1
EXHIBIT 10.8
Receivables Purchase Agreement dated as of August 22, 1996 by and among
Flexible Funding Corp. as Seller, Falcon Asset Securitization Corporation and
the financial institutions party hereto as Investors and The First National
Bank of Chicago as Agent.
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[FALCON/INVESTORS' PURCHASE AGREEMENT]
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$50,000,000
RECEIVABLES PURCHASE AGREEMENT
DATED AS OF AUGUST 22, 1996
AMONG
FLEXIBLE FUNDING CORP.,
AS SELLER,
FALCON ASSET SECURITIZATION CORPORATION,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AS INVESTORS,
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
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TABLE OF CONTENTS
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ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES................... 1
Section 1.1. Purchase Facility................................. 1
Section 1.2. Making Incremental Purchases ..................... 2
Section 1.3. Selection of Tranche Periods and Discount Rates... 2
Section 1.4. Percentage Evidenced by Receivable Interests...... 3
Section 1.5. Dividing or Combining Receivable Interests........ 3
Section 1.6. Reinvestment Purchases and Settlements............ 4
Section 1.7. Liquidation Settlement Procedures................. 4
Section 1.8. Recourse for Breach of Representation............. 5
Section 1.9. Discount; Payments and Computations, Etc.......... 5
Section 1.10. Maximum Aggregate Receivables Interest; Grant of.. 6
Security Interest................................. 6
Section 1.11. Seller's Extinguishment........................... 6
Section 1.12. Servicer Fee...................................... 7
ARTICLE II
LIQUIDITY FACILITY.................... 7
Section 2.1. Transfer to Investors............................. 7
Section 2.2. Transfer Price Reduction Discount................. 7
Section 2.3. Payments to FALCON................................ 7
Section 2.4. Limitation on Commitment to Purchase from FALCON.. 7
Section 2.5. Defaulting Investors.............................. 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES................. 8
Section 3.1. Seller Representations and Warranties........ 8
(a) Corporate Existence and Power..................... 8
(b) No Conflict....................................... 9
(c) Governmental Authorization........................ 9
(d) Binding Effect.................................... 9
(e) Accuracy of Information........................... 9
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(f) Use of Proceeds...................................... 9
(g) Title to Receivables................................. 9
(h) Good Title; Perfection............................... 10
(i) Places of Business................................... 10
(j) Collection Banks; etc................................ 10
(k) Material Adverse Effect.............................. 11
(l) Names................................................ 11
(m) Actions, Suits....................................... 11
(n) Credit and Collection Policy......................... 11
(o) Payments to Originator............................... 11
(p) Ownership of the Seller.............................. 11
(q) Not an Investment Company............................ 11
(r) Purpose.............................................. 11
(s) Net Eligible Receivables............................. 12
Section 3.2. Investor Representations and Warranties....... 12
(a) Existence and Power.................................. 12
(b) No Conflict.......................................... 12
(c) Governmental Authorization........................... 12
(d) Binding Effect....................................... 12
ARTICLE IV
CONDITIONS OF PURCHASES................. 12
Section 4.1. Conditions Precedent to Initial Purchase........ 12
Section 4.2. Conditions Precedent to All Purchases and
Reinvestments.................................. 12
ARTICLE V
COVENANTS......................... 13
Section 5.1. Affirmative Covenants of Seller................. 13
(a) Financial Reporting.................................. 13
(b) Notices.............................................. 14
(c) Compliance with Laws................................. 15
(d) Audits............................................... 15
(e) Keeping and Marking of Records and Books............. 15
(f) Compliance with Contracts and Credit and
Collection Policy................................... 15
(g) Purchase of Receivables from the Originator.......... 16
(h) Ownership Interest................................... 16
(i) Payment to the Originator............................ 16
(j) Performance and Enforcement of Sale Agreement........ 16
(k) Purchasers' Reliance................................. 16
(l) Collections.......................................... 18
(m) Minimum Net Worth.................................... 19
Section 5.2. Negative Covenants of Seller.................... 19
(a) Name Change, Offices, Records and Books of Accounts.. 19
(b) Change in Payment Instructions to Obligors........... 19
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(c) Modifications to Contracts and Credit and
Collection Policy.................................. 19
(d) Sales, Liens, Etc................................... 20
(e) Nature of Business; Other Agreements; Other
Indebtedness....................................... 20
(f) Amendments to Sale Agreement........................ 20
(g) Amendments to Corporate Documents................... 21
(h) Merger.............................................. 21
(i) Restricted Junior Payments.......................... 21
ARTICLE VI
ADMINISTRATION AND COLLECTION.......... 21
Section 6.1. Designation of Servicer............................. 21
Section 6.2. Duties of Servicer.................................. 22
Section 6.3. Collection Notices.................................. 23
Section 6.4. Responsibilities of the Seller...................... 23
Section 6.5. Receivables Reports................................. 24
ARTICLE VII
SERVICER DEFAULTS..................... 24
Section 7.1. Servicer Default.................................... 24
ARTICLE VIII
INDEMNIFICATION.................... 25
Section 8.1. Indemnities by the Seller........................... 25
Section 8.2. Increased Cost and Reduced Return................... 27
Section 8.3. Costs and Expenses Relating to this Agreement....... 38
ARTICLE IX
THE AGENT....................... 29
Section 9.1. Authorization and Action............................ 29
Section 9.2. Delegation of Duties................................ 29
Section 9.3. Exculpatory Provisions.............................. 29
Section 9.4. Reliance by Agent................................... 30
Section 9.5. Non-Reliance on Agent and Other Purchasers.......... 30
Section 9.6. Reimbursement and Indemnification................... 30
Section 9.7. Agent in its Individual Capacity.................... 30
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Section 9.8. Successor Agent...................................... 31
ARTICLE X
ASSIGNMENTS; PARTICIPATIONS............... 31
Section 10.1. Assignments......................................... 31
Section 10.2. Participations...................................... 32
ARTICLE XI
MISCELLANEOUS...................... 32
Section 11.1. Waivers and Amendments.............................. 32
Section 11.2. Notices............................................. 33
Section 11.3. Ratable Payments.................................... 34
Section 11.4. Protection of Ownership Interests of
the Purchasers..................................... 34
Section 11.5. Confidentiality..................................... 35
Section 11.6. Bankruptcy Petition................................. 35
Section 11.7. Limitation of Liability............................. 36
Section 11.8. CHOICE OF LAW....................................... 36
Section 11.9. CONSENT TO JURISDICTION............................. 36
Section 11.10. WAIVER OF JURY TRIAL................................ 36
Section 11.11. Integration; Survival of Terms...................... 37
Section 11.12. Counterparts; Severability.......................... 37
Section 11.13. First Chicago Roles................................. 37
Section 11.14. Characterization.................................... 37
EXHIBITS AND SCHEDULES
EXHIBIT I DEFINITIONS......................................... 41
EXHIBIT II CHIEF EXECUTIVE OFFICE OF THE SELLER;
LOCATIONS OF RECORDS; FEDERAL EMPLOYER
IDENTIFICATION NUMBER(S)............................ 60
EXHIBIT III COLLECTION ACCOUNTS; CONCENTRATION
ACCOUNTS; AND DEPOSITARY ACCOUNTS................... 61
EXHIBIT IV FORM OF COMPLIANCE CERTIFICATE...................... 62
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EXHIBIT V FORM OF COLLECTION ACCOUNT AGREEMENT................ 64
EXHIBIT VI CREDIT AND COLLECTION POLICY........................ 68
EXHIBIT VII FORM OF MONTHLY REPORT.............................. 69
EXHIBIT VIII FORM OF WEEKLY REPORT............................... 70
EXHIBIT IX FORM OF PURCHASE NOTICE............................. 71
SCHEDULE A DOCUMENTS AND RELATED ITEMS TO BE DELIVERED
TO THE AGENT ON OR PRIOR TO THE INITIAL
PURCHASE............................................ 73
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THIS RECEIVABLES PURCHASE AGREEMENT, dated as of August 22, 1996, is by
and among Flexible Funding Corp., a Delaware corporation (the "SELLER"), the
Investors (hereinafter defined), Falcon Asset Securitization Corporation
("FALCON") and The First National Bank of Chicago, as Agent. 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 Seller desires to transfer and assign Receivable Interests
to the Purchasers from time to time.
FALCON may, in its absolute and sole discretion, purchase
Receivable Interests from the Seller from time to time.
The Investors shall, at the request of the Seller, purchase
Receivable Interests from time to time. In addition, the Investors
have agreed to provide a liquidity facility to FALCON.
The First National Bank of Chicago has been requested and is
willing to act as Agent on behalf of FALCON and the Investors in
accordance with the terms hereof.
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility.
(a) Upon the terms and subject to the conditions hereof, the Seller
may, at its option, sell and assign Receivable Interests to the Agent for the
benefit of one or more of the Purchasers. FALCON may, at its option, instruct
the Agent to purchase on behalf of FALCON, or if FALCON shall decline to
purchase, unless the Seller cancels such purchase in accordance with SECTION
1.2, the Agent shall purchase on behalf of the Investors, Receivable Interests
from time to time during the period from the date hereof to but not including
the Facility Termination Date. The Seller hereby assigns, transfers and
conveys to the Agent for the benefit of the relevant Purchaser(s), and the
Agent hereby acquires, all of the Seller's now owned and existing and hereafter
arising or acquired right, title and interest in and to the Receivable
Interests.
(b) The Seller may, upon at least 30 days' notice to the Agent,
terminate in whole or reduce in part, ratably among the Investors, the unused
portion of the Purchase Limit;
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PROVIDED THAT each partial reduction of the Purchase Limit shall be in an
amount equal to $5,000,000 or an integral multiple thereof.
Section 1.2. Making Incremental Purchases. The Seller shall provide
the Agent with a purchase notice, in substantially the form of EXHIBIT IX
hereto (each, a "PURCHASE NOTICE"), at least one (1) Business Day prior to the
initial purchase of Receivable Interests hereunder (or two (2) Business Days
prior to such initial purchase if the Seller desires to select the Adjusted
LIBOR Rate with respect thereto) and at least two (2) Business Days prior to
each subsequent Incremental Purchase. Each Purchase Notice shall, except as
set forth below, be irrevocable and shall specify the requested Purchase Price
(which shall not be less than $3,000,000) and date of such Incremental
Purchase, together with the duration of the initial Tranche Period and the
initial Discount Rate related thereto. Following receipt of a Purchase Notice,
the Agent will determine whether FALCON agrees to make the purchase. If FALCON
declines to make a proposed purchase, the Agent shall promptly advise the
Seller and the Servicer of such fact, and (i) the Seller may thereupon cancel
the Purchase Notice or (ii) in the absence of such a cancellation, the
Incremental Purchase of the Receivable Interests will be made by the Investors.
On the date of each Incremental Purchase, upon satisfaction of the applicable
conditions precedent set forth in ARTICLE IV, FALCON or each Investor, as
applicable, shall deposit to the Facility Account, in immediately available
funds, no later than 12:00 noon (Chicago time), an amount equal to (i) in the
case of FALCON, the aggregate Purchase Price of each Receivable Interest FALCON
is then purchasing or (ii) in the case of an Investor, such Investor's Pro Rata
Share of the aggregate Purchase Price of each of the Receivable Interests the
Investors are purchasing.
Section 1.3. Selection of Tranche Periods and Discount Rates.
(a) Each Receivable Interest shall at all times have an associated amount
of Capital, a Discount Rate and Tranche Period applicable to it. Not less than
$3,000,000 of Capital may be allocated to any single Receivable Interest. The
Seller shall request Discount Rates and Tranche Periods for the Receivable
Interests of the Purchasers. The Seller may select the Adjusted LIBOR Rate or
the Base Rate to be applicable to each Receivable Interest; PROVIDED, HOWEVER,
that not more than 5 Tranche Periods with respect to Adjusted LIBOR Rates may
be outstanding at any one time. The Seller shall by 12:00 noon (Chicago time):
(i) at least two (2) Business Days prior to the expiration of
any then existing Tranche Period of FALCON with respect to which the
Adjusted LIBOR Rate is being requested as a new Discount Rate, and
(ii) at least three (3) Business Days prior to the expiration
of any then existing Tranche Period of the Investors with respect to
which the Adjusted LIBOR Rate is being requested as a new Discount
Rate, and
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(iii) at least one (1) Business Day prior to the expiration of
any Tranche Period of any of the Purchasers with respect to which
the Base Rate is being requested as a new Discount Rate,
give the Agent irrevocable notice of the new Tranche Period and Discount Rate
for the Receivable Interest associated with such expiring Tranche Period. If
the Seller fails to request timely a Discount Rate and/or a Tranche Period for
any Receivable Interest pursuant to the terms of this SECTION 1.3, the Discount
Rate shall be the Base Rate, and the applicable Tranche Period shall be a
period of one Business Day commencing on the day requested in the Purchase
Notice or the last day of the then expiring Tranche Period for such Receivable
Interest, as applicable. Until the Seller gives notice to the Agent of another
Discount Rate, the initial Discount Rate for any Receivable Interest
transferred to the Investors pursuant to SECTION 2.1 shall be the Base Rate.
(b) If any Investor notifies the Agent that it has determined that
funding its Pro Rata Share of the Receivable Interests of the Investors at an
Adjusted LIBOR Rate would violate any applicable law, rule, regulation, or
directive of any governmental or regulatory authority, whether or not having
the force of law, or that (i) deposits of a type and maturity appropriate to
match fund its Receivable Interests at such Adjusted LIBOR Rate are not
available or (ii) such Adjusted LIBOR Rate does not accurately reflect the cost
of acquiring or maintaining a Receivable Interest at such Adjusted LIBOR Rate,
then the Agent shall suspend the availability of such Adjusted LIBOR Rate and
require the Seller to select the Base Rate for any Receivable Interest accruing
Discount at such Adjusted LIBOR Rate.
