Exhibit 10.2
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
DATED AS OF OCTOBER 26, 2005
AMONG
ROCK-TENN COMPANY, AS PARENT,
ROCK-TENN COMPANY OF TEXAS, ROCK-TENN CONVERTING COMPANY,
ROCK-TENN MILL COMPANY, LLC, ROCK-TENN PACKAGING AND
PAPERBOARD, LLC, PCPC, INC. AND WALDORF CORPORATION,
AS ORIGINATORS,
AND
ROCK-TENN FINANCIAL, INC.,
AS BUYER
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE............................... 2
Section 1.1 Initial Dividend and Contribution of Receivables........... 2
Section 1.2 Purchase of Receivables (Other than Initial Contributed
Receivables)............................................... 3
Section 1.3 Payment for the Purchases.................................. 5
Section 1.4 Purchase Price Credit Adjustments.......................... 6
Section 1.5 Payments and Computations, Etc............................. 7
Section 1.6 License of Software........................................ 7
Section 1.7 Characterization........................................... 8
ARTICLE II REPRESENTATIONS AND WARRANTIES................................. 9
Section 2.1 Representations and Warranties............................. 9
(a) Existence and Power.............................................. 9
(b) Power and Authority; Due Authorization, Execution and Delivery... 9
(c) No Conflict...................................................... 9
(d) Governmental Authorization....................................... 9
(e) Actions, Suits................................................... 10
(f) Binding Effect................................................... 10
(g) Accuracy of Information.......................................... 10
(h) Use of Proceeds.................................................. 10
(i) Good Title....................................................... 10
(j) Perfection....................................................... 10
(k) Places of Business and Locations of Records...................... 11
(l) Collections...................................................... 11
(m) Material Adverse Effect.......................................... 11
(n) Names............................................................ 11
(o) Ownership of Buyer............................................... 11
(p) Not a Holding Company or an Investment Company................... 11
(q) Compliance with Law.............................................. 12
(r) Compliance with Credit and Collection Policy..................... 12
(s) Payments to such Originator...................................... 12
(t) Enforceability of Contracts...................................... 12
(u) Eligible Receivables............................................. 12
(v) Accounting....................................................... 12
ARTICLE III CONDITIONS OF PURCHASE........................................ 13
Section 3.1 Conditions Precedent to Purchase........................... 13
Section 3.2 Conditions Precedent to Subsequent Payments................ 13
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ARTICLE IV COVENANTS...................................................... 13
Section 4.1 Affirmative Covenants of Transferors....................... 13
(a) Financial Reporting.............................................. 13
(i) Annual Reporting............................................ 14
(ii) Quarterly Reporting......................................... 14
(iii) Compliance Certificate...................................... 14
(iv) Shareholders Statements and Reports......................... 14
(v) Auditors Reports and Management Letters..................... 14
(b) Other Notices and Information.................................... 15
(i) Reportable Events........................................... 15
(ii) Change in Credit and Collection Policy...................... 15
(iii) Other Information........................................... 15
(iv) Termination Events or Unmatured Termination Events.......... 15
(v) Downgrade of Parent......................................... 15
(vi) Material Adverse Effect..................................... 15
(c) Compliance with Laws and Preservation of Existence............... 15
(d) Audits........................................................... 16
(e) Keeping and Marking of Records and Books......................... 16
(f) Compliance with Contracts and Credit and Collection Policy....... 17
(g) Ownership........................................................ 17
(h) Lenders' Reliance................................................ 17
(i) Collections...................................................... 18
(j) Taxes............................................................ 18
Section 4.2 Negative Covenants of Transferors.......................... 18
(a) Name Change, Offices and Records................................. 18
(b) Change in Payment Instructions to Obligors....................... 18
(c) Modifications to Contracts and Credit and Collection Policy...... 19
(d) Sales, Liens..................................................... 19
(e) Accounting for Purchase.......................................... 19
ARTICLE V TERMINATION EVENTS.............................................. 19
Section 5.1 Termination Events......................................... 19
Section 5.2 Remedies................................................... 22
ARTICLE VI INDEMNIFICATION................................................ 22
Section 6.1 Indemnities by Transferors................................. 22
Section 6.2 Other Costs and Expenses................................... 25
ARTICLE VII MISCELLANEOUS................................................. 25
Section 7.1 Waivers and Amendments..................................... 25
Section 7.2 Notices.................................................... 25
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Section 7.3 Protection of Ownership Interests of Buyer................. 25
Section 7.4 Confidentiality............................................ 27
Section 7.5 Bankruptcy Petition........................................ 27
Section 7.6 Limitation of Liability.................................... 27
Section 7.7 CHOICE OF LAW.............................................. 28
Section 7.8 CONSENT TO JURISDICTION.................................... 28
Section 7.9 WAIVER OF JURY TRIAL....................................... 28
Section 7.10 Integration; Binding Effect; Survival of Terms............. 29
Section 7.11 Counterparts; Severability; Section References............. 29
EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records; Federal
Employer Identification Number; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Copy of Credit and Collection Policy
Exhibit VI - Form of Subordinated Note
Exhibit VII - Form of Purchase Report
Schedule A - List of Documents to Be Delivered to Buyer Prior to the
Purchases
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AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
THIS AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as of
October 26, 2005, is by and among:
(a) Rock-Tenn Company, a Georgia corporation ("PARENT"),
(b) Rock-Tenn Company of Texas, a Georgia corporation, Rock-Tenn
Converting Company, a Georgia corporation, Rock-Tenn Mill Company, LLC, a
Georgia limited liability company, Rock-Tenn Packaging and Paperboard, LLC, a
Georgia limited liability company, PCPC, Inc., a California corporation, and
Waldorf Corporation, a Delaware corporation (each of the foregoing, an
"ORIGINATOR" and collectively, the "ORIGINATORS"), and
(c) Rock-Tenn Financial, Inc., a Delaware corporation ("BUYER"),
and amends and restates in its entirety that certain Receivables Sale Agreement
dated as of November 1, 2000 by and among Parent, certain of the Originators (or
their predecessors) and Buyer (the "EXISTING AGREEMENT").
UNLESS DEFINED ELSEWHERE HEREIN, CAPITALIZED TERMS USED IN THIS AGREEMENT SHALL
HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN EXHIBIT I HERETO.
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time hereafter will
own, Receivables.
On the date of the Existing Agreement, each of the Originators party
to the Existing Agreement made a dividend to Parent of all of such Originator's
right, title and interest in and to 100% of its Receivables in existence as of
the close of business on its Initial Cutoff Date, together with the associated
Related Security and Collections, and Parent contributed all of such Receivables
and the associated Related Security and Collections to Buyer's capital (such
Receivables, the "INITIAL CONTRIBUTED RECEIVABLES" and, together with the
associated Related Security and Collections, the "INITIAL CONTRIBUTED ASSETS")
in exchange for 100% of the authorized Equity Interests of Buyer.
Parent intended the contribution of the Initial Contributed Assets to
be an absolute conveyance by Parent to Buyer thereof, providing Buyer with the
full benefits of ownership of such Initial Contributed Assets, and neither
Parent nor Buyer intended such contribution to be, or for any purpose to be
characterized as, a loan from Buyer to Parent.
Each of the Originators wishes to sell and assign to Buyer, and Buyer
wishes to purchase from each Originator, all of such Originator's right, title
and
interest in and to its Receivables (other than Initial Contributed Receivables),
together with the Related Security and Collections with respect thereto.
Each of the Originators and Buyer intend the transactions contemplated
hereby to be true sales to Buyer by such Originator of the Receivables
originated by it, providing Buyer with the full benefits of ownership of such
Receivables, and none of the Originators nor Buyer intends these transactions to
be, or for any purpose to be characterized as, loans from Buyer to such
Originator.
Buyer may finance its purchase of Receivables from the Originators, in
part, by borrowing pursuant to that certain Amended and Restated Credit and
Security Agreement dated as of October 26, 2005 (as amended, restated, replaced
and/or otherwise modified from time to time in accordance with the terms
thereof, the "CREDIT AND SECURITY AGREEMENT") among Buyer, Rock-Tenn Converting
Company, as initial Servicer, Blue Ridge Asset Funding Corporation, Three
Pillars Funding LLC, SunTrust Bank, SunTrust Capital Markets, Inc., as TPF
Agent, and Wachovia Bank, National Association, individually, as Blue Ridge
Agent and as administrative agent (in such last capacity, the "ADMINISTRATIVE
AGENT").
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Initial Dividend and Contribution of Receivables. On the date
hereof:
(a) Each of the Originators party to the Existing Agreement confirms
that it made a dividend to Parent of the Initial Contributed Assets; and
(b) Parent hereby confirms that it contributed, assigned, transferred,
set-over and otherwise conveyed to Buyer, and Buyer hereby confirms that it
accepted from Parent, the Initial Contributed Assets, in exchange for the
issuance of 100% of Buyer's Equity Interests.
(c) It is the intention of the parties hereto that (i) the
distribution by each Originator party to the Existing Agreement to Parent of the
Initial Contributed Assets originated by such Originator, and (ii) the
subsequent contribution thereof by Parent to Buyer hereunder, each constituted
an outright assignment of such Initial Contributed Assets, which assignment was
absolute and irrevocable and provided Buyer with the full benefits of ownership
of the Initial Contributed Assets. The distribution to Parent of Initial
Contributed Assets
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originated by each such Originator was made without recourse to such Originator,
and the contribution of such Initial Contributed Assets to Buyer was made
without recourse to Parent; PROVIDED, HOWEVER, that (i) such Originator remains
liable to Parent and its assigns for all representations, warranties, covenants
and indemnities made by such Originator pursuant to the terms of the Transaction
Documents to which such Originator is a party, (ii) Parent remains liable to
Buyer and its assigns for all representations, warranties, covenants and
indemnities made by Parent, and (iii) such distribution and contribution did not
constitute and were not intended to result in an assumption by Buyer or any
assignee thereof of any obligation of such Originator or any other Person
arising in connection with the Initial Contributed Assets or any other
obligations of such Originator. Each Originator party to the Existing Agreement
and Parent agrees that it has, on or prior to the date hereof and in accordance
with Section 4.1(e)(ii), marked its master data processing records relating to
the Initial Contributed Assets originated (or, in the case of Parent,
contributed) by it with a legend acceptable to Buyer and to the Administrative
Agent (as Buyer's assignee), evidencing that Buyer has acquired such Initial
Contributed Assets as provided in this Agreement and to note in its financial
statements that the Initial Contributed Assets have been distributed to Parent
and contributed to Buyer's capital. Upon the request of Buyer or the
Administrative Agent (as Buyer's assignee), each Originator and Parent will
execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate to perfect and maintain the perfection of Buyer's
ownership interest in the Initial Contributed Assets.
Section 1.2 Purchase of Receivables (Other than Initial Contributed
Receivables).
(a) In consideration for the Purchase Price paid to each Originator
and upon the terms and subject to the conditions set forth herein, each
Originator does hereby sell, assign, transfer, set-over and otherwise convey to
Buyer, without recourse (except to the extent expressly provided herein), and
Buyer does hereby purchase from such Originator, all of such Originator's right,
title and interest in and to all Receivables originated by such Originator and
existing as of the close of business on the Initial Cutoff Date (other than the
Initial Contributed Receivables) and all Receivables thereafter originated by
such Originator through and including the applicable Termination Date, together,
in each case, with all Related Security relating thereto and all Collections
thereof. In accordance with the preceding sentence, on the date hereof Buyer
shall acquire all of each Originator's right, title and interest in and to all
Receivables existing as of the Initial Cutoff Date (other than the Initial
Contributed Receivables) and thereafter arising through and including the
applicable Termination Date, together with all Related Security relating thereto
and all Collections thereof. Buyer shall be obligated to pay the
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Purchase Price for the Receivables purchased hereunder from each Originator in
accordance with Section 1.3.
