent may direct the Servicer (whether the Servicer is Armstrong
or any other Person) (x) during the occurrence of a Termination Event, to
commence or settle any legal action, and (y) at any other time (including, for
the avoidance of doubt, during the occurrence of an Incipient Termination Event
that is not a Termination Event), to take any commercially reasonable action, in
each case to enforce collection of any Pool Receivable or to foreclose upon or
repossess any Related Security.
 
(b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less all reasonable and appropriate out-of-pocket
costs and expenses of such Servicer of servicing, collecting and administering
such collections.  The Servicer, if other than Armstrong or an Affiliate
thereof, shall, as soon as practicable upon demand, deliver to the Seller all
records in its possession that evidence or relate to any indebtedness that is
not a Pool Receivable, and copies of records in its possession that evidence or
relate to any indebtedness that is a Pool Receivable.
 
(c) The Servicer’s obligations hereunder shall terminate on the latest of: (i)
the Facility Termination Date, (ii) the date on which no Capital or Discount in
respect of the Purchaser’s Interest shall be outstanding, (iii) the date the LC
Participation Adjusted Amount is reduced to zero and (iv) the date on which all
other amounts required to be paid to each Purchaser, the Administrative Agent
and any other Indemnified Party or Affected Person hereunder shall have been
paid in full.
 
 
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After such termination, the Servicer shall promptly deliver to the Seller all
books, records and related materials that the Seller previously provided to the
Servicer, or that have been obtained by the Servicer, in connection with this
Agreement.
 
Section 4.3 Account Arrangements.
 
(a) Prior to the Closing Date, the Seller shall have entered into (i) Lock-Box
Agreements with all of the Lock-Box Banks, (ii) the Intercreditor Agreement, and
(iii) a Collection Account Agreement with all of the Collection Account Banks,
and delivered original counterparts of each to the Administrative Agent.  Each
of the Lock-Box Accounts and the Collection Accounts shall be used for the
purpose of receiving Collections as described herein and in the other
Transaction Documents.  During the continuation of a Termination Event or
Incipient Termination Event, the Administrative Agent may, with the consent of
the Majority Purchasers, or shall, upon the direction of the Majority
Purchasers, at any time thereafter provide a Stop Transfer Notice (as defined in
the Intercreditor Agreement) to each Lock-Box Bank and provide notice to each
Collection Account Bank that the Administrative Agent is exercising its rights
under the Collection Account Agreements, as the case may be, to do any or all of
the following, in accordance with the Intercreditor Agreement: (a) to exercise
exclusive dominion and control over the funds deposited in the Lock-Box Accounts
and/or the Collection Accounts, (b) to have the proceeds of the Pool Receivables
that are sent to the respective Lock-Box Accounts allocated in accordance with
the Intercreditor Agreement pursuant to the Administrative Agent’s instructions
rather than deposited in the Collection Accounts and, and/or to have the
proceeds that are sent to the Collection Accounts redirected pursuant to the
Administrative Agent’s instructions rather than transferred to the Servicer, and
(c) to take any or all other actions permitted under the applicable Lock-Box
Agreement, Intercreditor Agreement and Collection Account Agreement.  The Seller
hereby agrees that if the Administrative Agent at any time takes any action set
forth in the preceding sentence, the Administrative Agent shall have exclusive
control (for the benefit of the Purchasers) of the proceeds (including
Collections) of all Pool Receivables and the Seller and the Servicer hereby
further agree to take any other action that the Administrative Agent may
reasonably request to transfer such control.  Any proceeds of Pool Receivables
received by the Seller or the Servicer thereafter shall be sent immediately to,
or as otherwise instructed by, the Administrative Agent.  The parties hereto
hereby acknowledge and agree that if at any time the Administrative Agent
exercises its right to take control of any Lock-Box Account and/or any
Collection Account, as the case may be, the Administrative Agent (i) shall not
have any rights to the funds therein in excess of the unpaid amounts due to the
Administrative Agent, any Purchaser, any Indemnified Party or any other Affected
Person hereunder, and (ii) shall distribute or cause to be distributed such
funds in accordance with Article I (as if such funds were held by the Servicer
thereunder).
 
(b) Other than during the continuation of a Termination Event or Incipient
Termination Event, all funds in a Collection Account during any Settlement
Period may be invested, by or at the direction of the Servicer, in Permitted
Investments, so long as (i) either (A) such Permitted Investments are credited
to a “securities account” (as defined in the applicable UCC) over which the
Administrative Agent (for the benefit of the Purchasers) shall have a first
priority perfected security interest, (B) such Permitted Investments are
purchased in the name of the Administrative Agent (for the benefit of the
Purchasers) or (C) such Permitted Investments are held in another manner
sufficient to establish the Administrative Agent’s first priority perfected
security interest over such Permitted Investments and (ii) such Permitted
Investments are scheduled to mature prior to the Settlement Date relating to the
Settlement Period in which such investments were made.  All income and gain or
loss realized from any such investment shall be credited or debited (as
applicable) to the applicable Collection Account.  The Administrative Agent
shall have no obligation to reimburse any Collection Account for any losses
realized by reason of such investments.
 
Section 4.4 Enforcement Rights.
 