Section 1.4. Percentage Evidenced by Receivable Interests. Each
Receivable Interest shall be initially computed on its date of purchase.
Thereafter, until its Liquidation Day, each Receivable Interest shall be
automatically recomputed (or deemed to be recomputed) on each day prior to its
Liquidation Day. The variable percentage represented by any Receivable
Interest as computed (or deemed recomputed) as of the close of business on the
day immediately preceding its Liquidation Day shall remain constant at all
times after such Liquidation Day.
Section 1.5. Dividing or Combining Receivable Interests. The Seller or
the Agent may, upon notice to and consent by the other received not later than
the applicable time required under SECTION 1.3(A) prior to the end of a Tranche
Period for any Receivable Interest, take any of the following actions with
respect to such Receivable Interest: (i) divide the Receivable Interest into
two or more Receivable Interests having aggregate Capital equal to the Capital
of such divided Receivable Interest, (ii) combine the Receivable Interest with
another Receivable Interest with a Tranche Period ending on the same day,
creating a new Receivable Interest having Capital equal to the Capital of the
two Receivable Interests combined or (iii) combine the Receivable Interest with
a Receivable Interest to be purchased on such day by such Purchaser, creating a
new Receivable Interest having Capital equal to the Capital of the two
Receivable Interests combined, PROVIDED THAT a Receivable Interest of FALCON
may not be combined with a Receivable Interest of the Investors.
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Section 1.6. Reinvestment Purchases and Settlements. At any time that
any Collection is received by the Servicer after the initial purchase, or any
other Incremental Purchase, of a Receivable Interest hereunder and on or prior
to the Liquidation Day of such Receivable Interest:
first, at any time the Servicer is not the Seller, the
Originator or an Affiliate thereof, the Servicer may retain a
portion of such Collection in payment of any Servicer Fee that is
then due and owing;
second, the Servicer is hereby directed to pay a portion of the
remainder, if any, of such Collection to the Agent in payment of any
accrued and unpaid Discount and Non-Use Fees that are then due and
owing;
third, except to the extent the Seller wishes to reduce the
outstanding amount of Capital of a Receivable Interest (in which
case the provisions of SECTION 1.7 shall be applicable to the
portion of such Receivable Interest represented by such reduction in
Capital), the Seller hereby requests and the Purchasers hereby agree
to make, simultaneously with such receipt, a reinvestment (each, a
"REINVESTMENT") with that portion of the remainder of such
Collection that is part of such Receivable Interest such that after
giving effect to such Reinvestment, the amount of the Capital of
such Receivable Interest immediately after any such receipt and
corresponding Reinvestment shall be equal to the amount of the
Capital immediately prior to such receipt;
fourth, if the Servicer is the Seller, the Originator or an
Affiliate thereof, the Servicer may retain a portion of the
remainder, if any, of such Collection in payment of any Servicer Fee
that is then due and owing; and
fifth, any remaining portion of such Collection may be applied
to making an additional Incremental Purchase in accordance with the
terms of this Agreement or paid to the Seller, in either case, as
the Seller may direct.
Section 1.7. Liquidation Settlement Procedures. On the Liquidation Day
of a Receivable Interest and on each day thereafter, the Servicer shall set
aside and hold in trust for the holder of such Receivable Interest, the
percentage evidenced by such Receivable Interest, of all Collections received
on such day. On the last day of each Tranche Period of a Receivable Interest
after the occurrence of its Liquidation Day, the Servicer shall remit to the
Agent's account the amounts set aside pursuant to the preceding sentence,
together with any remaining amounts set aside pursuant to SECTION 1.8 prior to
such day, but not to exceed the sum of: (i) the accrued Discount for such
Receivable Interest, (ii) the Capital of such Receivable Interest, (iii) the
aggregate of all other amounts then owed hereunder by Seller to the Purchasers,
and (iv) the accrued Servicer Fee for such Receivable Interest. If there shall
be insufficient funds on deposit for the Servicer to distribute funds in
payment in full of the aforementioned amounts, the Servicer shall distribute
funds:
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first, to reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
second, to the Servicer (if the Servicer is not the Seller, the
Originator or an Affiliate thereof) in payment of all accrued
Servicer Fee in respect of such Receivable Interest,
third, in payment of all accrued and unpaid Discount and
Non-Use Fees for such Receivable Interest that are then due and
owing,
fourth, in reduction of the Capital of such Receivable
Interest,
fifth, in payment of all other amounts (including, without
limitation, Deemed Collections, Early Collection Fees and Default
Fees, if any), that are then due and owing to the Purchasers, and
sixth, to the Servicer (if the Seller, the Originator or an
Affiliate thereof is the Servicer) in payment of all accrued
Servicer Fee in respect of such Receivable Interest.
Collections allocated to the Receivable Interests of the Investors shall be
shared ratably by the Investors in accordance with their Pro Rata Shares.
Collections applied to the payment of fees, expenses, Discount and all other
amounts payable by the Seller to the Agent and the Purchasers hereunder shall
be allocated ratably among the Agent and the Purchasers in accordance with such
amounts owing to each of them. To the extent Collections are available for
such purpose in accordance with the foregoing, the accrued Servicer Fee in
respect of each Receivable Interest shall be remitted to the Servicer.
Following the date on which the Aggregate Unpaids are reduced to zero, the
Servicer shall pay to Seller any remaining Collections set aside and held by
the Servicer pursuant to this SECTION 1.7.
Section 1.8. Recourse for Breach of Representation. If on any day
any of the representations or warranties in SECTION 3.1 are no longer true with
respect to a Receivable, the Seller shall be deemed to have received on such
day a Collection of such Receivable in full. If the Seller is deemed to
receive any Collections pursuant to this SECTION 1.8, the Seller shall
immediately pay such deemed Collections to the Servicer and, at all times prior
to such payment, such Collections shall be held in trust by the Seller for the
exclusive benefit of the Purchasers and the Agent.
Section 1.9. Discount; Payments and Computations, Etc.
(a) Discount shall accrue for each Receivable Interest for each day
occurring during the Tranche Period for such Receivable Interest and shall be
payable on the 20th day of
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each month after the initial Purchase from Collections in accordance with the
priorities set forth in SECTIONS 1.6 and 1.7 above.
(b) Notwithstanding any limitation on recourse contained in this
Agreement, the Seller shall pay to the Agent, for the account of the relevant
Purchasers, the Closing Fee and Non-Use Fees set forth in the Fee Letter, all
amounts payable pursuant to ARTICLE VIII, if any, all Servicer costs, if any,
payable pursuant to SECTION 6.2 and on demand therefor, any Early Collection
Fee. If any Person fails to pay any amount when due hereunder, such Person
agrees to pay, on demand, the Default Fee.
(c) All amounts to be paid or deposited by any Person hereunder shall be
paid or deposited in accordance with the terms hereof no later than 12:00 noon
(Chicago time) on the day when due in immediately available funds; if such
amounts are payable to a Purchaser, they shall be paid to the Agent, for the
account of such Purchaser, at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
until otherwise notified by the Agent. The Agent shall, in accordance with its
customary practice, provide invoices from time to time to the Seller in respect
of Discount and other fees and expenses payable by the Seller hereunder. In
the event the Seller shall at any time fail to pay any amount when due
hereunder, the Agent may, on notice to the Seller, debit the Facility Account
for such amount. All computations of Discount and per annum fees hereunder and
under the Fee Letter shall be made on the basis of a year of 360 days for the
actual number of days elapsed (including the first but excluding the last day).
All per annum fees shall be payable monthly in arrears on the 20th day of each
month. If any amount hereunder shall be payable on a day which is not a
Business Day, such amount shall be payable on the next succeeding Business Day.
Section 1.10. Maximum Aggregate Receivables Interest; Grant of Security
Interest. The Seller shall ensure that the aggregate Receivable Interests of
the Purchasers shall at no time exceed 100%. If, on any day, the aggregate
Receivable Interests of the Purchasers exceeds 100%, the Seller shall
immediately pay to the Agent an amount to be applied to reduce the Capital of
the Receivable Interests, such that after giving effect to such payment the
aggregate of the Receivable Interest equals or is less than 100%. Such amount
shall be applied to the reduction of the Capital of the Receivable Interests
ratably in accordance with the percentages of the Receivable Interests. Any
amounts received by the Investors pursuant to the preceding sentence shall be
applied ratably in accordance with their Pro Rata Shares. The Seller hereby
grants to the Agent for the ratable benefit of the Purchasers a security
interest in all of its now existing and hereafter arising or acquired right,
title and interest in and to the Receivables, the Related Security, the
Collection Accounts, the Collections and all proceeds of the foregoing
to secure payment of the Aggregate Unpaids, including its indemnity obligations
under ARTICLE VIII and all other obligations owed hereunder and under the Fee
Letter to the Agent and/or the Purchasers.
Section 1.11. Seller's Extinguishment. The Seller shall have the right,
on not less than thirty (30) Business Days' written notice to the Agent, at any
time following the reduction of the Capital to a level that is less than 5.0%
of the original Purchase Limit, to repurchase from the
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Purchasers all, but not less than all, of the then outstanding Receivable
Interests. The purchase price in respect thereof shall be an amount equal to
the Aggregate Unpaids through the date of such repurchase, payable in
immediately available funds. Such repurchase shall be without representation,
warranty or recourse of any kind by, on the part of, or against any Purchaser
or the Agent.
Section 1.12. Servicer Fee. To the extent of available Collections in
accordance with the priorities set forth in SECTIONS 1.6 and 1.7, on the 20th
day of each month hereafter commencing September 20, 1996, the Servicer shall
be paid the Servicer Fee in arrears for the preceding Calculation Period.
ARTICLE II
LIQUIDITY FACILITY
Section 2.1. Transfer to Investors. Each Investor hereby agrees,
subject to SECTION 2.4, that immediately upon written notice from FALCON
delivered on or prior to the Liquidity Termination Date, it shall acquire by
assignment from FALCON, without recourse or warranty, its Pro Rata Share of one
or more of the Receivable Interests of FALCON as specified by FALCON. Each
Investor shall promptly pay to the Agent at an account designated by the Agent,
for the benefit of FALCON, its Acquisition Amount. Unless an Investor has
notified the Agent that it does not intend to pay its Acquisition Amount, the
Agent may assume that such payment has been made and may, but shall not be
obligated to, make the amount of such payment available to FALCON in reliance
upon such assumption. FALCON hereby sells and assigns to the Agent for the
ratable benefit of the Investors, and the Agent hereby purchases and assumes
from FALCON, effective upon the receipt by FALCON of the FALCON Transfer Price,
the Receivable Interests of FALCON which are the subject of any transfer
pursuant to this ARTICLE II.
Section 2.2. Transfer Price Reduction Discount. If the Adjusted
Liquidity Price is included in the calculation of the FALCON Transfer Price for
any Receivable Interest, each Investor agrees that the Agent shall pay to
FALCON the Reduction Percentage of any Discount received by the Agent with
respect to such Receivable Interest.
Section 2.3. Payments to FALCON. In consideration for the reduction of
the FALCON Transfer Prices by the FALCON Transfer Price Reductions, effective
only at such time as the aggregate amount of the Capital of the Receivable
Interests of the Investors equals the FALCON Residual, each Investor hereby
agrees that the Agent shall not distribute to the Investors and shall
immediately remit to FALCON any Discount, Collections or other payments
received by it to be applied pursuant to the terms hereof or otherwise to
reduce the Capital of the Receivable Interests of the Investors.
Section 2.4. Limitation on Commitment to Purchase from FALCON.
Notwithstanding anything to the contrary in this Agreement, no Investor shall
have any obligation to purchase any Receivable Interest from FALCON, pursuant
to SECTION 2.1 or otherwise, if: (i)
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FALCON shall have voluntarily commenced any proceeding or filed any petition
under any bankruptcy, insolvency or similar law seeking the dissolution,
liquidation or reorganization of FALCON or taken any corporate action for the
purpose of effectuating any of the foregoing; or (ii) involuntary proceedings
or an involuntary petition shall have been commenced or filed against FALCON by
any Person under any bankruptcy, insolvency or similar law seeking the
dissolution, liquidation or reorganization of FALCON and such proceeding or
petition shall have not been dismissed.
Section 2.5. Defaulting Investors. If one or more Investors defaults
in its obligation to pay its Acquisition Amount pursuant to SECTION 2.1 (each
such Investor shall be called a "DEFAULTING INVESTOR" and the aggregate amount
of such defaulted obligations being herein called the "FALCON TRANSFER PRICE
DEFICIT"), then upon notice from the Agent, each Investor other than the
Defaulting Investors (a "NON-DEFAULTING INVESTOR") shall promptly pay to the
Agent, in immediately available funds, an amount equal to the lesser of (x)
such Non-Defaulting Investor's proportionate share (based upon the relative
Commitments of the Non-Defaulting Investors) of the FALCON Transfer Price
Deficit and (y) the unused portion of such Non-Defaulting Investor's
Commitment. A Defaulting Investor shall forthwith upon demand pay to the Agent
for the account of the Non-Defaulting Investors all amounts paid by each
Non-Defaulting Investor on behalf of such Defaulting Investor, together with
interest thereon, for each day from the date a payment was made by a
Non-Defaulting Investor until the date such Non-Defaulting Investor has been
paid such amounts in full, at a rate per annum equal to the Federal Funds
Effective Rate plus 0.5% for the first two Business Days and 2.0% per annum
thereafter. In addition, without prejudice to any other rights that FALCON may
have under applicable law, each Defaulting Investor shall pay to FALCON
forthwith upon demand, the difference between such Defaulting Investor's unpaid
Acquisition Amount and the amount paid with respect thereto by the
non-Defaulting Investors, together with interest thereon, for each day from the
date of the Agent's request for such Defaulting Investor's Acquisition Amount
pursuant to SECTION 2.1 until the date the requisite amount is paid to FALCON
in full, at a rate per annum equal to the Federal Funds Effective Rate plus
2.0%.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Seller Representations and Warranties. The Seller hereby
represents and warrants to the Agent and the Purchasers that:
(a) Corporate Existence and Power. The Seller 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 its business is conducted.
