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EXHIBIT 10.9
Intercreditor Agreement, dated August 22, 1996, by and between The First
National Bank of Chicago as Contractual Representative and The First National
Bank of Chicago as Agent.
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INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT, dated as of August 22, 1996 (this
"AGREEMENT"), is executed and delivered by The First National Bank of Chicago
in its capacity as contractual representative for itself and the "Lenders"
party to the Credit Agreement referred to below (in such capacity, together
with its successors in such capacity, the "BANK AGENT"), and The First National
Bank of Chicago as agent under the Purchase Agreement referred to below (in
such capacity, the "RECEIVABLES AGENT").
BACKGROUND
A. Printpack, Inc., a Georgia corporation (the "COMPANY"), and the Bank
Agent are parties to that certain Security Agreement dated as of August 22,
1996 (as amended, modified, supplemented or restated and in effect from time to
time, the "SECURITY AGREEMENT") for the benefit of certain creditors of the
Company party to the credit agreement referred to therein (as amended,
modified, supplemented or restated and in effect from time to time, the "CREDIT
AGREEMENT").
B. The Company is entering into that certain Receivables Sales Agreement
(as amended, modified, supplemented or restated and in effect from time to
time, the "RSA"), dated as of August 22, 1996, by and between the Company and
Flexible Funding Corp., a limited purpose Delaware corporation (the
"RECEIVABLES SUBSIDIARY"), pursuant to which the Company will sell to the
Receivables Subsidiary substantially all Receivables that it now owns and from
time to time hereafter will own, and the Company and the Receivables Subsidiary
are entering into a Stockholder and Subscription Agreement dated as of August
22, 1996 (as amended, modified, supplemented or restated and in effect from
time to time, the "SUBSCRIPTION AGREEMENT") with the Receivables Subsidiary,
pursuant to which the Company will contribute to the Receivables Subsidiary
some or all of its existing and hereafter arising Receivables.
C. Contemporaneously with the sale or contribution of Receivables to the
Receivables Subsidiary pursuant to the RSA and the Subscription Agreement, the
Receivables Subsidiary will transfer the Receivables and the other Specified
Assets (as defined below) to the Receivables Agent pursuant to that certain
Receivables Purchase Agreement (as amended, supplemented, modified or restated
and in effect from time to time, the "PURCHASE AGREEMENT") dated as of August
22, 1996 among the Receivables Subsidiary, Falcon Asset Securitization
Corporation ("FALCON"), various investors (together with Falcon, the
"PURCHASERS"), and the Receivables Agent.
D. To induce the Company, the Receivables Subsidiary, the Purchasers and
the Receivables Agent to enter into the Transaction Documents, the requisite
parties to the Credit Agreement have authorized the Bank Agent to execute and
deliver this Agreement.
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E. The execution and delivery of this Agreement is a condition precedent
to the effectiveness of the RSA, the Subscription Agreement, the Purchase
Agreement and the other Transaction Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. As used herein, the following terms shall have the
meanings specified below:
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the sum of all
accrued and unpaid Discount and Capital (each as defined in the Purchase
Agreement) and all other amounts owed (whether due or accrued) under the
Purchase Agreement, the Fee Letter or any other Transaction Document to the
Receivables Agent and/or the Purchasers at such time.
"AUTHORIZED OFFICER" means, with respect to the Receivables Agent, any
Vice President or higher of the Receivables Agent's Asset-Backed Finance
Division.
"BANK COLLATERAL" means all property and interests in property (other than
Specified Assets) now or hereafter acquired by the Company in or upon which a
security interest, lien or mortgage is granted by the Company to the Bank under
the Security Agreement or any other collateral document executed in connection
with the Credit Agreement, including the "EXCLUDED RECEIVABLES ASSETS," as
defined below.
"COLLECTION ACCOUNT" means each concentration account, depositary account,
lock-box, lock-box account or similar account in which any Collections are
collected or deposited.
"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.
