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EXHIBIT 10.7
Receivables Sale Agreement dated as of August 22,1996 by and between Printpack,
Inc. and Flexible Funding Corp.
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[INTERCOMPANY TRUE SALE AGREEMENT]
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RECEIVABLES SALE AGREEMENT
DATED AS OF AUGUST 22, 1996
BETWEEN
PRINTPACK, INC.,
AS THE ORIGINATOR
AND
FLEXIBLE FUNDING CORP.,
AS THE BUYER
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ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES 1
Section 1.1. Purchases of Receivables. 1
Section 1.2. Payment for the Purchases. 3
Section 1.3. Purchase Price Credit Adjustments 5
Section 1.4. Payments and Computations, Etc. 5
Section 1.5. Transfer of Records 6
Section 1.6. Characterization 6
ARTICLE II REPRESENTATIONS AND WARRANTIES 7
Section 2.1. Originator Representations and Warranties. 7
(a) Corporate Existence and Power. 7
(b) No Conflict. 7
(c) Governmental Authorization 7
(d) Binding Effect. 8
(e) Accuracy of Information. 8
(f) Use of Proceeds. 8
(g) Good Title; Perfection. 8
(h) Places of Business. 8
(i) Collection Banks; etc. 9
(j) Financial Statements; Material Adverse Effect 9
(k) Names 9
(l) Actions, Suits 10
(m) Credit and Collection Policy. 10
(n) Payments to Originator. 10
(o) Ownership of the Buyer. 10
(p) Not an Investment Company. 10
(q) Eligibility of Receivables 10
(r) Purpose. 10
(s) ERISA. 11
ARTICLE III CONDITIONS OF PURCHASES 11
Section 3.1. Conditions Precedent to Initial Purchase 11
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Section 3.2. Conditions Precedent to All Purchases 11
ARTICLE IV COVENANTS 12
Section 4.1. Affirmative Covenants of Originator 12
(a) Financial Reporting. 12
(i) Annual Reporting. 12
(ii) Quarterly Reporting. 12
(iii) Compliance Certificate. 13
(iv) Shareholders Statements and Reports. 13
(v) S.E.C. Filings 13
(vi) Notices under Transaction Documents 13
(vii) Change in Credit and Collection Policy 13
(viii) Other Information 13
(b) Notices. 13
(i) Events of Default or Potential Events of Default. 14
(ii) Litigation. 14
(iii) ERISA. 14
(iv) Downgrade. 14
(c) Compliance with Laws. 14
(d) Audits. 14
(e) Keeping and Marking of Records and Books. 15
(f) Compliance with Contracts and Credit and Collection Policy 15
(g) Ownership Interest. 15
(h) Purchasers' Reliance. 15
(i) Collections. 16
(j) ERISA. 17
(k) Lines of Business. 17
Section 4.2. Negative Covenants of Originator 17
(a) Name Change, Offices, Records and Books of Accounts. 17
(b) Change in Payment Instructions to Obligors. 17
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(c) Modifications to Credit and Collection Policy. 17
(d) Sales, Liens, Etc. 18
(e) Accounting for Purchases. 18
ARTICLE V ADMINISTRATION AND COLLECTION 18
Section 5.1. Designation of Sub-Servicer 18
Section 5.2. Duties of Sub-Servicer 19
Section 5.3. Collection Account Agreements 20
Section 5.4. Responsibilities of the Originator 20
Section 5.5. Receivables Reports. 20
Section 5.6. Sub-Servicer Fee. 21
ARTICLE VI EVENTS OF DEFAULT 21
Section 6.1. Events of Default. 21
Section 6.2. Remedies 22
ARTICLE VII INDEMNIFICATION 23
Section 7.1. Indemnities by the Originator 23
Section 7.2. Other Costs and Expenses 25
ARTICLE VIII MISCELLANEOUS 25
Section 8.1. Waivers and Amendments 25
Section 8.2. Notices. 25
Section 8.3. Protection of Buyer's Interests 26
Section 8.4. Confidentiality 26
Section 8.5. Bankruptcy Petition 27
Section 8.6. Limitation of Liability. 27
Section 8.7. CHOICE OF LAW. 28
Section 8.8. CONSENT TO JURISDICTION 28
Section 8.9. WAIVER OF JURY TRIAL 28
Section 8.10. Binding Effect; Assignability 29
Section 8.11. Subordination 29
Section 8.12. Integration; Survival of Terms. 30
Section 8.13. Counterparts; Severability. 30
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EXHIBIT I DEFINITIONS 32
EXHIBIT II CHIEF EXECUTIVE OFFICE OF THE ORIGINATOR;
LOCATIONS OF RECORDS; TRADE NAMES; FEDERAL EMPLOYER
IDENTIFICATION NUMBER 42
EXHIBIT III COLLECTION ACCOUNTS; LOCK-BOXES; CONCENTRATION
ACCOUNTS; AND DEPOSITARY ACCOUNTS 44
EXHIBIT IV FORM OF COMPLIANCE CERTIFICATE 45
EXHIBIT V FORM OF COLLECTION ACCOUNT AGREEMENT 46
EXHIBIT VI CREDIT AND COLLECTION POLICY 50
EXHIBIT VII FORM OF MONTHLY REPORT 51
EXHIBIT VIII FORM OF WEEKLY REPORT 52
EXHIBIT IX FORM OF SUBSCRIPTION AGREEMENT 53
Exhibit A to Stockholder and Subscription Agreement
Form of Certificate of Incorporation 60
Exhibit B to Stockholder and Subscription Agreement
Form of By-laws 71
EXHIBIT X FORM OF SUBORDINATED NOTE 87
SCHEDULE A DOCUMENTS AND RELATED ITEMS TO BE DELIVERED ON OR
PRIOR TO THE INITIAL PURCHASE 92
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THIS RECEIVABLES SALE AGREEMENT, dated as of August 22, 1996, is by and
between PRINTPACK, INC., a Georgia corporation (the "ORIGINATOR"), and FLEXIBLE
FUNDING CORP., a Delaware corporation (the "BUYER"). Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in EXHIBIT I hereto.
PRELIMINARY STATEMENTS
The Originator now owns, and from time to time hereafter will
own, Receivables. The Originator wishes to sell and assign to the
Buyer, and the Buyer wishes to purchase from the Originator, all
right, title and interest of the Originator in and to the
Receivables now and hereafter arising.
The Originator and the Buyer believe that it is in their
mutual best interests for the Originator to sell the Receivables
to the Buyer and for the Buyer to purchase the Receivables.
The Originator and the Buyer intend this transaction to be a
true sale of the Receivables from the Originator to the Buyer,
providing the Buyer with the full benefits of ownership of the
Receivables, and the Originator and the Buyer do not intend this
transaction to be, or for any purpose to be characterized as, a
loan from the Buyer to the Originator.
Upon purchasing the Receivables from the Originator, the
Buyer will sell interests in all or a portion of the Receivables
and certain related rights pursuant to that certain Receivables
Purchase Agreement dated as of August 22, 1996 (as the same may
from time to time hereafter be amended, supplemented, restated or
otherwise modified, the "PURCHASE AGREEMENT") among the Buyer,
Falcon Asset Securitization Corporation ("FALCON"), the financial
institutions parties thereto as "INVESTORS" and The First National
Bank of Chicago ("FIRST CHICAGO"), as agent for FALCON and such
Investors (in such capacity, the "AGENT").
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchases of Receivables.
(a) Effective on the date of the initial Purchase hereunder, in
consideration for the Purchase Price and upon the terms and subject to the
conditions set forth herein, the Originator does hereby sell, assign, transfer,
set-over and otherwise convey to the Buyer, without
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recourse (except to the extent expressly provided herein), and the Buyer does
hereby purchase from the Originator, on the term and subject to the conditions
set forth herein, all of the Originator's right, title and interest in
and to all Receivables existing as of the close of business on the date of such
initial Purchase and all Receivables thereafter arising, together, in each
case, with all Related Security relating there to and all Collections thereof;
PROVIDED, HOWEVER, that in no event shall the Buyer purchase, or the Originator
sell, any Receivable arising after the Termination Date. On the date of the
initial Purchase, the Buyer shall acquire all of the Originator's right, title
and interest in and to all Receivables existing as of the close of business on
such date (together with all Related Security relating thereto and all
Collections thereof). On each Business Day thereafter through and including
the Termination Date, the Buyer shall acquire all of the Originator's right,
title and interest in and to all Receivables which were not previously
purchased by the Buyer hereunder upon the creation of such Receivables
(together with all Related Security relating thereto and all Collections
thereof), PROVIDED THAT the acquisition by the Buyer of such right, title and
interest of the Originator in connection with each Purchase hereunder is
conditioned upon and subject to the Originator's receipt of the Purchase Price
therefor in accordance with SECTION 1.2 below. In connection with consummation
of any Purchase hereunder, the Buyer may request that the Originator deliver,
and the Originator shall deliver, such approvals, opinions, information,
reports or documents as the Buyer may reasonably request.
(b) It is the intention of the parties hereto that each Purchase of
Receivables made hereunder shall constitute a "sale of accounts," as such term
is used in Article 9 of the UCC, which sales are absolute and irrevocable and
provide the Buyer with the full benefits of ownership of the Receivables.
Except for the Purchase Price Credits owed pursuant to SECTION 1.3 hereof, each
sale of Receivables hereunder is made without recourse to the Originator;
PROVIDED, HOWEVER, that (i) the Originator shall be liable to the Buyer for all
representations, warranties and covenants made by the Originator pursuant to
the terms of the Transaction Documents, and (ii) such sale does not constitute
and is not intended to result in an assumption by the Buyer or any assignee
thereof of any obligation of the Originator or any other Person arising in
connection with the Receivables, the related Contracts and/or other Related
Security or any other obligations of the Originator. In view of the intention
of the parties hereto that the Purchases of Receivables made hereunder shall
constitute sales of such Receivables rather than loans secured by such
Receivables, the Originator agrees on or prior to the date hereof to xxxx its
master data processing records relating to the Receivables with a legend,
acceptable to the Buyer, evidencing that the Buyer has purchased such
Receivables as provided in this Agreement and to note in its financial
statements that its Receivables have been sold to the Buyer. Upon the request
of the Buyer or the Agent, the 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 the Buyer's ownership interest in the
Receivables, the Related Security and the Collections, or as the Buyer or the
Agent may reasonably request.
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Section 1.2. Payment for the Purchases.
(a) The Purchase Price for the initial Purchase of Receivables shall
be payable in full by the Buyer to the Originator on the date of such initial
Purchase, and shall be paid to the Originator in the following manner:
(i) by delivery of immediately available funds, to the extent
of funds made available to the Buyer in connection with its
subsequent sale of an interest in such Receivables to the
Purchasers under the Purchase Agreement,
(ii) by the issuance of equity in the manner contemplated in
the Subscription Agreement and having a value of not less than
$100,000, and
(iii) the balance, with the proceeds of a Subordinated Loan.
The Purchase Price for each Purchase after the initial Purchase shall become
due and owing in full by the Buyer to the Originator or its designee on the
date of such Purchase (EXCEPT THAT the Buyer may, with respect to any such
Purchase, offset against such Purchase Price any amounts owed by the Originator
to the Buyer hereunder and which have become due but remain unpaid) and shall
be paid to the Originator in the manner provided in the following paragraphs
(b), (c) and (d).
(b) With respect to any Purchase hereunder, at the time of
settlement of the Purchase Price therefor pursuant to paragraph (d) below, the
Buyer may elect to pay all or any part of, the applicable Purchase Price by
borrowing from the Originator a subordinated revolving loan (each, a
"SUBORDINATED LOAN"), and the Originator, subject to the remaining provisions
of this paragraph, irrevocably agrees to advance such Subordinated Loan in the
amount so specified by the Buyer (which amount, unless otherwise specified by
the Buyer, shall be deemed to be the lesser of (i) the aggregate Purchase Price
which remains owing to the Originator in connection with such settlement after
giving effect to funds received by the Originator which have been applied
thereto, and (ii) the maximum Subordinated Loan which may then be borrowed
under the restrictions set forth in the following sentence). Notwithstanding
the foregoing, the Originator is not committed to make any Subordinated Loan
(and the Buyer's right to make the election described hereinabove shall not be
effective), if and to the extent that, as of the end of the last Business Day
of the Calculation Period to which such settlement relates (or such other date
of determination as may be applicable pursuant to the proviso in paragraph (c)
below) and as a result of making such loan, either: (1) the aggregate
outstanding amount of the Subordinated Loans would exceed an amount equal to
THE SUM OF (x) the aggregate Outstanding Balance of the "ELIGIBLE RECEIVABLES"
under and as defined in the Purchase Agreement at such time, PLUS (y) 97% of
the aggregate Outstanding Balance of Receivables which are not "ELIGIBLE
RECEIVABLES" under and as defined in the Purchase Agreement at such time, MINUS
(z) the aggregate Capital outstanding at such time under the Purchase
Agreement, or (2) the Buyer's Net Worth would be less than $100,000, or (3) the
amount of the Subordinated Loan then being made would exceed an amount equal to
the Purchase Price payable in connection with the Purchases during such
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Calculation Period (or such other date or period as may be applicable pursuant
to the proviso in paragraph (c) below) MINUS funds then being made available
under the Purchase Agreement or otherwise then available to the Buyer during or
with respect to such Month Period (or such other date or period, if
applicable). The Subordinated Loans shall be evidenced by, and shall be
payable in accordance with the terms and provisions of, a promissory note in
the form of EXHIBIT X hereto (the "SUBORDINATED NOTE") and shall be payable
solely from funds which the Buyer is not required under the Purchase Agreement
to set aside for the benefit of, or otherwise pay over to, the Agent and/or the
Purchasers.
(c) In the case of any Purchase subsequent to the initial Purchase, if the
Buyer has insufficient funds to pay in full the applicable Purchase Price
(after taking account of the proceeds of Subordinated Loans available to the
Buyer), then the Originator shall be deemed to have contributed to the capital
of the Buyer Receivables having a Purchase Price equal to the otherwise unpaid
portion of the total Purchase Price owing for such Purchase, which capital
contributions shall be determined on an aggregate basis for the Calculation
Period in which such Purchase occurred in connection with the settlement for
such Calculation Period effected pursuant to paragraph (d) below; PROVIDED,
HOWEVER, that no such deemed capital contribution shall be made from and after
the date on which the Originator notifies the Buyer in writing that it has
designated a date as the Termination Date, and the Originator shall not be
obligated to convey Receivables to the Buyer or otherwise consummate Purchases
hereunder from and after such date unless the Originator reasonably determines
that the Purchase Price therefor will be satisfied with funds available to the
Buyer from Collections or otherwise or with the proceeds of Subordinated Loans.
(d) On each Business Day during a Calculation Period after the date of the
initial Purchase, all Collections available to the Buyer (after setting aside
amounts required to be set aside for the benefit of, or otherwise paid over to,
the Agent and/or the Purchasers in accordance with the Purchase Agreement)
shall be paid directly to the Originator and, subject to receipt by the
Originator of the sub-Servicer Fee payable by the Buyer pursuant to SECTION 5.6
hereof for the Calculation Period in which such Business Day occurs, shall be
applied as payments toward the Purchase Price of Receivables conveyed by the
Originator to the Buyer during such Calculation Period. Although amounts shall
be paid directly to the Originator on a daily basis in accordance with the
first sentence of this paragraph, settlement of the Purchase Price between the
Borrower and the Originator shall be effected on a fiscal monthly basis with
respect to all Purchases within the same Calculation Period concurrently with
the delivery of the Monthly Report relating to such Calculation Period
pursuant to SECTION 5.5 hereof and based on the information contained therein.
In addition to such other information as may be included therein, each Monthly
Report shall set forth the following with respect to the related Calculation
Period: (i) the aggregate Outstanding Balance of Receivables created and
conveyed in Purchases during such Calculation Period, (ii) the aggregate
Purchase Price payable to the Originator in respect of such Purchases,
specifying the Discount Factor in effect for such Calculation Period and the
aggregate Purchase Price Credits deducted in calculating such aggregate
Purchase Price, (iii) the
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aggregate amount of funds received by the Originator during such Calculation
Period which are to be applied toward the aggregate Purchase Price owing for
such Calculation Period pursuant to the first sentence of this paragraph, (iv)
the increase or decrease in the amount outstanding under the Subordinated Note
as of the end of such monthly Period after giving effect to the application of
funds toward the aggregate Purchase Price and the restrictions on Subordinated
Loans set forth in paragraph (b) above, and (v) the amount of any capital
contribution made by the Originator to the Buyer as of the end of such
Calculation Period pursuant to paragraph (c) above. Although settlement shall
be effected concurrently with the delivery of each Monthly Report, increases or
decreases in the amount owing under the Subordinated Note made pursuant to
paragraph (b) above and any contribution of capital by the Originator to the
Buyer made pursuant to paragraph (c) above 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 1.3. Purchase Price Credit Adjustments. If on any day the
Outstanding Balance of a Receivable is either (x) reduced as a result of any
defective goods or services, any cash discount or any adjustment by the
Originator (whether individually or in its performance of duties as
Sub-Servicer), or (y) 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 and whether such claim relates to the
Originator or any Affiliate thereof) or (z) is otherwise reduced as a result of
any of the factors set forth in the definition of Dilutions, then, in such
event, the Buyer shall be entitled to a credit (each, a "PURCHASE PRICE
CREDIT") against the Purchase Price otherwise payable hereunder equal to the
full amount of such reduction or cancellation. If such Purchase Price Credit
exceeds the Original Balance of the Receivables to be sold hereunder on any
date, then the Originator shall pay the remaining amount of such Purchase Price
Credit in cash on the next succeeding Business Day; PROVIDED THAT, if the
Termination Date has not occurred, the Originator shall be allowed to deduct
the remaining amount of such Purchase Price Credit from any indebtedness owed
to it under the Subordinated Note. Upon the payment (through offset or
otherwise) of any Purchase Price Credit relating to returned or repossessed
goods, all right, title and interest in and to such goods shall be re-vested in
the Originator and the Buyer shall have no further interest therein.
Section 1.4. Payments and Computations, Etc. All amounts to be paid or
deposited by the 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 Originator designated from time to time by the Originator or as
otherwise directed by the Originator. In the event that any payment owed by
any Person hereunder becomes due on a day which is not a Business Day, then
such payment shall be made on the next succeeding Business Day. Any amount due
hereunder which is not paid when due hereunder shall bear interest at the Base
Rate as in effect from time to time until paid in full; PROVIDED, HOWEVER, that
such interest 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.
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Section 1.5. Transfer of Records.
(a) In connection with the Purchases of Receivables hereunder, the
Originator hereby sells, transfers, assigns and otherwise conveys to the Buyer
all of the Originator's right and title to and interest in the Records relating
to all Receivables sold hereunder, without the need for any further
documentation in connection with any Purchase. In connection with such
transfer, the Originator hereby grants to each of the Buyer and the Servicer an
irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by the Originator to account for the Receivables, to
the extent necessary to administer the Receivables, whether such software is
owned by the Originator or is owned by others and used by the Originator under
license agreements with respect thereto, PROVIDED THAT should the consent of
any licensor of the Originator to such grant of the license described herein be
required, the Originator hereby agrees that upon the request of the Buyer (or
the Agent as the Buyer's assignee) it will use its reasonable efforts to obtain
the consent of such third-party licensor. The license granted hereby shall be
irrevocable, and shall terminate on the date this Agreement terminates in
accordance with its terms.