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(b) No Conflict. The execution, delivery and performance by the
Seller of this Agreement and each other Transaction Document, and the Seller'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 certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of the Seller or its Subsidiaries (except 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
Seller is a party has been duly authorized, executed and delivered by the
Seller.
(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 Seller of
the Transaction Documents.
(d) Binding Effect. The Transaction Documents constitute the legal,
valid and binding obligations of the Seller enforceable against the Seller 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 Seller or any of its Affiliates to 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 Seller or any of its Affiliates to 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 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) Title to Receivables. Each Receivable has been purchased by the
Seller from the Originator in accordance with the terms of the Sale Agreement,
and the Seller has thereby irrevocably obtained all legal and equitable title
to, and has the legal right to sell and encumber, such Receivable, its
Collections and the Related Security. Each such Receivable has been
transferred to the Seller free and clear of any Adverse Claim. Without
limiting the foregoing, there has been duly filed all financing statements or
other similar instruments or documents
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necessary under the UCC of all appropriate jurisdictions (or any comparable
law) to perfect the Seller's ownership interest in such Receivable.
(h) Good Title; Perfection. Immediately prior to each purchase
hereunder, the Seller 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. This Agreement
is effective to, and shall, upon each purchase hereunder, transfer to the
relevant Purchaser or Purchasers (and such Purchaser or Purchasers shall
acquire from the Seller) a valid and perfected first priority undivided
percentage ownership interest in each Receivable existing or hereafter arising
and in the Related Security and Collections with respect thereto, free and
clear of any Adverse Claim, except as created by the Transactions Documents.
(i) Places of Business. The principal place of business and chief
executive office of the Seller and the offices where the Seller keeps all its
Records are located at the address(es) listed on EXHIBIT II or such other
locations notified to the Agent in accordance with SECTION 5.2(A) in
jurisdictions where all action required by SECTION 5.2(A) has been taken and
completed. The Seller's Federal Employer Identification Number is correctly
set forth on EXHIBIT II.
(j) Collection Banks; etc. Except as otherwise notified to the Agent in
accordance with SECTION 5.2(B):
(i) the Seller has instructed, or has required the Originator
to instruct, 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,
(iii) the names and addresses of all Collection Banks, together
with the account numbers of the Collection Accounts of the Seller 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
which were established by the Originator or by any Person other than the Seller
(and other than the Bank Agent, from and after termination of the Collection
Account Agreements), exclusive dominion and control thereof has been
transferred to the Seller. The Seller has not granted any Person,
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other than the Agent as contemplated by this Agreement, dominion and control of
any lock-box or Collection Account, or the right to take dominion and control
of any lock-box or Collection Account at a future time or upon the occurrence
of a future event.
(k) Material Adverse Effect. Since March 31, 1996, no event has
occurred which would have a Material Adverse Effect.
(l) Names. In the past five years, the Seller has not used any
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement.
(m) Actions, Suits. There are no actions, suits or proceedings pending,
or to the best of the Seller's knowledge, threatened, against or affecting the
Seller or the Originator, or any of the respective properties of the Seller or
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 Seller or the Originator or (iii) materially adversely affect
the ability of the Seller or the Originator to perform its obligations under
the Transaction Documents. Neither the Seller nor the Originator is in default
with respect to any order of any court, arbitrator or governmental body.
(n) Credit and Collection Policy. With respect to each Receivable, each
of the Originator, the Seller and the Servicer has complied in all material
respects with the Credit and Collection Policy.
(o) Payments to Originator. With respect to each Receivable sold to the
Seller by the Originator, the Seller has given reasonably equivalent value to
the Originator in consideration for such Receivable and the Related Security
with respect thereto under the Sale Agreement and such transfer was not made
for or on account of an antecedent debt. No transfer by the Originator 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.
(p) Ownership of the Seller. The Originator owns, directly or
indirectly, 100% of the issued and outstanding capital stock of the Seller.
Such capital stock is validly issued, fully paid and nonassessable, and there
are no options, warrants or other rights to acquire securities of the Seller
other than the pledge by the Originator to the Bank Agent of the Seller's
stock.
(q) Not an Investment Company. The Seller 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.
(r) Purpose. The Seller has determined that, from a business viewpoint,
the purchase of Receivables and related interests from the Originator under the
Sale Agreement, and the sale of Receivable Interests to the Purchasers and the
other transactions contemplated herein, are in the best interest of the Seller.
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(s) Net Eligible Receivables. Both before and after giving effect to
each Incremental Purchase and Reinvestment, the product of (i) Net Eligible
Receivables times (ii) one minus the Minimum Reserve Ratio is greater than or
equal to the sum of (x) the aggregate Capital then outstanding, plus (y) the
Carrying Cost Reserve.
Section 3.2. Investor Representations and Warranties. Each Investor
hereby represents and warrants to the Agent and FALCON that:
(a) Existence and Power. Such Investor is a corporation or a banking
association duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, and has all
corporate power to perform its obligations hereunder.
(b) No Conflict. The execution, delivery and performance by such
Investor of this Agreement are within its corporate powers, have been duly
authorized by all necessary corporate action, do not contravene or violate (i)
its certificate or articles of incorporation or association or by-laws, (ii)
any law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or any of its property
is bound, or (iv) any order, writ, judgment, award, injunction or decree
binding on or affecting it or its property, and do not result in the creation
or imposition of any Adverse Claim on its assets. This Agreement has been duly
authorized, executed and delivered by such Investor.
(c) Governmental Authorization. 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
such Investor of this Agreement.
(d) Binding Effect. This Agreement constitutes the legal, valid and
binding obligation of such Investor enforceable against such Investor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or limiting creditors' rights generally.
ARTICLE IV
CONDITIONS OF PURCHASES
Section 4.1. Conditions Precedent to Initial Purchase. The initial
purchase of a Receivable Interest under this Agreement is subject to the
conditions precedent that (a) the Agent shall have received on or before the
date of such purchase those documents listed on SCHEDULE A hereto, and (b) the
Agent shall have been paid all fees required to be paid on such date pursuant
to the terms of the Fee Letter.
Section 4.2. Conditions Precedent to All Purchases and Reinvestments.
Each purchase of a Receivable Interest (other than pursuant to SECTION 2.1) and
each Reinvestment shall be subject to the further conditions precedent that:
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(a) in the case of each such purchase, the Servicer shall have delivered
to the Agent on or prior to the date of such purchase, in form and substance
satisfactory to the Agent, all Weekly Reports and Monthly Reports as and when
due under SECTION 6.5;
(b) on the date of each such purchase or Reinvestment, the following
statements shall be true both before and after giving effect to such purchase
or Reinvestment (and acceptance of the proceeds of such purchase or
Reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
(i) the representations and warranties set forth in SECTION 3.1
are correct on and as of the date of such purchase or Reinvestment
as though made on and as of such date;
(ii) no event has occurred, or would result from such purchase
or Reinvestment, that will constitute a Servicer Default, and no
event has occurred and is continuing, or would result from such
purchase or Reinvestment, that would constitute a Potential Servicer
Default; and
(iii) the Liquidity Termination Date shall not have occurred,
the aggregate Capital of all Receivable Interests shall not exceed
the Purchase Limit and the aggregate Receivable Interests shall not
exceed 100%; and
(c) the Agent shall have received such other approvals, opinions or
documents as it may reasonably request.
ARTICLE V
COVENANTS
Section 5.1. Affirmative Covenants of Seller. Until the date on which
the Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby
covenants, individually and in its capacity as Servicer, that:
(a) Financial Reporting. The Seller will maintain a system of
accounting established and administered in accordance with generally accepted
accounting principles, and furnish to the Agent:
(i) Annual Reporting. Within 90 days after the close of each of its
fiscal years, financial statements for such fiscal year certified in a
manner acceptable to the Agent by the Chief Financial Officer of the
Seller.
(ii) Quarterly Reporting. Within 45 days after the close of the
first three quarterly periods of each of its fiscal years, balance sheets
as at the close of each such
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period and statements of income and retained earnings and a statement of
cash flows for the period from the beginning of such fiscal year to the
end of such quarter, all certified by its Chief Financial Officer.
(iii) Compliance Certificate. Together with the financial statements
required hereunder, a compliance certificate in substantially the form of
EXHIBIT IV signed by the Seller's Chief Financial Officer and dated the
date of such annual financial statement or such quarterly financial
statement, as the case may be.
(iv) Notices under Transaction Documents. Forthwith upon its receipt
of any notice, request for consent, financial statements, certification,
report or other communication under or in connection with any Transaction
Document from any Person other than the Agent or FALCON, copies of the
same.
(v) 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.
(vi) Other Information. Such other information (including
non-financial information) as the Agent or any Purchaser may from time to
time reasonably request.
(b) Notices. The Seller will notify 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) Servicer Defaults or Potential Servicer Defaults. The
occurrence of each Servicer Default or each Potential Servicer
Default, by a statement of the Chief Financial Officer of the
Seller.
(ii) Judgment. The entry of any judgment or decree against the
Seller.
(iii) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding against the Seller
or to which the Seller becomes party in excess of $10,000.
(iv) Termination Date under Sale Agreement. The occurrence of
the "TERMINATION DATE" under the Sale Agreement.
(v) Downgrade. Any downgrade in the rating of any Indebtedness
of the Seller or 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.
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(c) Compliance with Laws. The Seller 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.
(d) Audits. The Seller will furnish to the Agent from time to time such
information with respect to the Receivables as the Agent may reasonably
request. The Seller shall, from time to time during regular business hours as
requested by the Agent upon reasonable notice, permit the Agent, or its agents
or representatives (and shall require the Originator to permit the Agent or its
agents or representatives) (i) to examine and make copies of and abstracts from
all Records in the possession or under the control of the Seller or 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 Seller or the Originator for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to the Seller's
or the Originator's financial condition or the Receivables and the Related
Security or the Seller's performance hereunder, or the Originator's performance
under any of the other Transaction Documents, or the Seller's or the
Originator's performance under the Contracts with any of the officers or
employees of the Seller or the Originator having knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) The Seller will, and will require the Originator to, maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information 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 Seller will, and will require the Originator
to, give the Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(ii) The Seller will, and will require the Originator to, (a) on or
prior to the date hereof, xxxx its master data processing records and
other books and records relating to the Receivable Interests with a
legend, acceptable to the Agent, describing the Receivable Interests and
(b) upon the request of the Agent (A) xxxx each Contract with a legend
describing the Receivable Interests and (B) deliver to the Agent all
Contracts (including, without limitation, all multiple originals of any
such Contract) relating to the Receivables then in the Seller's
possession.
(f) Compliance with Contracts and Credit and Collection Policy. The
Seller will, and will require the Originator to, timely and fully (i) perform
and comply, in all material respects, with all provisions, covenants and other
promises required to be observed by it under the Contracts related to the
Receivables, and (ii) comply in all material respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract. The
Seller will, and will require the Originator to, pay when due any taxes payable
in connection with the Receivables.
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(g) Purchase of Receivables from the Originator. With respect to each
Receivable purchased under the Sale Agreement, the Seller shall (or shall
require the Originator to) take all actions necessary to vest legal and
equitable title to such Receivable and the Related Security irrevocably in the
Seller, including, without limitation, the filing of all financing statements
or other similar instruments or documents necessary under the UCC of all
appropriate jurisdictions (or any comparable law) to perfect the Seller's
interest in such Receivable and such other action to perfect, protect or more
fully evidence the interest of the Seller as the Agent may reasonably request.
(h) Ownership Interest. The Seller shall take all necessary action to
establish and maintain a valid and perfected first priority undivided
percentage ownership interest in the Receivables and the Related Security and
Collections with respect thereto, to the full extent contemplated herein, in
favor of the Agent and the Purchasers, including, without limitation, taking
such action to perfect, protect or more fully evidence the interest of the
Agent and the Purchasers hereunder as the Agent may reasonably request.
(i) Payment to the Originator. With respect to any Receivable purchased
by the Seller from the Originator, such sale shall be effected under, and in
strict compliance with the terms of, the Sale Agreement, including, without
limitation, the terms relating to the amount and timing of payments to be made
to the Originator in respect of the purchase price for such Receivable.
(j) Performance and Enforcement of Sale Agreement. The Seller shall
timely perform the obligations required to be performed by the Seller, and
shall vigorously enforce the rights and remedies accorded to the Seller, under
the Sale Agreement. The Seller shall take all actions to perfect and enforce
its rights and interests (and the rights and interests of the Purchasers and
the Agents, as assignees of the Seller) under the Sale Agreement as the Agent
may from time to time reasonably request, including, without limitation, making
claims to which it may be entitled under any indemnity, reimbursement or
similar provision contained in the Sale Agreement.
(k) Purchasers' Reliance. The Seller acknowledges that the Purchasers are
entering into the transactions contemplated by this Agreement in reliance upon
the Seller's identity as a legal entity that is separate from the Originator.
