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Exhibit 10.2
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
DATED AS OF OCTOBER 26, 2005
AMONG
ROCK-TENN COMPANY, AS PARENT,
ROCK-TENN COMPANY OF TEXAS, ROCK-TENN CONVERTING COMPANY,
ROCK-TENN MILL COMPANY, LLC, ROCK-TENN PACKAGING AND
PAPERBOARD, LLC, PCPC, INC. AND WALDORF CORPORATION,
AS ORIGINATORS,
AND
ROCK-TENN FINANCIAL, INC.,
AS BUYER
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ARTICLE I AMOUNTS AND TERMS OF THE
PURCHASE............................... 2
Section 1.1 Initial Dividend and
Contribution of Receivables........... 2
Section 1.2 Purchase of
Receivables (Other than Initial Contributed
Receivables)...............................................
3
Section 1.3 Payment for the
Purchases.................................. 5
Section 1.4 Purchase Price Credit
Adjustments.......................... 6
Section 1.5 Payments and
Computations, Etc............................. 7
Section 1.6 License of
Software........................................ 7
Section 1.7
Characterization...........................................
8
ARTICLE II REPRESENTATIONS AND
WARRANTIES................................. 9
Section 2.1 Representations and
Warranties............................. 9
(a) Existence and
Power.............................................. 9
(b) Power and Authority; Due
Authorization, Execution and Delivery... 9
(c) No
Conflict......................................................
9
(d) Governmental
Authorization....................................... 9
(e) Actions,
Suits...................................................
10
(f) Binding
Effect...................................................
10
(g) Accuracy of
Information.......................................... 10
(h) Use of
Proceeds..................................................
10
(i) Good
Title.......................................................
10
(j)
Perfection.......................................................
10
(k) Places of Business and
Locations of Records...................... 11
(l)
Collections......................................................
11
(m) Material Adverse
Effect.......................................... 11
(n)
Names............................................................
11
(o) Ownership of
Buyer............................................... 11
(p) Not a Holding Company or an
Investment Company................... 11
(q) Compliance with
Law.............................................. 12
(r) Compliance with Credit and
Collection Policy..................... 12
(s) Payments to such
Originator...................................... 12
(t) Enforceability of
Contracts...................................... 12
(u) Eligible
Receivables.............................................
12
(v)
Accounting.......................................................
12
ARTICLE III CONDITIONS OF
PURCHASE........................................ 13
Section 3.1 Conditions Precedent
to Purchase........................... 13
Section 3.2 Conditions Precedent
to Subsequent Payments................ 13
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ARTICLE IV
COVENANTS......................................................
13
Section 4.1 Affirmative Covenants
of Transferors....................... 13
(a) Financial
Reporting..............................................
13
(i)
Annual
Reporting............................................ 14
(ii)
Quarterly
Reporting......................................... 14
(iii)
Compliance
Certificate...................................... 14
(iv)
Shareholders Statements and Reports.........................
14
(v)
Auditors Reports and Management Letters.....................
14
(b) Other Notices and
Information.................................... 15
(i)
Reportable Events...........................................
15
(ii)
Change in
Credit and Collection Policy...................... 15
(iii)
Other
Information........................................... 15
(iv)
Termination Events or Unmatured Termination Events..........
15
(v)
Downgrade of Parent.........................................
15
(vi)
Material
Adverse Effect..................................... 15
(c) Compliance with Laws and
Preservation of Existence............... 15
(d)
Audits...........................................................
16
(e) Keeping and Marking of
Records and Books......................... 16
(f) Compliance with Contracts
and Credit and Collection Policy....... 17
(g)
Ownership........................................................
17
(h) Lenders'
Reliance................................................
17
(i)
Collections......................................................
18
(j)
Taxes............................................................
18
Section 4.2 Negative Covenants of
Transferors.......................... 18
(a) Name Change, Offices and
Records................................. 18
(b) Change in Payment
Instructions to Obligors....................... 18
(c) Modifications to Contracts
and Credit and Collection Policy...... 19
(d) Sales,
Liens.....................................................
19
(e) Accounting for
Purchase.......................................... 19
ARTICLE V TERMINATION
EVENTS.............................................. 19
Section 5.1 Termination
Events......................................... 19
Section 5.2
Remedies...................................................
22
ARTICLE VI
INDEMNIFICATION................................................