(b) The Originator (i) shall take such action requested by the Buyer
and/or the Agent, from time to time hereafter, that may be necessary or
appropriate to ensure that the Buyer and its assigns under the Purchase
Agreement have an enforceable ownership interest in the Records relating to the
Receivables purchased from the Originator hereunder and (ii) shall use its
reasonable efforts to ensure that the Buyer and the Servicer each has an
enforceable right (whether by license or sublicense or otherwise) to use all of
the computer software used to account for the Receivables and/or to recreate
such Records.
Section 1.6. Characterization. If, notwithstanding the intention of the
parties expressed in SECTION 1.1(B), the conveyance by the Originator to the
Buyer of Receivables hereunder shall be characterized as a secured loan and not
a sale, this Agreement shall constitute a security agreement under the UCC and
other applicable law. For this purpose, the Originator hereby grants to the
Buyer a duly perfected security interest in all of the Originator's right,
title and interest in, to and under the Receivables, the Collections, each
Collection Account, all Related Security, all payments on or with respect to
such Receivables, all other rights relating to and payments made in respect of
the Receivables, and all proceeds of any thereof which security interest shall
be prior to all other liens on and security interests therein. After an Event
of Default, the Buyer and its assignees 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 after default 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. Originator Representations and Warranties. The Originator
hereby represents and warrants, individually and in its capacity as
Sub-Servicer, to the Buyer and its assigns that:
(a) Corporate Existence and Power. The Originator is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation, and has all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in
each jurisdiction in which it conducts its business and where the failure to
obtain such license, authorization, consent or approval would have a Material
Adverse Effect.
(b) No Conflict. The execution, delivery and performance by the
Originator of this Agreement and each other Transaction Document, and the
Originator's use of the proceeds of Purchases made hereunder, are within its
corporate powers, have been duly authorized by all necessary corporate action,
do not contravene or violate (i) its articles of incorporation or by-laws, (ii)
any law, rule or regulation applicable to it the contravention of which would or
could reasonably be expected to have a Material Adverse Effect, (iii) any
restrictions under any material agreement, contract or instrument to which it
is a party or by which it or any of its property is bound, or (iv) any material
order, writ, judgment, award, injunction or decree binding on or affecting it
or its property, and do not result in the creation or imposition of any Adverse
Claim on assets of the Originator or its Subsidiaries (except as created
hereunder); and no transaction contemplated hereby requires compliance with any
bulk sales act or similar law. This Agreement and each other Transaction
Document to which the Originator is a party have been duly authorized, executed
and delivered by the Originator.
(c) 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, delivery and performance by the Originator
of the Transaction Documents.
(d) Binding Effect. The Transaction Documents constitute the legal, valid
and binding obligations of the Originator enforceable against the Originator in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally.
(e) Accuracy of Information. All information heretofore furnished by the
Originator or any of its Affiliates to the Buyer, the Agent or the Purchasers
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 the Originator or any of its
Affiliates to the Buyer, the Agent and/or the Purchasers will be, true and
accurate in every material respect, on the date such information is stated or
certified and does not and will not
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contain any material misstatement of fact or omit to state a material fact or
any fact necessary to make the statements contained therein not misleading.
(f) Use of Proceeds. No proceeds of any Purchase hereunder will be
used (i) for a purpose which violates, or would be inconsistent with,
Regulation G, T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 13 or 14 of the Securities Exchange Act
of 1934, as amended.
(g) Good Title; Perfection. Immediately prior to each Purchase
hereunder, the Originator shall be the legal and beneficial owner of the
Receivables and Related Security with respect thereto, free and clear of any
Adverse Claim, except as created by the Transaction Documents and except for
the lien of the Bank Agent which will be automatically released simultaneously
with each such Purchase in accordance with the Intercreditor Agreement. This
Agreement is effective to, and shall, upon each Purchase hereunder, irrevocably
transfer to the Buyer legal and equitable title to, with the legal right to
sell and encumber, such Receivables and the Related Security, free and clear
of any Adverse Claim except as otherwise created by the Buyer under the
Purchase Agreement. Without limiting the foregoing, there has been duly filed
all financing statements or other similar instruments or documents necessary
under the UCC of all appropriate jurisdictions (or any comparable law) to
perfect the Buyer's ownership interest in such Receivables.
(h) Places of Business. The principal places of business and chief
executive office of the Originator and the offices where the Originator keeps
all its Records are located at the address(es) listed on EXHIBIT II or such
other locations notified to the Buyer in accordance with SECTION 4.2(A) in
jurisdictions where all action required by SECTION 4.2(A) has been taken and
completed. The Originator's Federal Employer Identification Number is
correctly set forth on EXHIBIT II.
(i) Collection Banks; etc. Except as otherwise notified to the
Buyer in accordance with SECTION 4.2(B):
(i) the Originator has instructed all Obligors (other than
the Obligors on Flexible Packaging Receivables) to pay all
Collections directly to a segregated lock-box identified on
EXHIBIT III hereto,
(ii) in the case of all proceeds remitted to any such
lock-box which is now or hereafter established, such proceeds will
be deposited directly by the applicable Collection Bank into a
concentration account or a depository account listed on EXHIBIT
III,
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(iii) the names and addresses of all Collection Banks,
together with the account numbers of the Collection Accounts of
the Originator at each Collection Bank, are listed on EXHIBIT III,
and
(iv) each lock-box and Collection Account to which
Collections are remitted shall be subject to a Collection Account
Agreement that is then in full force and effect.
In the case of lock-boxes and Collection Accounts identified on EXHIBIT III,
exclusive dominion and control thereof has been transferred to the Buyer. The
Originator has not granted any Person, other than the Buyer as contemplated by
this Agreement (and other than the Bank Agent, from and after termination of
the Collection Account Agreements), dominion and control of any lock-box or
other Collection Account, or the right to take dominion and control of any
lock-box or other Collection Account at a future time or upon the occurrence of
a future event.
(j) Financial Statements; Material Adverse Effect. The consolidated
financial statements of the Originator and its consolidated Subsidiaries dated
March 31, 1996 furnished by the Originator to the Buyer and the Agent are
complete and correct in all material respects, and such financial statements
have been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present, in all material respects, the
consolidated financial condition and results of operations of the Originator
and its consolidated Subsidiaries as of such date and for the period ended on
such date. As of the date of the initial purchase hereunder, no event has
occurred since March 31, 1996 which would have a Material Adverse Effect.
(k) Names. In the past five years, the Originator has not used any
corporate names, trade names or assumed names other than those listed on
EXHIBIT II.
(l) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of the Originator's knowledge, threatened, against or
affecting the Originator, or any of the properties of the Originator, in or
before any court, arbitrator or other body, which are reasonably likely to (i)
adversely affect the collectibility of a material portion of the Receivables,
(ii) materially adversely affect the financial condition of the Originator or
(iii) materially adversely affect the ability of the Originator to perform its
obligations under the Transaction Documents. The Originator is not in default
with respect to any order of any court, arbitrator or governmental or
regulatory body.
(m) Credit and Collection Policy. With respect to each Receivable,
each of the Originator and the Sub-Servicer has complied in all material
respects with the Credit and Collection Policy.
(n) Payments to Originator. With respect to each Receivable sold to
the Buyer under this Agreement, the Buyer has given reasonably equivalent value
to the Originator in
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consideration for the transfer of such Receivable and the Related Security with
respect thereto under this Agreement and such transfer was not made for or on
account of an antecedent debt. No sale by the Originator to the Buyer of any
Receivable is or may be voidable under any Section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. Section Section 101 et seq.), as amended.
(o) Ownership of the Buyer. The Originator owns one hundred percent
(100%) of the issued and outstanding capital stock of the Buyer. Such capital
stock is validly issued, fully paid and nonassessable and there are no options,
warrants or other rights to acquire securities of the Buyer other than the
pledge to the Bank Agent of the Buyer's stock. The management of the
Originator has determined that the organization of the Buyer and the limited
purposes of the Buyer are in the best interests of the Originator.
(p) Not an Investment Company. The Originator is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
from time to time, or any successor statute.
(q) Eligibility of Receivables. Each of the Receivables sold or
contributed by the Originator to the Buyer on each Business Day prior to the
Termination Date which is proposed to be included in Net Eligible Receivables
under the Purchase Agreement was an Eligible Receivable on the Business Day on
which it was sold or contributed by the Originator to the Buyer.
(r) Purpose. The Originator has determined that, from a business
viewpoint, the sale of the Receivables to the Buyer contemplated hereby is in
the best interests of the Originator.
(s) ERISA. No fact or circumstance, including but not limited to any
Reportable Event, exists in connection with any Plan which would constitute
grounds for the termination of any Plan by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States District
Court of a trustee to administer any such Plan and which would result in the
termination of a Plan and the incurrence of material liability by the
Originator or any ERISA Affiliate to the Plan, the PBGC, participants,
beneficiaries or a trustee. No Plan has an accumulated funding deficiency as
defined in Section 412(a) of the Code or Section 302(a) of ERISA, and no lien
exists with respect to any Plan for failure to make required contributions as
described under 412(n) of the Code or Section 302(f) of ERISA. For the
purposes of this representation and warranty, the Originator shall be deemed to
have knowledge of all facts attributable to the Plan administrator designated
pursuant to ERISA.
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ARTICLE III
CONDITIONS OF PURCHASES
Section 3.1. Conditions Precedent to Initial Purchase. The initial
Purchase under this Agreement is subject to the conditions precedent that (i)
the Buyer shall have received on or before the date of such Purchase those
documents listed on SCHEDULE A hereto and (ii) all conditions precedent to the
initial purchase under the Purchase Agreement shall have been satisfied and/or
waived.
Section 3.2. Conditions Precedent to All Purchases. Each Purchase shall
be subject to the further conditions precedent that (a) on the date of each
such Purchase, the following statements shall be true both before and after
giving effect to such Purchase (and acceptance of the proceeds of such Purchase
shall be deemed a representation and warranty by the Originator that such
statements are then true):
(i) the representations and warranties set forth in ARTICLE II are
correct on and as of the date of such Purchase as though made on and as of
such date;
(ii) no event has occurred, or would result from such Purchase, that
will constitute an Event of Default, and no event has occurred and is
continuing, or would result from such Purchase, that would constitute a
Potential Event of Default; and
(iii) the Termination Date shall not have occurred;
and (b) the Buyer shall have received such other approvals, opinions or
documents as it may reasonably request.
Notwithstanding the foregoing conditions precedent, upon payment of the
Purchase Price for any Purchase (whether by payment of cash, through an
increase in the amounts outstanding under the Subordinated Note, by offset of
amounts owed to the Buyer and/or by offset of capital contributions to be made
under the Subscription Agreement), title to the Receivables and related assets
included in such Purchase shall vest in the Buyer, whether or not the
conditions precedent to such Purchase were in fact satisfied.
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of Originator. Until the date this
Agreement shall terminate in accordance with its terms, the Originator hereby
covenants, individually and in its capacity as Sub-Servicer, that:
(a) Financial Reporting. The Originator will maintain a system of
accounting established and administered in accordance with generally accepted
accounting principles, and furnish to the Buyer:
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(i) Annual Reporting. Within 90 days after the close of each of its
fiscal years, a complete copy of the Originator's audit report, which
shall include at least the Originator's and its consolidated
Subsidiaries' consolidated balance sheet, consolidated income statement
and consolidated statement of cash flow for such year, examined in
accordance with generally accepted auditing standards by an independent
public accountant of national reputation selected by the Originator and
reasonably acceptable to the Buyer, together with the certificate
described in clause (iii) below. Such auditor's report shall be free
from exceptions, reservations or qualifications as result of which the
auditor is unable to conclude that the financial statements fairly
present or adequately disclose, in all material respects, the financial
condition of the Originator and its consolidated Subsidiaries and shall
not be limited because of restricted or limited access by such accountant
to any material portion of the Originator's or any Subsidiary's records.
(ii) Quarterly Reporting. Within 45 days after the close of each
of the first three quarterly periods of each of its fiscal years, the
Originator's and its consolidated Subsidiaries' unaudited consolidated
balance sheet, consolidated income statement and consolidated statement
of cash flow for such quarter and that portion of the fiscal year ending
with such quarter, certified by the Chief Financial Officer of the
Originator as being complete and correct and fairly presenting, in all
material respects, the Originator's and its consolidated Subsidiaries'
financial condition and results of operations as of the end of such
quarter and for that portion of the fiscal year ending with such quarter,
together with the certificate described in clause (iii) below.
(iii) Compliance Certificate. Together with the financial
statements required to be delivered under clauses (i) and (ii) above, a
compliance certificate in substantially the form of EXHIBIT IV signed by
the Originator's Chief Financial Officer and dated the date of such
annual financial statement or such quarterly financial statement, as the
case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof generally to the shareholders of the Originator,
copies of all financial statements, reports and proxy statements so
furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of all
registration statements, notices of securities issuance, annual,
quarterly, monthly or other regular reports which the Originator or any
of its Subsidiaries files with the Securities and Exchange Commission.
(vi) Notices under Transaction Documents. Forthwith upon its
receipt of any notice, request for consent, financial statements,
certification, report or other written communication under or in
connection with any Transaction Document from any Person other than the
Buyer, the Agent or any Purchaser, copies of the same.
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(vii) Change in Credit and Collection Policy. At least 30 days
prior to the effectiveness of any material change in or amendment to the
Credit and Collection Policy, a copy of the Credit and Collection Policy
then in effect and a notice indicating such change or amendment.
(viii) Other Information. Such other information (including
non-financial information) as the Buyer (or any of its assignees) may
from time to time reasonably request.
(b) Notices. The Originator will notify the Buyer and the Agent in
writing of any of the following immediately upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) Events of Default or Potential Events of Default. The
occurrence of each Event of Default or each Potential Event of Default,
by a statement of the Chief Financial Officer of the Originator.
(ii) Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding against the Originator or any of
its Subsidiaries, or to which the Originator or any of its Subsidiaries
becomes party, in either case which the Originator reports to the
Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, as amended.
(iii) ERISA. The occurrence of any Reportable Event under Section
4043(c) (5), (6) or (9) of ERISA with respect to any Plan, any decision
to terminate or withdraw from a Plan, any finding made with respect to a
Plan under Section 4041(c) or (e) of ERISA, the commencement of any
proceeding with respect to a Plan under Section 4042 of ERISA, the
failure to make any required installment or other required payment under
Section 412 of the Code or Section 302 of ERISA on or before the date for
such installment or payment, or any material increase in the actuarial
present value of unfunded vested benefits under all Plans over the
preceding year.
(iv) Downgrade. Any downgrading in the rating of any
Indebtedness of the Originator by Standard & Poor's Ratings
Group or by Xxxxx'x Investors Service, Inc., setting forth the
Indebtedness affected and the nature of such change.
(c) Compliance with Laws. The Originator will comply in all material
respects with all applicable laws, rules, regulations, orders writs, judgments,
injunctions, decrees or awards to which it may be subject the failure with
which to comply would or could reasonably be expected to have a Material
Adverse Effect.
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(d) Audits. The Originator will furnish to the Buyer (and/or the
Agent on behalf of the Buyer) from time to time such information with respect
to the Receivables as the Buyer or the Agent may reasonably request. The
Originator shall, from time to time during regular business hours as requested
by Buyer (or the Agent on its behalf) upon reasonable notice, permit the Buyer
or the Agent, 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 the Originator relating to Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of the Originator for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to the
Originator's financial condition or the Receivables and the Related Security or
the Originator's performance hereunder or the Originator's performance under
the Contracts with any of the officers or employees of the Originator having
knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) The Originator will maintain and implement administrative and
operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables in the event of the destruction
of the originals thereof), and keep and maintain all documents, books,
records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records
adequate to permit the immediate identification of each new Receivable
and all Collections of and adjustments to each existing Receivable). The
Originator will give the Agent notice of any material change in the
administrative and operating procedures referred to in the previous
sentence.
(ii) The Originator will (a) on or prior to the date hereof, xxxx
its master data processing records and other books and records as
required by SECTION 1.1(B) and further describing the "RECEIVABLE
INTERESTS" sold by the Buyer to the Purchasers pursuant to the Purchase
Agreement and (b) upon the request of the Buyer or the Agent: (x) xxxx
each Contract with a legend describing Buyer's interest therein and
further describing the Receivable Interests of the Purchasers and (y)
deliver to the Buyer or its designee all Contracts (including, without
limitation, all multiple originals of any such Contract) relating to the
Receivables then in the Originator's possession.
(f) Compliance with Contracts and Credit and Collection Policy. The
Originator will (i) timely and fully perform and comply, in all material
respects, with all provisions, covenants and other promises required to be
observed by it under the Contracts related to the Receivables, and (ii) comply
in all material respects with the Credit and Collection Policy. The Originator
will pay when due any taxes payable in connection with the Receivables.
(g) Ownership Interest. The Originator shall take all necessary
action to establish and maintain in favor of the Buyer a valid and perfected
first priority ownership interest
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in the Receivables and the Related Security, Collections and Collection
Accounts with respect thereto, to the full extent contemplated herein,
including, without limitation, taking such action to perfect, protect or more
fully evidence the interest of the Buyer hereunder as the Buyer or its
assignees may reasonably request.
(h) Purchasers' Reliance. The Originator acknowledges that the Agent and
the Purchasers are entering into the transactions contemplated by the Purchase
Agreement in reliance upon the Buyer's identity as a separate legal entity from
the Originator. Therefore, from and after the date of execution and delivery
of this Agreement, the Originator shall take all reasonable steps including,
without limitation, all steps that the Buyer or any assignee of the Buyer may
from time to time reasonably request, to maintain the Buyer's identity as a
separate legal entity and to make it manifest to third parties that the Buyer
is an entity with assets and liabilities distinct from those of the Originator
and any Affiliates thereof and not just a division of the Originator. Without
limiting the generality of the foregoing and in addition to the other covenants
set forth herein, the Originator (i) shall not hold itself out to third parties
as liable for the debts of the Buyer nor purport to own the Receivables and
other assets acquired by the Buyer, (ii) shall take all other actions necessary
on its part to ensure that the Buyer is at all times in compliance with the
covenants set forth in SECTION 5.1(K) of the Purchase Agreement and (iii) shall
cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between the Originator and the
Buyer on an arm's-length basis and in a manner consistent with the procedures
set forth in U.S. Treasury Regulations Section Section 1.1502-33(d) and
1.1552-1.