(a) At any time following the occurrence and during the continuation of a
Termination Event, the Administrative Agent may:
 
(i) direct the Obligors that payment of all amounts payable under any Pool
Receivable is to be made directly to the Administrative Agent or its designee,
 
(ii) instruct the Seller or the Servicer to give notice of the Purchaser’s
Interest and the Purchasers’ security interest in the Pool Receivables to each
Obligor, which notice shall direct that payments be made directly to the
Administrative Agent or its designee (on behalf of such Purchasers), and the
Seller or the Servicer, as the case may be, shall give such notice at the
expense of the Seller or the Servicer, as the case may be; provided, that if the
Seller or the Servicer, as the case may be, fails to so notify each Obligor, the
Administrative Agent (at the Seller’s or the Servicer’s, as the case may be,
expense) may so notify the Obligors,
 
(iii) request the Servicer to, and upon such request the Servicer shall, (A)
assemble all of the records necessary or desirable to collect the Pool
Receivables and the Related Security, and take commercially reasonable action to
transfer or license to a successor Servicer the use of all software necessary or
desirable to collect the Pool Receivables and the Related Security, and make the
same available to the Administrative Agent or its designee (for the benefit of
the Purchasers) at a place selected by the Administrative Agent, and (B)
segregate all cash, checks and other instruments received by it from time to
time constituting Collections in a manner reasonably acceptable to the
Administrative Agent and, promptly upon receipt, remit all such cash, checks and
instruments, duly indorsed or with duly executed instruments of transfer, to the
Administrative Agent or its designee, in each case in accordance with the
Intercreditor Agreement, and
 
(iv) collect any amounts due from any Originator under the Sale Agreement.
 
(b) The Seller hereby authorizes the Administrative Agent (on behalf of each
Purchaser), and irrevocably appoints the Administrative Agent as its
attorney-in-fact with full power of substitution and with full authority in the
place and stead of the Seller, which appointment is coupled with an interest,
after the occurrence and during the continuation of a Termination Event to take
any and all steps in the name of the Seller and on behalf of the Seller
necessary or desirable, in the determination of the Administrative Agent, to
collect any and all amounts or portions thereof due under any and all Pool
Assets, including indorsing the name of the Seller on checks and other
instruments representing Collections and enforcing such Pool Assets.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.
 
Section 4.5 Responsibilities of the Seller.
 
(a) Anything herein to the contrary notwithstanding, the Seller shall: (i)
perform all of its obligations, if any, under the Contracts related to the Pool
Receivables to the same extent as if interests in such Pool Receivables had not
been transferred hereunder, and the exercise by the Administrative Agent or the
Purchasers of their respective rights hereunder shall not relieve the Seller
from such obligations, and (ii) pay when due any taxes, including any sales
taxes payable in connection with the Pool Receivables and their creation and
satisfaction. None of the Administrative Agent or any of the Purchasers shall
have any obligation or liability with respect to any Pool Asset, nor shall any
of them be obligated to perform any of the obligations of the Seller, Servicer
or Armstrong hereunder or under any other Transaction Document or under the
related Contracts or the obligations of any Originator under the Sale Agreement
or any other Transaction Document or under the related Contracts.
 
(b) Armstrong hereby irrevocably agrees that if at any time it shall cease to be
the Servicer hereunder, it shall act (if the then-current Servicer so requests)
as the data-processing agent of the Servicer and, in such capacity, Armstrong
shall conduct the data-processing functions of the administration of the
Receivables and the Collections thereon in substantially the same way that
Armstrong conducted such data-processing functions while it acted as the
Servicer; provided, that the reasonable costs and expenses of such
data-processing functions shall be borne by the successor Servicer out of the
Servicing Fee.
 
Section 4.6 Servicing Fee.
 
(a) Subject to clause (b), the Servicer shall be paid a fee (the “Servicing
Fee”) equal to the Servicing Fee Rate multiplied by the daily average aggregate
Outstanding Balance of the Pool Receivables during the applicable month to which
such Servicing Fee relates, which shall be payable monthly in arrears.  The
Servicing Fee shall be paid through the distributions contemplated by Section
1.4(d).
 
(b) If the Servicer ceases to be Armstrong or an Affiliate thereof, the
servicing fee shall be the greater of (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
 
 
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Section 4.7 Annual Servicing Report of Independent Public Accountants.  In
addition to and without limiting any reports required to be provided by it in
Exhibit IV hereto, at the request of the Administrative Agent (made no more than
once in each calendar year), the Servicer shall cause a firm approved by the
Administrative Agent (who may also render other services to the Servicer or the
Seller) to furnish a report (addressed to the Administrative Agent) to the
Administrative Agent and each Purchaser, to the effect that:
 
(i) they have examined certain documents and records relating to the servicing
of Receivables under the Agreement, and compared the information contained in
the Servicer Reports (delivered pursuant to Section 2(a)(iii) of Exhibit IV to
the Agreement) during the period covered by such report with such documents and
records, and that, on the basis of such examination, such firm is of the opinion
that the servicing has been conducted in compliance with the terms and
conditions as set forth in this Article IV, and
 
(ii) that they have compared the mathematical calculations of each amount set
forth in the Servicer Reports (delivered pursuant to Section 2(a)(iii) of
Exhibit IV to the Agreement) during the period covered by such report with the
Servicer’s computer records that were the source of such amounts, and that, on
the basis of such comparison, such firm is of the opinion that such amounts are
in agreement,
 
in each case except for such exceptions as they believe to be immaterial and
such other exceptions as shall be set forth in such statements.
 