Therefore, from and after the date of execution and delivery of this Agreement,
the Seller shall take all reasonable steps including, without limitation, all
steps that the Agent or any Purchaser may from time to time reasonably request
to maintain the Seller's identity as a separate legal entity and to make it
manifest to third parties that the Seller is an entity with assets and
liabilities distinct from those of 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
Seller shall:
(i) conduct its own business in its own name and require that all
full-time employees of the Seller, if any, identify themselves as such and
not as employees of the
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Originator (including, without limitation, by means of providing such
employees with business or identification cards identifying such
employees as the Seller's employees);
(ii) compensate all employees, consultants and agents directly, from
the Seller's bank accounts, for services provided to the Seller by such
employees, consultants and agents and, to the extent any employee,
consultant or agent of the Seller is also an employee, consultant or agent
of the Originator, allocate the compensation of such employee, consultant
or agent between the Seller and the Originator on a basis which reflects
the services rendered to the Seller and the Originator;
(iii) clearly identify its offices (by signage or otherwise) as its
offices and, if such office is located in the offices of the Originator,
the Seller shall lease such office at a fair market rent;
(iv) have a separate telephone number, which will be answered only in
its name and separate stationery, invoices and checks in its own name;
(v) conduct all transactions with the Originator (including, without
limitation, any delegation of its obligations hereunder as Servicer)
strictly on an arm's-length basis, allocate all overhead expenses
(including, without limitation, telephone and other utility charges) for
items shared between the Seller and the Originator on the basis of actual
use to the extent practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use;
(vi) at all times have at least one member of its Board of Directors
(an "INDEPENDENT DIRECTOR") who is "INDEPENDENT" as provided in the
Seller's Certificate of Incorporation as in effect on the date hereof;
(vii) observe all corporate formalities as a distinct entity, and
ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the
dissolution or liquidation of the Seller or (C) the initiation of
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving the Seller, are
duly authorized by unanimous vote of its Board of Directors (including the
Independent Director);
(viii) maintain the Seller's books and records separate from those of
the Originator and otherwise readily identifiable as its own assets rather
than assets of the Originator;
(ix) prepare financial statements separate from those of the
Originator and insure that any consolidated financial statements of the
Originator or any Affiliate thereof that include the Seller have detailed
notes clearly stating that the Seller is a separate corporate entity and
that its assets will be available first and foremost to satisfy the claims
of the creditors of the Seller;
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(x) except as herein specifically otherwise provided, not commingle
funds or other assets of the Seller with those of the Originator and not
maintain bank accounts or other depository accounts to which the
Originator is an account party, into which the Originator makes deposits
or from which the Originator has the power to make withdrawals except in
its capacity as Sub-Servicer;
(xi) not permit the Originator to pay any of the Seller's operating
expenses (except pursuant to allocation arrangements that comply with the
requirements of this SECTION 5.1(K));
(xii) not permit the Seller to be named as an insured on the
insurance policy covering the property of the Originator or enter into an
agreement with the holder of such policy whereby in the event of a loss in
connection with such property, proceeds are paid to the Seller; and
(xiii) take such other actions as are necessary on its part to ensure
that the facts and assumptions set forth in the opinion issued by Xxxxxx &
Bird, as counsel for the Seller, in connection with the closing or initial
purchase under this Agreement and relating to substantive consolidation
issues, and in the certificates accompanying such opinion, remain true and
correct in all material respects at all times.
(l) Collections. The Seller shall instruct, or require the Originator to
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 Seller
shall cause all proceeds from such lock-box to be deposited directly by a
Collection Bank into a Collection Account listed on EXHIBIT III, which is
subject to a Collection Account Agreement. The Seller shall maintain exclusive
dominion and control (subject to the terms of this Agreement) to each such
Collection Account. In the case of any Collections received by the Seller or
the Originator, the Seller shall remit (or shall require the Originator to
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 Seller shall itself hold (or, if
applicable, shall require the Originator to hold) such Collections in trust,
for the exclusive benefit of the Purchasers and the Agent. In the case of any
remittances received by the Seller in any such Collection Account that shall
have been identified, to the satisfaction of the Servicer, to not constitute
Collections or other proceeds of the Receivables or the Related Security, the
Seller shall promptly remit such items to the Person identified to it as being
the owner of such remittances. From and after the date the Agent delivers to
any of the Collection Banks a Collection Notice pursuant to SECTION 6.3, the
Agent may request that the Seller, and the Seller thereupon promptly shall and
shall direct the Originator to, direct all Obligors on Receivables to remit all
payments thereon to a new depositary account (the "NEW CONCENTRATION
ACCOUNT")
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specified by the Agent and, at all times thereafter the Seller shall
not deposit or otherwise credit, and shall not permit the Originator or any
other Person to deposit or otherwise credit to the New Concentration Account
any cash or payment item other than Collections. Alternatively, the Agent may
request that the Seller, and the Seller thereupon promptly shall, direct all
Persons then making remittances to any Collection 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.
(m) Minimum Net Worth. The Seller shall at all times maintain Net Worth
of not less than $100,000.
Section 5.2. Negative Covenants of Seller. Until the date on which the
Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby
covenants, individually and in its capacity as Servicer, that:
(a) Name Change, Offices, Records and Books of Accounts. The Seller 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 Agent at least 45 days prior notice thereof and (ii) delivered to
the Agent all financing statements, instruments and other documents requested
by the Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. The Seller 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 Seller or payments to be made to any lock-box, Collection Account or
Collection Bank, unless 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;
PROVIDED, HOWEVER, that the Seller 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 Collection Account that is subject to
a Collection Account Agreement then in effect.
(c) Modifications to Contracts and Credit and Collection Policy. The
Seller 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 6.2(C), the Seller, acting
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as 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. Except as permitted by the Intercreditor
Agreement, the Seller shall not, and shall not authorize the Originator to,
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 or Related Security or
Collections in respect thereof, or upon or with respect to any Contract under
which any Receivable arises, or any lock-box or Collection Account or assign
any right to receive income in respect thereof (other than, in each case, the
creation of the interests therein in favor of the Agent and the Purchasers
provided for herein), and the Seller shall defend the right, title and interest
of the Agent and the Purchasers in, to and under any of the foregoing property,
against all claims of third parties claiming through or under the Seller or the
Originator.
(e) Nature of Business; Other Agreements; Other Indebtedness. The Seller
shall not engage in any business or activity of any kind or enter into any
transaction or indenture, mortgage, instrument, agreement, contract, lease or
other undertaking, in each case other than the transactions contemplated and
authorized by this Agreement and the Sale Agreement. Without limiting the
generality of the foregoing, the Seller shall not create, incur, guarantee,
assume or suffer to exist any indebtedness or other liabilities, whether direct
or contingent, other than:
(i) as a result of the endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary
course of business,
(ii) the incurrence of obligations under this Agreement,
(iii) the incurrence of obligations, as expressly contemplated
in the Sale Agreement, to make payment to the Originator thereunder
for the purchase of Receivables from the Originator under the Sale
Agreement, and
(iv) the incurrence of operating expenses in the ordinary
course of business of the type otherwise contemplated in SECTION
5.1(K) of this Agreement.
In the event the Seller shall at any time borrow a "SUBORDINATED LOAN" under
the Sale Agreement, the obligations of the Seller in connection therewith shall
be subordinated to the obligations of the Seller to the Purchasers and the
Agent under this Agreement, on the terms provided for in the Subordinated Note
and the Sale Agreement.
(f) Amendments to Sale Agreement. The Seller shall not, without the prior
written consent of the Agent (which consent shall not be unreasonably withheld
or delayed):
(i) cancel or terminate the Sale Agreement,
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(ii) give any consent, waiver, directive or approval under the
Sale Agreement,
(iii) waive any default, action, omission or breach under the
Sale Agreement, or otherwise grant any indulgence thereunder, or
(iv) amend, supplement or otherwise modify any of the terms of
the Sale Agreement.
(g) Amendments to Corporate Documents. The Seller shall not amend its
Certificate of Incorporation or By-Laws in any respect that would impair its
ability to comply with the terms or provisions of any of the Transaction
Documents, including, without limitation, SECTION 5.1(K) of this Agreement.
(h) Merger. The Seller shall not merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions, and except as otherwise contemplated herein) all
or substantially all of its assets (whether now owned or hereafter acquired)
to, or acquire all or substantially all of the assets of, any Person.
(i) Restricted Junior Payments. The Seller shall not make any Restricted
Junior Payment if any Servicer Default or Potential Servicer Default exists or
would result therefrom.
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.1. Designation of Servicer.
(a) The servicing, administration and collection of the Receivables shall
be conducted by such Person (the "SERVICER") so designated from time to time in
accordance with this SECTION 6.1. The Seller is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Servicer pursuant
to the terms of this Agreement. The Agent may at any time following a Servicer
Default designate as Servicer any Person to succeed the Seller or any successor
Servicer.
(b) The Seller is permitted to delegate, and the Seller hereby advises the
Purchasers and the Agent that it has delegated, to the Originator, as
subservicer of the Servicer, certain of its duties and responsibilities as
Servicer hereunder in respect of the Receivables transferred by the Originator
to the Seller. Notwithstanding the foregoing, (i) the Seller shall be and
remain primarily liable to the Agent and the Purchasers for the full and prompt
performance of all duties and responsibilities of the Servicer hereunder and
(ii) the Agent and the Purchasers shall be entitled to deal exclusively with
the Seller in matters relating to the discharge by the Servicer of its duties
and responsibilities hereunder, and the Agent and the Purchasers shall not be
required to give notice, demand or other communication to any Person other than
the Seller in
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order for communication to the Servicer and its subservicer or other delegate
in respect thereof to be accomplished. The Seller, at all times that it is the
Servicer, shall be responsible for providing its subservicer or other delegate
with any notice given under this Agreement.
(c) Without the prior written consent of the Required Investors, (i) the
Seller shall not be permitted to delegate any of its duties or responsibilities
as Servicer to any Person other than the Originator, and then such delegation
shall be limited to the activities of Servicer hereunder as the same may relate
to the Receivables originated by the Originator, and (ii) the Originator shall
not be permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by the Seller. If at any time
the Agent shall designate as Servicer any Person other than the Seller, all
duties and responsibilities theretofore delegated by the Seller to the
Originator may, at the discretion of the Agent, be terminated forthwith on
notice given by the Agent to the Seller.
Section 6.2. Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such actions as may
be necessary or advisable to collect each Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy.
(b) The Servicer shall administer the Collections in accordance with the
procedures described herein and in ARTICLE I. The Servicer shall set aside and
hold in trust for the account of the Seller and the Purchasers their respective
shares of the Collections of Receivables in accordance with SECTIONS 1.6 and
1.7. The Servicer shall upon the request of the Agent after the occurrence of
a Liquidation Day, segregate, in a manner acceptable to the Agent, all cash,
checks and other instruments received by it from time to time constituting
Collections from the general funds of the Servicer or the Seller prior to the
remittance thereof in accordance with SECTION 1.7. If the Servicer shall be
required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for the Purchasers on
the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.
(c) The Servicer, may, in accordance with the Credit and Collection
Policy, extend the maturity of any Receivable or adjust the Outstanding Balance
of any Receivable as the Servicer 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 this Agreement. Notwithstanding
anything to the contrary contained herein, from and after the occurrence of a
Servicer Default, the Agent shall have the absolute and unlimited right to
direct the 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 Servicer shall hold in trust for the Seller and the Purchasers, in
accordance with their respective interests in the Receivables, 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 Agent, deliver
or make available to the Agent all such Records, (x) if such demand is made at
any time prior to the replacement of the Seller as Servicer hereunder, at the
chief executive office of the Originator and (y) if such demand is made at any
time after the replacement of the Seller as Servicer hereunder, to such
location as the Agent may designate in writing. The Servicer shall, as soon as
practicable following receipt thereof, turn over to the Seller (i) that portion
of Collections of Receivables representing the Seller's undivided fractional
ownership interest therein, less, in the event the Seller is not the Servicer,
all reasonable out-of-pocket costs and expenses of the 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. The Servicer shall, from time to time at the request of any
Purchaser, furnish to the Purchasers (promptly after any such request) a
calculation of the amounts set aside for the Purchasers pursuant to SECTION
1.7.
(e) Any payment by an Obligor in respect of any indebtedness owed by it to
the Seller shall, except as otherwise specified by such Obligor or otherwise
required by contract or law and unless otherwise instructed by the Agent, be
applied as a 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 6.3. Collection Notices. The Agent is authorized at any time
after the occurrence of a Servicer Default to date and to deliver to the
Collection Banks a Collection Notice under any Collection Account Agreement.
The Seller hereby transfers to the Agent for the benefit of the Purchasers,
effective when the Agent delivers such notice, the exclusive ownership and
control of the Collection Accounts. In case any authorized signatory of the
Seller whose signature appears on a Collection Account Agreement shall cease to
have such authority before the delivery of such notice, such Collection Notice
shall nevertheless be valid as if such authority had remained in force. The
Seller hereby authorizes the Agent, and agrees that the Agent shall be entitled
to (i) endorse the Seller's name on checks and other instruments representing
Collections, (ii) enforce the Receivables, the related Contracts and the
Related Security, and (iii) subject to the other provisions of this Agreement,
take such action as shall be necessary or desirable to cause all cash, checks
and other instruments constituting Collections of Receivables to come into the
possession of the Agent rather than the Seller.
Section 6.4. Responsibilities of the Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicer or the Seller from any of their
duties or obligations with respect to any Receivables or under the related
Contracts. The Purchasers shall have no obligation or liability with respect
to any Receivables or related Contracts, nor shall any of them be obligated to
perform the obligations of the Seller.
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Section 6.5. 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
Servicer shall prepare and forward to the Agent a Weekly Report.
(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
Agent shall request, the Servicer shall prepare and forward to the Agent a
Monthly Report.
(c) Promptly following any request therefor by the Agent, the Seller shall
prepare and provide to the Agent a listing by Obligor of all Receivables
together with an aging of such Receivables.
ARTICLE VII
SERVICER DEFAULTS
Section 7.1. Servicer Default. The occurrence of any one or more of the
following events shall constitute a Servicer Default:
(a) The Servicer or the Seller 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 Servicer or the Seller shall fail to deliver any Weekly Report or
any Monthly Report within two (2) Business Days after the same is due.