(b) On the 15th day of each month hereafter (or if any such day is not
a Business Day, on the next succeeding Business Day thereafter, each Originator
shall (or shall require the Servicer to) deliver to Buyer a report in
substantially the form of Exhibit VII hereto (each such report being herein
called a "PURCHASE REPORT") with respect to the Receivables sold by such
Originator to Buyer during the Settlement Period then most recently ended. In
addition to, and not in limitation of, the foregoing, in connection with the
payment of the Purchase Price for any Receivables purchased hereunder, Buyer may
request that the applicable Originator deliver, and such Originator shall
deliver, such approvals, opinions, information or documents as Buyer may
reasonably request.
(c) It is the intention of the parties hereto that the Purchase of
Receivables (other than Initial Contributed Receivables) from each Originator
hereunder shall constitute a sale, which sale is absolute and irrevocable and
provides Buyer with the full benefits of ownership of the Receivables (other
than Initial Contributed Receivables) originated by such Originator. Except for
the Purchase Price Credits owed to such Originator pursuant to Section 1.4, the
sale of Receivables hereunder by each Originator is made without recourse to
such Originator; PROVIDED, HOWEVER, that (i) such Originator shall be liable to
Buyer for all representations, warranties, covenants and indemnities made by
such Originator pursuant to the terms of the Transaction Documents to which such
Originator is a party, and (ii) such sale does not constitute and is not
intended to result in an assumption by Buyer or any assignee thereof of any
obligation of such Originator or any other Person arising in connection with
such Receivables, the related Contracts and/or other Related Security or any
other obligations of such Originator. In view of the intention of the parties
hereto that the sale of Receivables (other than Initial Contributed Receivables)
by each Originator hereunder shall constitute a sale of such Receivables rather
than loans secured thereby, each Originator agrees that it will, on or prior to
the date hereof and in accordance with Section 4.1(e)(ii), xxxx its master data
processing records relating to the Receivables (other than Initial Contributed
Receivables) originated by it with a legend acceptable to Buyer and to the
Administrative Agent (as Buyer's assignee), evidencing that Buyer has purchased
such Receivables as provided in this Agreement and to note in its financial
statements that its Receivables have been sold to Buyer. Upon the request of
Buyer or the Administrative Agent (as Buyer's assignee), each Originator will
execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate to perfect and maintain the perfection of Buyer's
ownership interest in the Receivables (other than Initial Contributed
Receivables) originated by such
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Originator and the Related Security and Collections with respect thereto, or as
Buyer or the Administrative Agent (as Buyer's assignee) may reasonably request.
Section 1.3 Payment for the Purchases.
(a) The Purchase Price for the Purchase from each Originator of its
Receivables in existence as of the close of business on the Initial Cutoff Date
(other than the Initial Contributed Receivables) shall be payable in full by
Buyer to such Originator on the date hereof, and shall be paid to such
Originator in the following manner:
(i) by delivery of immediately available funds, to the extent of
funds made available to Buyer in connection with its subsequent sale of an
interest in such Receivables to the Lenders under the Credit and Security
Agreement, and/or
(ii) by delivery of the proceeds of a subordinated revolving loan
from such Originator to Buyer (a "SUBORDINATED LOAN") in an amount not to
exceed the least of (A) the remaining unpaid portion of such Purchase
Price, (B) the maximum Subordinated Loan that could be borrowed without
rendering Buyer's Net Worth less than the Required Capital Amount, and (C)
thirty percent (30%) of such Purchase Price. Each Originator is hereby
authorized by Buyer to endorse on the schedule attached to its Subordinated
Note an appropriate notation evidencing the date and amount of each advance
thereunder, as well as the date of each payment with respect thereto,
PROVIDED THAT the failure to make such notation shall not affect any
obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and owing in full by Buyer to the applicable Originator
or its designee on the date each such Receivable came into existence (except
that Buyer may, with respect to any such Purchase Price, offset against such
Purchase Price any amounts owed by such Originator to Buyer hereunder and which
have become due but remain unpaid) and shall be paid to such Originator in the
manner provided in the following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into existence after the
Initial Cutoff Date, on each Settlement Date, Buyer shall pay the applicable
Originator the Purchase Price therefor in accordance with Section 1.3(d) and in
the following manner:
FIRST, by delivery to the applicable Originator or its designee of
immediately available funds; and/or
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SECOND, by delivery to the applicable Originator or its designee of
the proceeds of a Subordinated Loan, PROVIDED THAT the making of any such
Subordinated Loan shall be subject to the provisions set forth in Section
1.3(a)(ii).
Subject to the limitations set forth in Section 1.3(a)(ii), each Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the applicable Termination Date. The Subordinated Loans owing to each
Originator shall be evidenced by, and shall be payable in accordance with the
terms and provisions of its Subordinated Note and shall be payable solely from
cash available to Buyer after payment of all amounts due in respect of the
Senior Claim (as defined in the Subordinated Note) or to become due in respect
of the Senior Claim within 30 days of the date of proposed payment on the
Subordinated Note.
(c) From and after the applicable Termination Date, no Originator
shall be obligated to (but may, at its option) sell Receivables to Buyer.
(d) Although the Purchase Price for each Receivable coming into
existence after the Initial Cutoff Date shall be due and payable in full by
Buyer to the applicable Originator on the date such Receivable came into
existence, settlement of the Purchase Price between Buyer and such Originator
shall be effected on a monthly basis on Settlement Dates with respect to all
Receivables originated by such Originator during the same Calculation Period and
based on the information contained in the Purchase Report delivered by such
Originator for the Calculation Period then most recently ended. Although
settlement shall be effected on Settlement Dates, increases or decreases in the
amount owing under the Subordinated Note made pursuant to Section 1.3 shall be
deemed to have occurred and shall be effective as of the last Business Day of
the Calculation Period to which such settlement relates.
Section 1.4 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable purchased from any
Originator is:
(i) reduced as a result of any defective or rejected or returned
goods or services, any discount or any adjustment or otherwise by such
Originator (other than as a result of a charge-off of such Receivable or
cash Collections applied to such Receivable),
(ii) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in Sections
2.1(i), (j), (l), (r), (s), (t), (u), the second sentence of Section 2.1(q)
hereof is not true when made or deemed made with respect to any such Receivable,
6
then, in such event, Buyer shall be entitled to a credit (each, a "PURCHASE
PRICE CREDIT") against the Purchase Price otherwise payable to the applicable
Originator hereunder equal to the Outstanding Balance of such Receivable
(calculated before giving effect to the applicable reduction or cancellation).
If such Purchase Price Credit exceeds the Original Balance of the Receivables
originated by the applicable Originator on any day, such Originator shall pay
the remaining amount of such Purchase Price Credit in cash immediately, PROVIDED
THAT if the applicable Termination Date has not occurred, such Originator shall
be allowed to deduct the remaining amount of such Purchase Price Credit from any
indebtedness owed to it under its Subordinated Note.
Section 1.5 Payments and Computations, Etc. All amounts to be paid or
deposited by Buyer hereunder shall be paid or deposited in accordance with the
terms hereof on the day when due in immediately available funds to the account
of the applicable Originator designated from time to time by such Originator or
as otherwise directed by such Originator. In the event that any payment owed by
any Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand, the
Default Rate in respect thereof until paid in full; PROVIDED, HOWEVER, that such
Default Rate shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
Section 1.6 License of Software.
(a) To the extent that any software used by any Originator to account
for the Receivables originated by it is non-transferable, such Originator hereby
grants to each of Buyer, the Administrative Agent and the Servicer an
irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all such software used by such Originator to account for such Receivables,
to the extent necessary to administer such Receivables, whether such software is
owned by such Originator or is owned by others and used by such Originator under
license agreements with respect thereto; PROVIDED THAT should the consent of any
licensor of such software be required for the grant of the license described
herein, to be effective, such Originator hereby agrees that upon the request of
Buyer (or Buyer's assignee), such Originator will use its reasonable efforts to
obtain the consent of such third-party licensor. If any software used by any
Originator to account for the Receivables originated by it prohibits such
Originator from granting the license to use described herein, or if, after
reasonable efforts, consent of any licensor of such software for the grant of
the license described herein is not obtained, there shall be no transfer of such
software hereunder or any grant by such Originator of the license to use
described herein. The license granted hereby shall be irrevocable until the
later to occur of (i) indefeasible payment in full of the Obligations (as
defined in the Credit and Security Agreement), and (ii) the
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date each of this Agreement and the Credit and Security Agreement terminates in
accordance with its terms.
(b) Each Originator (i) shall take such action requested by Buyer
and/or the Administrative Agent (as Buyer's assignee), from time to time
hereafter, that may be necessary or appropriate to ensure that Buyer and its
assigns have an enforceable ownership interest in the Records relating to the
Receivables distributed by purchased from such Originator hereunder, and (ii)
shall use its reasonable efforts to ensure that Buyer, the Administrative Agent
and the Servicer each has an enforceable right (whether by license or sublicense
or otherwise) to use all of the computer software used to account for such
Receivables and/or to recreate such Records.
Section 1.7 Characterization. If, notwithstanding the intention of the
parties expressed in Section 1.2(c), any sale or contribution by an Originator
or Parent to Buyer of Receivables hereunder shall be characterized as a secured
loan and not a sale or contribution or such transfer shall for any reason be
ineffective or unenforceable, then this Agreement shall be deemed to constitute
a security agreement under the UCC and other applicable law. For this purpose
and without being in derogation of the parties' intention that each conveyance
of Receivables by an Originator or Parent hereunder shall constitute a true sale
or other absolute assignment thereof: (i) Parent hereby grants to Buyer a duly
perfected security interest in all of Parent's right, title and interest in and
to the Initial Contributed Assets and all proceeds thereof to secure the prompt
and complete payment of a loan deemed to have been made in an amount equal to
the credit to Buyer's paid-in capital and capital surplus booked at the time of
the issuance to Parent of Buyer's Equity Interests, together with all other
obligations of Parent to Buyer hereunder, which security interest shall be prior
to all other Adverse Claims (except as created under the Transaction Documents),
and (ii) such Originator hereby grants to Buyer a duly perfected security
interest in all of such Originator's right, title and interest in, to and under
all Receivables of such Originator which are now existing or hereafter arising,
all Collections and Related Security with respect thereto, each Lock-Box and
Collection Account, all other rights and payments relating to such Receivables
and all proceeds of the foregoing to secure the prompt and complete payment of a
loan deemed to have been made in an amount equal to the Purchase Price owing to
such Originator. Buyer and its assigns shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies
provided to a secured creditor under the UCC and other applicable law, which
rights and remedies shall be cumulative.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties. Parent hereby represents and
warrants to Buyer and its assigns on the date hereof, and each Originator hereby
represents and warrants to Parent, Buyer and Buyer's assigns, on the date hereof
and on each date that any Receivable is originated by such Originator on or
after the date hereof, that:
(a) Existence and Power. Such Transferor is a corporation, duly
organized under the laws of the state set forth after its name in the preamble
to this Agreement (the "APPLICABLE STATE"), and no other state or jurisdiction,
and as to which such Applicable State must maintain a public record showing such
corporation to have been organized. Such Transferor is validly existing and in
good standing under the laws of its Applicable State and is duly qualified to do
business and is in good standing as a foreign entity, and has and holds all
power and all governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its business is
conducted except where the failure to so qualify or so hold could not reasonably
be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery.
The execution and delivery by such Person of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder, and, in the case of any Originator, such
Originator's use of the proceeds of the Purchase made from it hereunder, are
within its organizational powers and authority and have been duly authorized by
all necessary organizational action on its part. This Agreement and each other
Transaction Document to which such Transferor is a party has been duly executed
and delivered by such Transferor.