ARTICLE V
 
THE AGENTS
 
Section 5.1 Appointment and Authorization.  (a)  Each Purchaser hereby
irrevocably designates and appoints Crédit Agricole Corporate and Investment
Bank as the “Administrative Agent” hereunder and authorizes the Administrative
Agent to take such actions and to exercise such powers as are delegated to the
Administrative Agent hereby and to exercise such other powers as are reasonably
incidental thereto.  The Administrative Agent shall hold, in its name, for the
benefit of each Purchaser, ratably, the Purchaser’s Interest.  The
Administrative 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 Administrative Agent.  The Administrative Agent does not
assume, nor shall it be deemed to have assumed, any obligation to, or
relationship of trust or agency with, the Seller or Servicer.  Notwithstanding
any provision of this Agreement or any other Transaction Document to the
contrary, in no event shall the Administrative Agent ever be required to take
any action which exposes the Administrative Agent to personal liability or which
is contrary to the provision of any Transaction Document or applicable law.
 
(b) Except as otherwise specifically provided in this Agreement, the provisions
of this Article V are solely for the benefit of the Administrative Agent and the
Purchasers, and none of the Seller or Servicer shall have any rights as a
third-party beneficiary or otherwise under any of the provisions of this
Article V, except that this Article V shall not affect any obligations which the
Administrative Agent or any Purchaser may have to the Seller or the Servicer
under the other provisions of this Agreement.
 
(c) In performing its functions and duties hereunder, the Administrative Agent
shall act solely as the agent of the Purchasers and does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with or
for the Seller or Servicer or any of their successors and assigns.
 
Section 5.2 Delegation of Duties.  The Administrative 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 Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
 
Section 5.3 Exculpatory Provisions.  None of the Administrative Agent or 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 Majority
Purchasers and (ii) in the absence of such Person’s gross negligence or willful
misconduct.  The Administrative Agent shall not be responsible to any Purchaser
or other Person for (i) any recitals, representations, warranties or other
statements made by the Seller, Servicer, or any of their Affiliates, (ii) the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
any Transaction Document, (iii) any failure of the Seller, the Servicer, any
Originator or any of their Affiliates to perform any obligation hereunder or
under the other Transaction Documents to which it is a party (or under any
Contract), or (iv) the satisfaction of any condition specified in
Exhibit II.  The Administrative 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, Servicer, Originator or any of their Affiliates.
 
Section 5.4 Reliance by Agents.  (a)  The Administrative Agent shall in all
cases be entitled to rely, and shall be fully protected in relying, upon any
document or 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 with reasonable care by the
Administrative Agent.  The Administrative 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
Majority Purchasers, and assurance of its indemnification, as it deems
appropriate.
 
(b) The Administrative Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement in accordance with a request of
the Majority Purchasers, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Purchasers and the Administrative
Agent.
 
Section 5.5 Notice of Termination Events.  The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Termination Event or
Incipient Termination Event unless such Administrative Agent has received notice
from any Purchaser, the Servicer or the Seller stating that a Termination Event
or Incipient Termination Event has occurred hereunder and describing such
Termination Event or Incipient Termination Event.  In the event that the
Administrative Agent receives such a notice, it shall promptly give notice
thereof to each Purchaser.  The Administrative Agent shall take such action
concerning a Termination Event or Incipient Termination Event as may be directed
by the Majority Purchasers unless such action otherwise requires the consent of
all Purchasers, the LC Bank and/or all Related Committed Purchasers, but until
the Administrative Agent receives such directions, the Administrative Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, as the Administrative Agent deems advisable and in the best interests of
the Purchasers.
 
Section 5.6 Non-Reliance on Administrative Agent and Other Purchasers.  Each
Purchaser expressly acknowledges that neither the Administrative 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
Administrative Agent hereafter taken, including any review of the affairs of the
Seller, Armstrong, Servicer or any Originator, shall be deemed to constitute any
representation or warranty by the Administrative Agent.  Each Purchaser
represents and warrants to the Administrative Agent that, independently and
without reliance upon the Administrative 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, Armstrong, Servicer or the Originators, and the
Receivables and its own decision to enter into this Agreement and to take, or
omit, action under any Transaction Document.  Except for items specifically
required to be delivered hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Purchaser with any information concerning
the Seller, Armstrong, Servicer or the Originators or any of their Affiliates
that comes into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
 
Section 5.7 Administrative Agents and Affiliates.  Each of the Purchasers and
the Administrative Agent and their Affiliates may extend credit to, accept
deposits from and generally engage in any kind of banking, trust, debt, equity
or other business with the Seller, Armstrong, the Servicer or any Originator or
any of their Affiliates.  With respect to the acquisition of the Eligible
Receivables pursuant to this Agreement, the Administrative Agent shall have the
same rights and powers under this Agreement as any Purchaser and may exercise
the same as though it were not such an agent, and the terms “Purchaser” and
“Purchasers” shall include the Administrative Agent in its individual capacity.
 
 
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Section 5.8 Indemnification.  Each Related Committed Purchaser agrees to
indemnify and hold harmless the Administrative Agent (solely in its capacity as
Administrative Agent) and the LC Bank and their respective officers, directors,
employees, representatives and agents, ratably (based on its Commitment) 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 Administrative Agent, the LC Bank or such Person shall be
designated a party thereto) that may at any time be imposed on, incurred by or
asserted against the Administrative Agent, the LC Bank 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 from the
gross negligence or willful misconduct of the Administrative Agent or such
Person as finally determined by a court of competent jurisdiction), in each case
to the extent not reimbursed by the Seller, the Servicer or any Originator in
accordance with the terms hereof (it being understood that such indemnification
by the Related Committed Purchasers shall not relieve the Seller, the Servicer
or any Originator of any of its indemnification obligations hereunder).  Without
limiting the generality of the foregoing, each Related Committed Purchaser
agrees to reimburse the Administrative Agent and the LC Bank, ratably according
to their Commitment Percentages, promptly upon demand, for any out-of-pocket
expenses (including reasonable counsel fees) incurred by the Administrative
Agent or the LC Bank in connection with the administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of its rights or responsibilities
under, this Agreement.
 