"COMMERCIAL PAPER" means promissory notes of Falcon issued by Falcon in
the commercial paper market.
"CONTRACT" means, with respect to any Receivable, any and all instruments,
agreements, leases, bills of lading, invoices or other writings pursuant to
which such Receivable arises or which evidences such Receivable.
"EXCLUDED RECEIVABLES ASSETS" means: (i) all "INVENTORY" (as that term is
defined in the Security Agreement referred to in the Credit Agreement), other
than returned goods, if any, relating to the sale that gave rise to any
Receivables which are included in the Specified Assets ("SPECIFIED RETURNED
GOODS"); (ii) any Receivables or other proceeds of Inventory created or arising
(A) after a Bankruptcy Event in which the
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Company is the debtor (other than proceeds of Specified Returned Goods), (B)
after termination of purchases under the Purchase Agreement or (C) from the
sale or other disposition of any of the Inventory (other than Specified
Returned Goods) by the Bank Agent, as a secured party under the UCC (in each
case, together with all Related Security and Collections in respect thereof);
and (iii) any Specified Returned Goods which have been re-acquired by the
Company from the Receivables Subsidiary in accordance with the terms of the
RSA.
"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.
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract.
"PERSON" means an individual, partnership, corporation, association,
trust, or any other entity, or organization, including a government or
political subdivision or agency or instrumentality thereof.
"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 Purchase Agreement or the RSA) to the Company, whether
constituting an account, chattel paper, instrument, document or general
intangible, arising in connection with the sale of goods or insurance or
rendition of services by the Company and includes, without limitation, the
obligation to pay any Finance Charges with respect thereto. Indebtedness and
other rights and obligations arising from any one transaction, including,
without limitation, indebtedness and other rights and obligations represented
by an individual invoice, shall constitute a Receivable separate from a
Receivable consisting of the indebtedness and other rights and obligations
arising from any other transaction.
"RECORDS" means, with respect to any Receivable, all Contracts and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable, any Related Security
therefor and the related Obligor.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the Company's and the Receivables Subsidiary's interest in the
goods (including returned goods), if any, the sale of which by the Company gave
rise to such Receivable, and all insurance contracts with respect to such
goods,
(ii) all other security interests or liens and property subject thereto
from time to time, if any, purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with
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all financing statements and security agreements describing any collateral
securing such Receivable,
(iii) all guaranties, insurance and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise,
(iv) all Records related to such Receivables, and
(v) all proceeds of any of the foregoing.
"SPECIFIED ASSETS" means the Receivables, the Collections, the Collection
Accounts and the Related Security, as more fully described in the Purchase
Agreement; PROVIDED, HOWEVER, that, notwithstanding anything to the contrary in
the Purchase Agreement, Exhibit I to the Purchase Agreement or any other
Transaction Documents, the term "SPECIFIED ASSETS" shall not include any of the
Excluded Receivables Assets (including any proceeds thereof which may be
deposited in the Collection Accounts), which shall constitute Bank Collateral.
"TRANSACTION DOCUMENTS" means, collectively, (a) the RSA and the
Subordinated Note referred to therein, (b) the Purchase Agreement, (c) any
agreement entered into pursuant to the Purchase Agreement or the RSA with
respect to any Collection Account, (d) the Subscription Agreement, and (e) the
fee letter dated August 22, 1996 by and between the Receivables Subsidiary and
the Receivables Agent (as amended, modified, supplemented or restated and in
effect from time to time, the "FEE LETTER").
2. Authorization. The Bank Agent confirms that the terms of the Credit
Agreement (a) authorize the Bank Agent to execute, deliver and perform this
Agreement, and (b) provide for all of the existing and future parties to the
Credit Agreement to be bound by the terms of this Agreement.