(i) Collections. The Originator shall instruct all Obligors
(including, without limitation, from and after the time when the Originator
issues the first invoice with respect to each Flexible Packaging Receivable,
the Obligors on Flexible Packaging Receivables) to pay all Collections directly
to a segregated lock-box or other Collection Account listed on EXHIBIT III,
each of which is subject to a Collection Account Agreement. In the case of
payments remitted to any such lock-box, the Originator shall cause all proceeds
from such lock-box to be deposited directly by a Collection Bank into a
concentration account or a depositary account listed on EXHIBIT III. Pursuant
to SECTION 5.3 hereof and the Collection Account Agreements, the Originator has
transferred and assigned to the Buyer all of its right, title and interest in
and to, and exclusive ownership, dominion and control (subject to the terms of
this Agreement) to each such lock-box, concentration account and depositary
account. In the case of any Collections received by the Originator, the
Originator shall remit such Collections to a Collection Account not later than
the Business Day immediately following the date of receipt of such Collections,
and, at all times prior to such remittance, the Originator shall itself hold
such Collections in trust, for the exclusive benefit of the Buyer and its
assigns. In the case of any remittances received by the Originator in any such
lock-box, concentration account or depositary account that shall have been
identified, to the satisfaction of the Servicer, to not constitute Collections
or other proceeds of the Receivables or the Related Security, the Originator
shall promptly remit such items to the Person identified to it as being the
owner of such remittances. From and after the date the Agent delivers
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to any of the Collection Banks a Collection Notice pursuant to SECTION 6.3 of
the Purchase Agreement, the Agent, as assignee of the Buyer, may request
that the Originator, and the Originator thereupon promptly shall, direct all
Obligors on Receivables to remit all payments thereon to a new depositary
account (the "NEW CONCENTRATION ACCOUNT") specified by the Agent and, at all
times thereafter the Originator shall not deposit or otherwise credit to the
New Concentration Account any cash or payment item other than Collections.
Alternatively, the Agent may request that the Originator, and the Originator
thereupon promptly shall, direct all Persons then making remittances to any
account listed on EXHIBIT III which remittances are not payments on Receivables
to deliver such remittances to a location other than an account listed on
EXHIBIT III.
(j) ERISA. The Originator shall make all required installments or other
required payments under Section 412 of the Code or Section 302 of ERISA on or
before the due date for such installment or other payment.
(k) Lines of Business. The Originator shall continue to operate its
business in substantially the same fields of enterprise in which it is engaged
on the date of this Agreement.
Section 4.2. Negative Covenants of Originator. Until the date this
Agreement shall terminate in accordance with its terms, the Originator hereby
covenants, individually and in its capacity as Sub-Servicer, that:
(a) Name Change, Offices, Records and Books of Accounts. The Originator
will not change its name, identity or corporate structure (within the meaning
of Section 9-402(7) of any applicable enactment of the UCC) or relocate its
chief executive office or any office where Records are kept unless it shall
have: (i) given the Buyer and the Agent at least 45 days prior notice thereof
and (ii) delivered to the Buyer all financing statements, instruments and
other documents requested by the Buyer (or the Agent on behalf of the Buyer)
in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. The Originator will not
add or terminate any bank as a Collection Bank from those listed in EXHIBIT
III, or make any change in its instructions to Obligors regarding payments to
be made to the Originator or payments to be made to any lock-box, Collection
Account or Collection Bank, unless the Buyer and the Agent shall have received,
at least fifteen (15) Business 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 lock-box, Collection Account
or Collection Bank, an executed account agreement and an executed
Collection Account Agreement from such Collection Bank relating thereto;
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PROVIDED, HOWEVER, that the Originator may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing lock-box or other Collection Account that is
subject to a Collection Account Agreement then in effect.
(c) Modifications to Credit and Collection Policy. The Originator will
not make any change to the Credit and Collection Policy which would be
reasonably likely to adversely affect the collectibility of any material
portion of the Receivables or decrease the credit quality of any newly created
Receivables. Except as provided in SECTION 5.2(C), the Originator, acting as
Sub-Servicer or otherwise, 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, Etc. The Originator shall 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 sold or purported to be sold hereunder on or prior
to the Termination Date or the Related Security or Collections in respect
thereof, or upon or with respect to any Contract under which any such
Receivable arises, or any lock-box or other Collection Account or assign any
right to receive income in respect thereof (other than, in each case, the
creation of the interests therein in favor of the Buyer provided for herein and
the Agent and the Purchasers provided for in the Purchase Agreement), and the
Originator shall defend the right, title and interest of the Buyer in, to and
under any of the foregoing property, against all claims of third parties
claiming through or under the Originator.
(e) Accounting for Purchases. The Originator will not, and shall not
permit any Affiliate to, account for or treat (whether in financial statements
or otherwise) the transactions contemplated hereby in any manner other than the
sale of the Receivables and Related Security by the Originator to the Buyer or
in any other respect account for or treat the transactions contemplated hereby
in any manner other than as a sale of the Receivables and Related Security by
the Originator to the 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
ADMINISTRATION AND COLLECTION
Section 5.1. Designation of Sub-Servicer. (a) The servicing,
administration and collection of the Receivables shall be conducted by the
Servicer so designated from time to time in accordance with SECTION 6.1 of the
Purchase Agreement. The Originator is hereby designated as, and hereby agrees
to act as sub-servicer (the "SUB-SERVICER") for the Buyer in the
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Buyer's capacity as the initial Servicer designated pursuant to the terms of the
Purchase Agreement, and the Originator agrees in such capacity as Sub-Servicer
to perform all of the duties and obligations of the Servicer set forth herein
and in the Purchase Agreement with respect to the Receivables, Related Security
related thereto and Collections thereof.
(b) The Originator further agrees that it shall be directly liable to the
Agent and the Purchasers for the full and prompt performance of all such duties
and responsibilities of the Servicer PROVIDED THAT (i) nothing in this
Agreement shall eliminate the Buyer's primary liability to the Agent and the
Purchasers for its duties as Servicer, (ii) the Buyer and its assigns shall
retain sole responsibility and authority for withdrawing funds from the
Collection Accounts, and (iii) the Agent and the Purchasers shall be entitled
to deal exclusively with the Buyer in matters relating to the discharge by the
Servicer of its duties pursuant to SECTION 6.1 of the Purchase Agreement.
(c) Without the prior written consent of the Buyer and its assignees, the
Originator shall not be permitted to delegate any of its duties or
responsibilities as Sub-Servicer to any Person. If at any time the Agent
shall, as permitted under SECTION 6.1(A) of the Purchase Agreement, designate
as Servicer any Person other than the Buyer, all duties and responsibilities
theretofore delegated by the Buyer to the Originator may, at the discretion of
the Agent, be terminated forthwith on written notice given by the Buyer or the
Agent (as assignee of the Buyer) to the Originator.
Section 5.2. Duties of Sub-Servicer. (a) The Sub-Servicer shall take or
cause to be taken all such actions as may be necessary or advisable to collect
each Receivable from time to time, all in accordance with applicable laws,
rules and regulations, with reasonable care and diligence, and in accordance
with the Credit and Collection Policy.
(b) The Sub-Servicer shall use its best efforts to segregate, on each
Business Day, in a manner acceptable to the Buyer and the Agent, all cash,
checks and other instruments received by it from time to time constituting
Collections from the general funds of the Sub-Servicer prior to the remittance
thereof to the Buyer to be administered in accordance with the procedures
described herein and in Article I of the Purchase Agreement.
(c) The Sub-Servicer, may, in accordance with the Credit and Collection
Policy, extend the maturity of any Receivable or adjust the Outstanding Balance
of any Receivable as the Sub-Servicer may determine to be appropriate to
maximize Collections thereof; PROVIDED, HOWEVER, that such extension or
adjustment shall not alter the status of such Receivable as a Defaulted
Receivable or limit the rights of the Agent or the Purchasers under the
Purchase Agreement. Notwithstanding anything to the contrary contained herein,
from and after the occurrence of an Event of Default, the Buyer shall have the
absolute and unlimited right to direct the Sub-Servicer to commence or settle
any legal action with respect to any Receivable or to foreclose upon or
repossess any Related Security.
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(d) The Sub-Servicer shall hold in trust for the Buyer and its assignees,
in accordance with their respective interests, all Records that evidence or
relate to the Receivables, the related Contracts and Related Security or that
are otherwise necessary or desirable to collect the Receivables and shall, as
soon as practicable upon demand of the Buyer, deliver or make available to the
Buyer all such Records at the chief executive office of the Originator. The
Sub-Servicer shall, as soon as practicable following receipt thereof, turn over
to the Buyer all Collections of Receivables, less: (i) all reasonable
out-of-pocket costs and expenses of the Sub-Servicer of servicing,
administering and collecting the Receivables, and (ii) any cash collections or
other cash proceeds received with respect to indebtedness not constituting
Receivables.
(e) Any payment by an Obligor in respect of any indebtedness owed by it to
the Originator shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise instructed by the
Buyer, be applied as a Collection of any Receivable of such Obligor (starting
with the oldest such Receivable) to the extent of any amounts then due and
payable thereunder before being applied to any other receivable or other
obligation of such Obligor.
Section 5.3. Collection Account Agreements. The Originator hereby
transfers to the Buyer, effective concurrently with the initial Purchase
hereunder (or, if any Collection Account is not in existence on such date,
concurrently with the opening of such account), the exclusive ownership and
control of the Collection Accounts, as evidenced by the Collection Account
Agreements, and the Originator shall claim no further right, title and/or
interest in and to any such Collection Accounts nor any rights to withdraw
funds therefrom. The Originator hereby authorizes the Buyer, and agrees that
the Buyer shall be entitled to (i) endorse the Originator's name on checks and
other instruments representing Collections, (ii) enforce the Receivables, the
related Contracts and the Related Security and (iii) take such action as shall
be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the
Buyer and its designees rather than the Originator.
Section 5.4. Responsibilities of the Originator. Anything herein to the
contrary notwithstanding, the exercise by the Buyer (or its assignees) of its
rights hereunder shall not release the Sub-Servicer or the Originator from any
of their duties or obligations with respect to any Receivables or under the
related Contracts. Neither the Buyer nor any of its assignees (including any
Servicer) shall have any obligation or liability with respect to any
Receivables or related Contracts, nor shall any of them be obligated to perform
the obligations of the Originator.
Section 5.5. Receivables Reports.
(a) On Thursday of each week hereafter beginning September 5, 1996 (or, if
any such Thursday is not a Business Day, the next following Business Day), the
Sub-Servicer shall prepare and forward to the Buyer and the Agent a Weekly
Report.
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(b) On the 15th day of each month hereafter (or, if such date is not a
Business Day, the next following Business Day), and at such other times as the
Buyer or the Agent (as the Buyer's assignee) shall request, the Sub-Servicer
shall prepare and forward to the Buyer and the Agent a Monthly Report.
(c) Promptly following any request therefor by the Buyer or the Agent (as
the Buyer's assignee), the Sub-Servicer shall prepare and provide to the Buyer
and the Agent a listing by Obligor of all Receivables together with an aging of
such Receivables.
Section 5.6. Sub-Servicer Fee. In consideration of the Sub-Servicer's
agreement to perform the duties and obligations of the Servicer under the
Purchase Agreement, the Buyer hereby agrees that, so long as the Originator
shall continue to perform as Sub-Servicer hereunder, the Buyer shall pay over
to the Originator a monthly fee in an amount equal to (i) a per annum rate not
to exceed 1.25% agreed to by the Buyer and the Originator from time to time,
multiplied by (ii) the average Outstanding Balance of the Receivables held by
the Buyer (without taking account of any Receivable Interests held by the
Purchasers) during the preceding Calculation Period, such fee to be calculated
to provide the Servicer and the Sub-Servicer reasonable compensation for their
respective servicing activities.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.1. Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default:
(a) The Sub-Servicer or the Originator shall fail to make any payment or
deposit when required hereunder and such failure shall remain unremedied for
one (1) Business Day following the occurrence thereof.
(b) The Sub-Servicer or the Originator shall fail to deliver any Weekly
Report or any Monthly Report within two (2) Business Days after the same is
due.
(c) The Sub-Servicer or the Originator shall fail to perform or observe
any term, covenant or agreement hereunder (other than as referred to in SECTION
6.1(A) or SECTION 6.1(B)) and such failure shall remain unremedied for five (5)
Business Days following occurrence thereof.
(d) Any representation, warranty, certification or statement made by the
Originator or the Sub-Servicer in this Agreement, any other Transaction
Document or in any other document delivered pursuant hereto shall prove to have
been incorrect in any material respect when made or deemed made.
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(e) (i) The Originator or the Sub-Servicer shall generally not pay its
debts as such debts become due; (ii) the Originator or the Sub-Servicer shall
admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Originator or the Sub-Servicer seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or any substantial part of its property, unless any such proceeding or
action instituted by any Person other than the Originator is set aside or
withdrawn or ceases to be in effect within sixty (60) days from the date of the
filing of such action or making of any such appointment described in this
subsection (e); or (iii) the Originator or the Sub-Servicer shall take any
corporate action to authorize any of the actions set forth in clause (i) above
in this subsection (e).
(f) One or more final judgments shall be entered against the Originator or
any of its Subsidiaries for the payment of money in the aggregate amount of
$5,000,000, or the equivalent thereof in another currency, or more on claims
not covered by insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect for
sixty (60) consecutive days without a stay of execution.
(g) Any Plan of the Originator or any of its Subsidiaries shall be
terminated within the meaning of Title IV of ERISA except as permitted by
Section 4044(d) of ERISA, or a trustee shall be appointed by the appropriate
U.S. District Court to administer any Plan of the Originator or any of its
Subsidiaries, or the PBGC shall institute proceedings to terminate any Plan of
the Originator or any of its Subsidiaries or to appoint a trustee to administer
any such Plan and, upon the occurrence of any of the foregoing, the then
current value of guaranteed benefits and other benefit commitments (as such
terms are defined under Title IV of ERISA and determined in accordance with the
principles of Title IV of ERISA) for which the Originator or any Subsidiary
might be liable to any Person exceed the then current value of the assets
allocable to such benefits by more than $5,000,000.
(h) A Change of Control shall occur.
(i) A Servicer Default shall occur under the terms of the Purchase
Agreement and the Required Investors shall declare the Facility Termination
Date to have occurred.
Section 6.2. Remedies. Upon the occurrence and during the continuation of
an Event of Default, the Buyer may either (i) remove the Sub-Servicer as
Sub-Servicer (to the extent such Event of Default was cause by, or arose as a
result of the activities of, the Sub-Servicer), or (ii) declare the Termination
Date to have occurred, whereupon the Termination Date shall forthwith occur,
without demand, protest or further notice of any kind, all of which are hereby
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expressly waived by the Originator; PROVIDED, HOWEVER, that upon the occurrence
of an Event of Default described in SECTION 6.1(E)(II) OR (III) above or of an
actual or deemed entry of an order for relief with respect to the Originator
under the Federal Bankruptcy Code, the Termination Date shall automatically
occur, without demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Originator. Upon the occurrence of the
Termination Date for any reason whatsoever, the Buyer and its assigns shall
have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC, which rights
shall be cumulative.
ARTICLE VII
INDEMNIFICATION
Section 7.1. Indemnities by the Originator. Without limiting any other
rights which the Buyer may have hereunder or under applicable law, the
Originator hereby agrees to indemnify the Buyer and its assignees (including
the Agent and each Purchaser) and their respective officers, directors, agents
and employees (each an "INDEMNIFIED PARTY") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees and disbursements (all of
the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or actually incurred by any of them arising out of any of the
following:
(i) any representation or warranty made by the Originator or the
Sub-Servicer (or any officers of the Originator or the Sub-Servicer)
under or in connection with this Agreement, any other Transaction
Document, any Monthly Report, any Weekly Report or any other written
information or report delivered by the Originator or the Sub-Servicer
pursuant hereto or thereto, which shall have been false or incorrect when
made or deemed made;
(ii) the failure by the Originator or the Sub-Servicer 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 with any such applicable law, rule or regulation;
(iii) any failure of the Originator or the Sub-Servicer to perform
its duties or obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability or similar claim arising out of or in
connection with merchandise, insurance or services which are the subject
of any Contract;
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(v) any dispute, claim, offset (other than discounts for prompt
payment granted in the ordinary course of the Originator's business) or
defense (other than discharge in bankruptcy of the Obligor) of any
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
furnishing or failure to furnish the underlying goods and services;
(vi) the commingling of Collections of Receivables at any
time with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby or thereby, the use of the proceeds of a
Purchase, the ownership of the Receivables or any other investigation,
litigation or proceeding relating to the Originator in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby or thereby;
(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) the sale to the Buyer of any Receivable other than an Eligible
Receivable (except for Receivables sold at closing in exchange for equity
issuances under SECTION 1.2(A)(II)); or
(x) the failure to vest and maintain vested in the Buyer, or to
transfer to the Buyer, legal and equitable title to, and ownership of, a
first priority perfected ownership interest in the Receivables sold or
purported to be sold hereunder, and the Related Security and the
Collections in respect thereof, free and clear of any Adverse Claim
(other than as created under the Purchase Agreement);
EXCLUDING, HOWEVER, the following:
(a) Indemnified Amounts to the extent final judgment of a court of
competent jurisdiction holds 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 Eligible Receivables that prove to be uncollectible on account
of the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
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(c) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, on or measured by the
overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with (i) the characterization of
the Purchases as true sales and (ii) the characterization of the
transactions under the Purchase Agreement as creating indebtedness of the
Buyer for purposes of taxation;
Section 7.2. Other Costs and Expenses. The Originator shall pay to the
Buyer on demand any and all costs and expenses of the 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 amendment, waiver or other modification of this Agreement
following an Event of Default.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Waivers and Amendments.
(a) No failure or delay on the part of the Buyer (or any of its assignees)
or the Originator 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 the Originator and the Buyer and, to the
extent required under the Purchase Agreement, the Agent, the Investors and/or
the Required Investors.
Section 8.2. Notices. Except as otherwise expressly provided herein, 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 party hereto at its respective address
or telecopy number set forth on the signature pages hereof. All such
communications and notices shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when received through the mails, transmitted
by telecopy, delivered to the telegraph company, confirmed by telex answerback
or delivered to the cable company, respectively.
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Section 8.3. Protection of Buyer's Interests.
(a) The Originator agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Buyer (or its
assignees) may reasonably request, to perfect, protect or more fully evidence
the Buyer's ownership of the Receivables, or to enable the Buyer (or its
assignees) to exercise and enforce their rights and remedies hereunder. The
Buyer may, or the Buyer may direct the Originator to, notify the Obligors of
Receivables, at any time following the replacement of the Originator as
Sub-Servicer and at the Originator's expense, of the Buyer's ownership of the
Receivables and may also direct that payments of all amounts due or that become
due under any or all Receivables be made directly to the Buyer or its designee.
(b) If the Originator or the Sub-Servicer fails to perform any of its
obligations hereunder, the Buyer (or any of its assignees) may (but shall not
be required to) perform, or cause the performance of, such obligation; and the
Buyer's (and any of its assignee's) reasonable costs and expenses actually
incurred in connection therewith shall be payable by the Originator or the
Sub-Servicer, as applicable, on demand. The Originator and the Sub-Servicer
each irrevocably authorizes the Buyer at any time and from time to time in the
sole discretion of the Buyer, and appoints the Buyer as its attorney-in-fact,
to act on behalf of the Originator and the Sub-Servicer (i) to execute on
behalf of the Originator as seller/debtor and to file financing statements
necessary or desirable in the Buyer's sole discretion to perfect and to
maintain the perfection and priority of the Buyer's ownership interest in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Buyer in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority
of the Buyer's ownership interest in the Receivables. This appointment is
coupled with an interest and is irrevocable.
Section 8.4. Confidentiality.