22
Section 6.1 Indemnities by
Transferors................................. 22
Section 6.2 Other Costs and
Expenses................................... 25
ARTICLE VII
MISCELLANEOUS.................................................
25
Section 7.1 Waivers and
Amendments..................................... 25
Section 7.2
Notices....................................................
25
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Section 7.3 Protection of
Ownership Interests of Buyer................. 25
Section 7.4
Confidentiality............................................
27
Section 7.5 Bankruptcy
Petition........................................ 27
Section 7.6 Limitation of
Liability.................................... 27
Section 7.7 CHOICE OF
LAW.............................................. 28
Section 7.8 CONSENT TO
JURISDICTION.................................... 28
Section 7.9 WAIVER OF JURY
TRIAL....................................... 28
Section 7.10
Integration; Binding Effect; Survival of Terms.............
29
Section 7.11
Counterparts; Severability; Section References.............
29
</TABLE>
EXHIBITS AND SCHEDULES
Exhibit I -
Definitions
Exhibit II - Principal
Place of Business; Location(s) of Records; Federal
Employer Identification Number; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of
Compliance Certificate
Exhibit V - Copy
of Credit and Collection Policy
Exhibit VI - Form of
Subordinated Note
Exhibit VII - Form of Purchase Report
Schedule A - List of
Documents to Be Delivered to Buyer Prior to the
Purchases
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AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
THIS AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as
of
October 26, 2005, is by and among:
(a) Rock-Tenn Company, a Georgia corporation ("PARENT"),
(b) Rock-Tenn Company of Texas, a Georgia corporation,
Rock-Tenn
Converting Company, a Georgia corporation, Rock-Tenn Mill Company,
LLC, a
Georgia limited liability company, Rock-Tenn Packaging and
Paperboard, LLC, a
Georgia limited liability company, PCPC, Inc., a California
corporation, and
Waldorf Corporation, a Delaware corporation (each of the foregoing,
an
"ORIGINATOR" and collectively, the "ORIGINATORS"), and
(c) Rock-Tenn Financial, Inc., a Delaware corporation
("BUYER"),
and amends and restates in its entirety that certain Receivables
Sale Agreement
dated as of November 1, 2000 by and among Parent, certain of the
Originators (or
their predecessors) and Buyer (the "EXISTING AGREEMENT").
UNLESS DEFINED ELSEWHERE HEREIN, CAPITALIZED TERMS USED IN THIS
AGREEMENT SHALL
HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN EXHIBIT I HERETO.
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time hereafter
will
own, Receivables.
On the date of the Existing Agreement, each of the Originators
party
to the Existing Agreement made a dividend to Parent of all of such
Originator's
right, title and interest in and to 100% of its Receivables in
existence as of
the close of business on its Initial Cutoff Date, together with the
associated
Related Security and Collections, and Parent contributed all of
such Receivables
and the associated Related Security and Collections to Buyer's
capital (such
Receivables, the "INITIAL CONTRIBUTED RECEIVABLES" and, together
with the
associated Related Security and Collections, the "INITIAL
CONTRIBUTED ASSETS")
in exchange for 100% of the authorized Equity Interests of
Buyer.
Parent intended the contribution of the Initial Contributed Assets
to
be an absolute conveyance by Parent to Buyer thereof, providing
Buyer with the
full benefits of ownership of such Initial Contributed Assets, and
neither
Parent nor Buyer intended such contribution to be, or for any
purpose to be
characterized as, a loan from Buyer to Parent.
Each of the Originators wishes to sell and assign to Buyer, and
Buyer
wishes to purchase from each Originator, all of such Originator's
right, title
and
<PAGE>
interest in and to its Receivables (other than Initial Contributed
Receivables),
together with the Related Security and Collections with respect
thereto.
Each of the Originators and Buyer intend the transactions
contemplated
hereby to be true sales to Buyer by such Originator of the
Receivables
originated by it, providing Buyer with the full benefits of
ownership of such
Receivables, and none of the Originators nor Buyer intends these
transactions to
be, or for any purpose to be characterized as, loans from Buyer to
such
Originator.
Buyer may finance its purchase of Receivables from the Originators,
in
part, by borrowing pursuant to that certain Amended and Restated
Credit and
Security Agreement dated as of October 26, 2005 (as amended,
restated, replaced
and/or otherwise modified from time to time in accordance with the
terms
thereof, the "CREDIT AND SECURITY AGREEMENT") among Buyer,
Rock-Tenn Converting
Company, as initial Servicer, Blue Ridge Asset Funding Corporation,
Three
Pillars Funding LLC, SunTrust Bank, SunTrust Capital Markets, Inc.,
as TPF
Agent, and Wachovia Bank, National Association, individually, as
Blue Ridge
Agent and as administrative agent (in such last capacity, the
"ADMINISTRATIVE
AGENT").