Section 5.9 Successor Administrative Agent.  The Administrative Agent may, upon
at least five (5) days’ notice to the Seller and each Purchaser, resign as
Administrative Agent.  Such resignation shall not become effective until a
successor Administrative Agent, appointed by the Majority Purchasers, shall have
agreed in writing to perform the duties and obligations of the Administrative
Agent pursuant to the terms hereof.  Upon such agreement, such successor
Administrative Agent shall succeed to and become vested with all the rights and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under the Transaction
Documents.  After any retiring Administrative Agent’s resignation hereunder, the
provisions of Sections 3.1 and 3.2 and this Article V shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was the
Administrative Agent.
 
ARTICLE VI
 
MISCELLANEOUS
 
Section 6.1 Amendments, Etc.  No amendment or waiver of any provision of this
Agreement or any other Transaction Document, or consent to any departure by the
Seller or the Servicer therefrom, shall be effective unless in a writing signed
by the Administrative Agent, the LC Bank and the Majority Purchasers, and, in
the case of any amendment, by the other parties thereto; and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that, to the
extent required by the Conduit Purchaser’s commercial paper program, no such
amendment that is material (including, for the avoidance of doubt, any addition
to the list of Special Obligors on Annex V) shall be effective until the
applicable Rating Agencies for the Conduit Purchaser have notified the
Administrative Agent, in writing, that such action will not result in a
reduction or withdrawal of such Rating Agencies’ ratings on the Conduit
Purchaser’s Notes; provided, further, that no such amendment or waiver shall,
without the consent of each affected Purchaser, (A) extend the date of any
payment or deposit of Collections by the Seller or the Servicer, (B) reduce the
rate or extend the time of payment of Discount, (C) reduce any fees payable to
the Administrative Agent or any Purchaser pursuant to the Fee Letter, (D) change
the amount of Capital of any Purchaser, any Purchaser’s Commitment Percentage of
the Purchaser’s Interest or any Related Committed Purchaser’s Commitment, (E)
amend, modify or waive any provision of the definition of “Majority Purchasers”
or this Section 6.1, (F) consent to or permit the assignment or transfer by the
Seller of any of its rights and obligations under this Agreement, (G) change the
definition of “91-Day Receivables Percentage,” “Aged Receivables Ratio,”
“Average Dilution Ratio,” “Combined Reserve,” “Cross-Aged Obligor,” “Days’ Sales
Outstanding,” “Default Ratio,” “Delinquency Ratio,” “Dilution,” “Dilution
Horizon Factor,” “Dilution Ratio,” “Dilution Reserve Percentage,” “Dilution
Spike,” “Dilution Volatility,” “Direct-Pay LC Reserve,” “Eligible Obligor,”
“Eligible Receivable,” “Fee Reserve,” “Loss Ratio,” “Loss Horizon Factor,” “Loss
Ratio,” “Loss Reserve Floor Percentage,” “Loss Reserve Percentage,” “Maximum
Bond Rate,” “Outstanding Bond Balance,” “Servicing Fee Reserve Percentage,”
“Special Concentration Limit,” “Stress Factor,” “Termination Event,” “Three
Month Aged Receivables Ratio,” “Three Month Default Ratio,” “Three Month
Delinquency Ratio,” “Three Month Dilution Ratio,” “Yield Reserve” or “Yield
Reserve Percentage,” (H) amend or modify any defined term (or any defined term
used directly or indirectly in such defined term) used in clauses (A) through
(G) above in a manner that would circumvent the intention of the restrictions
set forth in such clauses, or (I) otherwise materially and adversely affect the
rights of any such Purchaser hereunder. No failure on the part of the Purchasers
or the Administrative Agent to exercise, and no delay in exercising any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
 
Section 6.2 Notices, Etc.  All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile and email communication) and be personally delivered or sent
to the intended party by facsimile, email or overnight mail to the mailing or
email address or facsimile number, as applicable, set forth under its name on
the signature pages hereof (or in any other Assumption Agreement or Transfer
Supplement pursuant to which it became a party hereto), or to such other address
or facsimile number as shall be designated by such party in a written notice to
the other parties hereto. Notices and communications by facsimile or email shall
be effective when sent (and shall be followed by hard copy sent by first class
mail), and notices and communications sent by other means shall be effective
when received.
 
Section 6.3 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, neither the Seller nor the
Servicer may assign or transfer any of its rights or delegate any of its duties
hereunder or under any Transaction Document without the prior consent of the
Administrative Agent and the LC Bank.  Each of the Related Committed Purchasers,
with the prior written consent of the Administrative Agent, the LC Bank, the
Servicer and the Seller (such consent not to be unreasonably withheld,
conditioned or delayed), may assign any of its interests, rights and obligations
hereunder to an Eligible Assignee; provided, that (i) the Commitment amount to
be assigned by any such Related Committed Purchaser hereunder shall not be less
than $50,000,000 and (ii) prior to the effective date of any such assignment,
the assignee and assignor shall have executed and delivered to the
Administrative Agent and the LC Bank an assignment and acceptance agreement in
form and substance satisfactory to the Administrative Agent and the LC Bank.
Upon the effectiveness of any such permitted assignment, (i) the assignee
thereunder shall, to the extent of the interests assigned to it, be entitled to
the interests, rights and obligations of a Related Committed Purchaser under
this Agreement and (ii) the assigning Related Committed Purchaser shall, to the
extent of the interest assigned, be released from any further obligations under
this Agreement.
 