(a) Each of the Originator, the Buyer and the Sub-Servicer shall
maintain and shall cause each of its employees and officers to maintain the
confidentiality of this Agreement and the Purchase Agreement and the other
confidential proprietary information with respect to the Agent and FALCON and
their respective businesses obtained by it or them in connection with the
structuring, negotiating and execution of the transactions contemplated herein
and therein, except that each of the Originator, the Buyer, the Sub-Servicer
and their respective officers and employees may disclose such information to
the Originator's, the Buyer's or the Sub-Servicer's external accountants and
attorneys and as required by any applicable law or order of any judicial or
administrative proceeding. In addition, each of the Originator, the Buyer and
the Sub-Servicer 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).
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(b) Anything herein to the contrary notwithstanding, each of the
Originator and the Sub-Servicer hereby consents to the disclosure of any
nonpublic information with respect to it (i) to the Buyer, the Agent, the
Investors or FALCON by each other, (ii) by the Buyer, the Agent or the
Purchasers to any prospective or actual assignee or participant of any of them
or (iii) by the Agent to any rating agency, Commercial Paper dealer or provider
of a surety, guaranty or credit or liquidity enhancement to FALCON or any
entity organized for the purpose of purchasing, or making loans secured by,
financial assets for which First Chicago acts as the administrative agent and
to any officers, directors, employees, outside accountants and attorneys of any
of the foregoing, provided each such Person is informed of the confidential
nature of such information in a manner consistent with the practice of the
Agent for the making of such disclosures generally to Persons of such types.
In addition, the Buyer, the Purchasers and the 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 8.5. Bankruptcy Petition.
(a) Each of the Originator and the Sub-Servicer hereby covenants and
agrees that, prior to the date which is one year and one day after the payment
in full of all outstanding senior indebtedness of FALCON, it will not institute
against, or join any other Person in instituting against, FALCON 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 of the Originator and the Sub-Servicer hereby covenants and
agrees that, prior to the date which is one year and one day after all
Aggregate Unpaids (under and as defined in the Purchase Agreement) have been
paid, it will not institute against, or join any other Person in instituting
against, the 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 8.6. Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of FALCON, the Agent
or any Investor, no claim may be made by the Originator, the Sub-Servicer or any
other Person against FALCON, the Agent or any Investor or their respective
Affiliates, directors, officers, employees, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and the Originator 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.
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SECTION 8.7. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS.
SECTION 8.8. CONSENT TO JURISDICTION. THE ORIGINATOR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE ORIGINATOR
PURSUANT TO THIS AGREEMENT AND THE ORIGINATOR HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE BUYER (OR THE RIGHTS OF THE AGENT OR ANY PURCHASER AS THE
BUYER'S ASSIGNEES) TO BRING PROCEEDINGS AGAINST THE ORIGINATOR IN THE COURTS OF
ANY OTHER JURISDICTION WHEREIN ANY ASSETS OF THE ORIGINATOR MAY BE LOCATED.
ANY JUDICIAL PROCEEDING BY THE ORIGINATOR AGAINST THE BUYER, THE AGENT OR ANY
PURCHASER, ANY AFFILIATE OF THE AGENT OR A PURCHASER, OR ANY OTHER OF THE
BUYER'S ASSIGNEES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY THE ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN
A COURT IN CHICAGO, ILLINOIS.
SECTION 8.9. WAIVER OF JURY TRIAL. EACH OF THE ORIGINATOR AND THE BUYER
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 THE ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
Section 8.10. Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Originator, the Buyer and their
respective successors and permitted assigns (including any trustee in
bankruptcy). The Originator may not assign any of its rights and obligations
hereunder or any interest herein without the prior written consent of the
Buyer. The Buyer may assign at any time its rights and obligations hereunder
and interests herein to any other Person without the consent of (but upon five
(5) Business Days prior written notice
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to) the Originator. Without limiting the foregoing, the Originator acknowledges
that the Buyer, pursuant to the Purchase Agreement, shall assign to the Agent,
for the benefit of the Purchasers, its rights, remedies, powers and privileges
hereunder and that the Agent may further assign such rights, remedies, powers
and privileges to the extent permitted in the Purchase Agreement, and the
Originator hereby waives the requirement for five (5) Business Days' prior
written notice of any such assignment. The Originator agrees that the Agent, as
the assignee of the Buyer, shall, subject to the terms of the Purchase
Agreement, have the right to enforce this Agreement and to exercise directly all
of the Buyer's rights and remedies under this Agreement (including, without
limitation, the right to give or withhold any consents or approvals of the Buyer
to be given or withheld hereunder) and the Originator agrees to cooperate fully
with the Agent and the Servicer in the exercise of such rights and remedies.
The Originator further agrees to give to the Agent copies of all notices it is
required to give to the Buyer hereunder. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and, subject to the proviso in SECTION 1.1(C), shall remain in full
force and effect until such time, after the Termination Date, as the Aggregate
Unpaids shall be equal to zero; PROVIDED, HOWEVER, that the rights and remedies
with respect to (i) any breach of any representation and warranty made by the
Originator pursuant to Article II, (ii) the indemnification and payment
provisions of Article VII, and (iii) SECTION 8.5 shall be continuing and shall
survive any termination of this Agreement.
Section 8.11. Subordination. The Originator agrees that any indebtedness,
obligation or claim, it may from time to time hold or otherwise have (other
than any obligation or claim with respect to the fees payable by the Buyer
under SECTION 5.6) against the Buyer or any assets or properties of the Buyer,
whether arising hereunder or otherwise existing, shall be subordinate in right
of payment to the prior payment in full of any indebtedness or obligation of
the Buyer owing to the Agent or any Purchaser under the Purchase Agreement.
The subordination provision contained herein is for the direct benefit of, and
may be enforced by, the Agent and the Purchasers and/or any of their assignees
under the Purchase Agreement.
Section 8.12. Integration; Survival of Terms. This Agreement, the
Subordinated Note, the Subscription Agreement, and the Collection Account
Agreements 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.
Section 8.13. Counterparts; Severability. This Agreement may be executed
in any number of counterparts and by each party 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
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such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
ORIGINATOR: PRINTPACK, INC.
By: /s/ R. Xxxxxxx Xxxxxxx
-----------------------------
Name:
Title:
Address for Notices:
Printpack, Inc.
0000 Xxxxxxx Xxxxx, X.X.
Xxxxxxx, XX 00000
Attention: R. Xxxxxxx Xxxxxxx
Phone: (000) 000-0000 x0000
Fax: (000) 000-0000
BUYER: FLEXIBLE FUNDING CORP.
By: /s/ R. Xxxxxxx Xxxxxxx
-----------------------------
Name:
Title:
Address for Notices:
Flexible Funding Corp.
000 Xxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
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EXHIBIT I
DEFINITIONS
AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO BOTH THE SINGULAR AND
PLURAL FORMS OF THE TERMS DEFINED):
"ADVERSE CLAIM" means a lien, security interest, charge or encumbrance, or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person.
"AFFILIATE" means, with respect to any Person, any other Person directly
or indirectly controlling (including but not limited to all directors and
officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control another Person
if such Person possesses, directly or indirectly, the power to direct or cause
the direction of the management or policies of the other Person, whether
through ownership of voting securities, by contract or otherwise.
"AGENT" means First Chicago in its capacity as "AGENT" under the Purchase
Agreement, and any successor Agent appointed under Article IX of the Purchase
Agreement.
"AGREEMENT" means this Receivables Sale Agreement, as it may be amended or
modified and in effect from time to time.
"AGGREGATE UNPAIDS" has the meaning set forth in the Purchase Agreement.
"BANK AGENT" has the meaning set forth in the Intercreditor Agreement.
"BASE RATE" means a rate per annum equal to the corporate base rate, prime
rate or base rate of interest, as applicable, announced by the Reference Bank
from time to time, changing when and as such rate changes; PROVIDED, HOWEVER,
that from and after the occurrence of an Event of Default, the "BASE RATE"
shall equal the sum of the corporate base rate, prime rate or base rate of
interest, as applicable, announced by the Reference Bank from time to time,
plus 2.00% per annum, changing when and as such rate changes.
"BUSINESS DAY" means any day on which banks are not authorized or required
to close in New York, New York or Chicago, Illinois and The Depository Trust
Company of New York is open for business.
"CALCULATION PERIOD" means a period beginning on the first day and ending
on the last day of each fiscal month of the Originator commencing on or after
August 1, 1996.
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"CAPITAL" shall have the meaning set forth in the Purchase Agreement.
"CHANGE OF CONTROL" means (i) any Person or Persons (other than Printpack
Holdings, Inc., any of the Principals or their Related Parties) acting in
concert shall acquire beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 20% or more of the outstanding shares of voting stock of Printpack,
Inc.; or (ii) during any period of twelve (12) consecutive months, commencing
before or after the date hereof, individuals who at the beginning of such
twelve-month period were directors of the Originator shall cease for any reason
to constitute a majority of the board of directors of the Originator; or (iv)
the Originator shall cease to own, free and clear of all Adverse Claims (other
than the pledge to the Bank Agent), all of the outstanding shares of voting
stock of the Seller on a fully diluted basis.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLECTION ACCOUNT" means each concentration account, depositary account,
lock-box account or similar account in which any Collections are collected or
deposited.
"COLLECTION ACCOUNT AGREEMENT" means, in the case of any actual or
proposed Collection Account, an agreement in substantially the form of EXHIBIT
V hereto.
"COLLECTION BANK" means, at any time, any of the banks or other financial
institutions holding one or more Collection Accounts.
"COLLECTION DATE" means that date following the Termination Date which is
one year and one day after the date which (i) the Outstanding Balance of all
Receivables sold hereunder has been reduced to zero and (ii) the Originator has
paid to the Buyer all indemnities, adjustments and other amounts which may be
owed hereunder in connection with the Purchases.
"COLLECTION NOTICE" means a notice, in substantially the form of the
Collection Notice contained in EXHIBIT V hereto, from the Agent to a Collection
Bank.
"COLLECTIONS" means, with respect to any Receivable, all cash collections
and other cash proceeds in respect of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable.
"CONTRACT" means, with respect to any Receivable, any and all instruments,
agreements, leases, bills of lading, invoices or other writings pursuant to
which such Receivable arises or which evidences such Receivable.
"CREDIT AND COLLECTION POLICY" means the Originator's credit and
collection policies and practices relating to Contracts and Receivables
existing on the date hereof and
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summarized in EXHIBIT VI hereto, as modified from time to time in accordance
with this Agreement.
"DEFAULTED RECEIVABLE" means a Receivable: (i) as to which any payment,
or part thereof, remains unpaid for 90 days or more from the original due date
for such payment; (ii) as to which the Obligor thereof has taken any action, or
suffered any event to occur, of the type described in SECTION 6.1(E) (as if
references to the Originator therein refer to such Obligor); (iii) as to which
the Obligor thereof, if a natural person, is deceased; or (iv) which has been
identified by the Originator or the Buyer as uncollectible.
"DILUTIONS" means, at any time, the aggregate amount of reductions in the
Outstanding Balances of the Receivables as a result of any setoff, discount
(other than discounts for prompt payment of up to 1% granted to customers in
the ordinary course of business), adjustment or otherwise, other than cash
Collections on account of the Receivables.
"DISCOUNT FACTOR" means a percentage calculated to provide the Buyer with
a reasonable return on its investment in the Receivables after taking account
of (i) the time value of money based upon the anticipated dates of collection
of the Receivables and the cost to the Buyer of financing its investment in the
Receivables during such period, (ii) the risk of nonpayment by the Obligors,
and (iii) the costs of sub-servicing performed by the Originator. The
Originator and the 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 in respect of Purchases which
occurred during any Calculation Period ending prior to the Calculation Period
during which the Originator and the Buyer agree to make such change.
"ELIGIBLE RECEIVABLE" means, at any time:
(1) a Receivable the Obligor of which (a) is not an Affiliate of any
of the parties hereto; and (b) is not a government or a governmental
subdivision or agency,
(2) a Receivable the Obligor of which is not the Obligor of
Receivables of which more than 50% of the aggregate Outstanding Balance
is more than 90 days past their respective due dates,
(3) a Receivable which is not a Defaulted Receivable,
(4) a Receivable which arises under a Contract that requires payment
within 30 days after the original invoice date therefor and has not had
its payment terms extended,
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(5) a Receivable which is an account receivable representing all or
part of the sales price of merchandise, insurance and services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended,
(6) a Receivable which is an "account" within the meaning of Section
9-106 of the UCC of all applicable jurisdictions,
(7) a Receivable which is denominated and payable only in United
States dollars in the United States,
(8) a Receivable which arises under a non-executory Contract, which,
together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the related
Obligor enforceable by the Originator and its assignees against such
Obligor in accordance with its terms,
(9) a Receivable which arises under a Contract which (a) does not
require the Obligor under such Contract to consent to the transfer, sale
or assignment of the rights of the Originator or any of its assignees
under such Contract and (b) is not subject to a confidentiality provision
that would have the effect of restricting the ability of the Agent or any
Purchaser to exercise its rights under this Agreement, including, without
limitation, its right to review the Contract,
(10) a Receivable which arises under a Contract that contains an
obligation to pay a specified sum of money, contingent only upon the
manufacture of the underlying goods by the Originator,
(11) a Receivable which is not subject to any right of rescission,
set-off (in respect of all or any portion of the Outstanding Balance
thereof then being proposed for inclusion in Net Eligible Receivables as
of any date), counterclaim, any other defense (including defenses arising
out of violations of usury laws) of the applicable Obligor or the
Originator or any other Adverse Claim,
(12) a Receivable as to which the Originator has satisfied and fully
performed all obligations on its part with respect to such Receivable
required to be fulfilled by it, and no further action is required to be
performed by any Person with respect thereto other than payment thereon
by the applicable Obligor,
(13) a Receivable all right, title and interest to and in which has
been validly transferred by the Originator directly to the Buyer under
and in accordance with this Agreement and the Intercreditor Agreement,
and the Buyer has good and marketable title thereto free and clear of any
Adverse Claim,
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(14) a Receivable which, together with the Contract related thereto,
was created in compliance with each, and does not contravene any, law,
rule or regulation applicable thereto (including, without limitation, any
law, rule and regulation relating to truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) in any material respect which would
limit the collectibility of such Receivable or give rise to a claim for
money damages against the Originator, the Buyer or any of the Buyer's
assignees and with respect to which no part of the Contract related
thereto is in violation of any such law, rule or regulation,
(15) a Receivable which satisfies all applicable requirements of the
Credit and Collection Policy,
(16) a Receivable which was generated in the ordinary course of the
Originator's business in connection with the sale and/or shipment of
flexible packaging products or other goods for the applicable Obligor by
the Originator, and
(17) a Receivable as to which the Buyer has not notified the
Originator that the Buyer or its assignees has reasonably determined that
such Receivable or class of Receivables is not acceptable as an Eligible
Receivable, including, without limitation, because such Receivable arises
under a Contract that is not acceptable to the Buyer or its assignees;
PROVIDED, HOWEVER, that Flexible Packaging Receivables shall not be considered
to be "ELIGIBLE RECEIVABLES" under this Agreement unless and until the
Originator has issued an invoice in respect thereof directing payments thereon
to be made to a Collection Account.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer with the Originator under
Section 414 of the Code.
"EVENT OF DEFAULT" has the meaning assigned to that term in SECTION 6.1.
"FACILITY TERMINATION DATE" has the meaning set forth in the Purchase
Agreement.
"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.
"FIRST CHICAGO" means The First National Bank of Chicago in its individual
capacity and its successors.
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"FLEXIBLE PACKAGING" means The Xxxxx River Flexible Packaging Group, a
division of Xxxxx River Corporation of Virginia.
"FLEXIBLE PACKAGING RECEIVABLE" means any Receivable which was originated
by Flexible Packaging and as to which the Originator has not issued at least
one invoice.
"FOREIGN OBLIGOR" means any Obligor which (a) if a natural person, who is
not a resident of the United States or Puerto Rico or (b) if a corporation or
other business organization, is organized under the laws of a jurisdiction
other than the United States, any political subdivision thereof or Puerto Rico
or has its chief executive office outside of the United States or Puerto Rico.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement dated
as of August 22, 1996 by and between The First National Bank of Chicago in its
capacity as contractual representative for itself and the "Lenders" party to
the Credit Agreement referred to therein (in such capacity, together with its
successors in such capacity, the "BANK AGENT"), and The First National Bank of
Chicago as agent under the Purchase Agreement (in such capacity, the
"RECEIVABLES AGENT"), as the same may be amended, supplemented, restated and/or
otherwise modified from time to time.
"INVESTORS" has the meaning set forth in the Preliminary Statement of this
Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition, business or operations of the Originator and its
subsidiaries taken as a whole, (ii) the ability of the Originator to perform
its obligations under any Transaction Document, (iii) the legality, validity or
enforceability of this Agreement, any Transaction Document or any Collection
Account Agreement or Collection Notice relating to a Collection Account into
which a material portion of Collections are deposited, (iv) the Originator's,
the Buyer's, the Agent's or any Purchaser's interest in the Receivables
generally or in any significant portion of the Receivables, the Related
Security or the Collections with respect thereto, or (v) the collectibility of
the Receivables generally or of any material portion of the Receivables.
"MONTHLY REPORT" means a report, in substantially the form of EXHIBIT VII
hereto (appropriately completed), furnished by the Sub-Servicer to the Buyer
and the Agent (as the Buyer's assignee) pursuant to SECTION 5.5.
"NET ELIGIBLE RECEIVABLES" has the meaning set forth in the Purchase
Agreement.
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"NET WORTH" means, on any date of determination, the excess, if any, of
the Buyer's total assets (determined from the most recent Weekly Report
delivered) over the Buyer's total liabilities on such date.
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract.
"ORIGINAL BALANCE" means, with respect to any Receivable, the Outstanding
Balance of such Receivable on the date it was purchased by the Buyer.
"ORIGINATOR" means Printpack, Inc., a Georgia corporation, and shall
include, from and after its acquisition by Printpack, Inc., Flexible Packaging.
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof, and shall exclude any interest or
finance charges thereon, without regard to whether any of the same shall have
been capitalized.
"PBGC" means the Pension Benefit Guaranty Corporation created under
Section 4002(a) of ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, association,
trust, or any other entity, or organization, including a government or
political subdivision or agent or instrumentality thereof.
"PLAN" means any defined benefit plan maintained or contributed to by the
Originator or any Subsidiary of the Originator or by any trade or business
(whether or not incorporated) under common control with the Originator or any
Subsidiary of the Originator as defined in Section 4001(b) of ERISA and insured
by the PBGC under Title IV of ERISA.
"POTENTIAL EVENT OF DEFAULT" means an event which, with the passage of
time or the giving of notice, or both, would constitute an Event of Default.
"PRINCIPALS" means Xxxxxx X. Love, Xxxxx X. Love, III, Xxxxx Xxxx Love
Xxxxxxxx, Xxxxxxx X. Love, Xxxxx X. Love, Xxxxxxx Xxxxx Love and Gay Love.
"PURCHASE" means a purchase by the Buyer of the Receivables and the
Related Security from the Originator pursuant to SECTION 1.1 of this Agreement.
"PURCHASE AGREEMENT" has the meaning set forth in the Preliminary
Statement of this Agreement.