(c) No Conflict. The execution and delivery by such Transferor of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not result in the
creation or imposition of any Adverse Claim on assets of such Transferor, or
contravene or violate (i) its Organizational Documents, (ii) any law, rule or
regulation applicable to it, (iii) any restrictions under any agreement,
contract or instrument to which it is a party or by which it or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property (except as created under the
Transaction Documents) except, in any case, where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect;
and no transaction contemplated hereby requires compliance with any bulk sales
act or similar law.
(d) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Transferor of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
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(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Transferor's knowledge, threatened, against or
affecting such Transferor, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect.
(f) Binding Effect. Each of the Transaction Document to which such
Transferor is a party constitutes the legal, valid and binding obligation of
such Transferor enforceable against such Transferor in accordance with its
respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) Accuracy of Information. All information heretofore furnished by
such Transferor or any of its Affiliates to Buyer (or its assigns) for purposes
of or in connection with this Agreement, any of the other Transaction Documents
or any transaction contemplated hereby or thereby is, and all such information
hereafter furnished by such Transferor or any of its Affiliates to Buyer (or its
assigns) will be, true and accurate in every material respect on the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein, taken as a whole, not
misleading.
(h) Use of Proceeds. No portion of any Purchase Price payment
hereunder will be used (i) for a purpose that violates, or would be inconsistent
with, any law, rule or regulation applicable to such Transferor or (ii) to
acquire any security in any transaction which is subject to Section 12, 13 or 14
of the Securities Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to the distribution of Initial
Contributed Assets by such Originator (if applicable) to Parent and the Purchase
from such Originator hereunder and upon the creation of each Receivable
originated by such Originator after the Initial Cut-Off Date, such Originator
(i) is the legal and beneficial owner of such Receivables and (ii) is the legal
and beneficial owner of the Related Security with respect thereto or possesses a
valid and perfected security interest therein, in each case, free and clear of
any Adverse Claim, except as created by the Transaction Documents. Immediately
prior to Parent's contribution of the Initial Contributed Assets to Buyer's
capital, Parent is the legal and beneficial owner of the Initial Contributed
Assets, free and clear of any Adverse Claim, except as created by the
Transaction Documents
(j) Perfection. This Agreement, together with the filing of the
financing statements and assignments contemplated hereby, is effective to
transfer to Buyer (and Buyer shall acquire from such Transferor, directly or
indirectly): (i) legal and equitable title to, with the right to sell and
encumber each Receivable originated by such Originator, whether now existing and
hereafter arising, together with the Collections with respect thereto, and (ii)
all of such Originator's right, title and interest in the Related Security
associated with each such Receivable, in each case, free and clear of any
Adverse Claim, except as created by the
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Transaction Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Buyer's ownership
interest in such Receivables, the Related Security and the Collections. Such
Transferor's jurisdiction of organization is a jurisdiction whose law generally
requires information concerning the existence of a nonpossessory security
interest to be made generally available in a filing, record or registration
system as a condition or result of such a security interest's obtaining priority
over the rights of a lien creditor which respect to collateral.
(k) Places of Business and Locations of Records. The principal place
of business and chief executive office of such Transferor and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit II
or such other locations of which Buyer has been notified in accordance with
Section 4.2(a) in jurisdictions where all action required by Section 4.2(a) has
been taken and completed. Such Transferor's Federal Employer Identification
Number is correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in Section
4.1(j) have at all times been satisfied and duly performed. The names and
addresses of all Collection Banks, together with the account numbers of the
Collection Accounts of such Transferor at each Collection Bank and the post
office box number of each Lock-Box, are listed on Exhibit III. Such Originator
has not granted any Person, other than Buyer (and its assigns) dominion and
control of any Lock-Box or Collection Account, or the right to take dominion and
control of any such Lock-Box or Collection Account at a future time or upon the
occurrence of a future event.
(m) Material Adverse Effect. Since June 30, 2005, no event has
occurred that would have a Material Adverse Effect.
(n) Names. The name in which such Transferor has executed this
Agreement is identical to the name of such Transferor as indicated on the public
record of its state of organization which shows such Transferor to have been
organized. In the past five (5) years, such Transferor has not used any
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement and as listed on Exhibit II.
(o) Ownership of Buyer. Parent owns, directly or indirectly, 100% of
the issued and outstanding Equity Interests of each Originator and Buyer. Such
Equity Interests are validly issued, fully paid and nonassessable, and there are
no options, warrants or other rights to acquire securities of Buyer or any
Originator.
(p) Not a Holding Company or an Investment Company. Such Transferor is
not a "holding company" or a "subsidiary holding company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or any successor statute. Such Transferor is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
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(q) Compliance with Law. Such Transferor has complied in all respects
with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (INCLUDING, WITHOUT
LIMITATION, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Transferor has
complied in all material respects with the Credit and Collection Policy with
regard to each Receivable originated or contributed by it that was reflected in
any Purchase Report as an Eligible Receivable and was an Eligible Receivable on
the date of its acquisition by Buyer hereunder, and with regard to each Contract
with respect to such Receivable, and has not made any change to such Credit and
Collection Policy, except such material change as to which Buyer (and its
assigns) have been notified in accordance with Section 4.1(a)(vii).
(s) Payments to such Originator. With respect to each Receivable
originated by such Originator and sold to Buyer hereunder, the Purchase Price
received by such Originator constitutes reasonably equivalent value in
consideration therefor. No transfer hereunder by such Originator of any
Receivable originated by such Originator is or may be voidable under any section
of the Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101 et seq.), as
amended.
(t) Enforceability of Contracts. Each Contract with respect to each
Receivable that was reflected in any Purchase Report as an Eligible Receivable
and was an Eligible Receivable on the date of its acquisition by Buyer hereunder
is effective to create, and has created, a legal, valid and binding obligation
of the related Obligor to pay the Outstanding Balance of the Receivable created
thereunder and any accrued interest thereon, enforceable against the Obligor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(u) Eligible Receivables. Each Receivable reflected in any Purchase
Report as an Eligible Receivable was an Eligible Receivable on the date of its
acquisition by Buyer hereunder.
(v) Accounting. The manner in which such Originator accounts for the
transactions contemplated by this Agreement in its financial statements does not
jeopardize the characterization of the transactions contemplated herein as being
true sales.
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ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchase from each
Originator under this Agreement is subject to the conditions precedent that (a)
Buyer shall have been capitalized with the Initial Contributed Assets, (b) Buyer
shall have received on or before the closing date of the Credit and Security
Agreement those documents listed on Schedule A and (c) all of the conditions to
the initial purchase under the Credit and Security Agreement shall have been
satisfied on or before the closing date thereof or waived in accordance with the
terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Buyer's obligation
to pay for Receivables coming into existence after the Initial Cutoff Date shall
be subject to the further conditions precedent that: (a) the Facility
Termination Date shall not have occurred under the Credit and Security
Agreement; (b) Buyer (or its assigns) shall have received such other approvals,
opinions or documents as it may reasonably request, and (c) on the date such
Receivable came into existence, the following statements shall be true (and
acceptance of the proceeds of any payment for such Receivable shall be deemed a
representation and warranty by such Originator that such statements are then
true):
(i) the representations and warranties set forth in Article II
are true and correct on and as of the date such Receivable came into
existence as though made on and as of such date; and
(ii) no event has occurred and is continuing that will constitute
a Termination Event or an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable originated by any Originator (whether by payment of
cash or through an increase in the amounts outstanding under such Originator's
Subordinated Note), title to such Receivable and the Related Security and
Collections with respect thereto shall vest in Buyer, whether or not the
conditions precedent to Buyer's obligation to pay for such Receivable were in
fact satisfied. The failure of such Originator to satisfy any of the foregoing
conditions precedent, however, shall give rise to a right of Buyer to rescind
the related purchase and direct such Originator to pay to Buyer an amount equal
to the Purchase Price payment that shall have been made with respect to any
Receivables related thereto.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Transferors. Until the date on which
this Agreement terminates in accordance with its terms:
(a) Financial Reporting. Parent agrees that it will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance
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with GAAP, and Parent will, and, as applicable, will cause each Originator to,
furnish to Buyer (and its assigns):
(i) Annual Reporting. Within 90 days after the close of each of
its fiscal years, the annual audited report for that fiscal year for the
Parent and its Subsidiaries, containing a consolidated balance sheet of the
Parent and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, stockholders' equity and cash
flows (together with all footnotes thereto) of the Parent and its
Subsidiaries for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year (which financial
statements shall be reported on by the Parent's independent certified
public accountants, such report to state that such financial statements
fairly present in all material respects the consolidated financial
condition and results of operation of the Parent and its Subsidiaries in
accordance with GAAP and to be without any material qualifications or
exceptions).
(ii) Quarterly Reporting. Within 45 days after the close of the
first three (3) quarterly periods of each of its fiscal years, the
quarterly unaudited consolidated balance sheet of the Parent and its
Subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income and cash flows (together with all
footnotes thereto) of the Parent and its Subsidiaries for such fiscal
quarter and the then elapsed portion of such fiscal year, setting forth in
each case in comparative form the figures for the corresponding quarter and
the corresponding portion of Parent's previous fiscal year, accompanied by
a certificate, dated the date of furnishing, signed by a Financial Officer
of the Parent to the effect that such financial statements accurately
present in all material respects the consolidated financial condition of
the Parent and its Subsidiaries and that such financial statements have
been prepared in accordance with GAAP consistently applied (subject to year
end adjustments).
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in substantially
the form of Exhibit IV signed by a Financial Officer of Parent and dated
the date of such annual financial statement or such quarterly financial
statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
filing thereof or otherwise becoming available, copies of all financial
statements, annual, quarterly and special reports, proxy statements and
notices sent or made available generally by Parent to its public security
holders, of all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any of them with any
securities exchange or with the Securities and Exchange Commission, and of
all press releases and other statements made available generally to the
public containing Material developments in the business or financial
condition of Parent and its Restricted Subsidiaries.
(v) Auditors Reports and Management Letters. Promptly upon
receipt thereof, copies of all financial statements of, and all reports
submitted by, independent public accountants to Parent in connection with
each annual, interim, or special audit of Parent's
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financial statements, including without limitation, the comment letter
submitted by such accountants to management in connection with their annual
audit;
(b) Other Notices and Information. Each Transferor will deliver to
Buyer and its assigns:
(i) Reportable Events. As soon as possible and in any event
within thirty (30) days after such Transferor or any Restricted Subsidiary
knows or has reason to know that any "REPORTABLE EVENT" (as defined in
Section 4043(b) of ERISA) with respect to any Plan has occurred (other than
such a Reportable Event for which the PBGC has waived the 30-day notice
requirement under Section 4043(a) of ERISA) and such Reportable Event
involves a matter that has had, or is reasonably likely to have, a Material
Adverse Effect, a statement of a Financial Officer of such Transferor or
such Restricted Subsidiary setting forth details as to such Reportable
Event and the action which the Parent or such Restricted Subsidiary
proposes to take with respect thereto, together with a copy of the notice
of such Reportable Event given to the PBGC if a copy of such notice is
available to the Parent or such Restricted Subsidiary;
(ii) Change in Credit and Collection Policy. At least thirty (30)
days prior to the effectiveness of any material change in or material
amendment to the Credit and Collection Policy, a copy of the Credit and
Collection Policy then in effect and a notice (A) indicating such proposed
change or amendment, and (B) if such proposed change or amendment would be
reasonably likely to materially adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created
Receivables, requesting Buyer's (and the Administrative Agent's, as Buyer's
assignee) consent thereto.
(iii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables
originated or contributed by such Transferor or the condition or
operations, financial or otherwise, of such Originator as Buyer (or its
assigns) may from time to time reasonably request in order to protect the
interests of Buyer (and its assigns) under or as contemplated by this
Agreement.
(iv) Termination Events or Unmatured Termination Events. The
occurrence of each Termination Event and each Unmatured Termination Event,
by a statement of a Financial Officer of such Transferor.