(c) The Servicer or the Seller shall fail to perform or observe any other
term, covenant or agreement hereunder (other than as referred to in SECTION
7.1(A) or SECTION 7.1(B)) and such failure shall remain unremedied for five (5)
Business Days following written notice thereof to the Servicer or the Seller,
as applicable.
(d) Any representation, warranty, certification or statement made by the
Seller, the Servicer or the Originator 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.
(e) (i) The Seller or the Servicer shall generally not pay its debts as
such debts become due; (ii) the Seller or the 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 Seller or the Servicer seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or
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composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or any substantial part of its property; or (iii) the Seller or any Servicer
shall take any corporate action to authorize any of the actions set forth in
above in clause (ii) of this subsection (e).
(f) (i) The Originator shall fail to perform or observe any term, covenant
or agreement contained in any other Transaction Document and such failure shall
continue unremedied beyond any applicable grace or cure period provided
therein, or (ii) the Originator shall for any reason cease to transfer, or
cease to have the legal capacity or otherwise be incapable of transferring,
Receivables to the Seller, as purchaser under the Sale Agreement, or (iii) any
"EVENT OF DEFAULT" shall occur under the Sale Agreement.
(g) The aggregate Receivable Interests hereunder shall at any time exceed
100%.
(h) A Change of Control shall occur.
(i) The Internal Revenue Service or the Pension Benefit Guaranty
Corporation files one or more tax or ERISA liens against the assets of the
Originator or the Seller and the same shall remain in effect for any period of
15 consecutive days.
(j) Any foreclosure or similar proceeding in respect of any Adverse Claim
on the Subordinated Note or the Seller's common stock shall have been comments,
or title to the Subordinated Note or any of the Seller's common stock shall
pass to the holder(s) of such Adverse Claim.
(k) The average of the Aged Receivables Ratios for any three (3)
consecutive Calculation Periods shall be greater than 1.6%.
(l) The average of the Dilution Ratios for any three (3) consecutive
Calculation Periods shall be greater than 8.0%.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Indemnities by the Seller. Without limiting any other
rights which the Agent or any Purchaser may have hereunder or under applicable
law, the Seller hereby agrees to indemnify 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 or as a result of
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this Agreement or the acquisition, either directly or indirectly, by a
Purchaser of an interest in the Receivables, EXCLUDING, HOWEVER:
(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 Receivables which are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor;
or
(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 the Intended
Characterization;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of the Seller or the Servicer or limit the recourse of the Purchasers
to the Seller or Servicer for amounts otherwise specifically provided to be
paid by the Seller or the Servicer under the terms of this Agreement. Without
limiting the generality of the foregoing indemnification, the Seller shall
indemnify the Agent and the Purchasers for Indemnified Amounts (including,
without limitation, losses in respect of uncollectible receivables, regardless
of whether reimbursement therefor would constitute recourse to the Seller or
the Servicer) relating to or resulting from:
(i) any representation or warranty made by the Seller, the
Originator or the Servicer (or any officers of the Seller, the
Originator or the Servicer) under or in connection with this
Agreement, any other Transaction Document, any Monthly Report or any
other written information or report delivered by the Seller, the
Originator or the Servicer pursuant hereto or thereto, which shall
have been false or incorrect when made or deemed made;
(ii) the failure by the Seller, the Originator or the 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 included therein with any such
applicable law, rule or regulation;
(iii) any failure of the Seller, the Originator or the 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 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
sale of the merchandise or service related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby or thereby, the use of the proceeds
of a purchase, the ownership of the Receivable Interests or any
other investigation, litigation or proceeding relating to the Seller
or 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) a Servicer Default described in SECTION 7.1(E);
(x) the failure to vest and maintain vested in the Agent and
the Purchasers, or to transfer to the Agent and the Purchasers,
legal and equitable title to, and ownership of, a first priority
perfected undivided percentage ownership (to the extent of the
Receivable Interests contemplated hereunder) in the Receivables, the
Related Security and the Collections, free and clear of any Adverse
Claim; or
(xi) any failure of the Seller to give reasonably equivalent
value to the Originator under the Sale Agreement in consideration of
the transfer by the Originator of any Receivable, or any attempt by
any Person to void any such transfer under statutory provisions or
common law or equitable action, including, without limitation, any
provision of the Bankruptcy Code.
Section 8.2. Increased Cost and Reduced Return.
(a) If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law,
rule or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance
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with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency (a "REGULATORY CHANGE"): (i)
which subjects any Funding Source to any charge or withholding on or with
respect to any Funding Agreement or a Funding Source's obligations under a
Funding Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Funding Source of any amounts payable
under any Funding Agreement (except for changes in the rate of tax on the
overall net income of a Funding Source) or (ii) which imposes, modifies or
deems applicable any reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for the account of a
Funding Source, or credit extended by a Funding Source pursuant to a Funding
Agreement or (iii) which imposes any other condition the result of which is to
increase the cost to a Funding Source of performing its obligations under a
Funding Agreement, or to reduce the rate of return on a Funding Source's
capital as a consequence of its obligations under a Funding Agreement, or to
reduce the amount of any sum received or receivable by a Funding Source under a
Funding Agreement or to require any payment calculated by reference to the
amount of interests or loans held or interest received by it, then, upon demand
by the Agent, the Seller shall pay to the Agent, for the benefit of the
relevant Funding Source, such amounts charged to such Funding Source or
compensate such Funding Source for such reduction.
(b) Payment of any sum pursuant to SECTION 8.2(A) shall be made by the
Seller to the Agent, for the benefit of the relevant Funding Source, not later
than ten (10) days after any such demand is made, and no payment of any such
sum shall be due or owing unless demand therefor is made within ninety (90)
days after the occurrence of the Regulatory Change giving rise thereto. A
certificate of any Funding Source, signed by an authorized officer claiming
compensation under this SECTION 8.2 and setting forth the additional amount to
be paid for its benefit and explaining the manner in which such amount was
determined shall constitute prima facie evidence of the amount to be paid.
Section 8.3. Costs and Expenses Relating to this Agreement. In addition
to the Closing Fee specified in the Fee Letter, the Seller shall pay to the
Agent and FALCON on demand all out-of-pocket expenses (other than audit fees
and time charges of outside counsel for the Agent and the Purchasers) actually
incurred in connection with the preparation, execution, delivery, amendments
and waivers of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder. The Seller shall pay to the Agent
on demand any and all costs and expenses of the Agent and the Purchasers, if
any, including reasonable counsel fees and expenses actually incurred in
connection with the enforcement of this Agreement and the other documents
delivered hereunder and in connection with any restructuring or workout of this
Agreement or such documents, or the administration of this Agreement following
a Servicer Default.
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ARTICLE IX
THE AGENT
Section 9.1. Authorization and Action. Each Purchaser hereby designates
and appoints First Chicago to act as its agent hereunder and under each other
Transaction Document, and authorizes the Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of this Agreement and the other Transaction Documents together with such
powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor
shall be deemed to have assumed any obligation or relationship of trust or
agency with or for the Seller or any of its successors or assigns. The Agent
shall not be required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent
hereunder shall terminate upon the indefeasible payment in full of all
Aggregate Unpaids. Each Purchaser hereby authorizes the Agent to execute on
behalf of such Purchaser (the terms of which shall be binding on such
Purchaser) each of the Uniform Commercial Code financing statements, together
with such other instruments or documents determined by the Agent to be
necessary or desirable in order to perfect, evidence or more fully protect the
interest of the Purchasers contemplated hereunder.
Section 9.2. Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 9.3. Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in
any manner to any of the Purchasers for any recitals, statements,
representations or warranties made by the Seller contained in this Agreement,
any other Transaction Document or any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement, or any other Transaction Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, or any other Transaction Document or any other document furnished in
connection herewith or therewith, or for any failure of the Seller to perform
its obligations hereunder or thereunder, or for the satisfaction of any
condition specified in ARTICLE IV, or for the perfection, priority, condition,
value or sufficiency or any collateral pledged in connection herewith. The
Agent shall not be under any obligation to any Purchaser to ascertain or to
inquire as to the observance or performance of any of the agreements or
covenants contained in, or conditions of, this Agreement or any other
Transaction Document, or to inspect the properties, books or records of the
Seller.
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The Agent shall not be deemed to have knowledge of a Servicer Default
or Potential Servicer Default unless the Agent has received notice from the
Seller or a Purchaser.
Section 9.4. Reliance by Agent. The Agent shall in all cases be entitled
to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Seller),
independent accountants and other experts selected by the Agent. The Agent
shall in all cases be fully justified in failing or refusing to take any action
under this Agreement or any other Transaction Document unless it shall first
receive such advice or concurrence of FALCON or the Required Investors or all
of the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, PROVIDED THAT unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected
in acting, or in refraining from acting, in accordance with a request of FALCON
or the Required Investors or all of the Purchasers, as applicable, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 9.5. Non-Reliance on Agent and Other Purchasers. Each Purchaser
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of the Seller,
shall be deemed to constitute any representation or warranty by the Agent.
Each Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Seller
and made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 9.6. Reimbursement and Indemnification. The Investors agree to
reimburse and indemnify the Agent and its officers, directors, employees,
representatives and agents ratably according to their Pro Rata Shares, to the
extent not paid or reimbursed by the Seller (i) for any amounts for which the
Agent, acting in its capacity as Agent, is entitled to reimbursement by the
Seller hereunder and (ii) for any other expenses actually incurred by the
Agent, in its capacity as Agent and acting on behalf of the Purchasers, in
connection with the administration and enforcement of this Agreement and the
other Transaction Documents.
Section 9.7. Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Seller or any Affiliate of the Seller as though the
Agent were not the Agent hereunder. With respect to the acquisition of
Receivable Interests pursuant to this Agreement, the Agent shall have the same
rights and powers under this Agreement as any Purchaser and may exercise the
same as though it
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were not the Agent, and the terms "Investor," "Purchaser," "Investors" and
"Purchasers" shall include the Agent in its individual capacity.
Section 9.8. Successor Agent. The Agent may, upon five days' notice to
the Seller and the Purchasers, and the Agent will, upon the direction of all of
the Purchasers (other than the Agent, in its individual capacity) resign as
Agent. If the Agent shall resign, then the Required Investors during such
five-day period shall appoint from among the Purchasers a successor agent. If
for any reason no successor Agent is appointed by the Required Investors during
such five-day period, then effective upon the termination of such five day
period, the Purchasers shall perform all of the duties of the Agent hereunder
and under the other Transaction Documents and the Seller shall make all
payments in respect of the Aggregate Unpaids directly to the applicable
Purchasers and for all purposes shall deal directly with the Purchasers. After
the effectiveness of any retiring Agent's resignation hereunder as Agent, the
retiring Agent shall be discharged from its duties and obligations hereunder
and under the other Transaction Documents and the provisions of this ARTICLE IX
and ARTICLE VIII shall continue in effect for its benefit with respect to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and under the other Transaction Documents.
ARTICLE X
ASSIGNMENTS; PARTICIPATIONS
Section 10.1. Assignments. (a) The Seller and each Investor hereby (i)
agree and consent to the complete or partial assignment by FALCON of all of its
rights under, interest in, title to and obligations under this Agreement to the
Agent for the benefit of the Investors pursuant to SECTION 2.1, and (ii) agree
that they will not unreasonably withhold or delay their consent to the complete
or partial assignment by FALCON of all of its rights under, interest in, title
to and obligations under this Agreement to any other special purpose
receivables funding or purchasing conduit for which The First National Bank of
Chicago performs administrative functions. Upon any complete or partial
assignment made in accordance with the preceding sentence, FALCON shall be
released from its obligations so assigned. Further, the Seller and each
Investor hereby agree that any assignee of FALCON of this Agreement or all or
any of the Receivable Interests of FALCON shall have all of the rights and
benefits under this Agreement as if the term "FALCON" explicitly referred to
such party, and no such assignment shall in any way impair the rights and
benefits of FALCON hereunder. The Seller shall not have the right to assign
its rights or obligations under this Agreement.
(b) With the prior written consent of FALCON and the Seller, which consent
shall not be unreasonably withheld or delayed, any Investor may at any time and
from time to time assign to one or more Persons (each, a "PURCHASING INVESTOR")
all or any part of its rights and obligations under this Agreement pursuant to
an assignment agreement, in a form and substance satisfactory to the Agent (the
"ASSIGNMENT AGREEMENT"), executed by such Purchasing Investor and such selling
Investor. Each assignee of an Investor must have a short-term debt rating of
X-0
00
00
or better by Standard & Poor's Ratings Group and P-1 by Xxxxx'x Investors
Service, Inc. and must agree to deliver to the Agent, promptly following any
request therefor by the Agent or FALCON, an enforceability opinion in form and
substance satisfactory to the Agent and FALCON. Upon delivery of the executed
Assignment Agreement to the Agent, such selling Investor shall be released from
its obligations hereunder to the extent of such assignment. Thereafter, the
Purchasing Investor shall for all purposes be an Investor party to this
Agreement and shall have all the rights and obligations of an Investor under
this Agreement to the same extent as if it were an original party hereto and no
further consent or action by the Seller, the Purchasers or the Agent shall be
required.
(c) Each of the Investors agrees that in the event that it shall cease to
have a short-term debt rating of A-1 or better by Standard & Poor's Corporation
and P-1 by Xxxxx'x Investors Service, Inc. (an "AFFECTED INVESTOR"), such
request of FALCON or the Agent, to assign all of its rights and obligations
hereunder to (i) another Investor or (ii) another financial institution
nominated by the Agent and acceptable to FALCON, and willing to participate in
this Agreement through the Liquidity Termination Date in the place of such
Affected Investor; PROVIDED THAT the Affected Investor receives payment in
full, pursuant to an Assignment Agreement, of an amount equal to such
Investor's Pro Rata Share of the Capital and Discount owing to the Investors
and all accruing but unpaid fees and other costs and expenses payable in
respect of its Pro Rata Share of the Receivable Interests.