(b) Participations.
 
(i) Except as otherwise specifically provided herein, any Purchaser may sell to
one or more Persons (including any Conduit) (each a “Participant”) participating
interests in the interests of such Purchaser hereunder; provided, however, that
no Purchaser shall grant any participation under which the Participant shall
have rights to approve any amendment to or waiver of this Agreement or any other
Transaction Document.  Such Purchaser shall remain solely responsible for
performing its obligations hereunder, and the Seller, the Servicer and the
Administrative Agent shall continue to deal solely and directly with such
Purchaser in connection with such Purchaser’s rights and obligations
hereunder.  A Purchaser shall not agree with a Participant to restrict such
Purchaser’s right to agree to any amendment hereto, except amendments that
require the consent of all Purchasers.
 
(ii) Notwithstanding anything contained in clause (a) or subclause (b)(i) of
this Section 6.3, each of the LC Bank and each Related Committed Purchaser may
sell participations in all or any part of any Purchase made by such Related
Committed Purchaser to a Participant so long as (i) no such grant of a
participation shall, without the consent of the Seller, require the Seller to
file a registration statement with the SEC and (ii) no holder of any such
participation shall be entitled to require such Related Committed Purchaser to
take or omit to take any action hereunder except that such Related Committed
Purchaser may agree with such participant that, without such Participant’s
consent, such Related Committed Purchaser will not consent to an amendment,
modification or waiver referred to in clauses (A) through (H) of Section
6.1.  Such Purchaser shall remain solely responsible for performing its
obligations hereunder, and the Seller, the Servicer and the Administrative Agent
shall continue to deal solely and directly with such Purchaser in connection
with such Purchaser’s rights and obligations hereunder.
 
Any such Participant shall not have any rights hereunder or under the
Transaction Documents except that such Participant shall have rights under
Sections 1.7, 1.8, 1.9 and 1.10 hereunder as if it were a Related Committed
Purchaser; provided that no such Participant shall be entitled to receive any
payment pursuant to such sections which is greater in amount than the payment
which the transferor Related Committed Purchaser would have otherwise been
entitled to receive in respect of the participation interest so sold.
 
 
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In addition, any Purchaser may at any time pledge or assign a security interest
in all or any portion of its rights (including, without limitation), rights to
payment of Capital and Yield) under this Agreement to secure the obligations of
such Purchaser to any Federal Reserve Bank, in each case without notice to or
consent of the Seller or the Administrative Agent; provided, that no such pledge
or assignment shall release such Purchaser from any of its obligations hereunder
or substitute any such pledge or assignee for such Purchaser as a party hereto.
 
(c) Assignments by Certain Related Committed Purchasers.  Any Related Committed
Purchaser may assign to one or more Persons (each a “Purchasing Related
Committed Purchaser”), who is reasonably acceptable to the Administrative Agent
and the Seller, any portion of its Commitment pursuant to a supplement hereto,
substantially in the form of Annex E with any changes as have been approved by
the parties thereto (each, a “Transfer Supplement”), executed by each such
Purchasing Related Committed Purchaser, such selling Related Committed
Purchaser, the Administrative Agent and the Seller, provided, that the consent
of the Seller shall not be unreasonably withheld or delayed.  Notwithstanding
the foregoing, the consent of the Seller shall not be required if:
 
(i) a Termination Event or Incipient Termination Event has occurred and is
continuing, or
 
(ii) if the assignment is made by a Related Committed Purchaser to (1) the
Administrative Agent, (2) any other Related Committed Purchaser, (3) an
Affiliate of the Administrative Agent or any Related Committed Purchaser, or (4)
any Program Support Provider.
 
Additionally, any Purchaser hereunder may assign any funded portion of its
Commitment, without the consent of the Seller, to (1) the Administrative Agent,
(2) any other Related Committed Purchaser, (3) an Affiliate of the
Administrative Agent or any Related Committed Purchaser, (4) any commercial
paper conduit or similar financing vehicle sponsored or administered by such
Purchaser and for whom such Purchaser acts as a program support provider or
through which (directly or indirectly) such Purchaser does or may fund Purchases
hereunder (each, a “Conduit”), or (5) any Program Support Provider.
 
Upon (i) the execution of the Transfer Supplement, (ii) delivery of an executed
copy thereof to the Seller, the Servicer and the Administrative Agent and (iii)
payment by the Purchasing Related Committed Purchaser to the selling Related
Committed Purchaser of the agreed-upon purchase price, if any, such selling
Related Committed Purchaser shall be released from its obligations hereunder to
the extent of such assignment and such Purchasing Related Committed Purchaser
shall for all purposes be a Related Committed Purchaser party hereto and shall
have all the rights and obligations of a Related Committed Purchaser hereunder
to the same extent as if it were an original party hereto.  The amount of the
Commitment of the selling Related Committed Purchaser allocable to such
Purchasing Related Committed Purchaser shall be equal to the amount of the
Commitment of the selling Related Committed Purchaser transferred regardless of
the purchase price, if any, paid therefor.  The Transfer Supplement shall be an
amendment hereof only to the extent necessary to reflect the addition of such
Purchasing Related Committed Purchaser as a “Related Committed Purchaser” and
any resulting adjustment of the selling Related Committed Purchaser’s
Commitment, and shall not otherwise be considered an amendment of this
Agreement.
 