(v) Downgrade of Parent. Promptly after the occurrence thereof,
any downgrade in the rating of any rated Debt of any Transferor by S&P or
by Xxxxx'x, setting forth the Debt affected and the nature of such change.
(vi) Material Adverse Effect. Promptly upon learning thereof, the
occurrence of any event or condition that has had, or could reasonably be
expected to have, a Material Adverse Effect.
(c) Compliance with Laws and Preservation of Existence. Each
Transferor will comply in all respects with all applicable laws, rules,
regulations, orders, writs,
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judgments, injunctions, decrees or awards to which it may be subject, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Each Transferor will preserve and maintain its legal
existence, rights, franchises and privileges in the jurisdiction of its
organization, and qualify and remain qualified in good standing as a foreign
entity in each jurisdiction where its business is conducted, except where the
failure to so qualify or remain in good standing could not reasonably be
expected to have a Material Adverse Effect.
(d) Audits. Each Transferor will furnish to Buyer (or its assigns)
from time to time such information with respect to it and the Receivables sold
or contributed by it as Buyer (or its assigns) may reasonably request. Each
Transferor will, from time to time during regular business hours as requested by
Buyer (or its assigns), upon reasonable notice and at the sole cost of such
Transferor, permit Buyer (or its assigns) or their respective agents or
representatives, (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Transferor relating to
the Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of such
Transferor for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to such Transferor's financial condition
or the Receivables and the Related Security or such Transferor's performance
under any of the Transaction Documents or such Transferor's performance under
the Contracts and, in each case, with any of the officers or employees of such
Transferor having knowledge of such matters (each of the foregoing examinations
and visits, a "REVIEW"); PROVIDED, HOWEVER, that, so long as no Amortization
Event (under and as defined in the Credit and Security Agreement) has occurred
and is continuing: (A) the Transferors, collectively, shall only be responsible
for the reasonable costs and expenses of one (1) Review in any one calendar
year, and (B) the Administrative Agent (as Buyer's assignee) will not request
more than four (4) Reviews in any one calendar year.
(e) Keeping and Marking of Records and Books.
(i) Such Transferor will maintain and implement administrative
and operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables in the event of the destruction of
the originals thereof), and keep and maintain all documents, books, records
and other information reasonably necessary or advisable for the collection
of all Receivables (including, without limitation, records adequate to
permit the immediate identification of each new Receivable and all
Collections of and adjustments to each existing Receivable). Such
Transferor will give Buyer (or its assigns) notice of any material change
in the administrative and operating procedures referred to in the previous
sentence.
(ii) Such Transferor will (A) on or prior to the date hereof,
xxxx its master data processing records and other books and records
relating to the Receivables with a legend, acceptable to Buyer (or its
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assigns), describing Buyer's ownership interests in the Receivables and
further describing the interest of the Administrative Agent (on behalf of
the Lenders) under the Credit and Security Agreement and (B) upon the
request of Buyer (or its assigns): (x) xxxx each Contract with a legend
describing Buyer's ownership interests in the Receivables originated by
such Transferor and further describing the interest of the Administrative
Agent (on behalf of the Lenders) and (y) after the occurrence of a
Termination Event, deliver to Buyer (or its assigns) all Contracts
(including, without limitation, all multiple originals of any such
Contract) relating to such Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such
Transferor will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables originated by it, and (ii) comply in all respects
with the Credit and Collection Policy in regard to each such Receivable and the
related Contract.
(g) Ownership. Such Transferor, as applicable, will take all necessary
action to establish and maintain, irrevocably in Buyer, (A) legal and equitable
title to the Receivables originated by such Transferor and the Collections and
(B) all of such Transferor's right, title and interest in the Related Security
associated with the Receivables originated by such Transferor, in each case,
free and clear of any Adverse Claims other than Adverse Claims in favor of Buyer
(and its assigns) (INCLUDING, WITHOUT LIMITATION, the filing of all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Buyer's interest
in such Receivables, Related Security and Collections and such other action to
perfect, protect or more fully evidence the interest of Buyer as Buyer (or its
assigns) may reasonably request).
(h) Lenders' Reliance. Such Transferor acknowledges that the
Administrative Agent and the Lenders are entering into the transactions
contemplated by the Credit and Security Agreement in reliance upon Buyer's
identity as a legal entity that is separate from such Transferor and any
Affiliates thereof. Therefore, from and after the date of execution and delivery
of this Agreement, such Transferor will take all reasonable steps including,
without limitation, all steps that Buyer or any assignee of Buyer may from time
to time reasonably request to maintain Buyer's identity as a separate legal
entity and to make it manifest to third parties that Buyer is an entity with
assets and liabilities distinct from those of such Transferor and any Affiliates
thereof and not just a division of such Transferor or any such Affiliate.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, such Transferor (i) will not hold itself out to
third parties as liable for the debts of Buyer nor purport to own any of the
Receivables and other assets acquired by Buyer, (ii) will take all other actions
necessary on its part to ensure that Buyer is at all times in compliance with
the "separateness covenants" set forth in Section 7.1(i) of the Credit and
Security Agreement and (iii) will cause all tax liabilities arising in
connection with the transactions contemplated herein or otherwise to be
allocated between such Transferor and Buyer on an arm's-length basis and in
17
a manner consistent with the procedures set forth in U.S. Treasury Regulations
Sections 1.1502-33(d) and 1.1552-1.
(i) Collections. Such Transferor will cause (1) all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each Lock-Box and Collection Account to be subject at all times
to a Collection Account Agreement that is in full force and effect. In the event
any payments relating to Receivables are remitted directly to such Transferor or
any Affiliate of such Transferor, such Transferor will remit (or will cause all
such payments to be remitted) directly to a Collection Bank and deposited into a
Collection Account within three (3) Business Days following receipt thereof and,
at all times prior to such remittance, such Transferor will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of Buyer and its assigns. Such Transferor will transfer exclusive
ownership, dominion and control of each Lock-Box and Collection Account to Buyer
and, will not grant the right to take dominion and control of any Lock-Box or
Collection Account at a future time or upon the occurrence of a future event to
any Person, except to Buyer (or its assigns) as contemplated by this Agreement
and the Credit and Security Agreement.
(j) Taxes. Such Transferor will file all tax returns and reports
required by law to be filed by it and promptly pay all taxes and governmental
charges at any time owing, except any such taxes which are not yet delinquent or
are being contested in good faith by appropriate and timely proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books. Such Transferor will pay when due any and all present and future stamp,
documentary, and other similar taxes and governmental charges payable in
connection with the Receivables originated by it, and hold Buyer and its assigns
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission to pay such taxes and governmental charges.
Section 4.2 Negative Covenants of Transferors. Until the date on which this
Agreement terminates in accordance with its terms, each Transferor hereby
covenants that:
(a) Name Change, Offices and Records. Such Transferor will not change
its (i) state of organization, (ii) name, (iii) identity or structure (within
the meaning of Article 9 of any applicable enactment of the UCC) or relocate its
chief executive office at any time while the location of its chief executive
office is relevant to perfection of Buyer's interest in the Receivables or the
associated Related Security and Collections or any office where Records are kept
unless it shall have: (i) given Buyer (and the Administrative Agent, as its
assignee) at least forty-five (45) days' prior written notice thereof and (ii)
delivered to the Administrative Agent (as Buyer's assignee) all financing
statements, instruments and other documents requested by the Administrative
Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Such Transferor will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless Buyer
18
(or its assigns) shall have received, at least ten (10) days before the proposed
effective date therefor, (i) written notice of such addition, termination or
change and (ii) with respect to the addition of a Collection Bank or a
Collection Account or Lock-Box, an executed Collection Account Agreement with
respect to the new Collection Account or Lock-Box; PROVIDED, HOWEVER, that such
Transferor may make changes in instructions to Obligors regarding payments if
such new instructions require such Obligor to make payments to another existing
Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. Such
Transferor will not make any change to the Credit and Collection Policy that
could reasonably be expected to adversely affect the collectibility of the
Receivables originated by it or decrease the credit quality of any of its newly
created Receivables. Except as otherwise permitted in its capacity as Servicer
pursuant to the Credit and Security Agreement, such Transferor will not extend,
amend or otherwise modify the terms of any Receivable or any Contract related
thereto other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Such Transferor will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer provided
for herein), and such Transferor will defend the right, title and interest of
Buyer in, to and under any of the foregoing property, against all claims of
third parties claiming through or under such Transferor.
(e) Accounting for Purchase. Such Transferor will not, and will not
permit any Affiliate to, financially account (whether in financial statements or
otherwise) for the transactions contemplated hereby in any manner other than the
sale or other outright conveyance by such Transferor to Buyer of the Receivables
originated by such Transferor and the associated Related Security or in any
other respect account for or treat the transactions contemplated hereby in any
manner other than as a sale of such Receivables and Related Security by such
Transferor to Buyer except to the extent that such transactions are not
recognized on account of consolidated financial reporting in accordance with
generally accepted accounting principles.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more of the
following events shall constitute a Termination Event:
(a) Any Transferor shall fail to make any payment or deposit required
hereunder when due and such failure shall continue for three (3) Business Days.
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(b) Any Transferor shall fail to observe or perform any covenant or
agreement contained in Section 4.1(b)(iv) or 4.2.
(c) Any Transferor shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those referred to in Sections
5.1(a) and (b)), and such failure shall remain unremedied for 30 days after the
earlier of (i) an Executive Officer of any of the Transferors obtaining
knowledge thereof, or (ii) written notice thereof shall have been given to Any
of the Transferors by Buyer or any of its assigns.
(d) Any representation, warranty, certification or statement made by
such Transferor in this Agreement, any other Transaction Document or in any
other document delivered pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made or deemed made; provided that the
materiality threshold in the preceding clause shall not be applicable with
respect to any representation or warranty which itself contains a materiality
threshold and provided further, that any misrepresentation or certification for
which Buyer has actually received a Purchase Price Credit shall not constitute a
Termination Event hereunder.
(e) Any of the Transferors or any of its Restricted Subsidiaries shall
fail to make when due (whether at stated maturity, by acceleration, on demand or
otherwise, and after giving effect to any applicable grace period) any payment
of principal of or interest on any Debt (other than the Obligations) exceeding
$10,000,000 individually or in the aggregate, or any of the Transferors or any
of its Restricted Subsidiaries shall fail to observe or perform within any
applicable grace period any covenants or agreements contained in any agreements
or instruments relating to any of its Debt exceeding $10,000,000 individually or
in the aggregate, or any other event shall occur if the effect of such failure
or other event is to accelerate, or to permit the holder of such Debt or any
other Person to accelerate, the maturity of such Debt; or any such Debt shall be
required to be prepaid (other than by a regularly scheduled required prepayment)
in whole or in part prior to its stated maturity.
(f) Any of the Transferors or any Restricted Subsidiary shall commence
a voluntary case concerning itself under the Bankruptcy Code or applicable
foreign bankruptcy laws; or an involuntary case for bankruptcy is commenced
against any of the Transferors or any of its Restricted Subsidiaries and the
petition is not controverted within 30 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) or similar official under applicable foreign bankruptcy laws is appointed
for, or takes charge of, all or any substantial part of the property of any of
the Transferors or any of its Restricted Subsidiaries; or any of the Transferors
or any of its Restricted Subsidiaries commences proceedings of its own
bankruptcy or to be granted a suspension of payments or any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction,
whether now or hereafter in effect, relating to any of the Transferors or any of
its Restricted Subsidiaries or there is commenced against any of the Transferors
or any of its Restricted Subsidiaries any such proceeding which remains
undismissed for a period of 60 days; or any of the Transferors or any
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of its Restricted Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or any of the Transferors or any of its Restricted Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or any of
the Transferors or any of its Restricted Subsidiaries makes a general assignment
for the benefit of creditors; or any of the Transferors or any of its Restricted
Subsidiaries shall fail to pay, or shall state that it is unable to pay, or
shall be unable to pay, its debts generally as they become due; or any of the
Transferors or any of its Restricted Subsidiaries shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its debts; or
any of the Transferors or any of its Restricted Subsidiaries shall by any act or
failure to act indicate its consent to, approval of or acquiescence in any of
the foregoing; or any corporate action is taken by any of the Transferors or any
of its Restricted Subsidiaries for the purpose of effecting any of the
foregoing.