3. Release of Specified Assets. The Bank Agent hereby releases all liens
and security interests of any kind whatsoever which the Bank Agent (or any
trustee or agent acting on its behalf) holds in Specified Assets, to the extent
that such Specified Assets would otherwise constitute Bank Collateral. It is
understood and agreed that the Bank Agent shall have no rights to or in any
proceeds of the Bank Collateral that constitute Specified Assets, except to the
extent such proceeds constitute Excluded Receivables Assets. The Bank Agent
agrees, upon the reasonable request of the Receivables Agent, to execute and
deliver to the Receivables Agent such UCC partial release statements and other
documents and instruments, and do such other acts and things, as the
Receivables Agent may reasonably request in order to evidence the release
provided for in this Section 3; PROVIDED, HOWEVER, that failure to execute and
deliver any such partial release statements, documents or instruments, or to do
such acts and things, shall not affect or impair the release provided for in
this Section 3.
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4. Separation of Collateral.
(a) The Receivables Agent hereby agrees promptly to return to the Company
funds or other property other than Specified Assets (or proceeds thereof, other
than proceeds constituting Excluded Receivables Assets) which constitute Bank
Collateral (or proceeds thereof); PROVIDED THAT the Company or the Bank Agent
shall have identified such Bank Collateral or proceeds in writing to the
Receivables Agent or an Authorized Officer of the Receivables Agent otherwise
has actual knowledge of the identity of such Bank Collateral or proceeds; and
PROVIDED FURTHER that if the Bank Agent shall so request in a written notice to
the Receivables Agent, the Receivables Agent shall return such funds and
property to the Bank Agent instead of to the Company. For purposes of
maintaining the perfection of the Bank Agent's lien thereon, the Bank Agent
hereby appoints the Receivables Agent as its agent in respect of such funds or
other property.
(b) The Bank Agent hereby agrees to promptly return to the Receivables
Agent any funds or other property which constitute Specified Assets (or
proceeds thereof); PROVIDED THAT the Receivables Agent shall have identified
such Specified Assets or proceeds in writing to the Bank Agent or an officer of
the Bank Agent otherwise has actual knowledge of the identity of such Specified
Assets or proceeds. For purposes of maintaining the perfection of the
Receivables Agent's interests therein, the Receivables Agent hereby appoints
the Bank Agent as its agent with respect to such Specified Assets and proceeds.
(c) All payments made by an Obligor that is obligated to make payment with
respect to both Specified Assets and other Receivables shall be applied against
the Receivables, if any, that are designated by such Obligor. In the absence
of such designation, such payment shall be applied against the oldest
outstanding Receivables owed by such Obligor.
(d) Unless the Receivables Agent and the Bank Agent agree otherwise in
writing, neither the Receivables Agent nor the Bank Agent shall send any notice
to an Obligor directing it to remit payments in respect of any Receivable to
any account other than the Collection Accounts.
(e) In the event that any of the Specified Assets (or proceeds thereof,
other than proceeds constituting Excluded Receivables Assets) become commingled
with any Bank Collateral (or proceeds thereof), then the Bank Agent and the
Receivables Agent shall, in good faith, cooperate with each other to separate
the Specified Assets (and proceeds thereof) from such Bank Collateral (and
proceeds thereof); PROVIDED, HOWEVER, that in the case of any assets, if such
separation is not possible, the parties hereto agree to share the proceeds of
such property proportionately according to the interests of the Bank Agent and
the Receivables Agent therein; PROVIDED, FURTHER, that each party shall bear
its own out-of-pocket costs and expenses incurred to effect such separation
and/or sharing (including without limitation fees and expenses of auditors and
attorneys) to the extent
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that such costs and expenses are not reimbursed or otherwise borne by the
Company (it being understood that nothing in this Agreement shall limit the
obligation of the Company to make such reimbursement or bear such costs and
expenses in accordance with the terms of the Credit Agreement, the Security
Agreement and the Transaction Documents); and PROVIDED, FURTHER, that this
Section 4(e) shall not require any party to this Agreement to take any action
which it believes, in good faith, may prejudice its ability to realize the
value of, or to otherwise protect, its interests (and the interests of the
parties for which it acts).