"PURCHASE PRICE" means, with respect to any Purchase on any date, the
aggregate price to be paid to the Originator for such Purchase in accordance
with SECTION 1.2 of this
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Agreement for the Receivables and Related Security being sold to the Buyer on
such date, which price shall equal (i) the product of (x) the Original Balance
of such Receivables TIMES (y) one minus the Discount Factor then in effect,
MINUS (ii) any Purchase Price Credits to be credited against the purchase
price otherwise payable in accordance with SECTION 1.3 hereof.
"PURCHASE PRICE CREDIT" has the meaning set forth in SECTION 1.3.
"PURCHASER" has the meaning set forth in the Purchase Agreement.
"RECEIVABLE" means the indebtedness and other obligations owed (at the
time it arises, and before giving effect to any transfer or conveyance
contemplated hereunder) to the Originator, whether constituting an account,
chattel paper, instrument or general intangible, arising in connection with the
manufacture and shipment of flexible packaging products or other goods by the
Originator and 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.
"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.
"REFERENCE BANK" means The First National Bank of Chicago or such other
bank as the Agent shall designate with the consent of the Buyer.
"RELATED PARTY" means, with respect to any Principal: (a) any spouse or
immediate family member of such Principal, or (b) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding the outstanding equity interests of which
consist of such Principal and/or such other Persons referred to in the
immediately preceding clause (a).
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the Originator's interest, if any, in the goods, the
financing of which gave rise to such Receivable, and any and all
insurance contracts with respect to such goods,
(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
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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, insurance and other agreements or arrangements
of whatever character from time to time supporting or securing payment of
such Receivable whether pursuant to the Contract related to such
Receivable or otherwise,
(iv) all Records related to such Receivable,
(v) all of the Originator's right, title and interest in, to and
under each Contract executed in connection therewith in favor of or
otherwise for the benefit of the Originator; and
(vi) all proceeds of any of the foregoing.
"REPORTABLE EVENT" has the meaning set forth in Section 4043 of ERISA.
"REQUIRED INVESTORS" has the meaning set forth in the Purchase Agreement.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SERVICER" means at any time the Person then authorized pursuant to
ARTICLE VI of the Purchase Agreement to service, administer and collect
Receivables.
"SERVICER DEFAULT" has the meaning set forth in the Purchase Agreement.
"SUBORDINATED LOAN" has the meaning set forth in SECTION 1.2(B).
"SUBORDINATED NOTE" means a promissory note in substantially the form of
EXHIBIT X hereto as more fully described in SECTION 1.2, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"SUBSCRIPTION AGREEMENT" means the Stockholder and Subscription Agreement
in substantially the form of EXHIBIT IX hereto, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"SUB-SERVICER" means the Originator in its capacity as sub-servicer for
the Servicer as described in SECTION 5.1 hereof.
"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
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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, 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. Unless otherwise expressly
provided, all references herein to a "SUBSIDIARY" shall mean a Subsidiary of the
Originator.
"TERMINATION DATE" means, the earliest of (i) the Facility Termination
Date, (ii) the date of the declaration or automatic occurrence of the
Termination Date pursuant to SECTION 6.2 and (iii) the date designated by the
Originator as the Termination Date in a written notice delivered to the Buyer
not less than ten days prior to such designated date; PROVIDED, HOWEVER, that
the Originator shall only be entitled to deliver such a notice pursuant to this
clause (iii) if the Originator has received more than 20% of the Purchase Price
in respect of any Purchase by means of a capital contribution pursuant to
SECTION 1.2(C) hereof.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each
Contract, the Subordinated Note, the Subscription Agreement, each Collection
Account Agreement and all other instruments, documents and agreements executed
and delivered by the Originator in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
"WEEKLY REPORT" means a report, in substantially the form of EXHIBIT VIII
hereto (appropriately completed), furnished by the Sub-Servicer to the Buyer
and the Agent pursuant to SECTION 5.5(A).
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE CONSTRUED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. ALL TERMS USED IN
ARTICLE 9 OF THE UCC IN THE STATE OF ILLINOIS, AND NOT SPECIFICALLY DEFINED
HEREIN, ARE USED HEREIN AS DEFINED IN SUCH ARTICLE 9.
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EXHIBIT II
CHIEF EXECUTIVE OFFICE OF THE ORIGINATOR; LOCATIONS OF RECORDS;
TRADE NAMES; FEDERAL EMPLOYER IDENTIFICATION NUMBER
Chief Executive Office:
Printpack, Inc.
0000 Xxxxxxx Xxxxx, X.X.
Xxxxxxx, XX 00000
Location of Records:
Printpack, Inc.
0000 Xxxxxxx Xxxxx, X.X.
Xxxxxxx, XX 00000
Federal Employer Identification Number of Originator: 00-0000000
Trade Names: None, except:
Printpack, Inc. d/b/a Printpack Georgia, Inc. within the
State of Missouri.
Virtual Image Group
Applied Physics Research
Prior Corporate Names: None, except:
APR, Inc.
[The following result from the acquisition of Flexible Packaging]
Xxxxx River Corporation of Xxxxxxxx
Xxxxx River Paper Company, Inc.
Xxxxx River II, Inc.
JOHIO, Inc.
Xxxxx River Norwalk, Inc.
Crown Zellerbach Corporation
Rampart Packaging, Inc.
The Specialty Paper Company
Xxxxx River Corporation of Nevada
Assumed Names: None, except as noted above.
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EXHIBIT III
COLLECTION ACCOUNTS; LOCK-BOXES;
CONCENTRATION ACCOUNTS; AND DEPOSITARY ACCOUNTS
None, except X.X. Xxx 000000, Xxxxxxx, Xxxxxxx 00000-0000 for which SunTrust
Bank, Atlanta, X.X. Xxx 0000, 00 Xxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, is the
Collection Bank. Proceeds of Collections remitted to such lock-box are
deposited by such Collection Bank into account #8801238646 maintained at such
bank.
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EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished pursuant to that certain
Receivables Sale Agreement dated as of August 22, 1996, between Printpack, Inc.
(the "ORIGINATOR") and Flexible Funding Corp. (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 Originator;
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 Originator and its Subsidiaries during the accounting
period covered by the attached financial statements; and
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 an
Event of Default or a Potential Event of Default, 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.
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 the 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 ____________,
19__.
______________________________
[Name]
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EXHIBIT V
FORM OF COLLECTION ACCOUNT AGREEMENT
[On letterhead of Buyer]
________ 19__
[Lock-Box Bank/Concentration Bank/Depositary Bank]
Re: Flexible Funding Corp.
Printpack, Inc.
Ladies and Gentlemen:
You have exclusive control of P.O. Box #______________ in **[city, state,
zip code]** (the "LOCK-BOX") for the purpose of receiving mail and processing
payments therefrom pursuant to that certain **[name of lock-box agreement]**
between you and Printpack, Inc. dated (the "AGREEMENT"). You hereby confirm
your agreement to perform the services described therein. Among the services
you have agreed to perform therein, is to endorse all checks and other
evidences of payment, and credit such payments to checking account no._______
maintained with you in the name of Printpack, Inc. (the "LOCK-BOX ACCOUNT").
Printpack, Inc. ("PRINTPACK") hereby transfers and assigns all of its
right, title and interest in and to, and exclusive ownership and control over,
the Lock-Box and the Lock-Box Account to Flexible Funding Corp.
("FLEXIBLE-SPC"). Printpack and Flexible-SPC hereby request that the name of
the Lock-Box Account be changed to Flexible Funding Corp., as "COLLECTION
AGENT" for the benefit of The First National Bank of Chicago ("FNBC"), as agent
under that certain Receivables Purchase Agreement (the "RECEIVABLES PURCHASE
AGREEMENT") dated as of August 22, 1996 among Flexible-SPC, Falcon Asset
Securitization Corporation, certain financial institutions parties thereto and
FNBC.
Flexible-SPC hereby irrevocably instructs you, and you hereby agree, that
upon receiving notice from FNBC in the form attached hereto as Annex A: (i) the
name of the Lock-Box Account will be changed to FNBC for itself and as agent
(or any designee of FNBC) and FNBC will have exclusive ownership of and access
to such Lock-Box Account, and neither Printpack, Flexible-SPC nor any of their
respective affiliates will have any control of such Lock-Box Account or any
access thereto, (ii) you will either continue to send the funds from the
Lock-Box to the Lock-Box Account, or will redirect the funds as FNBC may
otherwise request, (iii) you will transfer monies on deposit in the Lock-Box
Account, at any time, as directed by FNBC, (iv) all services to be performed by
you under the Agreement will be performed on behalf
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of FNBC, and (v) all correspondence or other mail which you have agreed to
send to either Printpack or Flexible-SPC will be sent to FNBC at the following
address:
The First National Bank of Chicago
Suite 0079, 21st Floor
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Credit Manager, Asset-Backed Finance
Moreover, upon such notice, FNBC for itself and as agent will have all
rights and remedies given to Printpack or Flexible-SPC under the Agreement.
Each of Printpack and Flexible-SPC agrees, however, to continue to pay all fees
and other assessments due thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box Account or
any other account established with you by FNBC for the purpose of receiving
funds from the Lock-Box are subject to the liens of FNBC for itself and as
agent under the Receivables Purchase Agreement, and will not be subject to
deduction, set-off, banker's lien or any other right you or any other party may
have against Printpack or Flexible-SPC, except that you may debit the Lock-Box
Account for any items deposited therein that are returned or otherwise not
collected and for all charges, fees, commissions and expenses incurred by you
in providing services hereunder, all in accordance with your customary
practices for the charge back of returned items and expenses.
This letter agreement and the rights and obligations of the parties
hereunder will be governed by and construed and interpreted in accordance with
the laws of the State of Illinois. This letter agreement may be executed in
any number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between the parties,
and may not be altered, modified, terminated or amended in any respect, nor may
any right, power or privilege of any party hereunder be waived or released or
discharged, except upon execution by all parties hereto of a written instrument
so providing. In the event that any provision in this letter agreement is in
conflict with, or inconsistent with, any provision of the Agreement, this
letter agreement will exclusively govern and control. Each party agrees to
take all actions reasonably requested by any other party to carry out the
purposes of this letter agreement or to preserve and protect the rights of each
party hereunder.
Please indicate your agreement to the terms of this letter agreement by
signing in the space provided below. This letter agreement will become
effective immediately upon execution of a counterpart of this letter agreement
by all parties hereto.
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Very truly yours,
PRINTPACK, INC.
By
------------------------------
Title
---------------------------
FLEXIBLE FUNDING CORP.
By
------------------------------
Title
---------------------------
Acknowledged and agreed to
this _____ day of ____________, 1996:
[COLLECTION BANK]
By:
----------------------------------
Title:
-------------------------------
Acknowledged and agreed to
this _____ day of ___________, 1996:
THE FIRST NATIONAL BANK OF CHICAGO (for itself and
as Agent)
By
-----------------------------------
Authorized Agent
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ANNEX A
FORM OF COLLECTION NOTICE
[On letterhead of FNBC]
________________, 19 ___
[Collection Bank/Depositary Bank/Concentration Bank]
Re: Flexible Funding Corp.
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to that
certain letter agreement among Printpack, Inc., Flexible Funding Corp., you and
us, to have the name of, and to have exclusive ownership and control of,
account number ____________ (the "LOCK-BOX ACCOUNT") maintained with you,
transferred to us. Lock-Box Account will henceforth be a zero-balance account,
and funds deposited in the Lock-Box Account should be sent at the end of each
day to _________________. You have further agreed to perform all other
services you are performing under that certain agreement dated _____________
between you and Printpack, Inc. on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
(for itself and as agent)
By:___________________________
Authorized Agent
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EXHIBIT VI
CREDIT AND COLLECTION POLICY
[to be provided by the Originator]
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EXHIBIT VII
FORM OF MONTHLY REPORT
[to be provided by First Chicago]
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EXHIBIT VIII
FORM OF WEEKLY REPORT
[to be provided by First Chicago]
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EXHIBIT IX
FORM OF SUBSCRIPTION AGREEMENT
---
STOCKHOLDER AND SUBSCRIPTION AGREEMENT
THIS STOCKHOLDER AND SUBSCRIPTION AGREEMENT (this "AGREEMENT"), dated as
of August ___, 1996, is entered into by and between Flexible Funding Corp., a
Delaware corporation ("FLEXIBLE-SPC"), and Printpack, Inc., a Georgia
corporation ("PRINTPACK"). Except as otherwise specifically provided herein,
capitalized terms used in this Agreement have the meanings ascribed thereto in
the Receivables Sale Agreement dated as of even date herewith between
Flexible-SPC and Printpack (as amended, restated, supplemented or otherwise
modified from time to time, the "SALE AGREEMENT").
R E C I T A L S
A. Flexible-SPC has been organized under the laws of the State of Delaware
for the purpose of, among other things, purchasing, holding, financing,
receiving and transferring accounts receivable and related assets originated or
otherwise held by Printpack.
B. Contemporaneously with the execution and delivery of this Agreement:
(i) Printpack and Flexible-SPC have entered into the Sale Agreement pursuant to
which Printpack has, from and after the initial purchase date thereunder and
prior to the termination date specified therein, sold all of its Receivables,
Collections and Related Security to Flexible-SPC and (ii) Flexible-SPC, certain
financial institutions party thereto as "PURCHASERS," and The First National
Bank of Chicago, as the "AGENT," have entered into a Receivables Purchase
Agreement (as amended, restated, supplemented or otherwise modified from time
to time, the "PURCHASE AGREEMENT") pursuant to which Flexible-SPC will sell
"RECEIVABLE INTERESTS" to the Agent for the benefit of the Purchasers.
C. Flexible-SPC desires to sell shares of its capital stock to Printpack,
and Printpack desires to purchase such shares, on the terms set forth in this
Agreement.
NOW, THEREFORE, Flexible-SPC and Printpack agree as follows:
1. Purchase and Sale of Capital Stock.
Printpack hereby purchases from Flexible-SPC, and Flexible-SPC hereby
sells to Printpack, 1,000 shares of common stock, par value $.01 per share, of
Flexible-SPC (the
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"COMMON STOCK") for the Stock Purchase Price set forth in SECTION 2.1. The
shares of Common Stock being purchased under this Agreement are referred to
herein as the "SHARES."
Within three (3) Business Days from the date hereof, Flexible-SPC shall
deliver to Printpack a certificate registered in Printpack's name representing
the Shares.
2. Consideration for Shares and Capital Contributions.
2.1 Consideration for Shares.
To induce Flexible-SPC to enter into the Sale Agreement and to enable
Flexible-SPC to fund its obligations thereunder by consummating the
transactions contemplated by the Purchase Agreement, and in reliance upon the
representations and warranties set forth herein, Printpack hereby pays to
Flexible-SPC on the date hereof $25,000 (the "STOCK PURCHASE PRICE") in
consideration of the purchase of the Shares. The Stock Purchase Price shall
take the form of a transfer of cash, except that Printpack may, in lieu of cash
payment of the Stock Purchase Price, offset the amount of the Stock Purchase
Price against the purchase price otherwise payable by Flexible-SPC to Printpack
on the initial purchase date pursuant to the Sale Agreement.
2.2 Contributions After Initial Closing Date.
From time to time Printpack may make additional capital contributions to
Flexible-SPC. All such contributions shall take the form of a cash transfer,
except that Flexible-SPC agrees to, in lieu of cash payment thereof, offset the
amount of such contributions against the purchase price for Receivables
otherwise payable by Flexible-SPC to Printpack on the date of such capital
contributions. All of the Receivables so paid for through such offset shall
constitute purchased Receivables within the meaning of the Sale Agreement and
shall be subject to all of the representations, warranties and indemnities
otherwise made hereunder. It is expressly understood and agreed that Printpack
has no obligations under this Agreement or otherwise to make any capital
contributions from and after payment of the Stock Purchase Price.
3. Representations and Warranties of Flexible-SPC.
Flexible-SPC represents and warrants to Printpack as follows:
(a) Flexible-SPC is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware,
and has all requisite corporate power and authority to carry on its
business as proposed to be conducted on the date hereof.
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(b) Flexible-SPC has all requisite legal and corporate power to
enter into this Agreement, to issue the Shares and to perform its other
obligations under this Agreement.
(c) Upon receipt by Flexible-SPC of the Stock Purchase Price and the
issuance of the Shares to Printpack, the Shares will be duly authorized,
validly issued, fully paid and nonassessable.
(d) Flexible-SPC has taken all corporate action necessary for its
authorization, execution and delivery of, and, its performance under,
this Agreement.
(e) This Agreement constitutes a legally valid and binding
obligation of Flexible-SPC, enforceable against Flexible-SPC in
accordance with its terms, except that enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and by general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) Flexible-SPC has filed its Certificate of Incorporation in the
form attached hereto as Exhibit A with the Secretary of State of Delaware
and (ii) adopted By-laws in the form attached hereto as Exhibit B.
(g) The issuance of the Shares by Flexible-SPC hereunder is legally
permitted by all laws and regulations to which Flexible-SPC is subject.
4. Representations and Warranties of Printpack.
Printpack represents and warrants to Flexible-SPC as follows:
(a) Printpack is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Georgia, and has all
requisite corporate power and authority to carry on its business as
conducted on the date hereof.
(b) Printpack has all requisite legal and corporate power to enter
into this Agreement, to purchase the Shares and to perform its other
obligations under this Agreement.
(c) Printpack has taken all corporate action necessary for its
authorization, execution and delivery of, and its performance under, this
Agreement.
(d) This Agreement constitutes a legally valid and binding
obligation of Printpack, enforceable against Printpack in accordance with
its terms, except that
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enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(e) Printpack is purchasing the Shares for investment for its own
account, not as a nominee or agent, and not with a view to any
distribution of any part thereof; and except for a pledge of all the
Shares to Printpack's senior secured lenders, Printpack has no current
intention of selling, granting a participation in, or otherwise
distributing, the same.
(f) Printpack understands that the Shares have not been registered
under the Securities Act of 1933, as amended, or under any other Federal
or state law, and that Flexible-SPC does not contemplate such a
registration.
(g) Printpack has such knowledge, sophistication and experience in
financial and business matters that it is capable of evaluating the
merits and risks of the transactions contemplated by this Agreement, and
has made such investigations in connection herewith as have been deemed
necessary or desirable to make such evaluation.
(h) The purchase of the Shares by Printpack is legally permitted by
all laws and regulations to which Printpack is subject.
5. Restrictions on Transfer Imposed by the Act; Legend.
5.1 Legend. Each certificate representing any Shares shall be
endorsed with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES ACT. SUCH SECURITIES SHALL NOT BE SOLD, PLEDGED,
HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED OR DISPOSED OF
ABSENT SUCH REGISTRATION, UNLESS, IN THE OPINION OF THE
CORPORATION'S COUNSEL, SUCH REGISTRATION IS NOT REQUIRED. IN ADDITION,
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13)
OF SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AS
AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A
TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER SUCH ACT;
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5.2 Registration of Transfers. Flexible-SPC need not register a transfer
of any Shares unless the conditions specified in the legend set forth in
SECTION 5.1 hereof are satisfied. Flexible-SPC may also instruct its transfer
agent (which may be Flexible-SPC) not to register the transfer of any Shares
unless the conditions specified in the legend set forth in SECTION 5.1 hereof
are satisfied.