(g) A Change of Control shall occur.
(h) A Plan of any of the Transferors or any Restricted Subsidiary or a
Plan subject to Title IV of ERISA of any of its ERISA Affiliates: (i) shall fail
to be funded in accordance with the minimum funding standard required by
applicable law, the terms of such Plan, Section 412 of the Tax Code or Section
302 of ERISA for any plan year or a waiver of such standard is sought or granted
with respect to such Plan under applicable law, the terms of such Plan or
Section 412 of the Tax Code or Section 303 of ERISA; or (ii) is being, or has
been, terminated or the subject of termination proceedings under applicable law
or the terms of such Plan; or (iii) shall require any of the Transferors or any
Restricted Subsidiary to provide security under applicable law, the terms of
such Plan, Section 401 or 412 of the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to any of the Transferors or any Restricted
Subsidiary under applicable law, the terms of such Plan, or Title IV of ERISA;
and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC or a Plan that would have a Material Adverse Effect.
(i) Judgments or orders for the payment of money in excess of
$10,000,000 individually or in the aggregate or otherwise having a Material
Adverse Effect shall be rendered against any of the Transferors or any
Restricted Subsidiary and such judgment or order shall continue unsatisfied (in
the case of a money judgment) and in effect for a period of 30 days during which
execution shall not be effectively stayed or deferred (whether by action of a
court, by agreement or otherwise).
(j) Any Transaction Document ceases to be in full force and effect or
the validity or enforceability thereof is disaffirmed by or on behalf of any
Transferor or any Restricted Subsidiary, or at any time it is or becomes
unlawful for any Transferor or any Restricted Subsidiary to perform or comply
with its obligations under any Transaction Document, or the obligations of Any
of the Transferors or any Restricted Subsidiary under any Transaction Document
are not or cease to be legal, valid and binding on any of the Transferors or any
Restricted Subsidiary.
21
(k) There shall occur any loss, termination, cancellation or other
material impairment of any governmental license, certificate, or permit by any
Transferor or any Restricted Subsidiary which is reasonably likely to have a
Material Adverse Effect.
Section 5.2 Remedies. Upon the occurrence and during the continuation of a
Termination Event, Buyer may take any of the following actions: (i) declare the
applicable Termination Date to have occurred, whereupon the applicable
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Transferor;
PROVIDED, HOWEVER, that upon the occurrence of a Termination Event described in
Section 5.1(f) with respect to any Transferor, or of an actual or deemed entry
of an order for relief with respect to any Transferor under the Bankruptcy Code,
the applicable Termination Date shall automatically occur, without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
each Transferor and (ii) to the fullest extent permitted by applicable law,
declare that the Default Rate shall accrue with respect to any amounts then due
and owing by such Transferor to Buyer. The aforementioned rights and remedies
shall be without limitation and shall be in addition to all other rights and
remedies of Buyer and its assigns otherwise available under any other provision
of this Agreement, by operation of law, at equity or otherwise, all of which are
hereby expressly preserved, including, without limitation, all rights and
remedies provided under the UCC, all of which rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Transferors. Without limiting any other rights
that Buyer may have hereunder or under applicable law, each Transferor hereby
agrees to indemnify (and pay upon demand to) Buyer and its assigns, officers,
directors, agents and employees (each an "INDEMNIFIED PARTY") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be employees of Buyer or any such assign) and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables originated by such Transferor, EXCLUDING, HOWEVER:
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables originated by such Transferor that are uncollectible on
account of the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
22
(c) taxes imposed on or measured by such Indemnified Party's net
income, and franchise taxes and branch profit taxes imposed on it, by the
jurisdiction under the laws of which such Indemnified Party is organized or any
political subdivision thereof, and taxes imposed on or measured by such
Indemnified Party's net income, and franchise taxes and branch profit taxes
imposed on it, by the jurisdiction in which such Indemnified Party's principal
executive office is located or any political subdivision thereof;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of such Transferor or limit the recourse of Buyer to such Transferor
for amounts otherwise specifically provided to be paid by such Transferor under
the terms of this Agreement. Without limiting the generality of the foregoing
indemnification, but subject in each case to clauses (a), (b) and (c) above,
each Transferor shall indemnify Buyer for Indemnified Amounts relating to or
resulting from:
(i) any representation or warranty made by such Transferor (or
any officers of such Transferor) under or in connection with any Purchase
Report, this Agreement, any other Transaction Document or any other
information or report delivered by such Transferor pursuant hereto or
thereto for which Buyer has not received a Purchase Price Credit that shall
have been false or incorrect when made or deemed made;
(ii) the failure by such Transferor, to comply with any
applicable law, rule or regulation with respect to any Receivable or
Contract related thereto, or the nonconformity of any Receivable or
Contract included therein with any such applicable law, rule or regulation
or any failure of such Transferor to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(iii) any failure of such Transferor to perform its duties,
covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage, suit or
other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any
Receivable;
(v) any dispute, claim, offset or defense (other than a defense
related to the financial condition, or discharge in bankruptcy, of the
Obligor) of the Obligor to the payment of any Receivable (including,
without limitation, a defense based on such Receivable or the related
Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or service related to such
Receivable or the furnishing or failure to furnish such merchandise or
services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
23
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, such Transferor's use of the proceeds of
the Purchase from it hereunder, the ownership of the Receivables originated
by such Transferor or any other investigation, litigation or proceeding
relating to such Transferor in which any Indemnified Party becomes involved
as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Termination Event described in Section 5.1(f);
(x) any failure to vest and maintain vested in Buyer, or to
transfer to Buyer, legal and equitable title to, and ownership of, the
Receivables originated by such Transferor and the associated Collections,
and all of such Transferor's right, title and interest in the Related
Security associated with such Receivables, in each case, free and clear of
any Adverse Claim;
(xi) 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
Receivable originated by such Transferor, the Related Security and
Collections with respect thereto, and the proceeds of any thereof, whether
at the time of the Purchase from such Transferor hereunder or at any
subsequent time;
(xii) any action or omission by such Transferor which reduces or
impairs the rights of Buyer with respect to any Receivable or the value of
any such Receivable;
(xiii) any attempt by any Person to void the Purchase from such
Transferor hereunder under statutory provisions or common law or equitable
action; and
(xiv) the failure of any Receivable reflected as an Eligible
Receivable on any Purchase Report prepared by such Transferor to be an
Eligible Receivable at the time acquired by Buyer.
Notwithstanding the foregoing, (i) the foregoing indemnification is not intended
to, and shall not, constitute a guarantee of the collectibility or payment of
the Receivables conveyed hereunder; and (ii) nothing in the Section 6.1 shall
require a Transferor to indemnify any Indemnified Party for Receivables which
are not collected, not paid or otherwise uncollectible on account of the
insolvency, bankruptcy, creditworthiness or financial inability to pay of the
applicable Obligor.
24
Section 6.2 Other Costs and Expenses. Each Transferor shall pay to Buyer on
demand all costs and out-of-pocket expenses in connection with the preparation,
execution, delivery and administration of this Agreement, the transactions
contemplated hereby and the other documents to be delivered hereunder. Each
Transferor shall pay to Buyer on demand any and all costs and expenses of Buyer,
if any, including reasonable counsel fees and expenses actually incurred in
connection with the enforcement of this Agreement and the other documents
delivered hereunder and in connection with any restructuring or workout of this
Agreement or such documents, or the administration of this Agreement following a
Termination Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its assigns) in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing signed by each Transferor and Buyer and, to
the extent required under the Credit and Security Agreement, the Administrative
Agent and the Liquidity Banks or the Required Liquidity Banks. Any material
amendment, supplement, modification or waiver will required satisfaction of the
Rating Agency Condition.
Section 7.2 Notices. All communications and notices provided for hereunder
shall be in writing (including bank wire, telecopy or electronic facsimile
transmission or similar writing) and shall be given to the other parties hereto
at their respective addresses or telecopy numbers set forth on the signature
pages hereof or at such other address or telecopy number as such Person may
hereafter specify for the purpose of notice to each of the other parties hereto.
Each such notice or other communication shall be effective (a) if given by
telecopy, upon the receipt thereof, (b) if given by mail, five (5) Business Days
after the time such communication is deposited in the mail with first class
postage prepaid or (c) if given by any other means, when received at the address
specified in this Section 7.2.
Section 7.3 Protection of Ownership Interests of Buyer.
(a) Each Transferor agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that Buyer (or its assigns) may
25
request, to perfect, protect or more fully evidence the interest of Buyer
hereunder and the interest of the Administrative Agent (on behalf of the
Lenders) under the Credit and Security Agreement, or to enable Buyer (or its
assigns) to exercise and enforce their rights and remedies hereunder. At any
time, Buyer (or its assigns) may, at such Transferor's sole cost and expense,
direct such Transferor to notify the Obligors of Receivables of the ownership
interests of Buyer under this Agreement and may also direct that payments of all
amounts due or that become due under any or all Receivables be made directly to
Buyer or its designee.
(b) If any Transferor fails to perform any of its obligations
hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or
cause performance of, such obligations, and Buyer's (or such assigns') costs and
expenses incurred in connection therewith shall be payable by such Transferor as
provided in Section 6.2. Each Transferor irrevocably authorizes Buyer (and its
assigns) at any time and from time to time in the sole discretion of Buyer (or
its assigns), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact,
to act on behalf of such Transferor (i) to execute on behalf of such Transferor
as debtor and to file financing statements necessary or desirable in Buyer's (or
its assigns') sole discretion to perfect and to maintain the perfection and
priority of the interest of Buyer in the Receivables originated by such
Transferor and the associated Related Security and Collections and (ii) to file
a carbon, photographic or other reproduction of this Agreement or any financing
statement with respect to the Receivables as a financing statement in such
offices as Buyer (or its assigns) in their sole discretion deem necessary or
desirable to perfect and to maintain the perfection and priority of Buyer's
interests in such Receivables. This appointment is coupled with an interest and
is irrevocable. From and after July 1, 2001, if any Transferor fails to perform
any of its obligations hereunder: (A) such Transferor hereby authorizes Buyer
(or its assigns) to file financing statements and other filing or recording
documents with respect to the Receivables and Related Security (including any
amendments thereto, or continuation or termination statements thereof), without
the signature or other authorization of such Transferor, in such form and in
such offices as Buyer (or any of its assigns) reasonably determines appropriate
to perfect or maintain the perfection of the ownership or security interests of
Buyer (or its assigns) hereunder, (B) such Transferor acknowledges and agrees
that it is not authorized to, and will not, file financing statements or other
filing or recording documents with respect to the Receivables or Related
Security (including any amendments thereto, or continuation or termination
statements thereof), without the express prior written approval by the
Administrative Agent (as Buyer's assignee), consenting to the form and substance
of such filing or recording document, and (C) such Transferor approves,
authorizes and ratifies any filings or recordings made by or on behalf of the
Administrative Agent (as Buyer's assign) in connection with the perfection of
the ownership or security interests in favor of Buyer or the Administrative
Agent (as Buyer's assign).
26
Section 7.4 Confidentiality.
(a) Each Transferor and Buyer shall maintain and shall cause each of
its employees and officers to maintain the confidentiality of the Fee Letter and
the other confidential or proprietary information with respect to the
Administrative Agent and the Conduits and their respective businesses obtained
by it or them in connection with the structuring, negotiating and execution of
the transactions contemplated herein, except that such Transferor and its
officers and employees may disclose such information to such Transferor's
external accountants, attorneys and other advisors and as required by any
applicable law or order of any judicial or administrative proceeding.