Section 10.2. Participations. Any Investor may, in the ordinary course
of its business at any time sell to one or more Persons (each, a "PARTICIPANT")
participating interests in its Pro Rata Share of the Receivable Interests of
the Investors, its obligation to pay FALCON its Acquisition Amounts or any
other interest of such Investor hereunder. Notwithstanding any such sale by an
Investor of a participating interest to a Participant, such Investor's rights
and obligations under this Agreement shall remain unchanged, such Investor
shall remain solely responsible for the performance of its obligations
hereunder, and the Seller, FALCON and the Agent shall continue to deal solely
and directly with such Investor in connection with such Investor's rights and
obligations under this Agreement. Each Investor agrees that any agreement
between such Investor and any such Participant in respect of such participating
interest shall not restrict such Investor's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in SECTION 11.1(B)(I).
ARTICLE XI
MISCELLANEOUS
Section 11.1. Waivers and Amendments. (a) No failure or delay on the part
of any party hereto 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
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remedies provided by law. Any waiver of this Agreement shall be effective only
in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing in accordance with the provisions of this SECTION
11.1(B). FALCON, the Seller and the Agent, at the direction of the Required
Investors, may enter into written modifications or waivers of any provisions of
this Agreement, PROVIDED, HOWEVER, that no such modification or waiver shall:
(i) without the consent of each affected Purchaser, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of
Collections by the Seller or the Servicer, (B) reduce the rate or extend
the time of payment of Discount (or any component thereof), (C) reduce any
fee payable to the Agent for the benefit of the Purchasers, (D) except
pursuant to ARTICLE X hereof, change the amount of the Capital of any
Purchaser, an Investor's Pro Rata Share or an Investor's Commitment, (E)
amend, modify or waive any provision of the definition of Required
Investors or this SECTION 11.1(B), (F) consent to or permit the assignment
or transfer by the Seller of any of its rights and obligations under this
Agreement, (G) change the definition of "ELIGIBLE RECEIVABLE," "ALLOWANCE
FOR ESTIMATED FUTURE DISCOUNT", "ALLOWANCE FOR ESTIMATED FUTURE
SERVICING", "DILUTION RATIO," "DILUTION RESERVE RATIO," "AGED RECEIVABLES
RATIO," "LOSS RESERVE RATIO" OR "NET ELIGIBLE RECEIVABLES", or (H) amend
or modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (G) above in
a manner which would circumvent the intention of the restrictions set
forth in such clauses; or
(ii) without the written consent of the then Agent, amend, modify or
waive any provision of this Agreement if the effect thereof is to affect
the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Investors, the
Agent may, with the consent of the Seller, amend this Agreement solely to add
additional Persons as Investors hereunder and (ii) without the consent of the
Seller, the Agent, the Required Investors and FALCON may enter into amendments
to modify any of the terms or provisions of ARTICLE II, ARTICLE IX, ARTICLE X
or SECTION 11.13, PROVIDED THAT such amendment has no negative impact upon the
Seller. Any modification or waiver made in accordance with this SECTION 11.1
shall apply to each of the Purchasers equally and shall be binding upon the
Seller, the Purchasers and the Agent.
Section 11.2. Notices.
(a) Except as provided in subsection (b) below, all communications and
notices provided for hereunder shall be in writing (including bank wire,
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other parties hereto at their respective
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41
addresses or telecopy numbers 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, except that communications and
notices to the Agent or any Purchaser pursuant to ARTICLE I or II shall not be
effective until received by the intended recipient.
(b) The Seller hereby authorizes the Agent to effect purchases and
Tranche Period and Discount Rate selections based on telephonic notices made by
any Person whom the Agent in good faith believes to be acting on behalf of the
Seller. The Seller agrees to deliver promptly to the Agent, upon request, a
written confirmation of each telephonic notice signed by an authorized officer
of the Seller. However, the absence of such confirmation shall not affect the
validity of such notice. If the written confirmation differs from the action
taken by the Agent, the records of the Agent shall govern absent manifest
error.
Section 11.3. Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
SECTION 8.2 or 8.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse
or warranty a portion of the Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of the
Aggregate Unpaids; PROVIDED THAT if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 11.4. Protection of Ownership Interests of the Purchasers. (a)
The Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may be necessary or desirable, or that the Agent may reasonably request, to
perfect, protect or more fully evidence the Receivable Interests, or to enable
the Agent or the Purchasers to exercise and enforce their rights and remedies
hereunder. At any time after the occurrence of a Servicer Default, the Agent
may, or the Agent may direct the Seller to, notify the Obligors of Receivables,
at any time following the replacement of the Seller as Servicer and at the
Seller's expense, of the ownership interests of the Purchasers under this
Agreement and may also direct that payments of all amounts due or that become
due under any or all Receivables be made directly to the Agent or its designee.
The Seller shall, at any Purchaser's written request, withhold the identity
of such Purchaser in any such notification.
(b) If the Seller or the Servicer fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be required to)
perform, or cause performance of, such obligation; and the Agent's or such
Purchaser's reasonable costs and expenses actually incurred in connection
therewith shall be payable by the Seller (if the Servicer that fails to so
perform is the Seller or an Affiliate thereof) as provided in SECTION 8.3, as
applicable. The Seller and the Servicer each irrevocably authorizes the Agent
at any time and from time to time in the
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42
sole discretion of the Agent, and appoints the Agent as its attorney-in-fact,
to act on behalf of the Seller and the Servicer (i) to execute on behalf of the
Seller as debtor and to file financing statements necessary or desirable in the
Agent's sole discretion to perfect and to maintain the perfection and priority
of the interest of the Purchasers in the Receivables and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as the
Agent in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of the interests of the Purchasers in the
Receivables. This appointment is coupled with an interest and is irrevocable.
Section 11.5. Confidentiality.
(a) The Seller shall maintain and shall cause each of its employees and
officers to maintain the confidentiality of this 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,
except that the Seller and its officers and employees may disclose such
information to the Bank Agent (and the lenders represented by it) and to the
Seller's external accountants and attorneys and as required by any applicable
law or order of any judicial or administrative proceeding. In addition, the
Seller 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).
(b) Each of the Agent and the Purchasers shall maintain and shall cause
each of its employees and officers to maintain the confidentiality of this
Agreement and the Sale Agreement and the other confidential proprietary
information with respect to the Seller and the Originator and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein. Anything
herein to the contrary notwithstanding, the Seller hereby consents to the
disclosure of any nonpublic information with respect to it and the Originator:
(i) to the Agent, the Investors, FALCON and the Bank Agent (and the lenders
represented by the Bank Agent), (ii) by 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 THAT 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 type. In
addition, 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 11.6. Bankruptcy Petition. The Seller, the Agent and each
Investor hereby covenants and agrees that, prior to the date which is one year
and one day after the
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43
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.
Section 11.7. 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 Seller, the 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 Seller hereby
waives, releases, and agrees not to xxx upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
Section 11.8. 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 11.9. CONSENT TO JURISDICTION. THE SELLER 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 SELLER
PURSUANT TO THIS AGREEMENT AND THE SELLER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST THE SELLER
IN THE COURTS OF ANY OTHER JURISDICTION WHEREIN ANY ASSETS OF THE SELLER OR THE
ORIGINATOR MAY BE LOCATED. ANY JUDICIAL PROCEEDING BY THE SELLER AGAINST THE
AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR A PURCHASER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE SELLER PURSUANT
TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 11.10. WAIVER OF JURY TRIAL. THE AGENT, THE SELLER AND EACH
PURCHASER HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER
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44
(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
SELLER PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR
THEREUNDER.
Section 11.11. Integration; Survival of Terms. This Agreement, the
Collection Account Agreements, and the Fee Letter 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. The provisions of ARTICLE VIII and
SECTION 11.6 shall survive any termination of this Agreement.
Section 11.12. Counterparts; Severability. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 11.13. First Chicago Roles. Each of the Investors acknowledges
that First Chicago and certain of its Affiliates including (First Chicago
Capital Markets, Inc.) act, or may in the future act, (i) as administrative
agent for FALCON, (ii) as issuing and paying agent for the Commercial Paper,
(iii) to provide credit or liquidity enhancement for the timely payment for the
Commercial Paper and (iv) to provide other services from time to time for
FALCON (collectively, the "FIRST CHICAGO ROLES"). Without limiting the
generality of this SECTION 11.13, each Investor hereby acknowledges and
consents to any and all First Chicago Roles and agrees that in connection with
any First Chicago Role, First Chicago may take, or refrain from taking, any
action which it, in its discretion, deems appropriate, including, without
limitation, in its role as administrative agent for FALCON, the giving of
notice to the Agent of a mandatory purchase pursuant to SECTION 2.1.
Section 11.14. Characterization.
(a) It is the intention of the parties hereto that each purchase hereunder
shall constitute an absolute and irrevocable sale, which purchase shall provide
the applicable Purchaser with the full benefits of ownership of the applicable
Receivable Interest. Except as specifically provided in this Agreement, each
sale of a Receivable Interest hereunder is made without recourse to the Seller;
PROVIDED, HOWEVER, that (i) the Seller shall be liable to each Purchaser and
the Agent for all representations, warranties and covenants made by the Seller
pursuant to the terms of this Agreement, and (ii) such sale does not constitute
and is not intended to result in an assumption by any Purchaser or the Agent or
any assignee thereof of any obligation of the Seller or the
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45
Originator or any other person arising in connection with the Receivables, the
Related Security, or the related Contracts, or any other obligations of the
Seller or the Originator.
(b) If the conveyance by the Seller to the Purchasers of interests in
Receivables hereunder shall be characterized as a secured loan and not a sale,
it is the intention of the parties hereto that this Agreement shall constitute
a security agreement under applicable law, and that the Seller shall be deemed
to have granted to the Agent for the ratable benefit of the Purchasers a duly
perfected security interest in all of the Seller'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 prior to all other liens on and security interests
therein. After a Servicer Default, the Agent and the Purchasers 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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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.
FLEXIBLE FUNDING CORP.
By: /s/
-------------------------------------
Name:
Title:
Flexible Funding Corp.
000 Xxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
FALCON ASSET SECURITIZATION CORPORATION
By: /s/
-------------------------------------
Authorized Signatory
c/o The First National Bank
of Chicago
Asset-Backed Finance
Suite 0079, 0-00
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Fax:(000) 000-0000
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INVESTORS:
Commitment
-----------
$50,000,000 THE FIRST NATIONAL BANK OF CHICAGO, as
an Investor and as Agent
By: /s/
-------------------------------
Authorized Agent
The First National Bank of Chicago
Suite 0079, 0-00
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
============
$50,000,000 PURCHASE LIMIT
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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):
"ACQUISITION AMOUNT" means, on the date of any purchase from FALCON of
Receivable Interests pursuant to SECTION 2.1, (i) with respect to each Investor
other than First Chicago, the lesser of (a) such Investor's Pro Rata Share of
the FALCON Transfer Price and (b) such Investor's unused Commitment and (ii)
with respect to First Chicago, the difference between (a) the FALCON Transfer
Price and (b) the aggregate amount payable by all other Investors on such date
pursuant to clause (i) above.
"ADJUSTED LIBOR RATE" means, on any date of determination with respect to
any Receivable Interest: the sum of (a) the applicable LIBOR Rate, plus (b)
0.50% per annum.
"ADJUSTED LIQUIDITY PRICE" means, in determining the FALCON Transfer Price
for any Receivable Interest, an amount equal to:
(i) DC (ii) RI x [ NDR ]
-----------------
1 + (.50 x MRR)
where:
RI = the undivided percentage interest evidenced by such Receivable
Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all non-Defaulted Receivables.
MRR = the Minimum Reserve Ratio.
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.
"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
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49
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. In addition, for purposes of the definitions of
"EXCESS CONCENTRATION BALANCES," "ELIGIBLE RECEIVABLE" and "NET ELIGIBLE
RECEIVABLES," a Person shall be deemed to control another Person if such Person
owns more than 50% of any class of voting securities (or corresponding interest
in the case of non-corporate entities) of the other Person.
"AGED RECEIVABLES RATIO" means, as calculated in each Monthly Report as of
the Cut-Off Date for each Calculation Period, a fraction (expressed as a
percentage) having (a) a numerator that is the sum of (i) the incremental
increase, if any, in Receivables outstanding more than 90 days after their
respective due dates during such Calculation Period, plus (ii) the aggregate
Outstanding Balance of Receivables that were written off as uncollectible
during the most recently ended Calculation Period and (b) a denominator that is
the aggregate amount payable pursuant to invoices giving rise to Receivables
that were generated by the Originator during the Calculation Period that
occurred five (5) fiscal months prior to the most recently ended Calculation
Period.
"AGENT" means First Chicago in its capacity as agent for the Purchasers
pursuant to ARTICLE IX, and not in its individual capacity as an Investor, and
any successor Agent appointed pursuant to ARTICLE IX.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the sum of all
accrued and unpaid Discount, Capital and all other amounts owed (whether due or
accrued) hereunder or under the Fee Letter to the Agent and the Purchasers at
such time, plus all accrued and unpaid Servicer Fees owed hereunder to the
Servicer.
"AGREEMENT" means this Receivables Purchase Agreement, as it may be
amended or modified and in effect from time to time.
"ALLOWANCE FOR ESTIMATED FUTURE DISCOUNT" means, on any date of
determination, the amount determined pursuant to the following formula:
[ (C x 1.5 x DR) x 2 x TD ]
---------
360
where:
C = the aggregate Capital outstanding as of the date of
determination;
DR = the highest Discount Rate applicable on the date of
determination; and
TD = Turnover Days.