6. Agreement to Vote. Printpack hereby agrees and covenants to vote all
of the shares of Common Stock now or hereafter owned by it, whether
beneficially or otherwise, as is necessary at a meeting of stockholders of
Flexible-SPC, or by written consent in lieu of any such meeting, to cause to be
elected to, and maintained on, Flexible-SPC's board of directors at least one
(1) person (an "INDEPENDENT DIRECTOR") meeting the qualifications and selected
in accordance with the provisions of the Certificate of Incorporation and
By-laws of Flexible-SPC.
7. Successors and Assigns.
Each party agrees that it will not assign, sell, transfer, delegate, or
otherwise dispose of, whether voluntarily or involuntarily, or by operation of
law, any right or obligation under this Agreement except in connection with a
transfer of Shares in compliance with the terms and conditions hereof, as
contemplated by Section 5.2 above, or otherwise in accordance with the terms
hereof. Any purported assignment, transfer or delegation in violation of this
SECTION 7 shall be null and void AB INITIO. Subject to the foregoing limits on
assignment and delegation and except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their respective heirs, legatees, executors, administrators, assignees and
legal successors.
8. Amendments and Waivers.
Any term hereof may be amended and the observance of any term hereof may
be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of Flexible-SPC
and Printpack. Any amendment or waiver so effected shall be binding upon
Flexible-SPC and Printpack.
9. Further Acts.
Each party agrees to perform any further acts and execute and deliver any
document which may be reasonably necessary to carry out the provisions of this
Agreement.
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10. Counterparts.
This Agreement may be executed in any number of counterparts, and all of
such counterparts together will be deemed one instrument.
11. Notices.
Any and all notices, acceptances, statements and other communications to
Printpack in connection herewith shall be in writing, delivered personally, by
facsimile or certified mail, return receipt requested, and shall be addressed
to the address of Printpack indicated on the stock transfer register of
Flexible-SPC or, if no address is so indicated, to the address provided to
Flexible-SPC pursuant to the Sale Agreement unless changed by written notice to
Flexible-SPC or its successor.
12. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAWS OF THE STATE OF GEORGIA, EXCEPT AND TO THE EXTENT THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE IS APPLICABLE.
13. Entire Agreement.
This Agreement, together with the Sale Agreement and the other documents
expressly to be delivered in connection therewith, constitute the full and
entire understanding and agreement between the parties hereto with regard to
the subject matter hereof and thereof.
14. Severability of this Agreement.
In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused their respective
officers thereunto duly authorized to execute this Agreement as of the date
first written above.
PRINTPACK, INC.
By:
---------------------------
Name:
Title:
FLEXIBLE FUNDING CORP.
By:
---------------------------
Name:
Title:
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EXHIBIT A
TO
STOCKHOLDER AND SUBSCRIPTION AGREEMENT
Form of Certificate of Incorporation
______________________________________
CERTIFICATE OF INCORPORATION
OF
FLEXIBLE FUNDING CORP.
______________________________________
ARTICLE ONE
NAME
The name of the corporation (the "Corporation") is: "Flexible Funding Corp."
ARTICLE TWO
REGISTERED OFFICE AND AGENT
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx,
Xxxxxx of New Castle. Its registered agent at such address is The Corporation
Trust Company.
ARTICLE THREE
OBJECTS AND POWERS
The nature of the Corporation's business, and its objects, purposes and
powers are as follows:
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(1) to enter into any agreement to purchase, make loans secured by
or otherwise acquire, own, hold, sell, transfer, exchange or dispose of
interests in, or undivided interests in, pools of accounts, securities,
general intangibles, chattel paper, instruments, or other financial
assets of Printpack, Inc. or any Affiliate thereof (all such assets,
"Permitted Assets");
(2) to enter into any agreement providing for (i) the sale of
Permitted Assets or undivided interests therein or (ii) borrowing by the
Corporation to facilitate any activity authorized herein, either on an
unsecured basis or secured by a pledge of all or any portion of the
Corporation's assets (all of the foregoing, "Permitted Financings");
(3) to loan or otherwise invest proceeds from the Permitted
Financings, the issuance of the Corporation's equity securities and any
other income as determined by the Corporation's Board of Directors or any
officer or agent exercising authority delegated by the Corporation's
Board of Directors;
(4) to enter into any agreement providing for the management and
administration of the activities of the Corporation; and
(5) To transact any business, to engage in any act or activity, and
to exercise all powers permitted to corporations by the General
Corporation Law of Delaware that are incident or necessary to the
foregoing or to the accomplishment of such objects, purposes and powers.
ARTICLE FOUR
CAPITAL STOCK
4.01 TOTAL NUMBER OF SHARES. The total number of shares of all
classes of capital stock ("Shares") which the Corporation shall have the
authority to issue is 10,000, consisting of 10,000 Shares of common stock,
$.01 par value per share ("Common Stock").
4.02 DIVIDENDS. Dividends upon all classes and series of Shares
shall be payable only when, as and if declared by the Board of Directors from
funds lawfully available therefor, which funds shall include, without
limitation, the Corporation's capital surplus. Dividends upon any class or
series of Shares may be paid in cash, property, or Shares of any class or
series of or other securities or evidences of indebtedness of the Corporation
or any other issuer, as may be determined by resolution or resolutions of the
Board of Directors.
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ARTICLE FIVE
DIRECTORS
5.01 NUMBER OF DIRECTORS. The Board of Directors of the Corporation shall
consist of not less than three nor more than five members, including at least
one person who is Independent, and who shall otherwise qualify as provided in
Section 8.06(1) hereof. A director who otherwise meets the description of
Independent Director as set forth herein shall not be disqualified from serving
as an Independent Director of this Corporation if he or she is also a director
of another corporation that is an Affiliate of Printpack, Inc., the
Corporation's sole shareholder, with a certificate of incorporation
substantially similar to the certificate of incorporation of the Corporation.
To the fullest extent permitted by applicable law, including the General
Corporation Law of the State of Delaware as in effect from time to time, each
Independent Director's fiduciary duty in respect of any decision on any matter
referred to in Article Eight shall be to the Corporation (including its
creditors) rather than solely to the Corporation's stockholders. In
furtherance of the foregoing, when voting on matters subject to the vote of the
Board of Directors, including those matters referred to in Article Eight,
notwithstanding that the Corporation is not then insolvent, each Independent
Director shall take into account the interests of the creditors of the
Corporation as well as the interests of the Corporation.
5.02 RELIANCE UPON RECORDS, ETC. A member of the Board of Directors, or a
member of any committee designated by the Board of Directors, shall, in the
performance of his or her duties, be fully protected in relying in good faith
upon the records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of the Corporation's
officers or employees or committees of the Board of Directors, or by any person
as to matters the member reasonably believes are within such other person's
professional, expert or other competence and who has been selected with
reasonable care by or on behalf of the Corporation.
ARTICLE SIX
INDEMNIFICATION
6.01 INDEMNIFICATION.
(1) Each person who was or is made a party or is threatened to be made
a party to or is involved in any action, suit or proceeding, whether civil,
criminal, arbitral, governmental, administrative, investigative or otherwise
(hereinafter, a "Proceeding"), by reason of the fact that he or she, or a
Person of
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whom he or she is the legal representative, is or was a
director, officer or employee of the Corporation or is or was
serving at the request of the Corporation as a director, officer
or employee of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect
to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer or
employee or in any other capacity while serving as a director,
officer or employee, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all
expenses, liability and loss (including penalties, fines,
judgments, reasonable attorneys' fees and charges, amounts paid or
to be paid in settlement and excise taxes imposed on fiduciaries
with respect to (i) employee benefit plans, (ii) charitable
organizations or (iii) similar matters) reasonably incurred or
suffered by such person in connection therewith, and such
indemnification shall continue as to a person who has ceased to be
a director, officer or employee and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however,
that the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof)
initiated by such person (other than pursuant to subsection
6.01(2)) only if such proceeding (or part thereof) was authorized
by the Board of Directors of the Corporation. The right to
indemnification conferred in this subsection 6.01(1) shall be a
contract right and shall include the right to be paid by the
Corporation the reasonable expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however,
that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and in any other
capacity in which service was or is rendered by such person while
a director or officer, including, without limitation, service to
an employee benefit plan) in advance of the final disposition of a
proceeding shall be made only upon delivery to the Corporation of
an undertaking, by or on behalf of such director or officer, to repay
all amounts so advanced if it shall ultimately be determined that
such director or officer is not entitled to be indemnified under this
subsection 6.01(1) or otherwise.
(2) If a claim which the Corporation is obligated to pay
under subsection 6.01(1) is not paid in full by the Corporation
within 60 days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be
entitled to be paid also the reasonable expense of prosecuting
such claim. It shall be a defense to any
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such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standards
of conduct which make it permissible under the Delaware General
Corporation Law for the Corporation to indemnify the claimant for the
amount claims, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board
of Directors, independent legal counsel or its shareholders) to have made
a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he
or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel
or its shareholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of
conduct.
(3) The provisions of this Section 6.01 shall cover claims,
actions, suits and proceedings, civil or criminal, whether now
pending or hereafter commenced, and shall be retroactive to cover
acts or omissions or alleged acts or omissions which heretofore
have taken place. If any part of this Section 6.01 should be
found to be invalid or ineffective in any proceeding, the validity
and effectiveness of the remaining provisions shall not be
affected.
(4) The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final
disposition conferred in this Section 6.01 are non-exclusive of
any other right which any person may have or hereafter acquire
under any statute, provision of this Certificate of Incorporation,
or any Corporation By-Law, insurance policy or agreement, vote of
shareholders or disinterested directors or otherwise.
(5) The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any such expense,
liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
(6) The Corporation may, to the extent authorized from time
to time by the Board of Directors, grant rights to
indemnification, and rights to be paid by the Corporation the
expenses incurred in defending any proceeding in advance of its
final disposition, to any agent of the Corporation to the fullest
extent of the
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provisions of this Section 6.01 with respect to the indemnification
and advancement of expenses of directors, officers and employees of the
Corporation.
6.02 LIMITATION OF MONETARY DAMAGES. A director shall not be
personally liable to the Corporation or its shareholders for monetary damages
for breach of fiduciary duty as a director, except this provision shall not
eliminate liability of a director (i) for any breach of the director's duty of
loyalty to the Corporation or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for unlawful payment or dividend or unlawful stock purchase or
redemption under Delaware General Corporation Law, Section 174, or (iv) for any
transaction from which the director derived an improper personal benefit.
Any repeal or modification of this Section 6.02 by the Corporation's
shareholders shall not adversely affect any right of protection of a director
of the Corporation existing at the time of such repeal or modification with
respect to acts or omissions occurring prior to such repeal or modification. If
the Delaware General Corporation Law hereafter is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the Corporation, in addition to the limitation on
personal liability provided herein, shall be limited to the fullest extent
permitted by the amended Delaware General Corporation Law.
6.03 SEVERABILITY. In the event that any of the provisions of this
Article Six (including any provision within a single sentence) are held by a
court of competent jurisdiction to be invalid, void or otherwise unenforceable,
the remaining provisions are severable and shall remain enforceable to the
fullest extent permitted by law.
ARTICLE SEVEN
INCORPORATOR
The name and mailing address of the incorporator is:
Name Mailing Address
---- ---------------
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ARTICLE EIGHT
SPECIAL PROVISIONS
In furtherance and not in limitation of the powers conferred herein and
by law, the following provisions for regulation of the Corporation, its
directors and shareholders are hereby established:
8.01 PURCHASE OF SHARES. The Corporation shall have the right to
purchase, take, receive or otherwise acquire, hold, own, pledge, transfer or
otherwise dispose of its own Shares to the full extent of undivided profits,
earned surplus, capital surplus or other surplus or any other funds lawfully
available therefor.
8.02 TRANSACTIONS WITH CERTAIN PERSONS. No contract or other
transaction between the Corporation and one or more of its directors or
officers or between the Corporation or any other person, corporation, firm,
association or entity in which one or more of its directors or officers are
directors or officers or are financially interested, shall be void or voidable
because of such relationship or interest, or because such director or officer
is present at or participates in a meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction, or solely because his or their votes are counted for such purpose,
if such contract or transaction is permitted by the Delaware General
Corporation Law, Section 144, as now or hereafter in effect.
8.03 TRANSFER RESTRICTIONS, ETC. Written restrictions on the transfer
or registration of transfer of the Corporation's Shares, securities or
evidences of indebtedness or any interest therein may be imposed by the
Partnership, entered into as part of an agreement, adopted as By-Laws, or
recognized by the Corporation as the Corporation's Board of Directors may
determine by resolution or resolutions. Any such transfer restrictions shall
be noted conspicuously on the security or evidence of indebtedness. The
Corporation may from time to time enter into any agreement to which all, or
less than all, holders of record of the Corporation's issued and outstanding
Shares are parties, restricting the transfer or registration of transfer of any
or all of the Corporation's Shares, upon such reasonable terms and conditions
as may be approved by resolution or resolutions adopted by the Corporation's
Board of Directors.
8.04 NO LIABILITY OF SHAREHOLDERS. The holders of Corporation Shares
shall not be personally or otherwise liable to any extent whatsoever for the
payment of the Corporation's debts, liabilities and obligations, and the
private property of the holders of Corporation Shares shall not be subject to
the payment of the Corporation's debts, liabilities and obligations to any
extent whatsoever.
8.05 COMPROMISES AND ARRANGEMENTS WITH CREDITORS. Whenever a
compromise or arrangement is proposed between this Corporation and its
creditors or any class of them and/or between this Corporation and its
shareholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of
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this Corporation or of any creditor or shareholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of Title 8
of the Delaware Code, order a meeting of the creditors or class of creditors,
and/or of the shareholders or class of shareholders of this Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the shareholders or class of shareholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which said application has been made, be
binding on all the creditors or class of creditors, and/or on all the
shareholders or class of shareholders, of this Corporation, as the case may be,
and also on this Corporation.
8.06 CORPORATE SEPARATENESS. At all times from and after the
establishment of the Corporation:
(1) At least one of the Corporation's directors and at least one of
the Corporation's officers shall be persons who are Independent (each
such director, an "Independent Director," and each such officer, an
"Independent Officer"). The same individual may serve as both an
Independent Officer and an Independent Director; and
(2) The Corporation's assets will not be commingled with those of
any other Person; and
(3) The Corporation will maintain separate corporate records and
books of account from those of any other Person; and
(4) The Corporation will conduct its business from an office
separate from any direct or ultimate parent of the Corporation.
8.07 ELECTION OF DIRECTORS. Elections of directors need not be
by written ballot unless the By-Laws of the Corporation shall so provide.
8.08 BANKRUPTCY, DISSOLUTION, ETC.
(1) Notwithstanding any other provision of this Certificate of
Incorporation, the unanimous approval of the Board of Directors is
required for the filing by the Corporation of a voluntary bankruptcy
petition under Section 301 of the Bankruptcy Code, 11 U.S.C. Section
301, or any successor thereto.
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(2) Notwithstanding any other provision of this Certificate of
Incorporation and any provision of law that otherwise so empowers the
Corporation, the Corporation shall not, while any indebtedness of the
Corporation is outstanding, do any of the following:
(a) voluntarily dissolve the Corporation; or
(b) other than any indebtedness (i) in connection with a
Permitted Financing and (ii) in connection with the acquisition of
Permitted Assets and any agreements entered into in connection
therewith, incur any additional indebtedness of liability for
borrowed money, or assume or guaranty any indebtedness or
liability for borrowed money of any entity.
8.09 CERTAIN DEFINITIONS. As used herein, the following terms
shall have the following meanings:
"AFFILIATE" shall mean any Person other than the Corporation
(i) which owns beneficially, directly or indirectly, individually
or as a part of a "Group" as defined in Securities and Exchange
Commission ("SEC") Rule 13d-3, 10% or more of the outstanding
shares of the Corporation's Common Stock, (ii) which is in control
of the Corporation, as "control" is defined under SEC Rule 405, as
in effect on the date hereof, (iii) of which 10% or more of the
outstanding shares of Common Stock is owned beneficially, directly
or indirectly, by a Person, individual or as a part of a Group
described in clauses (i) or (ii) above, or (iv) which is
controlled by, or under common control with a Person, individually
or as part of a Group described in clauses (i) or (ii) above, as
"control" and "controlled by" are defined for purposes of such
Rule 405.
"INDEPENDENT" means, with respect to the Corporation, any
Person (i) who is not an officer or employee, or a beneficial
owner, directly or indirectly of 10% or more of any equity
interest in the Corporation or any Affiliate thereof, and who is
not related by blood, marriage or adoption with any of the
foregoing Persons; (ii) who has not been an employee of the
Corporation or any Affiliate in the last five years; (iii) who is
not affiliated with, or employed by, any Person providing services
to, any of the Corporation's significant customers or suppliers;
(iv) who is not affiliated with any tax exempt or other
organization that receives significant contributions from the
Corporation or any of its Affiliates; and (v) who has not provided
and is not providing directly or indirectly, whether or not
through any related corporation, partnership, limited liability
company, limited liability partnership or other Person, legal,
accounting or investment banking services for the Corporation or
any Affiliate. In the case of an accountant, an accountant will
only be Independent for purposes hereof only where he or she also
meets the
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criteria of independence described in SEC Regulation S-X, Rule
2-01(B) and does not otherwise provide any professional
services directly or indirectly to the Corporation or its
Affiliates and none of his or her professional affiliates having
managerial responsibilities participate in any such services. A
Person that is otherwise Independent of the Corporation shall not
be precluded from serving as an Independent Director by virtue of
his or her service as a director of any direct or indirect parent
of the Corporation.
"PERSON" means any individual, partnership, corporation,
trust, unincorporated association, joint venture or other entity,
or any government, or any government agency, authority or
political subdivision thereof, or any other form of entity.
8.10 The Corporation reserves the right to amend, alter, change or
repeal any provision (except Article Three and Sections 8.05, 8.06 and 8.08)
contained in this Certificate of Incorporation, in the manner now or hereafter
prescribed by statute or this Certificate, and all rights conferred upon
shareholders herein are granted subject to this reservation.
8.11 BY-LAWS. The Corporation's Board of Directors is authorized and
empowered to amend, alter, change or repeal the Corporation's By-Laws and to
adopt new By-Laws.
ARTICLE NINE
DURATION
The Corporation shall have perpetual duration and existence.
THE UNDERSIGNED, being the Incorporator named above, for the purpose
of forming a corporation pursuant to the General Corporation Law of the State of
Delaware, does make this Certificate, hereby declaring and certifying that this
is my act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand as of this 19th day of August, 1996.
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-------------------------------------------------------------------------------
EXHIBIT B
TO
STOCKHOLDER AND SUBSCRIPTION AGREEMENT
Form of By-laws
______________________________________
FLEXIBLE FUNDING CORP.
BY-LAWS
______________________________________
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL AND REGISTERED OFFICE. The Corporation's
principal office shall be in the City of Atlanta, County of Xxxxxx, Georgia.
The Corporation's registered office in the State of Delaware shall be in the
City of Wilmington, County of New Castle.
SECTION 2. OTHER OFFICES. The Corporation may also have offices at
such other places, both within and without the States of Georgia and Delaware,
as the Board of Directors may from time to time determine or the business of
the Corporation may require to the extent not prohibited by law.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. LOCATION. All meetings of shareholders shall be held at the
Corporation's principal office in Atlanta, Georgia, or at such other place
either within or without the States of Georgia or Delaware as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting.