(b) Each Transferor hereby consents to the disclosure of any nonpublic
information with respect to it (i) to Buyer, the Agents, the Liquidity Banks or
the Conduits by each other, (ii) to any prospective or actual assignee or
participant of any of the Persons described in clause (i), and (iii) to any
rating agency, Commercial Paper dealer or provider of a surety, guaranty or
credit or liquidity enhancement to a Conduit or any entity organized for the
purpose of purchasing, or making loans secured by, financial assets for which
Wachovia acts as the administrative agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing, PROVIDED
each such Person described in the foregoing clauses (ii) and (iii) is informed
of the confidential nature of such information. In addition, the Lenders and the
Administrative Agent may disclose any such nonpublic information pursuant to any
law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
Section 7.5 Bankruptcy Petition.
(a) Each Transferor and Buyer each hereby covenants and agrees that,
prior to the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of a Conduit, it will not institute against, or
join any other Person in instituting against, such Conduit any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
(b) Each Transferor covenants and agrees that, prior to the date that
is one year and one day after the payment in full of all outstanding obligations
of Buyer under the Credit and Security Agreement, it will not institute against,
or join any other Person in instituting against, Buyer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 7.6 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of any Transferor,
Buyer, any Conduit, any
27
Agent or any Liquidity Bank, no claim may be made by any such Person (or its
Affiliates, directors, officers, employees, attorneys or agents) against any
such other Person (or its Affiliates, directors, officers, employees, attorneys
or agents) for any special, indirect, consequential or punitive damages in
respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and each of the
parties hereto, on behalf of itself and its Affiliates, directors, officers,
employees, attorneys, agents, successors and assigns, hereby waives, releases,
and agrees not to xxx upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF GEORGIA.
Section 7.8 CONSENT TO JURISDICTION. EACH TRANSFEROR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
GEORGIA STATE COURT SITTING IN THE STATE OF GEORGIA IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH
TRANSFEROR PURSUANT TO THIS AGREEMENT AND SUCH TRANSFEROR HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST SUCH
TRANSFEROR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
SUCH TRANSFEROR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH TRANSFEROR
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN THE STATE OF
GEORGIA.
Section 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY SUCH
TRANSFEROR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.
28
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of
the Transferors, Buyer and their respective successors and permitted assigns
(including any trustee in bankruptcy). No Transferor may assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of any Transferor. Without limiting the foregoing, each Transferor
acknowledges that Buyer, pursuant to the Credit and Security Agreement, may
assign to the Administrative Agent, for the benefit of the Lenders, its rights,
remedies, powers and privileges hereunder and that the Administrative Agent may
further assign such rights, remedies, powers and privileges to the extent
permitted in the Credit and Security Agreement. Each Transferor agrees that the
Administrative Agent, as the assignee of Buyer, shall, subject to the terms of
the Credit and Security Agreement, have the right to enforce this Agreement and
to exercise directly all of Buyer's rights and remedies under this Agreement
(including, without limitation, the right to give or withhold any consents or
approvals of Buyer to be given or withheld hereunder) and each Transferor agrees
to cooperate fully with the Administrative Agent in the exercise of such rights
and remedies. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until terminated in accordance with its terms;
PROVIDED, HOWEVER, that the rights and remedies with respect to (i) any breach
of any representation and warranty made by any Transferor pursuant to Article
II; (ii) the indemnification and payment provisions of Article VI; and (iii)
Section 7.5 shall be continuing and shall survive any termination of this
Agreement.
Section 7.11 Counterparts; Severability; Section References. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
29
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.
ROCK-TENN COMPANY, as Parent
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxxx X. Xxxx
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
ROCK-TENN MILL COMPANY, LLC,
as Originator
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxxx X. Xxxx
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
ROCK-TENN PACKAGING AND PAPERBOARD, LLC,
as Originator
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxxx X. Xxxx
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
[S-1]
[Amended and Restated Receivables Sale Agreement]
ROCK-TENN COMPANY OF TEXAS,
as Originator
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxxx X. Xxxx
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
ROCK-TENN CONVERTING COMPANY,
as Originator
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxxx X. Xxxx
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
WALDORF CORPORATION, as Originator
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxxx X. Xxxx
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
[S-2]
[Amended and Restated Receivables Sale Agreement]
PCPC, INC., as Originator
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name Printed: Xxxxxxx X. Xxxx
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
ROCK-TENN FINANCIAL, INC., as Buyer
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name Printed: Xxxxxxx Xxxxx
Title: Treasurer
Address: 0000 Xxxxxx Xxxxx Xxxx.
Xxxxxxx-Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
[S-3]
[Amended and Restated Receivables Sale Agreement]
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined).
(a) Capitalized terms used and not otherwise defined in the Agreement
or this Exhibit are used with the meanings attributed thereto in the Credit and
Security Agreement.
(c) As used in the Agreement and the Exhibits and Schedules thereto,
capitalized terms have the meanings set forth in this Exhibit I (such meanings
to be equally applicable to the singular and plural forms thereof).
"ADVERSE CLAIM" means a Lien.
"AFFILIATES" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10-50%
of any class of voting securities of the controlled Person only if it also
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise, or (b) if the controlling Person owns more
than 50% of any class of voting securities of the controlled Person.
"ADMINISTRATIVE AGENT" has the meaning set forth in the Preliminary
Statements to the Agreement.
"AGREEMENT" means the Amended and Restated Receivables Sale Agreement,
dated as of October 26, 2005, among Parent, Originators and Buyer, as the same
may be amended, restated or otherwise modified.
"APPLICABLE STATE" has the meaning set forth in Section 2.1(a).
"BANKRUPTCY CODE" means the Bankruptcy Code of 1978, as amended and in
effect from time to time (11 U.S.C. Section 101 et seq.) and any successor
statute thereto.
"BUSINESS DAY" means any day on which banks are not authorized or
required to close in New York, New York, or Atlanta, Georgia, and The Depository
Trust Company of New York is open for business.
"BUYER" has the meaning set forth in the preamble to the Agreement.
"CALCULATION PERIOD" means each calendar month or portion thereof
which elapses during the term of the Agreement. The first Calculation Period
shall commence on the
34
date of the Purchases hereunder and the final Calculation Period shall terminate
on the applicable Termination Date.
"CAPITALIZED LEASE" means any lease the obligation for rentals with
respect to which is required to be capitalized on a balance sheet of the lessee
in accordance with GAAP.
"CHANGE OF CONTROL" means (a) as applied to Parent, that, during any
period of twelve consecutive calendar months, (i) more than 50% of the members
of the Board of Directors of Parent who were members on the first day of such
period shall have resigned or been removed or replaced, other than as a result
of death, disability, or change in personal circumstances, or (ii) any Person or
"Group" (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, but excluding (A) any employee benefit or stock ownership plans of
Parent, and (B) members of the Board of Directors and executive officers of
Parent as of the date of this Agreement, members of the immediate families of
such members and executive officers, and family trusts and partnerships
established by or for the benefit of any of the foregoing individuals) shall
have acquired more than 50% of the outstanding voting Equity Interests of
Parent, except that Parent's purchase of its common stock outstanding on the
date hereof which results in one or more of Parent's shareholders of record as
of the date of this Agreement controlling more than 50% of the outstanding
voting Equity Interests of Parent shall not constitute an acquisition hereunder,
(b) Parent ceases to own, directly or indirectly, a majority of the outstanding
voting Equity Interests of any Originator, or (c) Parent ceases to own a
majority of the outstanding voting Equity Interests of Buyer.
"COLLECTION ACCOUNT" means each concentration account, depository
account, lock-box account or similar account in which any Collections are
collected or deposited and which is listed on Exhibit III hereto.
"COLLECTION ACCOUNT AGREEMENT" means an agreement in form reasonably
acceptable to the Administrative Agent among an Originator, Servicer, Buyer, the
Administrative Agent and a Collection Bank.
"COLLECTION BANK" means, at any time, any of the banks holding one or
more Collection Accounts.
"COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all Finance Charges or other related amounts accruing in
respect thereof and all cash proceeds of Related Security with respect to such
Receivable; PROVIDED, HOWEVER, that the term "COLLECTIONS" shall not include any
payment made for the account of a third-party service provider or sub-contractor
whose services were not included in the amount invoiced for the applicable
Receivable.
"COMMERCIAL PAPER" means promissory notes issued by a Conduit in the
commercial paper market.
35
"CONSOLIDATED SUBSIDIARIES" means, at any date as of which the same is
to be determined, any Subsidiary or other entity the accounts of which would be
consolidated with those of Parent in its consolidated financial statements if
such statements were prepared as of such date in accordance with GAAP.
"CONTRACT" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable.
"CREDIT AND COLLECTION POLICY" means the Originators' credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in EXHIBIT V, as modified from time to time in
accordance with the Agreement.
"CREDIT AND SECURITY AGREEMENT" has the meaning set forth in the
Preliminary Statements to the Agreement.
"DEBT" means, with respect to any Person at any date, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such Person as lessee
under Capitalized Leases, (v) all obligations of such Person to purchase
securities (or other property) which arise out of or in connection with the sale
of the same or substantially similar securities or property, (vi) all
obligations of such Person to reimburse any bank or other person in respect of
amounts paid under a letter of credit or similar instrument, (vii) all Debt of
others secured by a lien on any asset of such Person to the extent of the fair
market value of such asset, whether or not such Debt is assumed by such Person,
(viii) all Synthetic Lease Liabilities of such Person, and (ix) all Debt of
others guaranteed by such Person to the extent such Debt represents a liability
of such Person; provided that liabilities resulting from the recognition of
other post-retirement benefits required by Financial Accounting Standard No. 106
shall not constitute "DEBT."
"DEFAULT RATE" means a rate per annum equal to the sum of (i) the
Prime Rate, PLUS (ii) 2.00%, changing when and as the Prime Rate changes.
"DEFAULT RATIO" has the meaning set forth in the Credit and Security
Agreement.
"DISCOUNT FACTOR" means a percentage calculated to provide Buyer with
a reasonable return on its investment in the Receivables purchased from each
Originator after taking account of (i) the time value of money based upon the
anticipated dates of collection of such Receivables and the cost to Buyer of
financing its investment in such Receivables during such period, (ii) the risk
of nonpayment by the Obligors, (iii) servicing costs, and (iv) factoring
expenses. Each Originator and Buyer may agree from time to time to change the
Discount Factor based on changes in one or more of the items affecting the
calculation thereof, PROVIDED THAT any change to the Discount Factor shall take
effect as of the commencement of a Calculation Period, shall apply only
prospectively and shall not affect the Purchase Price payment made prior
36
to the Calculation Period during which such Originator and Buyer agree to make
such change. As of the date hereof, the Discount Factor in respect of Eligible
Receivables is 1.4% and the Discount Factor in respect of all other Receivables
is 1.4%.
"EQUITY INTERESTS" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with any Originator within the meaning of
Section 414(b) or (c) of the Tax Code (and Sections 414(m) and (o) of the Tax
Code for purposes of provisions relating to Section 412 of the Tax Code).
"ERISA EVENT" has the meaning provided in the Parent Credit Agreement.
"EXECUTIVE OFFICER" shall mean with respect to any Person, the Chief
Executive Officer, President, Vice Presidents (if elected by the Board of
Directors of such Person), Chief Financial Officer, Treasurer, Secretary and any
Person holding comparable offices or duties (if elected by the Board of
Directors of such Person).
"FINANCE CHARGES" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.
"FINANCIAL OFFICER" means with respect to the Parent, any of the Chief
Financial Officer, Vice President of Finance, and Treasurer.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"INDEMNIFIED AMOUNTS" has the meaning set forth in Section 6.1.