(d) Assignments to Liquidity Providers and other Program Support Providers.  The
Conduit Purchaser may at any time grant to one or more of its Liquidity
Providers or other Program Support Providers, participating interests in its
portion of the Purchaser’s Interest.  The Seller agrees that each Liquidity Bank
and Program Support Provider hereunder shall be entitled to the benefits of
Section 1.7.  Such Conduit Purchaser shall remain solely responsible for
performing its obligations hereunder, and the Seller, the Servicer and the
Administrative Agent shall continue to deal solely and directly with such
Conduit Purchaser in connection with such Conduit Purchaser’s rights and
obligations hereunder.
 
(e) Other Assignment by Conduit Purchaser.  Without limiting the right of the
Conduit Purchaser to sell or grant interests or participations to its Liquidity
Providers and Program Support Providers as described in clause (d), above, each
party hereto agrees and consents to (i) the Conduit Purchaser’s assignment,
participation, grant of security interests in or other transfers of any portion
of, or any of its beneficial interest in, the Purchaser’s Interest (or portion
thereof), including without limitation to any collateral agent in connection
with a commercial paper program, and (ii) the complete assignment by the Conduit
Purchaser of all of its rights and obligations hereunder to any other Person,
and upon such assignment the Conduit Purchaser shall be released from all
obligations and duties, if any, hereunder; provided, however, that the Conduit
Purchaser may not, without the prior consent of its Related Committed
Purchasers, make any such transfer of its rights pursuant to this clause (e)
unless the assignee (x) is a Conduit or (y) (i) has as its Liquidity Bank any
Liquidity Bank of the assigning Conduit Purchaser and (ii) is in the business or
funding assets through the issuance (directly or indirectly) of commercial paper
notes.  Any assigning Conduit Purchaser shall deliver to any assignee a Transfer
Supplement with any changes as have been approved by the parties thereto, duly
executed by such Conduit Purchaser, assigning any portion of its interest in the
Purchaser’s Interest to its assignee.  Such Conduit Purchaser shall promptly (i)
notify each of the other parties hereto of such assignment and (ii) take all
further action that the assignee reasonably requests in order to evidence the
assignee’s right, title and interest in such interest in the Purchaser’s
Interest and to enable the assignee to exercise or enforce any rights of such
Conduit Purchaser hereunder.  Upon the assignment of any portion of its interest
in the Purchaser’s Interest, the assignee shall have all of the rights hereunder
with respect to such interest (except that the Discount therefor shall
thereafter accrue at the rate, determined with respect to the assigning Conduit
Purchaser unless the Seller and the assignee shall have agreed upon a different
Discount).  No assignment by any Conduit Purchaser of all or any portion of its
Purchaser’s Interest shall in any way diminish the obligation of its Related
Committed Purchasers under Section 1.1 to fund any Purchase not funded by such
Conduit Purchaser or the assignee Conduit Purchaser.
 
(f) Register.  The Seller hereby designates the Administrative Agent to serve as
the Seller’s agent, solely for the purpose of this clause (f), to maintain a
register (the “Register”) on which the Administrative Agent will record any
interests in the Receivables Pool held by any Affected Person or
Participant.  The Register shall include the respective commitments,
participation of each party in the Receivables Pool and each repayment in
respect of the Receivables Pool, and annexed to which the Administrative Agent
shall retain a copy of any Transfer Supplement delivered to the Administrative
Agent pursuant to this clause (f).  Failure to make any recordation, or any
error in such recordation, shall not affect the Seller’s obligations in respect
of the Transaction Documents.  The entries in the Register shall be conclusive
(provided, however, that any failure to make any recordation or any error in
such recordation shall be corrected by the Administrative Agent upon notice or
discovery thereof), and the Seller, the Administrative Agent and each other
party to the transaction (including any assignees and Participants) shall treat
each person in whose name an interest in the Receivables Pool is registered as
the owner thereof for all purposes of the Transaction Documents, notwithstanding
notice or any provision herein to the contrary.
 
Section 6.4 Costs, Expenses and Taxes.
 