SECTION 2. ANNUAL MEETINGS. Annual meetings of shareholders shall be
held on the date and time as shall be designated from time to time by the Board
of Directors and stated in the
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notice of the meeting. At the annual meeting, the shareholders shall
elect a Board of Directors by plurality vote, and shall transact any other
business as may properly come before the meeting.
SECTION 3. NOTICE OF ANNUAL MEETING. Written notice of the annual
meeting stating the place, day and hour of the meeting shall be given to each
shareholder of record entitled to vote at such meeting not less than 10 nor
more than 60 days before the date of the meeting.
SECTION 4. SPECIAL MEETINGS. Special meetings of shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman or the President,
or a majority of the Board of Directors, or upon the written request of
shareholders owning not less than 25% of all shares of capital stock of the
Corporation issued and outstanding and entitled to vote at such meeting. Such
request by the shareholders shall state specifically the purpose or purposes of
the proposed meeting.
SECTION 5. NOTICE OF SPECIAL MEETINGS. Written notice of a special
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given to each shareholder
entitled to vote at such meeting, not less than 10 nor more than 60 days before
the date of the meeting.
SECTION 6. BUSINESS OF SPECIAL MEETINGS. Business transacted at any
special meeting of shareholders shall be limited to the purposes stated in the
notice.
SECTION 7. SHAREHOLDER LIST. The officer who has charge of the
Corporation's stock ledger shall prepare and make at least 10 days before every
meeting of shareholders, a complete list of shareholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
shareholder and the number of shares registered in the name of each
shareholder. Such list shall be available for inspection by any shareholder
for any purpose germane to the meeting during ordinary business hours for a
period of at least 10 days prior to the meeting either at a place within the
city where the meeting is to be held, which place is specified in the notice of
the meeting or at the place where the meeting is to be held. The list of
shareholders entitled to vote also shall be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
shareholder who is present. The original stock transfer books shall be the
only evidence as to the shareholders entitled to examine the shareholder list
or stock transfer book, or to vote at any meeting of shareholders.
SECTION 8. QUORUM. The holders of a majority of the Corporation's shares
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of shareholders
for the transaction of business except as otherwise provided by the Delaware
General Corporation Law or the Certificate of Incorporation. If, however, such
quorum is not present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by
proxy, shall have the
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power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than 30
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, written notice of the adjourned meeting shall be given to the
shareholders entitled to vote at the meeting. Every meeting of the
shareholders may be adjourned from time to time until its business is
completed, and except as provided herein or by applicable law, no notice need
be given of such adjourned meeting.
SECTION 9. ACTION BY SHAREHOLDERS. When a quorum is present at any
meeting, the vote of the holders of a majority of the shares having voting
power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which by express
provision of the Delaware General Corporation Law or the Certificate of
Incorporation, a different vote is required, in which case, such express
provision shall govern and control the decision of such question.
SECTION 10. VOTING. Each shareholder shall at every meeting of the
shareholders be entitled to one vote in person or by proxy for each share
having voting power held by such shareholder, except as may otherwise be
provided in the Certificate of Incorporation or any Certificate of Designation
thereunder.
SECTION 11. WAIVER OF NOTICE. Whenever any notice is required to be
given to any shareholder, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be equivalent to the giving of such notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
SECTION 12. ACTION WITHOUT A SHAREHOLDERS' MEETING. Any action
required to be taken at any annual or special meeting of shareholders of the
Corporation, or any action which may be taken at any annual or special meeting
of such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding shares entitled to vote on such
matters having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Any such consent shall be
delivered to the Corporation at its registered office in the State of Delaware,
its principal place of business, or to an officer or agent of the Corporation
having custody of the minutes of the proceedings of the shareholders. Any
delivery made to the Corporation's registered office of corporate action by
less than unanimous written consent shall be given to those shareholders who
have not consented in writing.
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SECTION 13. FORM OF WRITTEN CONSENT. Every written consent by a
shareholder or shareholders shall bear the date of signature of each
shareholder who signs the consent. No written consent shall be effective with
respect to the action referred therein, unless, within 60 days of the earliest
date of consent delivered as required by these By-Laws and the Delaware General
Corporation Law, written consents signed by a sufficient number of shareholders
to take action are delivered to the Corporation by delivery as provided in
Section 12 of this Article II.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL, POWERS; NUMBER, TENURE AND QUALIFICATIONS. The
Corporation's business, properties and affairs shall be managed by its Board of
Directors (the "Board"), comprised of the number and type of directors
determined in the Certificate of Incorporation. Directors shall be elected at
each annual meeting of the shareholders, and shall hold office as provided in
the Certificate of Incorporation and until their successors are elected and
qualified. At all times, at least one member of the Board of Directors shall
be an "Independent Director" (as defined in Section 8.06 of the Certificate of
Incorporation and as further provided in Section 5.01 thereof.
SECTION 2. VACANCIES. Vacancies in the Board shall be filled by the
affirmative vote of a majority of the remaining directors even though such
remaining directors constitute less than a quorum of the Board. A director
elected to fill a vacancy shall serve a term as provided in the Certificate of
Incorporation. Any directorship to be filled by reason of an increase in the
number of directors shall be filled by election at an annual or special meeting
of shareholders. If there are no directors in office, then the shareholders
may hold a special meeting to elect directors, at least one of whom shall be an
Independent Director.
SECTION 3. LOCATION OF MEETINGS. Meetings of the Board, regular or
special, shall be held at the Corporation's principal office unless otherwise
specified in the notice thereof, in which event the meeting shall be held where
specified in the notice, either within or without the States of Georgia or
Delaware.
SECTION 4. ORGANIZATIONAL MEETINGS. The first meeting of each
newly-elected Board shall be held on the day and time specified by the
Corporation's Board. No notice of such meeting shall be necessary to the
newly-elected directors in order to legally constitute the meeting, provided a
quorum is present.
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SECTION 5. REGULAR MEETINGS. Regular meetings of the Board shall be
held at such times and places as the Board by resolution may determine.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board may be
called by the Chairman or President on 24 hours' personal, telephonic,
telegraphic or facsimile notice to each director, or on three days' written
notice to each director. Upon the written request of a majority of directors
constituting the whole Board, special meetings may be called by the Chairman or
President, and appropriate notice given. Any notice or waiver thereof of a
special meeting, whether personal, telephonic, telegraphic or written, need not
include a statement of the business to be transacted at, nor the purposes of,
such special meeting except as expressly required by statute, the Corporation's
Certificate of Incorporation or these By-Laws. Meetings of any committee of
the Board may be called by the Chairman, the President, or by the chairman of
the committee, at any time upon personal, telephonic, telegraphic or written
notice to each member of such committee and need not include a statement of the
business to be transacted at, nor the purposes of, such special meeting.
SECTION 7. MEETINGS BY CONFERENCE TELEPHONE, ETC. Meetings of the
Board, and of any committee thereof, may be held by means of a conference
telephone or equivalent communication equipment by which all persons
participating in the meeting can hear each other simultaneously. Participation
by such means shall constitute presence in person at any such meeting.
SECTION 8. QUORUM. At all meetings of the Board, a majority of the
directors then holding office shall constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board, except as may otherwise
specifically be provided by statute, the Certificate of Incorporation or these
By-Laws. If a quorum is not present at any meeting of the Board, the directors
present may adjourn the meeting from time to time, without notice other than
announcements at the meeting, until a quorum shall be present.
SECTION 9. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the Board or of any committee thereof may be
taken without a meeting or vote, if a written consent setting forth the action
taken is signed by all members of the Board or committee, as the case may be,
and such written consent or consents are filed with the minutes of proceedings
of the Board or of such committee. Such consents shall have the same effect on
a unanimous vote of the Board.
SECTION 10. COMMITTEES. The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee
to consist of two or more of the directors of the Corporation. Any such
committee, to the extent provided in the resolution or resolutions of the
Board, shall have and may exercise all the powers and authority of the Board in
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the management of the business and affairs of the Corporation during intervals
between meetings of the Board, and may authorize the seal of the Corporation to
be affixed to all papers which may require it; but no such committee shall have
any power or authority to declare a dividend or distribution from capital or
earned surplus, issue shares of the Corporation, amend the Certificate of
Incorporation, adopt an agreement of merger or consolidation, recommend to the
shareholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommend to the shareholders a dissolution
of the Corporation or a revocation thereof, fill vacancies in the Board, or
amend these By-Laws, authorize the issuance of stock or adopt a certificate of
ownership and merger pursuant to Delaware General Corporation Law, Section 253,
or adopt any plan of bankruptcy or reorganization under the United States
Bankruptcy Code, as amended (the "Bankruptcy Code") or any similar state laws,
or otherwise take any action described in Section 15 of this Article III. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board.
SECTION 11. COMMITTEE MINUTES AND REPORTS. Each committee shall keep
regular minutes of its meetings and report the same to the Board whenever
required or requested.
SECTION 12. COMPENSATION. The Board shall have the authority to fix
the compensation of directors. The directors may be paid a fixed sum for
attendance at each meeting of the Board and/or a stated salary as directors. No
such payment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor. Members of special or
standing committees may be compensated for attending committee meetings.
SECTION 13. TRANSACTIONS WITH DIRECTORS, ETC. Insofar as not
prohibited by applicable law, no contract or other transaction between the
Corporation and one or more of its directors or any other corporation,
partnership, association or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be either void or voidable because of such relationship or interest, or
because such director or directors are present at or participates in the
meeting of the Board or a committee thereof which authorizes, approves or
ratifies such contract or transaction or solely because his or their votes are
counted for such purpose, if the contract or transaction is fair and reasonable
to the Corporation and if either:
(a) The material facts as to such relationship or interest and as to
the contract or transaction are disclosed or are known to the Board or
committee which, in good faith, authorizes, approves or ratifies the
contract or transaction by the affirmative vote or consent of a majority
of the disinterested directors even though the disinterested directors
are less than a quorum; or
(b) The material facts as to his relationship or interest and as to
such contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and
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the contract or transaction is specifically approved in good
faith by vote or written consent of the shareholders; or
(c) The contract or transaction is fair as to the Corporation as of
the time it is authorized, approved or ratified by the Board or a
committee thereof or by the shareholders.
SECTION 14. REMOVAL OF DIRECTORS. Any director may be removed from
office only for cause, and the Independent Director may only be removed if a
successor Independent Director has been designated who is qualified under the
Certificate of Incorporation, and who is willing and able to serve as the
Independent Director effective immediately upon the removal of such Independent
Director.
SECTION 15. INSTITUTION OF INSOLVENCY PROCEEDINGS. Notwithstanding
anything to the contrary contained in the Delaware General Corporation Law, the
Certificate of Incorporation or these By-Laws, the unanimous approval of the
Board of Directors is required for the filing by the Corporation of a voluntary
bankruptcy petition under Section 301 of the Bankruptcy Code, 11 U.S.C. Section
301, or any successor thereto, or consent to the institution of bankruptcy or
insolvency proceedings against it, or the filing of a petition or consent to a
petition seeking reorganization or relief under any applicable federal or state
laws relating to bankruptcy or insolvency, or the consent to the appointment of
receiver, liquidation, assignee, trustee, sequestrator (or other similar
official) of the Corporation or a substantial part of its property, or the
making of any assignment for the benefit of creditors, or, except as required
by law, the admittance in writing of its inability to pay its debts generally
as they become due, or the taking of any corporate action in furtherance of any
such action. When voting on matters subject to the vote of the Board of
Directors, including those matters specified in this Section 15,
notwithstanding that the Corporation is not then insolvent, the Independent
Director shall take into account the interests of the creditors of the
Corporation as well as the interests of the Corporation.
ARTICLE IV
NOTICES
SECTION 1. MANNER OF GIVING NOTICE. Except as otherwise required by law,
whenever notice is required to be given to any director or shareholder, such
notice requirement can be satisfied by giving written notice by mail, postage
prepaid, addressed to such director or shareholder, at his address as it
appears on the records of the Corporation, and such notice shall be deemed to
be given at the time when the same is deposited in the United States mail.
Notice to directors may also be given in person, or by telegram, facsimile or
telephone.
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SECTION 2. WAIVER OF NOTICE. Whenever any notice is required to be
given to any shareholder or director of the Corporation, a waiver thereof in
writing, signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice.
ARTICLE V
OFFICERS
SECTION 1. OFFICERS, ELECTION, TERMS. The officers of the Corporation
shall be a President, a Treasurer, and a Secretary. The Board may also elect a
Chairman of the Board, and one or more Vice Presidents, Assistant Treasurers,
Assistant Secretaries and such other officers as the Board may from time to
time deem proper. At all times, at least one of the officers shall be an
"Independent Officer" as defined in Section 8.06 of the Certificate of
Incorporation and who is not affiliated, associated or related by blood or
marriage to any other Corporation officer or director. Subject to paragraph
8.06(1) of the Certificate of Incorporation, the Corporation's officers shall
be elected annually by the Board at its regular annual organizational meeting
to serve for a term of one year and until their respective successors are
elected and qualified. If the officers or any of them for any reason should
not be elected at the regular annual meeting of the Board, they may be elected
at any regular or special meeting of the Board. Any person may hold two or
more of the offices in the Corporation except the same person may not serve as
President and Secretary (or Assistant Secretary). The Board may in is
discretion designate one or more of the Vice Presidents as Executive or Senior
Vice Presidents.
SECTION 2. DUTIES OF THE CHAIRMAN OF THE BOARD. The Chairman of the
Board, if one is elected and serving, shall preside at all meetings of the
shareholders and Board. He shall have authority to execute bonds, mortgages,
and other contracts requiring a seal, under the seal of the Corporation. He
shall have power to endorse, when sold, assigned, transferred or otherwise
disposed of by the Corporation, all certificates or shares of stock, bonds, or
other securities issued by other corporations, associations, trusts, whether
public or private, or by any government agency thereof, and owned or held by
the Corporation, and to make, execute and deliver all instruments or
assignments of transfer of any of such stocks, bonds or other securities. He
may, with the approval of the Board, or shall, at the Board's direction,
delegate any or all of such duties to the President.
SECTION 3. DUTIES OF THE PRESIDENT. The President shall be the
Corporation's chief executive officer and shall be responsible for all of the
operations of the Corporation and shall report to the Board.
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The President shall be responsible to the Chairman and to the Board and
shall see that all orders and resolutions of the Board are carried into effect.
He shall, under the direction of the Board, have general supervision and
direction of the other officers, employees and agents of the Corporation and
shall see that their duties, as assigned by the Board, are properly performed.
He shall designate and assign the duties of the officers under his supervision,
with the approval of the Board or at their direction.
The President shall have authority to execute bonds, mortgages and
other contracts requiring a seal, under the seal of the Corporation; he shall
have power to endorse, when sold, assigned, transferred or otherwise disposed
of by the Corporation, all certificates for shares, bonds, or other securities
or evidences of indebtedness issued by other corporations, associations,
trusts, whether public or private, or by any government or agency thereof, and
owned or held by the Corporation and to make, execute and deliver all
instruments or assignments or transfers of any such stocks, bonds, or other
securities. In the absence of the Chairman of the Board, or in the event a
Chairman is not elected, the President shall have authority to do any and all
things delegated to the Chairman of the Board by the Board or by any committee
of the Board having authority.
He shall have general authority over the Corporation's business, and if
the office of Chairman of the Board is vacant, shall exercise the duties and
have the powers of the Chairman of the Board, and shall have such other powers
and perform such other duties as the Board may from time to time prescribe.
SECTION 4. VICE PRESIDENTS. The Vice Presidents (in order of the
Executive Vice President, Senior Vice President and other Vice Presidents, each
class in order of the seniority of its respective members or as designated by
resolution of the Board) shall, in the absence or disability of the Chairman
and President, perform the duties and exercise the powers of said officers, and
shall perform such other duties and exercise such other powers as the Board,
the Chairman of the Board or the President may prescribe. One or more Vice
Presidents may be designated by the Board as either "Executive Vice President"
or "Senior Vice President."
SECTION 5. TREASURER. The Treasurer shall be the Corporation's chief
financial officer and shall have charge and custody of, and shall be
responsible for, all funds and securities of the Corporation, and shall deposit
all such funds in the name of the Corporation in such banks or other
depositories as shall be selected or authorized to be selected by the Board;
shall render or cause to be rendered a statement of the condition of the
finances of the Corporation at all regular meetings of the Board, and a full
financial report at the annual meeting of shareholders, if called upon so to
do; shall receive and give receipts for moneys due and payable to the
Corporation from any source whatsoever; and, in general, shall perform or cause
to be performed all the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him by the Board.
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SECTION 6. ASSISTANT TREASURER. The Assistant Treasurers shall perform
such duties as from time to time may be assigned to them by the Chairman of the
Board, the President, the Treasurer or the Board. At the request of the
Treasurer, or in case of his absence or inability to act, any Assistant
Treasurer may act in his place.
SECTION 7. SECRETARY. The Secretary, if present, shall act as
secretary at all meetings of the Board and of the shareholders and keep the
minutes thereof in a book or books to be provided for that purpose; shall see
that all notices required to be given by the Corporation are duly given and
served; shall be custodian of the seal of the Corporation and shall affix the
seal or cause it or a facsimile thereof to be affixed to all certificates
representing shares of the Corporation and to all documents the execution of
which on behalf of the Corporation under its seal shall be duly authorized in
accordance with the provisions of these By-Laws; shall have charge of the stock
records of the Corporation; shall see that all reports, statements and other
documents required by law are properly kept and filed; may sign, with any other
proper officer of the Corporation thereunto authorized, certificates for
shares, securities or evidences of indebtedness of the Corporation; and, in
general, shall perform all the duties incident to the office of the Secretary
and such other duties as from time to time may be assigned to him by the
Chairman of the Board or the Board.
SECTION 8. ASSISTANT SECRETARIES. The Assistant Secretaries shall
perform such duties as from time to time may be assigned to them by the
Chairman of the Board, the President, the Secretary or the Board. At the
request of the Secretary, or in case of his absence or inability to act, any
Assistant Secretary may act in his place.
SECTION 9. COMPENSATION. The salaries of the Corporation's principal
officers shall be fixed from time to time by the Board, after taking account of
any recommendations by any committee to which the power to advise with respect
to salaries is delegated by the Board. The Board may from time to time
delegate to any principal officer or any committee power to fix the salaries of
other officers, agents, factors and employees. No officer shall be prevented
from receiving such salary by reason of the fact that he is also a director of
the Corporation or a member of any committee contemplated by these By-Laws.
SECTION 10. OTHER OFFICERS. The other officers of the Corporation
shall perform such duties and shall exercise such powers as may be prescribed
by the Board, or by the Chairman or the President acting under authority
delegated them by the Board.
SECTION 11. VACANCIES. Vacancies in office arising from any cause may
be filled by action of the Board at any regular or special meeting of the Board,
provided that in the case of a vacancy in the office held by the Independent
Officer, such vacancy shall be filled with a person who, upon election to such
office, shall be an Independent Officer.
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SECTION 12. REMOVAL OF OFFICERS. The Board may remove any officer from
office at any time by a majority vote of the whole Board of Directors;
provided, however, if there is only one Independent Officer, the Independent
Officer may be removed only if a successor has been designated who is qualified
under the Certificate of Incorporation and who is willing and able to serve in
such capacity effective immediately upon the removal of the Independent
Officer.