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"ALLOWANCE FOR ESTIMATED FUTURE SERVICING" means, on any date of
determination, the amount determined pursuant to the following formula:
[ (AOB x SFP) x 2 x TD ]
-------
360
where:
AOB = the aggregate Outstanding Balance of Receivables as of the
Cut-Off Date immediately prior to the date of determination;
SFP = the Servicer Fee Percentage applicable on the date of
determination; and
TD = Turnover Days.
"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 a Servicer Default (other than a Servicer
Default giving rise to the obligation to pay a Default Fee), and during the
continuation thereof, the "BASE RATE" shall mean a rate per annum equal to the
sum of 2% per annum PLUS 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.
"XXXX AND HOLD" means an arrangement in which the Originator, pursuant to
an outstanding order from one of its customers, invoices the customer for goods
but retains possession of such goods for a period of time; PROVIDED THAT all of
the following requirements are satisfied:
(a) title to, and the risk of loss of, the goods is transferred
to the customer, and the Originator's inventory records are marked
to indicate that title has passed;
(b) the Originator's records are adequate to enable the
Originator or a third-party to identify the goods subject to such
arrangement as separate from the Originator's own inventory at any
time; and
(c) the related invoice is payable on the normal due date for
similar Receivables that do not arise from Xxxx and Hold
arrangements.
"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, and, if the applicable Business Day
relates to any computation or
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51
payment to be made with respect to the Adjusted LIBOR Rate, any day on which
dealings in dollar deposits are carried on in the London interbank market.
"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.
"CAPITAL" of any Receivable Interest means, at any time, the Purchase
Price of such Receivable Interest (and after giving effect to any adjustments
contemplated in SECTION 1.5), minus the sum of the aggregate amount of
Collections and other payments received by the Agent which in each case are
applied to reduce such Capital; PROVIDED THAT such Capital shall be restored in
the amount of any Collections or payments so received and applied if at any
time the distribution of such Collections or payments are rescinded or must
otherwise be returned for any reason.
"CARRYING COST RESERVE" means, on any Business Day, the sum of (a) the
Current Carrying Costs; plus (b) the Allowance for Estimated Future Discount;
plus (c) the Allowance for Estimated Future Servicing.
"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.
"CLOSING FEE" shall have the meaning specified in the Fee Letter.
"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 NOTICE" means a notice, in substantially the form of the
Collection Notice contained in EXHIBIT V hereto, from the Agent to a Collection
Bank.
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"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 and all amounts payable to the Purchasers by the Seller pursuant to
SECTION 1.8.
"COMMERCIAL PAPER" means promissory notes of FALCON issued by FALCON in
the commercial paper market.
"COMMITMENT" means, for each Investor, the commitment of such Investor to
purchase its Pro Rata Share of Receivable Interests from (i) the Seller and
(ii) FALCON, such Pro Rata Share not to exceed, in the aggregate, the amount
set forth opposite such Investor's name on the signature pages of this
Agreement, as such amount may be modified in accordance with the terms hereof.
"CONTRACT" means, collectively, with respect to any Receivable, any and
all instruments, bills of lading, invoices or other writings which evidence
such Receivable or the goods underlying such Receivable.
"CREDIT AND COLLECTION POLICY" means the Seller's credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in EXHIBIT VI hereto, as modified from time to time
in accordance with this Agreement. It is understood that the Credit and
Collection Policy of the Seller in respect of any Receivable shall be the
credit and collection policies of the Originator thereof. To the extent the
Originator shall not have comprehensively reduced to writing its credit and
collection policies, the Credit and Collection Policy in respect of Receivables
originated by the Originator shall be those credit and collection policies of
the Originator in effect on the date hereof and disclosed to the Agent on or
prior to the date hereof.
"CURRENT CARRYING COSTS" means, on any date of determination, an amount
determined by reference to the following formula:
[C x DR x (30/360)]
where:
C = the aggregate outstanding amount of Capital on such date; and
DR = the weighted average of the Discount Rates then applicable to
all Receivable Interests.
"CUT-OFF DATE" means the last day of each fiscal month after the date of
this Agreement commencing with the fiscal month of August, 1996.
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"DEEMED COLLECTIONS" means the aggregate of all amounts owing to FALCON
pursuant to SECTIONS 1.8 and 8.1.
"DEFAULT FEE" means with respect to any amount due and payable by the
Seller hereunder or under the Fee Letter, an amount equal to interest on any
such amount at a rate per annum equal to 2% above the Base Rate; PROVIDED,
HOWEVER, that such interest rate will not at any time exceed the maximum rate
permitted by applicable law.
"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 7.1(E) (as if
references to the Seller 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 Seller as uncollectible.
"DILUTION HORIZON VARIABLE" means, at any time, a fraction having (a) a
numerator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated by the Originator during the 2-1/2
Calculation Periods ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate Outstanding Balance of all Receivables as of
the most recent Cut-Off Date.
"DILUTION RATIO" means, as calculated in each Monthly Report as of the
Cut-Off Date for the most recently-ended Calculation Period, a fraction
(expressed as a percentage) having (a) a numerator equal to the aggregate
amount of Dilutions occurring during such Calculation Period, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated by the Originator during the third
preceding Calculation Period (so that, for example, if the Calculation Period
specified in clause (a) corresponded to the May fiscal month, the Calculation
Period in this clause (b) would be the one corresponding to the February fiscal
month).
"DILUTION RESERVE RATIO" means, as calculated in each Monthly Report, the
result (expressed as a percentage) calculated in accordance with the following
formula; PROVIDED, HOWEVER, that in the event such formula results in a
Dilution Reserve Ratio greater than 20% for any Calculation Period, the
Dilution Reserve Ratio will be adjusted by subtracting up to 5% (so long as the
resulting Dilution Reserve Ratio is not less than 20%):
(2 x ADR) + { [(HDR - ADR) x (HDR/ADR)] x DHV } + 1%
where:
ADR = average Dilution Ratio for the prior 12 Calculation Periods;
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HDR = highest rolling average of the Dilution Ratio for any 3
consecutive Calculation Periods during the prior 12
Calculation Periods; and
DHV = the Dilution Horizon Variable.
"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" means, for each Receivable Interest for any Tranche Period:
[ DR x C x (AD/360) ]
where:
DR = the Discount Rate for such Receivable Interest for such
Tranche Period;
C = the Capital of such Receivable Interest during such Tranche
Period; and
AD = the actual number of days elapsed during such Tranche Period;
PROVIDED, THAT no provision of this Agreement shall require the payment or
permit the collection of Discount in excess of the maximum permitted by
applicable law; and PROVIDED, FURTHER, that Discount for any Tranche Period
shall not be considered paid by any distribution to the extent that at any time
all or a portion of such distribution is rescinded or must otherwise be
returned for any reason.
"DISCOUNT RATE" means the Adjusted LIBOR Rate or the Base Rate, as
applicable; PROVIDED THAT from and after the occurrence of a Servicer Default,
the Discount Rate in respect of each Receivable Interest and Tranche Period
shall be the Base Rate.
"EARLY COLLECTION FEE" means, for any Receivable Interest which has its
Capital reduced, or its Tranche Period terminated prior to the date on which it
was originally scheduled to end, the excess, if any, of (i) the Discount that
would have accrued during the remainder of the Tranche Period subsequent to the
date of such reduction or termination on the Capital of such Receivable
Interest if such reduction or termination had not occurred, over (ii) the sum
of (a) to the extent all or a portion of such Capital is allocated to another
Receivable Interest, the Discount actually accrued during such period on such
Capital for the new Receivable Interest, and (b) to the extent such Capital is
not allocated to another Receivable Interest, the income, if any, actually
received during such period by the holder of such Receivable Interest from
investing the portion of such Capital not so allocated. In the event that the
amount referred to in clause (ii) exceeds the
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amount referred to in clause (i), the relevant Purchaser or Purchasers agree to
pay to the Seller the amount of such excess.
"ELIGIBLE RECEIVABLE" means, at any time:
(1) a Receivable the Obligor of which (a) is not an Affiliate of any
of the parties to the Transaction Documents; 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,
(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 Seller 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,
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(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 Seller under
and in accordance with the Sale Agreement, and the Seller has good and
marketable title thereto free and clear of any Adverse Claim,
(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 Seller or any of the Seller'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 Agent has not notified the Seller
that the Agent has reasonably determined that such Receivable or class of
Receivables is not acceptable as an Eligible Receivable, including,
without limitation, because such Receivable arises under a Contract that
is not acceptable to the Agent;
PROVIDED, HOWEVER, that Flexible Packaging Receivables shall not be considered
to be "ELIGIBLE RECEIVABLES" under this Agreement unless and until Printpack,
Inc. 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.
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"EXCESS CONCENTRATION BALANCES" means, on any day, the portion of the
aggregate Outstanding Balance of Receivables in the following classes which
exceeds the applicable limitation set forth below, as shown on the most recent
Weekly Report:
(a) with respect to Receivables owing from any Investment Grade
Obligor (other than a Foreign Obligor or Special Obligor): (i)
33.33%, times (ii) the Minimum Reserve Ratio, times (iii) the
aggregate Outstanding Balance of all Eligible Receivables;
(b) with respect to Receivables owing from any Non-Investment
Grade Obligor (other than a Foreign Obligor or Special Obligor):
(i) 25%, times (ii) the Minimum Reserve Ratio, times (iii) the
aggregate Outstanding Balance of all Eligible Receivables;
(c) with respect to Receivables owing from all Foreign
Obligors, 5% of the aggregate Outstanding Balance of all Eligible
Receivables;
(d) with respect to Receivables owing from PepsiCo, 20% of
Facility Limit, and with respect to any other Special Obligor, such
amount or percentage limitation as the Agent and the Seller may
agree to from time to time; and
(e) with respect to all Receivables arising under Xxxx and Hold
arrangements, 5% of the aggregate Outstanding Balance of all
Eligible Receivables.
For purposes of placing Obligors in each of the tiers or categories specified
above, (1) all Obligors that are Affiliates of each other shall be treated as a
single Obligor, and (2) if an Obligor does not have either a commercial paper
rating or a senior actual or implied debt rating from Standard & Poor's Ratings
Group or Xxxxx'x Investors Services, Inc., but is the wholly-owned direct or
indirect Subsidiary of a Person that has either such rating, such Obligor shall
be placed in the same tier as such Person would be placed if it was an Obligor.
"FACILITY ACCOUNT" means the Seller's Account No. 55-66541 at First
Chicago.
"FACILITY TERMINATION DATE" means the earliest of (i) the Liquidity
Termination Date, (ii) the date the Seller shall exercise its right to
repurchase the outstanding Receivable Interests pursuant to SECTION 1.11, (iii)
any date selected by the Seller on not less than fifteen (15) Business Days'
prior written notice to the Agent; PROVIDED THAT if any Person then acting as
Agent hereunder shall have elected or been required to resign as Agent pursuant
to SECTION 9.8, the Seller may elect, by written notice to the Agent given
promptly following notice to the Seller of such resignation, to have the
Facility Termination Date occur on the effective date of such resignation, (iv)
the date of the occurrence of a Servicer Default involving the Seller and of
the type described in SECTION 7.1(E), and (v) any date following the
occurrence, and during the
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continuance, of a Servicer Default which the Required Investors declare in
writing to be the Facility Termination Date.
"FALCON RESIDUAL" means the sum of the FALCON Transfer Price Reductions.
"FALCON TRANSFER PRICE" means, with respect to the assignment by FALCON of
one or more Receivable Interests to the Agent for the benefit of the Investors
pursuant to SECTION 2.1, the sum of (i) the lesser of (a) the Capital of each
Receivable Interest and (b) the Adjusted Liquidity Price of each Receivable
Interest and (ii) all accrued and unpaid Discount for such Receivable
Interests.
"FALCON TRANSFER PRICE REDUCTION" means in connection with the assignment
of a Receivable Interest by FALCON to the Agent for the benefit of the
Investors, the positive difference between (i) the Capital of such Receivable
Interest and (ii) the Adjusted Liquidity Price for such Receivable Interest.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period equal to (i) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
preceding Business Day) by the Federal Reserve Bank of New York in the
Composite Closing Quotations for U.S. Governments Securities; or (ii) if such
rate is not so published for any day which is a Business Day, the average of
the quotations at approximately 10:30 a.m. (Chicago time) for such day on such
transactions received by the Reference Bank from three federal funds brokers of
recognized standing selected by it.
"FEE LETTER" means that certain letter agreement dated as of the date
hereof between the Seller and the Agent, as it may be amended or modified and
in effect from time to time.
"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.
"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.
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"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.
"FUNDING AGREEMENT" means this Agreement and any agreement or instrument
executed by any Funding Source with or for the benefit of FALCON (to the extent
that such agreement or instrument is available as liquidity, credit enhancement
or back-up purchase support or facilities available to support its Commercial
Paper issued in connection with this Agreement).
"FUNDING SOURCE" means (i) any Investor or (ii) any insurance company,
bank or other financial institution providing liquidity, credit enhancement or
back-up purchase support or facilities to FALCON in respect of its purchase of
Receivable Interests hereunder.
"INCREMENTAL PURCHASE" means a purchase of one or more Receivable
Interests which increases the total outstanding Capital hereunder.
"INTENDED CHARACTERIZATION" means, for income tax purposes, the
characterization of the acquisition by the Agent for the benefit of the
Purchasers of Receivable Interests as a loan or loans by the Purchasers to the
Seller secured by the Receivables, the Related Security, the Collection
Accounts and the Collections.
"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 hereunder, as the same may be amended, supplemented, restated
and/or otherwise modified from time to time.