(f) The Receivables Agent hereby acknowledges that Collections of Excluded
Receivables Assets may from time to time be deposited in the Collection
Accounts. In the event that the Receivables Agent gives notice to any bank
maintaining a Collection Account that the Receivables Agent is asserting
exclusive dominion and control over the Collection Accounts, the Receivables
Agent agrees, upon the Bank Agent's request from and after the date on which
purchases have terminated under the Purchase Agreement, to notify any banks
maintaining a Collection Account of the Bank Agent's interest in and to such
Collection Account to the extent that such notice may be reasonably necessary
to perfect or preserve the Bank Agent's interest in any Collections of Excluded
Receivables Assets as against the applicable banks. The Receivables Agent
further agrees, upon the payment in full of the Aggregate Unpaids or, if
earlier, the date on which all Specified Assets have been collected and/or
written off as uncollectible, to transfer its ownership and control over the
Collection Accounts to the Bank Agent in order to assist the Bank Agent in
realizing its interest in and to the Excluded Receivables Assets. Any such
transfer shall be without representation, recourse or warranty of any kind on
the part of the Receivables Agent. If such transfer occurs prior to the date
on which the Aggregate Unpaids have been paid and collected in full, then, (i)
notwithstanding any such transfer, all Collections and other proceeds
subsequently deposited into the Collection accounts on account of the Specified
Assets shall be delivered to the Receivables Agent as provided in paragraph (e)
above and (ii) the Bank Agent shall, if the Receivables Agent so requests,
notify any bank maintaining a Collection Account of the Receivables Agent's
continuing interest, if any, in the Collections of such Specified Assets as may
be reasonably necessary to maintain perfection of or otherwise preserve the
Receivables Agent's interest in any Collections of Specified Assets as against
the banks maintaining the Collection Accounts.
5. Additional Agreements with Bank Parties. The Bank Agent agrees,
represents and warrants, on behalf of itself and the other existing and future
parties to the Credit Agreement (excluding the Company; the Bank Agent and such
other parties being herein called the "BANK PARTIES") as follows:
(a) The Bank Parties shall not (i) challenge the transfers of Specified
Assets from the Company to the Receivables Subsidiary, whether on the grounds
that such transfers were disguised financings or fraudulent conveyances or
otherwise, so long as such transfers are carried out in all material respects
in accordance with the Transaction Documents, (ii) assert that the Company and
the Receivables Subsidiary should be substantively consolidated, or (iii) agree
to any amendment of Section 7.1(r) the effect of
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which would be to provide that a "Default" under the Credit Agreement will
arise upon the occurrence of an event that would permit, but does not cause,
the Receivables Agent or the Purchasers to cease making purchases or advances
thereunder.
(b) Notwithstanding any prior termination of this Agreement, the Bank
Parties shall not, with respect to the Receivables Subsidiary, institute or
join any other Person in instituting a proceeding of the type referred in the
definition of "EVENT OF BANKRUPTCY", so long as any Aggregate Unpaids shall be
outstanding or there shall not have lapsed one year plus one day since the last
day on any such Commercial Paper of Falcon shall have been outstanding. The
foregoing will not limit the rights of Bank Parties to file any claim or
otherwise take any action with respect to any such insolvency proceedings that
may be instituted against the Receivables Subsidiary by a Person other than a
Bank Party.
(c) No Bank Party shall assign its rights or obligations under the Credit
Agreement to any other Person unless such Person shall have agreed in writing
to be bound by the terms of this Agreement as if it were a party hereto.
(d) Subject to any applicable restrictions in the Transaction Documents,
the Receivables Agent may (but shall not be required to) enter into one or more
premises of the Company, whether leased or owned, at any time during reasonable
business hours, without force or process of law and without obligation to pay
rent or compensation to the Company, the Receivables Subsidiary or the Bank
Parties and may use any equipment (including data processing equipment) located
thereon relating to Records and may have access and use of such Records and any
other property (including software) to which such access and use are granted
under the Transaction Documents, in each case provided that such uses are for
the purposes of enforcing the Receivables Agent's rights with respect to the
Specified Assets.