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.1.
"INITIAL CONTRIBUTED ASSETS" has the meaning set forth in the
Preliminary Statements.
"INITIAL CONTRIBUTED RECEIVABLES" has the meaning set forth in the
Preliminary Statements.
37
"INITIAL CUTOFF DATE" means, for each Originator, the close of
business on the Business Day immediately preceding that date on which such
Originator became a party to this Agreement.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).
"LOCK-BOX" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and which is listed on Exhibit III hereto.
"MATERIAL" means, SOLELY WHEN CAPITALIZED, the measure of a matter of
significance which shall be determined as being more than an amount equal to the
greater of (i) Ten Million Dollars ($10,000,000) or (ii) ten percent (10%) of
the Consolidated Net Worth (as defined in the Parent Credit Agreement).
"MATERIAL ADVERSE EFFECT" means (i) any Material adverse effect on the
business, operations, financial condition or assets of the Parent and its
Restricted Subsidiaries, taken as a whole, (ii) any Material adverse effect on
the ability of any Transferor to perform its obligations under the Transaction
Documents to which it is a party, (iii) any material adverse effect on the
legality, validity or enforceability of the Agreement or any other Transaction
Document, (iv) any material adverse effect on any Transferor's, Buyer's, the
Administrative Agent's or any Lender's interest in the Receivables generally or
in any significant portion of the Receivables, the Related Security or
Collections with respect thereto, or (v) any material adverse effect on the
collectibility of the Receivables generally or of any material portion of the
Receivables.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NET WORTH" means as of the last Business Day of each Calculation
Period preceding any date of determination, the excess, if any, of (a) the
aggregate Outstanding Balance of the Receivables at such time plus cash-on-hand,
OVER (b) the sum of (i) the Aggregate Principal outstanding at such time, PLUS
(ii) the aggregate outstanding principal balance of the Subordinated Loans
(including any Subordinated Loan proposed to be made on the date of
determination).
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract.
"ORGANIZATIONAL DOCUMENTS" means, for any Person, the documents for
its formation and organization, which, for example, (a) for a corporation are
its corporate charter and bylaws, (b) for a partnership are its certificate of
partnership (if applicable) and partnership agreement, (c) for a limited
liability company are its certificate of formation or organization and
38
its operating agreement, regulations or the like and (d) for a trust is the
trust agreement, declaration of trust, indenture or bylaws under which it is
created.
"ORIGINAL BALANCE" means, with respect to any Receivable coming into
existence after the Initial Cutoff Date, the Outstanding Balance of such
Receivable on the date it was created.
"ORIGINATOR" has the meaning set forth in the preamble to the
Agreement.
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof.
"PARENT" has the meaning set forth in the preamble to the Agreement.
"PARENT CREDIT AGREEMENT" means that certain Credit Agreement, dated
as of June 6, 2005, among Rock-Tenn Company, Rock-Tenn Company of Canada, the
guarantors from time to time party thereto, the lenders from time to time party
thereto, Wachovia Bank, National Association, as administrative agent, SunTrust
Bank, as syndication agent, and Bank of America, N.A., as documentation agent,
as the same may be amended from time to time in accordance with the terms
thereof.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" has the meaning provided in the Parent Credit Agreement.
"PRIME RATE" means a rate per annum equal to the prime rate of
interest announced from time to time by Wachovia (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.
"PURCHASE" means the purchase by Buyer from an Originator pursuant to
Section 1.2(a) of the Agreement of the Receivables originated by such Originator
(other than Initial Contributed Receivables) and the Related Security and
Collections related thereto, together with all related rights in connection
therewith.
"PURCHASE PRICE" means, with respect to the Purchase from each
Originator, the aggregate price to be paid by Buyer to such Originator for such
Purchase in accordance with Section 1.3 of the Agreement for the Receivables
originated by such Originator and the associated Collections and Related
Security being sold to Buyer, which price shall equal on any date (i) the
product of (x) the Outstanding Balance of such Receivables on such date,
MULTIPLIED BY (y) one minus the Discount Factor in effect on such date, minus
(ii) any Purchase Price
39
Credits to be credited against the Purchase Price otherwise payable in
accordance with Section 1.4 of the Agreement.
"PURCHASE PRICE CREDIT" has the meaning set forth in Section 1.4 of
the Agreement.
"PURCHASE REPORT" has the meaning set forth in Section 1.2(b) of the
Agreement.
"RECEIVABLE" means all indebtedness and other obligations owed to an
Originator (at the times it arises, and before giving effect to any transfer or
conveyance under this Agreement) (including, without limitation, any
indebtedness, obligation or interest constituting an account, chattel paper,
instrument or general intangible) arising in connection with the sale of goods
or the rendering of services by such Originator to customers that are domiciled
in the United States or Canada and further includes, without limitation, the
obligation to pay any Finance Charges with respect thereto. Indebtedness and
other rights and obligations arising from any one transaction, including,
without limitation, indebtedness and other rights and obligations represented by
an individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other rights and obligations arising from any
other transaction; PROVIDED, FURTHER, that any indebtedness, rights or
obligations referred to in the immediately preceding sentence shall be a
Receivable regardless or whether the account debtor or such Originator treats
such indebtedness, rights or obligations as a separate payment obligation.
"RECORDS" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the applicable Originator's interest in the inventory
and goods (including returned or repossessed inventory or goods), if any,
the sale, financing or lease of which by such Originator gave rise to such
Receivable, and all insurance contracts with respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise,
40
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of the applicable Originator's right, title and interest
in each Lock-Box and each Collection Account, and
(vii) all proceeds of any of the foregoing.
"REPORTABLE EVENT" has the meaning set forth in Section 403(b) of
ERISA.
"REQUIRED CAPITAL AMOUNT" means, as of any date of determination, an
amount equal to the greater of (a) 3% of the Aggregate Commitment under the
Credit and Security Agreement, and (b) the product of (i) 1.5 times the product
of the Default Ratio times the Default Horizon Ratio, each as determined from
the most recent Monthly Report received from the Servicer under the Credit and
Security Agreement, and (ii) the Outstanding Balance of all Receivables as of
such date, as determined from the most recent Monthly Report received from the
Servicer under the Credit and Security Agreement.
"REQUIRED LIQUIDITY BANKS" has the meaning set forth in the Credit and
Security Agreement.
"RESTRICTED SUBSIDIARY" has the meaning provided in the Parent Credit
Agreement.
"REVIEW" has the meaning set forth in Section 4.1(d).
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"SERVICER" means at any time the Person (which may be the
Administrative Agent) then authorized pursuant to the Credit and Security
Agreement to service administer and collect Receivables.
"SETTLEMENT DATE" means, with respect to each Calculation Period, the
date that is the 15th calendar day of the month following such Calculation
Period.
"SUBORDINATED LOAN" has the meaning set forth in Section 1.3(a) of the
Agreement.
"SUBORDINATED NOTE" means a promissory note in substantially the form
of Exhibit VI hereto as more fully described in Section 1.3 of the Agreement, as
the same may be amended, restated, supplemented or otherwise modified from time
to time.
41
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, limited liability company, joint venture
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
"SYNTHETIC LEASE LIABILITIES" of a Person means any liability under
any tax retention operating lease or so-called "synthetic" lease transaction, or
any obligations arising with respect to any other similar transaction which is
the functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such Person and its
Subsidiaries (other than leases which do not have an attributable interest
component that are not Capitalized Leases).
"TAX CODE" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"TERMINATION DATE" means, as to each Originator, the earliest to occur
of (i) the Business Day immediately prior to the occurrence of a Termination
Event set forth in Section 5.1(f) with respect to such Originator, (ii) the
Business Day specified in a written notice from Buyer to such Originator
following the occurrence of any other Termination Event, and (iii) the date
which is 10 Business Days after Buyer's receipt of written notice from such
Originator that it wishes to terminate the facility evidenced by this Agreement.
"TERMINATION EVENT" has the meaning set forth in Section 5.1 of the
Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each
Collection Account Agreement, the Subordinated Note, and all other instruments,
documents and agreements executed and delivered in connection herewith.
"TRANSFEROR" means (a) as to the Initial Contributed Assets, each
applicable Originator and Parent, and (b) as to all other Receivables, together
with the associated Related Security and Collections, the applicable Originator.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"UNMATURED TERMINATION EVENT" means an event which, with the passage
of time or the giving of notice, or both, would constitute a Termination Event.
"WACHOVIA" means Wachovia Bank, National Association in its individual
capacity and its successors.
42
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE
STATE OF GEORGIA, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS
DEFINED IN SUCH ARTICLE 9.
43
EXHIBIT II
Places of Business; Locations of Records;
Federal Employer Identification Number(s); Other Names
ROCK-TENN COMPANY
Places of Business: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Locations of Records: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Federal Employer Identification Number: 00-0000000
Legal, Trade and Assumed Names: none
Organizational Identification Number: J518706
ROCK-TENN CONVERTING COMPANY
Place of Business: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Locations of Records: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Federal Employer identification Number: 00-0000000
Legal, Trade and Assumed Names: Alliance, a Rock-Tenn Company, Voxgrafica
Organizational Identification Number: J518594
ROCK-TENN COMPANY OF TEXAS
Places of Business: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Locations of Records: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Federal Employer Identification Number: 00-0000000
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
ROCK-TENN MILL COMPANY, LLC
Places of Business: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Locations of Records: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Federal Employer Identification Number: __________________
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
ROCK-TENN PACKAGING AND PAPERBOARD, LLC
Places of Business: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Locations of Records: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Federal Employer Identification Number: __________________
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
44
WALDORF CORPORATION
Places of Business: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Locations of Records: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Federal Employer Identification Number: 00-0000000
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
PCPC, INC.
Places of Business: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Locations of Records: 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Federal Employer Identification Number: __________________
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
ROCK-TENN FINANCIAL, INC.
Places of Business: 0000 Xxxxxx Xxxxx Xxxx., Xxxxxxx-Xxxxx, XX 00000
Locations of Records: 0000 Xxxxxx Xxxxx Xxxx., Xxxxxxx-Xxxxx, XX 00000
Federal Employer Identification Number: 00-0000000
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
45
EXHIBIT III
Lock-boxes; Collection Accounts; Collection Banks
LOCK-BOX RELATED COLLECTION ACCOUNT
-------- --------------------------
P.O. Box 102064 Account No. 8800849666 at
Xxxxxxx, Xxxxxxx 00000 SunTrust Bank in Atlanta, Georgia
ABA Xx. 000000000
X.X. Xxx 000000 Account No. 2018661618358 at
Xxxxxxxxx, X.X. 00000 Wachovia Bank in Charlotte, North Carolina
ABA No. 0530000219
46
EXHIBIT IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that certain
Amended and Restated Receivables Sale Agreement dated as of October 26, 2005,
among Rock-Tenn Company (the "PARENT"), and certain of its subsidiaries, as
Originators, and Rock-Tenn Financial, Inc., as buyer (the "AGREEMENT").
Capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of the Parent.
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Parent and its Subsidiaries during the accounting period
covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Termination Event or an Unmatured Termination Event, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate[, except as set forth below].