NOW, THEREFORE, in consideration of the foregoing premises and
the
mutual agreements herein contained and other good and valuable
consideration,
the receipt and adequacy of which are hereby acknowledged, the
parties hereto
agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Initial Dividend and Contribution of Receivables. On
the date
hereof:
(a) Each of the Originators party to the Existing Agreement
confirms
that it made a dividend to Parent of the Initial Contributed
Assets; and
(b) Parent hereby confirms that it contributed, assigned,
transferred,
set-over and otherwise conveyed to Buyer, and Buyer hereby confirms
that it
accepted from Parent, the Initial Contributed Assets, in exchange
for the
issuance of 100% of Buyer's Equity Interests.
(c) It is the intention of the parties hereto that (i) the
distribution by each Originator party to the Existing Agreement to
Parent of the
Initial Contributed Assets originated by such Originator, and (ii)
the
subsequent contribution thereof by Parent to Buyer hereunder, each
constituted
an outright assignment of such Initial Contributed Assets, which
assignment was
absolute and irrevocable and provided Buyer with the full benefits
of ownership
of the Initial Contributed Assets. The distribution to Parent of
Initial
Contributed Assets
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originated by each such Originator was made without recourse to
such Originator,
and the contribution of such Initial Contributed Assets to Buyer
was made
without recourse to Parent; PROVIDED, HOWEVER, that (i) such
Originator remains
liable to Parent and its assigns for all representations,
warranties, covenants
and indemnities made by such Originator pursuant to the terms of
the Transaction
Documents to which such Originator is a party, (ii) Parent remains
liable to
Buyer and its assigns for all representations, warranties,
covenants and
indemnities made by Parent, and (iii) such distribution and
contribution did not
constitute and were not intended to result in an assumption by
Buyer or any
assignee thereof of any obligation of such Originator or any other
Person
arising in connection with the Initial Contributed Assets or any
other
obligations of such Originator. Each Originator party to the
Existing Agreement
and Parent agrees that it has, on or prior to the date hereof and
in accordance
with Section 4.1(e)(ii), marked its master data processing records
relating to
the Initial Contributed Assets originated (or, in the case of
Parent,
contributed) by it with a legend acceptable to Buyer and to the
Administrative
Agent (as Buyer's assignee), evidencing that Buyer has acquired
such Initial
Contributed Assets as provided in this Agreement and to note in its
financial
statements that the Initial Contributed Assets have been
distributed to Parent
and contributed to Buyer's capital. Upon the request of Buyer or
the
Administrative Agent (as Buyer's assignee), each Originator and
Parent will
execute and file such financing or continuation statements, or
amendments
thereto or assignments thereof, and such other instruments or
notices, as may be
necessary or appropriate to perfect and maintain the perfection of
Buyer's
ownership interest in the Initial Contributed Assets.
Section 1.2 Purchase of Receivables (Other than Initial
Contributed
Receivables).
(a) In consideration for the Purchase Price paid to each
Originator
and upon the terms and subject to the conditions set forth herein,
each
Originator does hereby sell, assign, transfer, set-over and
otherwise convey to
Buyer, without recourse (except to the extent expressly provided
herein), and
Buyer does hereby purchase from such Originator, all of such
Originator's right,
title and interest in and to all Receivables originated by such
Originator and
existing as of the close of business on the Initial Cutoff Date
(other than the
Initial Contributed Receivables) and all Receivables thereafter
originated by
such Originator through and including the applicable Termination
Date, together,
in each case, with all Related Security relating thereto and all
Collections
thereof. In accordance with the preceding sentence, on the date
hereof Buyer
shall acquire all of each Originator's right, title and interest in
and to all
Receivables existing as of the Initial Cutoff Date (other than the
Initial
Contributed Receivables) and thereafter arising through and
including the
applicable Termination Date, together with all Related Security
relating thereto
and all Collections thereof. Buyer shall be obligated to pay
the
3
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Purchase Price for the Receivables purchased hereunder from each
Originator in
accordance with Section 1.3.