By way of clarification, and not of limitation, of Sections 1.7 or 3.1, the
Seller shall pay to the Administrative Agent, for its own account and for the
account of each Purchaser, on demand all costs and expenses in connection with
(i) the preparation, execution, delivery and administration (including
amendments or waivers of any provision) of this Agreement or the other
Transaction Documents and other documents to be delivered hereunder or
thereunder, (ii) the perfection (and continuation) of the Administrative Agent’s
rights in the Receivables, Collections and other Pool Assets, (iii) the
enforcement by the Administrative Agent or the Purchasers of the obligations of
the Seller, the Servicer or the Originators under the Transaction Documents or
of any Obligor under a Receivable, and (iv) the maintenance by the
Administrative Agent of the Lock-Box Accounts (and any related lock-box or post
office box) and the Collection Accounts, including reasonable fees, costs and
expenses of legal counsel for the Administrative Agent relating to any of the
foregoing or to advising the Administrative Agent, any Purchaser any Liquidity
Provider or any other Program Support Provider about its rights and remedies
under any Transaction Document or any related Funding Document and all
reasonable costs and expenses (including reasonable counsel fees and expenses)
of the Administrative Agent and any Purchaser in connection with the enforcement
of the Transaction Documents or any Funding Document and in connection with the
administration of the Transaction Documents.  The Seller shall reimburse the
Administrative Agent and each Purchaser for the cost of such Person’s auditors
(which may be employees of such Person and/or auditors of the Seller) auditing
the books, records and procedures of the Seller or the Servicer to the extent
set forth in clause 1(e) of Exhibit IV.  The Seller shall reimburse the Conduit
Purchaser for any amounts the Conduit Purchaser must pay to any Liquidity
Provider or other Program Support Provider pursuant to any Funding Document on
account of any tax; excluding, however, any net income taxes or franchise taxes
based upon net income imposed on any such Person as a result of a present or
former connection between such Person and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from such
Person having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement, the other Transaction Documents or
any Liquidity Agreement or Program Support Agreement executed in connection
herewith or therewith, or from the interest conveyed hereunder or thereunder in
the Receivables and other Pool Assets or in respect of any Contract).  The
Seller shall reimburse the Conduit Purchaser on demand for all costs and
expenses incurred by the Conduit Purchaser or any shareholder of the Conduit
Purchaser in connection with the Transaction Documents or the transactions
contemplated thereby, including the costs of the Rating Agencies and reasonable
fees and out-of-pocket expenses of counsel of the Administrative Agent or the
Conduit Purchaser, or any shareholder, or administrator, of the Conduit
Purchaser for advice relating to the Conduit Purchaser’s operation.  For the
avoidance of doubt, no Purchaser or other Affected Person shall be entitled to
indemnification pursuant to this Section 6.4 of any cost, expense or other
amount for which such Purchaser has been compensated pursuant to any of Sections
1.7, 1.10, 3.1 or 3.2.
 
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    Section 6.5 No Proceedings; Limitation on Payments.  (a) Each of the Seller,
Armstrong, the Servicer, the Administrative Agent, the Purchasers, each assignee
of the Purchaser’s Interest or any interest therein, and each Person that enters
into a commitment to purchase the Purchaser’s Interest or interests therein,
hereby covenants and agrees that it will not institute against, or join any
other Person in instituting against, any Conduit Purchaser any Insolvency
Proceeding, for one year and one day after the date the latest maturing Note
issued by such Conduit Purchaser is paid in full.  The provisions of this
Section 6.5(a) shall survive any termination of this Agreement.
 
(b) Notwithstanding any provisions contained in this Agreement to the contrary,
the Conduit Purchaser shall not be obligated to pay any amount, if any, payable
by it pursuant to this Agreement or any other Transaction Document unless (i)
the Conduit Purchaser has received funds which may be used to make such payment
and which funds are not required to repay the Notes when due and (ii) after
giving effect to such payment, either (x) the Conduit Purchaser could issue
Notes to refinance all outstanding Notes (assuming such outstanding Notes
matured at such time) in accordance with the program documents governing the
Conduit Purchaser’s commercial paper program or (y) all Notes are paid in
full.  Any amount which such Conduit Purchaser does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in
§101 of the Bankruptcy Code) against or company obligation of such Conduit
Purchaser for any such insufficiency unless the provisions of clauses (i) and
(ii) above are satisfied.  Any and all claims against the Conduit Purchaser
under this Agreement shall be subordinate to the claims of the holders of the
Notes or the Conduit Purchaser’s other obligations with respect to its
commercial paper program.  The provisions of this Section 6.5(b) shall survive
any termination of this Agreement.
 
(c) Notwithstanding any provisions contained in this Agreement to the contrary,
the Company shall not, and shall not be obligated to, use any funds to pay any
amount pursuant to this Agreement or any other Transaction Document unless the
Company has received funds that may be used to make such payment.  Any amount
that the Company does not pay pursuant to the operation of the preceding
sentence shall not constitute a claim (as defined in §101 of the Bankruptcy
Code) against or company obligation of the Seller for any such insufficiency
unless and until the provisions of the foregoing sentence are satisfied  The
provisions of this Section 6.5(c) shall survive any termination of this
Agreement.
 
Section 6.6 GOVERNING LAW AND JURISDICTION.
 
(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE APPLICABLE
CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
 
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES
HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH
OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
 
Section 6.7 Confidentiality.  Unless otherwise required by applicable law,
rules, regulations or judicial process, each of the Seller and the Servicer
agrees to maintain the confidentiality of this Agreement and the other
Transaction Documents (and all drafts thereof) in communications with third
parties and otherwise; provided, that this Agreement may be disclosed to: (a)
third parties to the extent such disclosure is made pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to
the Administrative Agent, and (b) the Seller’s and the Servicer’s legal counsel
and auditors.  Unless otherwise required by applicable law, rules, regulations
or judicial process, the Administrative Agent and each the Purchasers agree to
maintain the confidentiality of this Agreement and the other Transaction
Documents (and all drafts hereof and thereof) and any information obtained
hereunder and thereunder regarding the Seller, the Servicer and the Originators,
in communications with third parties and otherwise; provided, that such
information may be disclosed to: (i) third parties to the extent such disclosure
is made pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the party to which such information relates, (ii)
legal counsel and auditors of the Purchasers or the Administrative Agent, (iii)
if applicable, the rating agencies rating the Notes of the Conduit Purchaser,
(iv) any Program Support Provider or potential Program Support Provider (if they
agree to hold it confidential), (v) any placement agency placing the Notes and
(vi) any regulatory authorities having jurisdiction over the Administrative
Agent, any Purchaser, any Program Support Provider or any Liquidity Provider.
 