[4. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Originator has taken, is taking, or
proposes to take with respect to each such condition or event:
_______________________________].
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ____ day of
______________, 200_.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
47
EXHIBIT V
Credit and Collection Policy
[SEE ATTACHED]
48
EXHIBIT VI
Form of Subordinated Note
SUBORDINATED NOTE
October 26, 2005
1. Note. FOR VALUE RECEIVED, the undersigned, Rock-Tenn Financial,
Inc., a Delaware corporation ("SPV"), hereby unconditionally promises to pay to
the order of [ORIGINATOR NAME], a(n) __________ ***[corporation] [limited
liability company] [partnership]*** ("ORIGINATOR"), in lawful money of the
United States of America and in immediately available funds, on or before the
date following the applicable Termination Date which is one year and one day
after the date on which (i) the Outstanding Balance of all Receivables sold by
Originator under the "Sale Agreement" referred to below has been reduced to zero
and (ii) Originator has paid to Buyer all indemnities, adjustments and other
amounts which may be owed thereunder in connection with the Purchase thereunder
(the "COLLECTION DATE"), the aggregate unpaid principal sum outstanding of all
"Subordinated Loans" made from time to time by Originator to SPV pursuant to and
in accordance with the terms of that certain Amended and Restated Receivables
Sale Agreement dated as of October 26, 2005 among Originator and certain of its
affiliates, as sellers, and SPV, as buyer (as amended, restated, supplemented or
otherwise modified from time to time, the "SALE AGREEMENT"). Reference to
Section 1.3 of the Sale Agreement is hereby made for a statement of the terms
and conditions under which the loans evidenced hereby have been and will be
made. All terms which are capitalized and used herein and which are not
otherwise specifically defined herein shall have the meanings ascribed to such
terms in the Sale Agreement.
2. Interest. SPV further promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full hereof
at a rate equal to the 1-month LIBOR rate published in THE WALL STREET JOURNAL
on the first Business Day of each month (or portion thereof) during the term of
this Subordinated Note, computed for actual days elapsed on the basis of a year
consisting of 360 days and changing on the first business day of each month
hereafter ("LIBOR"); PROVIDED, HOWEVER, that if SPV shall default in the payment
of any principal hereof, SPV promises to pay, on demand, interest at the rate
equal to LIBOR plus 2.00% per annum on any such unpaid amounts, from the date
such payment is due to the date of actual payment. Interest shall be payable on
the first Business Day of each month in arrears; PROVIDED, HOWEVER, that SPV may
elect on the date any interest payment is due hereunder to defer such payment
and upon such election the amount of interest due but unpaid on such date shall
constitute principal under this Subordinated Note. The outstanding principal of
any loan made under this Subordinated Note shall be due and payable on the
Collection Date and may be repaid or prepaid at any time without premium or
penalty.
49
3. Principal Payments. Originator is authorized and directed by SPV to
enter on the grid attached hereto, or, at its option, in its books and records,
the date and amount of each loan made by it which is evidenced by this
Subordinated Note and the amount of each payment of principal made by SPV, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered; PROVIDED THAT neither the failure of
Originator to make any such entry or any error therein shall expand, limit or
affect the obligations of SPV hereunder.
4. Subordination. Originator shall have the right to receive, and SPV
shall make, any and all payments and prepayments relating to the loans made
under this Subordinated Note PROVIDED THAT, after giving effect to any such
payment or prepayment, the aggregate Outstanding Balance of Receivables (as each
such term is defined in the Credit and Security Agreement hereinafter referred
to) owned by SPV at such time exceeds the sum of (a) the Obligations (as defined
in the Credit and Security Agreement) outstanding at such time under the Credit
and Security Agreement, plus (b) the aggregate outstanding principal balance of
all loans made under this Subordinated Note. Originator hereby agrees that at
any time during which the conditions set forth in the proviso of the immediately
preceding sentence shall not be satisfied, Originator shall be subordinate in
right of payment to the prior payment of any indebtedness or obligation of SPV
owing to the Administrative Agent or any Lender under that certain Amended and
Restated Credit and Security Agreement dated as of October 26, 2005 by and among
SPV, Rock-Tenn Converting Company, as initial Servicer, various "Lenders" and
"Co-Agents" from time to time party thereto, and Wachovia Bank, National
Association, as the "Administrative Agent" (as amended, restated, supplemented
or otherwise modified from time to time, the "CREDIT AND SECURITY AGREEMENT").
The subordination provisions contained herein are for the direct benefit of, and
may be enforced by, the Administrative Agent and the Lenders and/or any of their
respective assignees (collectively, the "SENIOR CLAIMANTS") under the Credit and
Security Agreement. Until the date on which the "Aggregate Principal"
outstanding under the Credit and Security Agreement has been repaid in full and
all other obligations of SPV and/or the Servicer thereunder and under the "Fee
Letter" referenced therein (all such obligations, collectively, the "SENIOR
CLAIM") have been indefeasibly paid and satisfied in full, Originator shall not
institute against SPV any proceeding of the type described in Section 5.1(f) of
the Sale Agreement unless and until the Collection Date has occurred. Should any
payment, distribution or security or proceeds thereof be received by Originator
in violation of this Section 4, Originator agrees that such payment shall be
segregated, received and held in trust for the benefit of, and deemed to be the
property of, and shall be immediately paid over and delivered to the
Administrative Agent for the benefit of the Senior Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of
the type described in Section 5.1(f) of the Sale Agreement involving SPV as
debtor, then and in any such event the Senior Claimants shall receive payment in
full of all amounts due or to become due on or in respect of the Aggregate
Principal and the Senior Claim (including "Interest" as defined and as accruing
under the Credit and Security Agreement after the commencement of any such
proceeding, whether or not any or all of such Interest is an allowable claim in
any such proceeding) before Originator is entitled to receive payment on account
of this Subordinated
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Note, and to that end, any payment or distribution of assets of SPV of any kind
or character, whether in cash, securities or other property, in any applicable
insolvency proceeding, which would otherwise be payable to or deliverable upon
or with respect to any or all indebtedness under this Subordinated Note, is
hereby assigned to and shall be paid or delivered by the Person making such
payment or delivery (whether a trustee in bankruptcy, a receiver, custodian or
liquidating trustee or otherwise) directly to the Administrative Agent for
application to, or as collateral for the payment of, the Senior Claim until such
Senior Claim shall have been paid in full and satisfied.
6. Amendments. This Subordinated Note shall not be amended or modified
except in accordance with Section 7.1 of the Sale Agreement. The terms of this
Subordinated Note may not be amended or otherwise modified without the prior
written consent of the Administrative Agent for the benefit of the Lenders.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED
IN THE STATE OF GEORGIA, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF
THE STATE OF GEORGIA. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
SUBORDINATED NOTE.
8. Waivers. All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor. Originator additionally expressly waives all notice of the
acceptance by any Senior Claimant of the subordination and other provisions of
this Subordinated Note and expressly waives reliance by any Senior Claimant upon
the subordination and other provisions herein provided.
9. Assignment. This Subordinated Note may not be assigned, pledged or
otherwise transferred to any party other than Originator without the prior
written consent of the Administrative Agent, and any such attempted transfer
shall be void.
ROCK-TENN FINANCIAL, INC.
By:
------------------------------------
Title:
---------------------------------
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SCHEDULE
TO
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
AMOUNT OF AMOUNT OF UNPAID
SUBORDINATED PRINCIPAL PRINCIPAL NOTATION MADE BY
DATE LOAN PAID BALANCE (INITIALS)
---- ------------ --------- --------- ----------------
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EXHIBIT VII
[Form of] Purchase Report
For the Calculation Period beginning [date] and ending [date]
TO: BUYER AND THE ADMINISTRATIVE AGENT (AS BUYER'S ASSIGNEE)
Aggregate Outstanding Balance of all
Receivables sold during the period: $_______ A
LESS: Aggregate Outstanding Balance of all
Receivables sold during such period which
were not Eligible Receivables on the date
when sold: ($_____) (B)
EQUALS: Aggregate Outstanding Balance of
all Eligible Receivables sold during the
period (A - B): $_______ =C
LESS: Purchase Price discount during the
Period: ($_____) (D)
EQUALS: Gross Purchase Price Payable
during the period (C - D) $_______ =E
LESS: Total Purchase Price Credits arising
during the Period: ($_____) (F)
EQUALS: Net Purchase Price payable during
the Period (E - F): $_______ =G
Cash Purchase Price Paid to Originator
during the Period: $_______ H
Subordinated Loans made during the Period: $_______ I
LESS: Repayments of Subordinated Loans
received during the Period: ($_____) (J)
EQUALS: Purchase Price paid in Cash or
Subordinated Loans during the period
(H + I - J): $_______ =K
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SCHEDULE AB
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE DATE OF THIS AGREEMENT
1. Executed copies of the Receivables Sale Agreement, duly executed by the
parties thereto.
2. Copy of the Credit and Collection Policy to attach to the Receivables Sale
Agreement as an Exhibit.
3. A certificate of each Transferor's [Assistant] Secretary certifying:
(a) A copy of the Resolutions of the Board of Directors of such
Transferor, authorizing such Transferor's execution, delivery and performance of
the Receivables Sale Agreement and the other documents to be delivered by it
thereunder;
(b) A copy of the Organizational Documents of such Transferor (also
certified, to the extent that such documents are filed with any governmental
authority, by the Secretary of State of the jurisdiction of organization of such
Originator on or within thirty (30) days prior to closing);
(c) Good Standing Certificates for such Transferor issued by the
Secretaries of State of its state of incorporation and each jurisdiction where
it has material operations; and
(d) The names and signatures of the officers authorized on its behalf
to execute the Receivables Sale Agreement and any other documents to be
delivered by it thereunder.
4. Pre-filing state and federal tax lien, judgment lien and UCC lien searches
against each Transferor from the following jurisdictions:
a.
b.
5. Time stamped receipt copies of proper financing statements, duly filed
under the UCC on or before the date of the initial Purchase (as defined in
the Receivables Sale Agreement) in all jurisdictions as may be necessary
or, in the opinion of Buyer (or its assigns), desirable, under the UCC of
all appropriate jurisdictions or any comparable law in order to perfect the
ownership interests contemplated by the Receivables Sale Agreement.
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6. Time stamped receipt copies of proper UCC termination statements, if any,
necessary to release all security interests and other rights of any Person
in the Receivables, Contracts or Related Security previously granted by
each Transferor.
7. Executed Collection Account Agreements for each Lock-Box and Collection
Account.
8. A favorable opinion of legal counsel for the Transferors licensed to give
opinions under Georgia law reasonably acceptable to Buyer (and the
Administrative Agent, as Buyer's assignee) as to the following:
(a) Due organization, valid existence, and in good standing of such
Transferor.
(b) Requisite authority of such Transferor to conduct its business in
each jurisdiction where failure to be so qualified would have a material adverse
effect on such Originator's business.
(c) Due authorization, execution, delivery by such Transferor of the
Receivables Sale Agreement and each other Transaction Document to which it is a
party.
(d) No filings (other than financing statements) required and
noncontravention of applicable laws, Organization Documents, Material contracts
and court orders; or
(iii) No creation of any Adverse Claim (except as created under
the Transaction Documents)
(d) Enforceability of the Receivables Sale Agreement and each other
Transaction Document to which such Transferor is a party.
(e) Proper form for filing of UCC-1 and UCC-3 financing statements.
(f) Valid creation, perfection and filing priority of the security
interests purported to be created by the Receivables Sale Agreement.
(h) Absence of any Material adverse litigation.
(i) Such Transferor is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
9. A "TRUE SALE/ABSOLUTE ASSIGNMENT" opinion and "SUBSTANTIVE CONSOLIDATION"
opinion of counsel for the Transferors with respect to the transactions
contemplated by the Receivables Sale Agreement.
10. A Certificate of a Financial Officer of Parent certifying that, as of the
closing date, no Termination Event or Unmatured Termination Event exists
and is continuing.
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11. Executed copies of (i) all consents from and authorizations by any Persons
and (ii) all waivers and amendments to existing credit facilities, that are
necessary in connection with the Receivables Sale Agreement.
12. Executed Subordinated Note by Buyer in favor of each Originator.
13. If applicable, a direction letter executed by each Transferor authorizing
Buyer (and the Administrative Agent, as its assignee) and directing
warehousemen to allow Buyer (and the Administrative Agent, as its assignee)
to inspect and make copies from such Transferor's books and records
maintained at off-site data processing or storage facilities.
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