(b) On the 15th day of each month hereafter (or if any such day is
not
a Business Day, on the next succeeding Business Day thereafter,
each Originator
shall (or shall require the Servicer to) deliver to Buyer a report
in
substantially the form of Exhibit VII hereto (each such report
being herein
called a "PURCHASE REPORT") with respect to the Receivables sold by
such
Originator to Buyer during the Settlement Period then most recently
ended. In
addition to, and not in limitation of, the foregoing, in connection
with the
payment of the Purchase Price for any Receivables purchased
hereunder, Buyer may
request that the applicable Originator deliver, and such Originator
shall
deliver, such approvals, opinions, information or documents as
Buyer may
reasonably request.
(c) It is the intention of the parties hereto that the Purchase
of
Receivables (other than Initial Contributed Receivables) from each
Originator
hereunder shall constitute a sale, which sale is absolute and
irrevocable and
provides Buyer with the full benefits of ownership of the
Receivables (other
than Initial Contributed Receivables) originated by such
Originator. Except for
the Purchase Price Credits owed to such Originator pursuant to
Section 1.4, the
sale of Receivables hereunder by each Originator is made without
recourse to
such Originator; PROVIDED, HOWEVER, that (i) such Originator shall
be liable to
Buyer for all representations, warranties, covenants and
indemnities made by
such Originator pursuant to the terms of the Transaction Documents
to which such
Originator is a party, and (ii) such sale does not constitute and
is not
intended to result in an assumption by Buyer or any assignee
thereof of any
obligation of such Originator or any other Person arising in
connection with
such Receivables, the related Contracts and/or other Related
Security or any
other obligations of such Originator. In view of the intention of
the parties
hereto that the sale of Receivables (other than Initial Contributed
Receivables)
by each Originator hereunder shall constitute a sale of such
Receivables rather
than loans secured thereby, each Originator agrees that it will, on
or prior to
the date hereof and in accordance with Section 4.1(e)(ii), mark its
master data
processing records relating to the Receivables (other than Initial
Contributed
Receivables) originated by it with a legend acceptable to Buyer and
to the
Administrative Agent (as Buyer's assignee), evidencing that Buyer
has purchased
such Receivables as provided in this Agreement and to note in its
financial
statements that its Receivables have been sold to Buyer. Upon the
request of
Buyer or the Administrative Agent (as Buyer's assignee), each
Originator will
execute and file such financing or continuation statements, or
amendments
thereto or assignments thereof, and such other instruments or
notices, as may be
necessary or appropriate to perfect and maintain the perfection of
Buyer's
ownership interest in the Receivables (other than Initial
Contributed
Receivables) originated by such
4
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Originator and the Related Security and Collections with respect
thereto, or as
Buyer or the Administrative Agent (as Buyer's assignee) may
reasonably request.
Section 1.3 Payment for the Purchases.
(a) The Purchase Price for the Purchase from each Originator of
its
Receivables in existence as of the close of business on the Initial
Cutoff Date
(other than the Initial Contributed Receivables) shall be payable
in full by
Buyer to such Originator on the date hereof, and shall be paid to
such
Originator in the following manner:
(i) by delivery of immediately available funds, to the extent
of
funds made available to Buyer in connection with its subsequent
sale of an
interest in such Receivables to the Lenders under the Credit and
Security
Agreement, and/or
(ii) by delivery of the proceeds of a subordinated revolving
loan
from
such Originator to Buyer (a "SUBORDINATED LOAN") in an amount not
to
exceed the least of (A) the remaining unpaid portion of such
Purchase
Price, (B) the maximum Subordinated Loan that could be borrowed
without
rendering Buyer's Net
Worth less than the Required Capital Amount, and (C)
thirty percent (30%) of such Purchase Price. Each Originator is
hereby
authorized by Buyer to endorse on the schedule attached to its
Subordinated
Note
an appropriate notation evidencing the date and amount of each
advance
thereunder, as well as the date of each payment with respect
thereto,
PROVIDED THAT the failure to make such notation shall not affect
any
obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after
the Initial
Cutoff Date shall be due and owing in full by Buyer to the
applicable Originator
or its designee on the date each such Receivable came into
existence (except
that Buyer may, with respect to any such Purchase Price, offset
against such
Purchase Price any amounts owed by such Originator to Buyer
hereunder and which
have become due but remain unpaid) and shall be paid to such
Originator in the
manner provided in the following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into existence after
the
Initial Cutoff Date, on each Settlement Date, Buyer shall pay the
applicable
Originator the Purchase Price therefor in accordance with Section
1.3(d) and in
the following manner:
FIRST, by delivery to the applicable Originator or its designee
of
immediately available funds; and/or
5
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SECOND, by delivery to the applicable Originator or its designee
of
the proceeds of a Subordinated Loan, PROVIDED THAT the making of
any such
Subordinated Loan shall be subject to the provisions set forth in
Section
1.3(a)(ii).