"INVESTMENT GRADE OBLIGOR" means any Obligor that has (a) a commercial
paper rating from Standard & Poor's Ratings Group or Xxxxx'x Investors
Services, Inc. of at least "A-3" (or its equivalent) or (b) a senior actual or
implied debt rating from Standard & Poor's Ratings Group or Xxxxx'x Investors
Services, Inc. of at least "BBB-" (or its equivalent), PROVIDED THAT if such
Obligor has both a commercial paper rating from Standard & Poor's Ratings Group
or Xxxxx'x Investors Services, Inc. and a senior actual or implied debt rating
from Standard & Poor's Ratings Group or Xxxxx'x Investors Services, Inc., such
Obligor must have a commercial paper rating from Standard & Poor's Ratings
Group or Xxxxx'x Investors Services, Inc. of at least "A-3" (or its equivalent)
and a senior actual or implied debt rating from Standard & Poor's Ratings Group
or Xxxxx'x Investors Services, Inc. of at least "BBB-" (or its equivalent) to
be an Investment Grade Obligor.
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"INVESTORS" means the financial institutions listed on the signature pages
of this Agreement under the heading "INVESTORS" and their respective successors
and assigns.
"LIBOR RATE" means, on any date of determination with respect to any
Receivable Interest: (a) the offered rate for 1, 2 or 3-month U.S. Dollar
deposits appearing on Telerate Screen Page 3750 (or successor page) at 11:30
a.m. (Chicago time) two Business Days prior to the first day of a Tranche
Period and in an amount comparable to the Capital of the Receivable Interest
that is to be funded at the LIBOR Rate, or if such Telerate Screen Page 3750
shall not exist on such day, the rate (rounded, if necessary, to the next
higher 1/16 of 1%) at which deposits in U.S. Dollars are offered by the
Reference Bank to first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of the applicable Tranche Period, such deposits being in the approximate amount
of the Capital of such Receivable Interest.
"LIQUIDATION DAY" means, for any Receivable Interest, the earliest to
occur of (i) any Business Day so designated by the Agent on or at any time
following any day on which the conditions precedent set forth in SECTION 4.2
are not satisfied, (ii) any Business Day so designated by the Seller or FALCON
after the occurrence of the Termination Date, and (iii) the Business Day
immediately prior to the occurrence of a Servicer Default set forth in SECTION
7.1(E).
"LIQUIDITY TERMINATION DATE" means August 20, 2001.
"LOSS RESERVE RATIO" means, as calculated in each Monthly Report, the
percentage equal to the following:
(2 x ARR) x (TR/NER)
where:
ARR = highest rolling average of the Aged Receivables Ratio for any
3 consecutive Calculation Periods during the past 12
Calculation Periods;
TR = total Receivables generated during the prior 3 Calculation
Periods; and
NER = Net Eligible Receivables as of most recent Cut-Off Date.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition, business or operations of the Seller or the Originator,
(ii) the ability of the Seller or 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
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Collections are deposited, (iv) the Seller'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.
"MINIMUM RESERVE RATIO" means, on any date of determination, the greater
of (a) 20% or (b) the percentage equal to the sum of the Loss Reserve Ratio and
the Dilution Reserve Ratio.
"MONTHLY REPORT" means a report, in substantially the form of EXHIBIT VII
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to SECTION 6.5(B).
"NET ELIGIBLE RECEIVABLES" means, at any time, (a) the aggregate
Outstanding Balance of all Eligible Receivables, minus (b) the then aggregate
amount of all Excess Concentration Balances.
"NET WORTH" means, on any date of determination, the excess, if any, of
the Seller's total assets (determined from the most recent Weekly Report
delivered to the Agent) over the Seller's total liabilities on such date.
"NEW CONCENTRATION ACCOUNT" has the meaning set forth in SECTION 5.1(L).
"NON-INVESTMENT GRADE OBLIGOR" means any Obligor (other than an Investment
Grade Obligor).
"NON-USE FEE" shall have the meaning specified in the Fee Letter.
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract.
"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.
"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.
"POTENTIAL SERVICER DEFAULT" means an event which, with the passage of
time or the giving of notice, or both, would constitute a Servicer Default.
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"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.
"PRO RATA SHARE" means, for each Investor, the Commitment of such Investor
divided by the Purchase Limit, adjusted as necessary to give affect to the
application of the terms of SECTION 2.5.
"PURCHASE LIMIT" means the aggregate of the Commitments of the Investors
hereunder (which aggregate amount is $50,000,000 as of the date of this
Agreement).
"PURCHASE PRICE" means, with respect to any Purchase, the least of:
(a) the amount of Capital requested by the Seller,
(b) the remaining unused portion of the Purchase Limit on the
date of such Purchase, and
(c) the excess, if any, of (i) Net Eligible Receivables on the
date of such Purchase multiplied by 1 minus the then applicable
Minimum Reserve Ratio, over (ii) the Carrying Cost Reserve
applicable on the date of such Purchase.
"PURCHASER" means FALCON or an Investor, as applicable.
"RECEIVABLE" means the indebtedness and other obligations owed (at the
time it arises, and before giving effect to any transfer or conveyance
contemplated under the Sale Agreement or hereunder) to the Originator, whether
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the manufacture and sale of flexible packaging
products or other goods by the Originator or Flexible Packaging 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.
"RECEIVABLE INTEREST" means, at any time, an undivided percentage
ownership interest associated with a designated amount of Capital, Discount
Rate and Tranche Period selected pursuant to SECTION 1.3 in (i) all Receivables
transferred to or otherwise acquired or held by the Seller and arising prior to
the time of the most recent computation or recomputation of such undivided
interest pursuant to SECTION 1.4, (ii) all Related Security with respect to
such Receivables, and (iii) all Collections with respect to, and other proceeds
of, such Receivables. Such undivided percentage interest shall equal:
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C
-----------------------
[NER x (1 - MRR)] - CCR
where:
C = the Capital of such Receivable Interest.
MRR = the Minimum Reserve Ratio.
NER = the Net Eligible Receivables.
CCR = the Carrying Cost Reserve.
"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.
"REDUCTION PERCENTAGE" means, for any Receivable Interest acquired by the
Investors from FALCON for less than the Capital of such Receivable Interest, a
percentage equal to a fraction the numerator of which is the FALCON Transfer
Price Reduction for such Receivable Interest and the denominator of which is
the Capital of such Receivable Interest.
"REFERENCE BANK" means First Chicago or such other bank as the Agent shall
designate with the consent of the Seller.
"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 Seller's interest in the goods, the sale of which gave
rise to such Receivable, and any and all insurance contracts with respect
thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
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(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 Seller's right, title and interest in, to and under
the Sale Agreement; and
(vi) all proceeds of any of the foregoing.
"REQUIRED INVESTORS" means, at any time, Investors with Commitments in
excess of 66-2/3% of the Purchase Limit.
"RESERVE REQUIREMENT" means the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed against the Reference Bank in respect of Eurocurrency liabilities, as
defined in Regulation D of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of capital stock of
the Seller now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock or in any junior class of stock to the
Originator, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of the Seller now or hereafter outstanding, (iii)
any payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of capital stock of the Seller now or hereafter
outstanding, and (iv) any payment of management fees by the Seller.
"SALE AGREEMENT" means that certain Receivables Sale Agreement of even
date herewith between the Seller, as purchaser, and the Originator, as seller,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SERVICER" means at any time the Person (which may be the Agent) then
authorized pursuant to ARTICLE VI to service, administer and collect
Receivables.
"SERVICER DEFAULT" has the meaning specified in SECTION 7.1.
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"SERVICER FEE" means, for any Calculation Period, a servicing and
collection fee computed pursuant to the following formula:
SFP x C x [AD/360]
where:
SFP = the Servicer Fee Percentage;
C = the average daily Capital outstanding during such Calculation
Period; and
AD = the actual number of days in such Calculation Period.
"SERVICER FEE PERCENTAGE" means 1.25% or such other percentage as may be
agreed upon between the Agent and the Servicer as an arms-length rate for the
Servicer Fee.
"SPECIAL OBLIGOR" means (i) PepsiCo and (ii) any other Obligor that the
Agent and the Seller from time to time agree shall be treated as a "SPECIAL
OBLIGOR".
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, 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 Seller.
"TERMINATION DATE" means, for any Receivable Interest, the Facility
Termination Date, and, solely with respect to a Receivable Interest of FALCON,
that Business Day so designated by the Seller or FALCON by notice to the other.
"TRANCHE PERIOD" means, with respect to any Receivable Interest:
(i) if Discount for such Receivable Interest is calculated on the
basis of the Adjusted LIBOR Rate, a period of one, two or three months, or
such other period as may be mutually agreeable to the Agent and the
Seller, commencing on a Business Day selected by the Seller or the Agent
pursuant to this Agreement. Such Tranche Period shall end on the day
in the applicable succeeding calendar month which corresponds numerically
to the beginning day of such Tranche Period, PROVIDED, HOWEVER, that if
there is no such numerically corresponding day in such succeeding month,
such Tranche Period shall end on the last Business Day of such succeeding
month; and
(ii) if Discount for such Receivable Interest is calculated on the
basis of the Base Rate, a period of at least one Business Day.
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If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, PROVIDED,
HOWEVER, that in the case of Tranche Periods corresponding to the Adjusted
LIBOR Rate, if such next succeeding Business Day falls in a new month, such
Tranche Period shall end on the immediately preceding Business Day. In the
case of any Tranche Period for any Receivable Interest of which commences
before the Termination Date and would otherwise end on a date occurring after
the Termination Date, such Tranche Period shall end on the Termination Date.
The duration of each Tranche Period which commences after the Termination Date
shall be of such duration as selected by the Agent.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, the Sale
Agreement, the Fee Letter, each Collections Notice and all other instruments,
documents and agreements executed and delivered by the Seller or the Originator
in connection herewith or with the Sale Agreement.
"TURNOVER DAYS" means, at any time: (a) one-half of the sum of the
beginning and ending Outstanding Balances of all Receivables during the
Calculation Period most recently ended, multiplied by (b) the number of days in
the Calculation Period most recently ended divided by the aggregate amount
payable pursuant to invoices generated during that Calculation Period.
"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 Servicer to the Agent
pursuant to SECTION 6.5(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.
CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN ARE USED WITH THE
MEANINGS ATTRIBUTED THERETO IN THE SALE AGREEMENT.
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EXHIBIT II
CHIEF EXECUTIVE OFFICE OF THE SELLER; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
Chief Executive Office:
Flexible Funding Corp.
000 Xxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Location of Records:
Flexible Funding Corp.
000 Xxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Federal Employer Identification Number of the Seller: 00-0000000
Trade Names: None
Prior Corporate Names: None
Assumed Names: None
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EXHIBIT III
COLLECTION ACCOUNTS;
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
To: The First National Bank of Chicago, as Agent
This Compliance Certificate is furnished pursuant to that certain
Receivables Purchase Agreement dated as of August 22, 1996, among Flexible
Funding Corp. (the "SELLER"), the Purchasers party thereto, and The First
National Bank of Chicago, as agent for such Purchasers (the "AGREEMENT").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ________________________of the Seller;
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 Seller and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Servicer Default or Potential Servicer 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 Seller 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__.
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SCHEDULE I TO COMPLIANCE REPORT
A. Schedule of Compliance of Flexible Funding Corp. with Sections 7.1(k) and
(l) of the Agreement. Unless otherwise defined herein, the terms used in
this Compliance Certificate have the meanings ascribed thereto in the
Purchase Agreement.
This schedule relates to the month ended:
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EXHIBIT V
FORM OF COLLECTION ACCOUNT AGREEMENT
[On letterhead of Seller]
_________ 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.
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Please indicate your agreement to the terms of this letter agreement by
signing in the space provided below. This letter agreement will become
effective immediately upon execution of a counterpart of this letter agreement
by all parties hereto.
Very truly yours,
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 Seller]
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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 PURCHASE NOTICE
[Date]
The First National Bank of Chicago,
as Agent for the Purchasers parties
to the Receivables Purchase Agreement
referred to below
Suite 0079, 0-00
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Asset-Backed Finance
Gentlemen:
The undersigned, Flexible Funding Corp., refers to the Receivables
Purchase Agreement, dated as of August 22, 1996 (the "RECEIVABLES PURCHASE
AGREEMENT", the terms defined therein being used herein as therein defined),
among the undersigned, Falcon Asset Securitization Corporation ("FALCON"),
certain Investors parties thereto and The First National Bank of Chicago, as
Agent for FALCON and such Investors, and hereby gives you notice, irrevocably,
pursuant to SECTION 1.2 of the Receivables Purchase Agreement that the
undersigned hereby requests a Purchase under the Receivables Purchase
Agreement, and in that connection sets forth below the information relating to
such Purchase (the "PROPOSED PURCHASE") as required by SECTION 1.2 of the
Receivables Purchase Agreement:
(i) The Business Day of the Proposed Purchase is _________, 19__.
(ii) The requested Purchase Price in respect of the Proposed Purchase
is $___________________.
(iii) The requested Purchaser[s] in respect of the Proposed Purchase
[is FALCON] [are the Investors].
(iv) The duration of the initial Tranche Period for
the Proposed Purchase is ____________ [days] [months].
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(v) The Discount Rate related to such initial Tranche
Period is requested to be the [Adjusted LIBOR] [Base] Rate.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Purchase (before
and after giving effect to the Proposed Purchase):
(A) the representations and warranties set forth in SECTION
3.1 of the Receivables Purchase Agreement are correct on and as
of such date, as though made on and as of such date;
(B) no event has occurred, or would result from the
Proposed Purchase that will constitute a Servicer Default, and no
event has occurred and is continuing, or would result from such
Proposed Purchase, that would constitute a Potential Servicer
Default; and
(C) the Liquidity Termination Date shall not have occurred,
the aggregate Capital of all Receivable Interests shall not
exceed the Purchase Limit and the aggregate Receivable Interests
shall not exceed 100%.
Very truly yours,
FLEXIBLE FUNDING CORP.
By:____________________________________
Title:
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SCHEDULE A
DOCUMENTS AND RELATED ITEMS TO BE DELIVERED TO THE AGENT
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
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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