Section 6.8 Execution in Counterparts.  This Agreement may be executed in any
number of counterparts, each of which, when so executed, shall be deemed to be
an original, and all of which, when taken together, shall constitute one and the
same agreement.
 
Section 6.9 Survival of Termination.  The provisions of Sections 1.7, 1.8, 1.9,
1.10, 3.1, 3.2, 6.4, 6.5, 6.6, 6.7, 6.8, 6.10 and 6.15 shall survive any
termination of this Agreement.
 
Section 6.10 WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE.  EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
 
Section 6.11 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 Capital 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 Purchaser in such
recovery.  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 6.12 Right of Setoff.  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 6.13 Entire Agreement.  This Agreement and the other Transaction
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.
 
Section 6.14 Headings.  The captions and headings of this Agreement and any
Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.
 
Section 6.15 Purchasers’ Liabilities.  The obligations of each Purchaser and the
Administrative Agent under the Transaction Documents are solely the corporate
obligations of such Person. Except with respect to any claim arising out of the
willful misconduct or gross negligence of the Administrative Agent or any
Purchaser, no claim may be made by the Seller or the Servicer or any other
Person against the Administrative Agent or any Purchaser or their respective
Affiliates, directors, officers, employees, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other Transaction Document,
or any act, omission or event occurring in connection therewith; and each of
Seller and Servicer hereby waives, releases, and agrees not to sue upon any
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
 
 
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Section 6.16 Limited Recourse.  Each party acknowledges and agrees that the
Seller will be liable for the indebtedness and obligations set forth in this
Agreement and the other Transaction Documents to the full extent (but only to
the extent) that the Seller has assets available to pay such obligations.  For
the purposes of this Section 6.16, the assets of the Seller shall include (i)
any and all cash, Permitted Investments or other securities, whether
certificated or uncertificated, held by or registered in the name of the Seller,
(ii) all of the Seller’s rights under the Transaction Documents (including its
rights as against the Originators and Armstrong in its various capacities under
the Sale Agreement), (iii) all proceeds of, and all amounts received or
receivable under any or all of, the foregoing, and (iv) to the extent not
captured in (i), (ii) or (iii) above, the Pool Assets.
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
 
ARMSTRONG RECEIVABLES COMPANY  LLC, as Seller

By: __________________________________________                                                                          
Name: Mark A. Telymonde
Title:   Assistant Treasurer

Address:          c/o Armstrong World Industries, Inc.
2500 Columbia Ave
Lancaster, PA 17603

Attention:        Mark A. Telymonde
Telephone:       (717) 396-3306
Facsimile:          (717) 396-6136

 
S-1
 

 
 

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ARMSTRONG WORLD INDUSTRIES, INC.,
as Servicer and Performance Guarantor

By:__________________________________________                                                                           
Name:  Thomas J. Waters
Title:    Vice-President and Treasurer

Address:          Armstrong World Industries, Inc.
2500 Columbia Ave
Lancaster, PA 17603

Attention:        Mark A. Telymonde
Telephone:       (717) 396-3306
Facsimile:          (717) 396-6136

 
S-2
 

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ATLANTIC ASSET SECURITIZATION LLC,
                         as  Conduit Purchaser
 
By:______________________________________                                                                           
Name:____________________________________
Title:_____________________________________
 
By:______________________________________                                                                           
Name:____________________________________
Title:_____________________________________

                         Address:               c/o Crédit Agricole Corporate
and
Investment Bank
1301 Avenue of the Americas
New York, NY 10019

Attention:              Thomas Luccioni
Telephone:             (212) 261-3894
Facsimile:                (917) 849-5584

 
S-3
 

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CRÉDIT AGRICOLE CORPORATE
AND INVESTMENT BANK,
as a Related Committed Purchaser for Atlantic Asset Securitization LLC

By:______________________________________                                                                           
Name:____________________________________
Title:_____________________________________
 
 
By:______________________________________                                                                           
Name:____________________________________
Title:_____________________________________

Address:               1301 Avenue of the Americas
New York, NY 10019

Attention              Thomas Luccioni
Telephone:            (212) 261-3894
Facsimile:               (917) 849-5584

Commitment:  $100,000,000

 
S-4
 

 
 

--------------------------------------------------------------------------------

 

CRÉDIT AGRICOLE CORPORATE
AND INVESTMENT BANK,
as the LC Bank

By:______________________________________                                                                           
Name:____________________________________
Title:_____________________________________
 
By:______________________________________                                                                           
Name:____________________________________
Title:_____________________________________

Address:                1301 Avenue of the Americas
New York, NY 10019

Attention               Thomas Luccioni
Telephone:             (212) 261-3894
Facsimile:                (917) 849-5584

 
S-5
 

 
 

--------------------------------------------------------------------------------

 

CRÉDIT AGRICOLE CORPORATE
AND INVESTMENT BANK,
as Administrative Agent

By:______________________________________                                                                           
Name:____________________________________
Title:_____________________________________
 
By:______________________________________                                                                           
Name:____________________________________
Title:_____________________________________

                         Address:                1301 Avenue of the Americas
New York, NY 10019

Attention               Thomas Luccioni
Telephone:             (212) 261-3894
Facsimile:                (917) 849-5584

 
S-6