ARTICLE VI
CONTRACTS, CHECKS, BANK ACCOUNTS, ETC.
SECTION 1. CONTRACTS, ETC., HOW EXECUTED. The Board may authorize any
officer or officers or agent or agents to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the Corporation, and
such authority may be general or confined to specific instances and if the
Board so provides may be delegated by the person so authorized; and, unless so
authorized by the Board or these By-Laws, no officer, agent or employee shall
have any power or authority to bind the Corporation by any contract or
engagement or to pledge its credit or to render it liable pecuniarily for any
purpose or to any amount.
SECTION 2. LOANS. No loan shall be contracted on behalf of the
Corporation, and no negotiable paper shall be issued in its name, unless (i)
authorized by the Board and (ii) all necessary consents as are required under
the Certificate of Incorporation have been obtained. When so authorized, the
Chairman of the Board, the President or a Vice President or the Treasurer may
effect loans and advances at any time for the Corporation from any bank, trust
company or other institution or from any firm, corporation or individual, and
for such loans and advances the Chairman of the Board, the President or a Vice
President or the Treasurer shall make, execute and deliver, with the
counter-signature, unless otherwise authorized by the Board of Directors
including the affirmative vote of the Independent Director, of the Secretary or
an Assistant Secretary, bonds, debentures, promissory notes or other evidences
of indebtedness of the Corporation and, when authorized as aforesaid, as
security for the payment of any and all loans, advances, indebtedness and
liabilities of the Corporation, may mortgage, pledge, hypothecate or transfer
any real or personal property at any time held by the Corporation and to that
end execute and deliver instruments of mortgage or pledge or otherwise transfer
such property. Any authority so granted by the Board may be general or
confined to specific instances, and if the Board so provides, may be delegated
by the person so authorized.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be
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signed by such officer or officers, or agent or agents, as shall from
time to time be determined by resolution of the Board.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Chairman of the Board, the President or any other officer
or officers authorized by the Board shall direct in such banks, trust companies
or other depositories as may be selected by the Chairman of the Board, the
President or any other officer or officers or agents or agents to whom power in
that respect shall have been delegated by the Board. For the purpose of
deposit and for the purpose of collection for the account of the Corporation,
checks, drafts and other orders for the payment of money which are payable to
the order of the Corporation may be endorsed, assigned and delivered by such
officer or officers or agent or agents as shall be determined by the Chairman
of the Board, the President or any other officer or officers designated by the
Board.
SECTION 5. GENERAL AND SPECIAL BANK ACCOUNTS. The Board or the
Chairman of the Board, the President or any other officer or officers
designated by the Board may from time to time authorize the opening and keeping
of general and special bank accounts with such banks, trust companies or other
depositories as may be selected by the Board. The Board may make such special
rules and regulations with respect to such bank accounts, not inconsistent with
the provisions of these By-Laws, as it may deem expedient.
ARTICLE VII
SHARES
SECTION 1. CERTIFICATES FOR SHARES. Every holder of shares shall be
entitled to have a certificate, in such form as the Board shall prescribe,
certifying the number and class of Corporation shares owned by him. Each such
certificate shall be signed in the name of the Corporation by the Chairman or
Vice Chairman of the Board, the President or a Vice President, and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary.
The signature of any such officer may be a facsimile. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon, any such certificate shall cease to be such officer, transfer
agent or registrar, before such certificate shall have been issued by the
Corporation, such certificate may nevertheless be issued by the Corporation
with the same effect as if such person were such officer, transfer agent or
registrar at the date of issue. A record shall be kept of the respective names
of the persons, firms or corporations owning the shares represented by
certificates, respectively, and the respective dates thereof, and, in case of
cancellation, the respective dates of cancellation. Every certificate
surrendered to the Corporation for exchange or transfer shall be cancelled, and
a new certificate or certificates shall not be issued
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in exchange for any existing certificates until such existing
certificate shall have been so cancelled, except in cases otherwise provided
for in this Article VII.
SECTION 2. TRANSFER OF SHARES. Each transfer of Corporation shares
shall be made only on the books of the Corporation by the registered holder
thereof, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the Corporation, or with a transfer
agent appointed as provided in this Article VII, upon the payment of any taxes
thereon and the surrender of the certificate or certificates for such shares
properly endorsed and in good delivery form. The person in whose name
Corporation shares stand on the books of the Corporation shall be deemed the
owner thereof for all purposes as regards the Corporation; provided that
whenever any transfer of shares shall be made for collateral security and not
absolutely, such fact, if known to the Corporation or to any such transfer
agent, shall be so expressed in the entry of transfer if requested by both the
transferor and transferee.
SECTION 3. REGULATIONS. The Board may make such rules and regulations
as it may deem expedient, not inconsistent with these By-Laws, concerning the
issue, transfer and registration of certificates for Corporation shares. It
may appoint, or authorize the Chairman or President to appoint, one or more
transfer agents and one or more registrars, and may require all certificates
for shares of the Corporation to bear the signature or signatures of any such
transfer agents or registrars.
SECTION 4. DATE FOR DETERMINING SHAREHOLDERS OF RECORD.
(a) In order that the Corporation may determine the
shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof or entitled to receive
payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect to any change,
conversion or exchange of shares or for the purpose of any other
lawful action, the Board may fix in advance, a record date, which
record date shall not precede the date upon which the resolution
fixing the record date is adopted, and which shall not be more than
60 nor less than 10 days before the date of such meeting. If no
record date is fixed by the Board, the record date shall be at the
close of business on the day next preceding the day on which notice
is given, or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A
determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of
such meeting; provided, however, that the Board may fix a new record
date for the adjourned meeting.
(b) If no record date has been fixed by the Board, the record
date for determining shareholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the
Board is required under the Delaware General Corporation Law, shall
be the first date on which a signed written consent setting forth the
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action taken or proposed to be taken is delivered to the Corporation
by delivery to its registered or principal office. Delivery to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested.
SECTION 5. LOST, DESTROYED AND MUTILATED CERTIFICATES. The holder of
any Corporation shares or other securities shall immediately notify the
Corporation of any loss, destruction or mutilation of the certificate(s)
therefor, and the Board may, in its discretion, and after the expiration of
such period of time as it may determine to be advisable, cause to be issued to
him a new certificate or certificates for shares, upon the surrender of the
mutilated certificate, or in case of loss or destruction of the certificate,
upon proof satisfactory to the Board of such loss or destruction, and the Board
or its delegee may, in its discretion, require the owner of the lost, destroyed
or mutilated certificate, or his legal representatives, to give the Corporation
a bond, in such sum and with such surety or sureties as it may direct, or to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, destruction or mutilation of any such certificate
or the issuance of such new certificate.
SECTION 6. EXAMINATION OF BOOKS BY SHAREHOLDERS OR BONDHOLDERS. The
Board shall, subject to any applicable statutes, have the power to determine,
from time to time, whether and to what extent and at what times and places and
under what conditions and regulations the accounts and books and documents of
the Corporation, or any of them, shall be open to the inspection of the
shareholders or bondholders; and no shareholder or bondholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by any such statute, unless and until authorized so to do by
resolution of the Board or of the shareholders of the Corporation.
ARTICLE VIII
WAIVER OF NOTICE
Whenever any notice whatsoever is required to be given by these By-Laws
or by statute, the person entitled thereto may in person, or in the case of a
shareholder by his attorney thereunto duly authorized, waive such notice in
writing (including, telegraph, cable, radio or wireless), whether before or
after the meeting, or other matter in respect of which such notice is to be
given, and in such event such notice, and any action to be taken after such
notice or after the lapse of a prescribed period of time, may be taken without
such notice and without the lapse of any period of time.
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ARTICLE IX
BUSINESS COMBINATIONS
The Corporation expressly elects not to be governed by Section 203 of
the Delaware General Corporation Law. Any "business combination" as defined in
such Section 203 shall be governed by the Corporation's Certificate of
Incorporation and by these By-Laws, without giving effect to said Section 203.
This Article IX shall not be amended, altered or repealed except as provided by
law, and by the Corporation's Certificate of Incorporation and these By-Laws.
ARTICLE X
SEAL
The seal of the Corporation shall be in the form of a circle and shall
bear the word "Delaware", and may also bear the name of the Corporation and the
year of its incorporation. It need not be affixed to contracts and other
agreements to which the Corporation is a party for such contracts and
agreements to be binding.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Corporation shall be determined by resolution of
the Board of Directors.
ARTICLE XII
AMENDMENTS
These By-Laws (including, without limitation, this Article XIII) may be
altered, amended or repealed or new By-Laws may be adopted by (i) the Board
solely in the manner prescribed in the Corporation's Certificate of
Incorporation, or by (ii) the Corporation's shareholders only upon the
favorable vote of a majority of the voting shares and only at an annual or
special meeting of shareholders where the notice of such meeting specifically
described such action and contains a copy of the proposed alteration,
amendment, or new By-Laws. The foregoing notwithstanding, Article III,
Sections 1 and 15; and Article V, Sections 1, 11 and 12 may not be altered,
amended or repealed except as provided in this Article IX, and in the case of
Articles III and V, upon the unanimous vote of of the Board of Directors,
including the affirmative vote of the Independent Director.
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EXHIBIT X
FORM OF SUBORDINATED NOTE
---
SUBORDINATED NOTE
August 22, 1996
1. Note. FOR VALUE RECEIVED, the undersigned, FLEXIBLE FUNDING CORP.,
a Delaware corporation ("FLEXIBLE-SPC"), hereby unconditionally promises to pay
to the order of PRINTPACK, INC., a Georgia corporation ("PRINTPACK"), in lawful
money of the United States of America and in immediately available funds, on
the "COLLECTION DATE" (as defined in the "SALE AGREEMENT" referred to below)
the aggregate unpaid principal sum outstanding of all "SUBORDINATED LOANS" made
from time to time by Printpack to Flexible-SPC pursuant to and in accordance
with the terms of that certain Receivables Sale Agreement dated as of August
22, 1996 between Printpack and Flexible-SPC (as amended, restated, supplemented
or otherwise modified from time to time, the "SALE AGREEMENT"). Reference to
SECTION 1.2 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. Flexible-SPC 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 Base Rate; PROVIDED, HOWEVER, that if
Flexible-SPC shall default in the payment of any principal hereof, Flexible-SPC
promises to, on demand, pay interest at the rate of the Base Rate plus 2.00% 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 Flexible-SPC 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.
3. Principal Payments. Printpack is authorized and directed by
Flexible-SPC 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 Flexible-SPC, and absent manifest error, such entries shall constitute
prima facie evidence of the accuracy of the information so entered; PROVIDED
THAT
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neither the failure of Printpack to make any such entry or any error therein
shall expand, limit or affect the obligations of Flexible-SPC hereunder.
4. Subordination. The indebtedness evidenced by this Subordinated Note
is subordinated to the prior payment in full of all of Flexible-SPC's recourse
obligations under that certain Receivables Purchase Agreement dated as of
August 22, 1996 by and among Flexible-SPC, Falcon Asset Securitization
Corporation, certain financial institutions party thereto as "PURCHASERS", and
The First National Bank of Chicago, as the "AGENT" (as amended, restated,
supplemented or otherwise modified from time to time, the "PURCHASE
AGREEMENT"). The subordination provisions contained herein are for the direct
benefit of, and may be enforced by, the Agent and the Purchasers and/or any of
their respective assignees (collectively, the "SENIOR CLAIMANTS") under the
Purchase Agreement. Until the date on which all "CAPITAL" outstanding under
the Purchase Agreement has been repaid in full and all other obligations of
Flexible-SPC 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, Printpack shall not demand,
accelerate, xxx for, take, receive or accept from Flexible-SPC, directly or
indirectly, in cash or other property or by set-off or any other manner
(including, without limitation, from or by way of collateral) any payment or
security of all or any of the indebtedness under this Subordinated Note or
exercise any remedies or take any action or proceeding to enforce the same;
PROVIDED, HOWEVER, that (i) Printpack hereby agrees that it will not institute
against Flexible-SPC any proceeding of the type described in SECTION 6.1(E) of
the Sale Agreement unless and until the Collection Date has occurred and (ii)
nothing in this paragraph shall restrict Flexible-SPC from paying, or Printpack
from requesting, any payments under this Subordinated Note so long as
Flexible-SPC is not required under the Purchase Agreement to set aside for the
benefit of, or otherwise pay over to, the funds used for such payments to any
of the Senior Claimants and further provided that the making of such payment
would not otherwise violate the terms and provisions of the Purchase Agreement.
Should any payment, distribution or security or proceeds thereof be received by
Printpack in violation of the immediately preceding sentence, Printpack 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 Agent for the benefit of the Senior Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any Servicer Default
described in SECTION 7.1(C) of the Purchase Agreement involving Flexible-SPC 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 Capital and the
Senior Claim (including "DISCOUNT" accruing under the Purchase Agreement after
the commencement of any such proceeding, whether or not any or all of such
Discount is an allowable claim in any such proceeding) before Printpack is
entitled to receive payment on account of this Subordinated Note, and to that
end, any payment or distribution of assets of Flexible-SPC of any kind or
character, whether in cash, securities or other property, in any applicable
insolvency proceeding, which would otherwise be payable to or
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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 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 9.1 of the Sale Agreement. The terms of this
Subordinated Note may not be amended or otherwise modified without the prior
written consent of the Agent for the benefit of the Purchasers.
7. Governing Law. This Subordinated Note has been made and delivered
at Atlanta, 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. Printpack 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 Printpack without the prior
written consent of the Agent, and any such attempted transfer shall be void.
FLEXIBLE FUNDING CORP.
By:__________________________
Title:
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SCHEDULE
TO
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
Amount of Amount Unpaid
Subordinated of Principal Notation
Date Loan Principal Paid Balance made by
---- ---- -------------- --------- --------
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
_______ ___________ ____________ ____________ __________
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SCHEDULE A
DOCUMENTS AND RELATED ITEMS TO BE DELIVERED
ON OR PRIOR TO THE INITIAL PURCHASE
I. Receivables Sale Agreement
A. Receivables Sale Agreement dated as of August 22, 1996 (the "SALE
AGREEMENT") by and between Printpack, Inc., a Georgia corporation (the
"ORIGINATOR"), and Flexible Funding Corp., a Delaware corporation
("FLEXIBLE-SPC"), with the following exhibits:
Exhibit I - Definitions
Exhibit II - Places of Business of Originator; Locations of Records;
Trade Names; Prior Names; Federal Employer I.D. Number
Exhibit III - Lockboxes; Collection Accounts; Concentration Accounts; and
Depositary Accounts
Exhibit IV - Compliance Certificate
Exhibit V - Collection Account Agreement
Exhibit VI - Credit and Collection Policy
Exhibit VII - Form of Monthly Report
Exhibit VIII - Form of Weekly Report
Exhibit IX - Stockholder and Subscription Agreement
Exhibit X - Subordinated Note
B. Revolving Subordinated Note dated August 22, 1996 executed by
Flexible-SPC in favor of the Originator.
C. Stockholder and Subscription Agreement dated as of August 22, 1996 by
and between the Originator and Flexible-SPC.
D. Certificate of the Originator's [Assistant] Secretary certifying:
1. An attached copy of the Originator's Articles of Incorporation
(certified within 30 days prior to closing by the Georgia Secretary
of State)
2. An attached copy of the Originator's By-Laws
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3. An attached copy of resolutions of the Originator's Board of
Directors authorizing the Originator's execution, delivery and
performance of the Sale Agreement and related documents
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4. The names, titles and specimen signatures of the Originator's
officers authorized to execute and deliver the Sale Agreement and
related documents
E. Good standing certificates for the Originator from the following states
certified within 30 days prior to closing:
1. Georgia
2. Arizona (photocopy)
3. California (photocopy)
4. Delaware (photocopy)
5. Illinois (photocopy)
6. Indiana (photocopy)
7. Louisiana (photocopy)
8. Minnesota (photocopy)
9. Missouri (photocopy)
10. New Jersey (photocopy)
11. North Carolina (photocopy)
12. Ohio (photocopy)
13. Pennsylvania (photocopy)
14. Tennessee (photocopy)
15. Texas (photocopy)
16. Tennessee (photocopy)
17. Texas (photocopy)
18. Virginia (photocopy)
19. Wisconsin (photocopy)
F. Pre-filing state and federal tax lien, judgment lien and UCC lien
searches against the Originator.
G. UCC Financing Statements naming the Originator, as debtor,
Flexible-SPC, as secured party, and The First National Bank of Chicago, as
Agent, as assignee of secured party, for filing in the following jurisdictions:
1. Xxxxxx County, Georgia.
H. Post-filing UCC lien searches against the Originator from the following
jurisdictions:
1. Xxxxxx County, Georgia.
I. Collection Account Agreement
1. SunTrust
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J. Opinions of Xxxxxx & Bird:
1. Corporate/UCC opinion
2. True sale opinion
3. Non-consolidation opinion
K. CFO's Certificate re no Servicer Default or Potential Servicer Default
and absence of Material Adverse Effect since March 31, 1996.
L. Intercreditor Agreement.
II. Receivables Purchase Agreement
A. Receivables Purchase Agreement dated as of August 22, 1996 (the
"INVESTOR AGREEMENT") by and among Flexible-SPC, Falcon Asset Securitization
Corporation ("FALCON"), various Investors, and The First National Bank of
Chicago, as Agent (in such capacity, the "AGENT") with the following exhibits:
Exhibit I - Definitions
Exhibit II - Places of Business of Flexible-SPC; Locations of Records;
Trade Names; Federal Employer I.D. Number
Exhibit III - Lockboxes; Collection Accounts; Concentration Accounts; and
Depositary Accounts
Exhibit IV - Compliance Certificate
Exhibit V - Collection Account Agreement
Exhibit VI - Credit and Collection Policy
Exhibit VII - Form of Monthly Report
Exhibit VIII - Form of Weekly Report
Exhibit IX - Form of Purchase Notice
B. Fee Letter dated as of August 22, 1996 by and between Flexible-SPC and
the Agent.
C. Certificate of Flexible-SPC's [Assistant] Secretary certifying:
1. An attached copy of Flexible-SPC's Certificate of Incorporation
(certified within 30 days prior to closing by the Delaware
Secretary of State)
2. An attached copy of Flexible-SPC's By-Laws
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3. An attached copy of resolutions of Flexible-SPC's Board of
Directors authorizing Flexible-SPC's execution, delivery and
performance of the Investor Agreement and related documents
4. The names, titles and specimen signatures of Flexible-SPC's
officers authorized to execute and deliver the Investor Agreement
and related documents
D. Good standing certificates for Flexible-SPC from the following states
certified within 30 days prior to closing:
1. Delaware
2. Xxxxxxx
X. UCC Financing Statements naming Flexible-SPC, as debtor, and the Agent,
as secured party, for filing in the following jurisdictions:
1. Xxxxxx County, GA
F. Post-filing UCC lien searches against Flexible-SPC from the following
jurisdictions:
1. Xxxxxx County, GA
G. Collection Account Agreement
1. SunTrust
H. Purchase Notice executed by Flexible-SPC.
I. Opinion of Flexible-SPC's counsel re corporate/UCC issues
J. CFO's Certificate re no Servicer Default or Potential Servicer Default
and absence of Material Adverse Effect since March 31, 1996.
K. Weekly Report.
L. Monthly Report.
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