6. Additional Agreements of Receivables Agent. The Receivables Agent
agrees, represents and warrants as follows:
(a) The Receivables Agent shall not (i) challenge the transfers of the
Bank Collateral (other than Specified Assets) from the Company to the Bank
Agent, whether on the grounds that such transfers were fraudulent conveyances
or otherwise, so long as such transfers are carried out in all material
respects in accordance with the Credit Agreement, the Security Agreement and
related documents, or (ii) assert that the Company and the Receivables
Subsidiary should be substantively consolidated.
(b) The Receivables Agent shall not assign its rights or obligations under
the Transaction Documents to any other Person unless such Person shall have
agreed in writing to be bound by the terms of this Agreement as if it were a
party hereto.
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(c) The Receivables Agent does not have any security or other interest in
any portion of the Bank Collateral (including, without limitation, Receivables)
that do not constitute Specified Assets.
(d) The Receivables Agent shall use commercially reasonable efforts to
notify the Bank Agent of any termination of the Purchase Agreement, but failure
to give such notice shall not create any liability on the part of the
Receivables Agent or affect its rights hereunder.
(e) Subject to any applicable restrictions in the Credit Agreement and/or
the Security Agreement, the Bank Agent may (but shall not be required to) enter
into one or more premises of the Company, whether leased or owned, at any time
during reasonable business hours, without force or process of law and without
obligation to pay rent or compensation to the Company, the Receivables
Subsidiary, the Receivables Agent or any of the Purchasers and may have access
to and use of all Records located thereon and may have access and use of any
other property (including software) to which such access and use are granted
under the Transaction Documents, in each case provided that such access and
uses are for the purposes of enforcing the Bank Agent's rights with respect to
the Excluded Receivables Assets.
7. Reliance. Each of the Receivables Subsidiary, the Receivables Agent,
all Lenders, all Investors and all Bank Parties may rely on this Agreement as
if such Person were a party hereto. This Agreement shall remain in effect
until the termination of the Trust in accordance with the terms of the Pooling
Agreement.
8. Miscellaneous.
(a) No delay upon the part of any party to this Agreement in the exercise
of any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise by any such party of any right, power or remedy
preclude other or further exercise thereof, or the exercise of any other right,
power or remedy. No waiver, amendment or other modification, or consent with
respect to, any provision of this Agreement shall be effective unless the same
shall be in writing and shall be signed by the Bank Agent and the Receivables
Agent.
(b) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of one which so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(c) This Agreement shall be governed by and construed in accordance with
the internal laws (as opposed to conflicts of law provisions) of the State of
Illinois.
(d) This Agreement shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors and assigns.
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(e) All notices and other communications for hereunder shall, unless
otherwise stated herein, be in writing (including communications by facsimile
copy) and mailed, transmitted or delivered, as to each party hereto at its
address set forth under its name on the signature pages hereof or at such other
address as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective upon
receipt or (i) in the case of notice by mail, three business days after being
deposited in the mails, postage prepaid, and (ii) in the case of notice by
facsimile copy, upon the earlier to occur of (A) completion of transmission and
telephone confirmation of receipt or (B) the recipient's close of business on
the date of transmission.
IN WITNESS WHEREOF, the Bank Agent and the Receivables Agent have caused
this Agreement to be executed and delivered as of the day first above written.
THE FIRST NATIONAL BANK OF CHICAGO, as
Bank Agent
By: /s/
-------------------------------
Name:
------------------------------
Title:
-----------------------------
Address: Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO, as
Receivables Agent
By: /s/
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address: One First Xxxxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Asset-Backed Finance
Credit Manager
Phone: (000) 000-0000
Fax: (000) 000-0000
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ACKNOWLEDGED AND AGREED:
FLEXIBLE FUNDING CORP.
By: /s/
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Name:
--------------------------
Title:
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PRINTPACK, INC.
By: /s/
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Name:
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Title:
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