Subject to the limitations set forth in Section 1.3(a)(ii), each
Originator
irrevocably agrees to advance each Subordinated Loan requested by
Buyer on or
prior to the applicable Termination Date. The Subordinated Loans
owing to each
Originator shall be evidenced by, and shall be payable in
accordance with the
terms and provisions of its Subordinated Note and shall be payable
solely from
cash available to Buyer after payment of all amounts due in respect
of the
Senior Claim (as defined in the Subordinated Note) or to become due
in respect
of the Senior Claim within 30 days of the date of proposed payment
on the
Subordinated Note.
(c) From and after the applicable Termination Date, no
Originator
shall be obligated to (but may, at its option) sell Receivables to
Buyer.
(d) Although the Purchase Price for each Receivable coming into
existence after the Initial Cutoff Date shall be due and payable in
full by
Buyer to the applicable Originator on the date such Receivable came
into
existence, settlement of the Purchase Price between Buyer and such
Originator
shall be effected on a monthly basis on Settlement Dates with
respect to all
Receivables originated by such Originator during the same
Calculation Period and
based on the information contained in the Purchase Report delivered
by such
Originator for the Calculation Period then most recently ended.
Although
settlement shall be effected on Settlement Dates, increases or
decreases in the
amount owing under the Subordinated Note made pursuant to Section
1.3 shall be
deemed to have occurred and shall be effective as of the last
Business Day of
the Calculation Period to which such settlement relates.
Section 1.4 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable purchased from any
Originator is:
(i) reduced as a result of any defective or rejected or
returned
goods or services, any discount or any adjustment or otherwise by
such
Originator (other than as a result of a charge-off of such
Receivable or
cash
Collections applied to such Receivable),
(ii) reduced or canceled as a result of a setoff in respect of
any
claim by any Person (whether such claim arises out of the same or
a
related transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in
Sections
2.1(i), (j), (l), (r), (s), (t), (u), the second sentence of
Section 2.1(q)
hereof is not true when made or deemed made with respect to any
such Receivable,
6
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then, in such event, Buyer shall be entitled to a credit (each, a
"PURCHASE
PRICE CREDIT") against the Purchase Price otherwise payable to the
applicable
Originator hereunder equal to the Outstanding Balance of such
Receivable
(calculated before giving effect to the applicable reduction or
cancellation).
If such Purchase Price Credit exceeds the Original Balance of the
Receivables
originated by the applicable Originator on any day, such Originator
shall pay
the remaining amount of such Purchase Price Credit in cash
immediately, PROVIDED
THAT if the applicable Termination Date has not occurred, such
Originator shall
be allowed to deduct the remaining amount of such Purchase Price
Credit from any
indebtedness owed to it under its Subordinated Note.
Section 1.5 Payments and Computations, Etc. All amounts to be paid
or
deposited by Buyer hereunder shall be paid or deposited in
accordance with the
terms hereof on the day when due in immediately available funds to
the account
of the applicable Originator designated from time to time by such
Originator or
as otherwise directed by such Originator. In the event that any
payment owed by
any Person hereunder becomes due on a day that is not a Business
Day, then such
payment shall be made on the next succeeding Business Day. If any
Person fails
to pay any amount hereunder when due, such Person agrees to pay, on
demand, the
Default Rate in respect thereof until paid in full; PROVIDED,
HOWEVER, that such
Default Rate shall not at any time exceed the maximum rate
permitted by
applicable law. All computations of interest payable hereunder
shall be made on
the basis of a year of 360 days for the actual number of days
(including the
first but excluding the last day) elapsed.
Section 1.6 License of Software.
(a) To the extent that any software used by any Originator to
account
for the Receivables originated by it is non-transferable, such
Originator hereby
grants to each of Buyer, the Administrative Agent and the Servicer
an
irrevocable, non-exclusive license to use, without royalty or
payment of any
kind, all such software used by such Originator to account for such
Receivables,
to the extent necessary to administer such Receivables, whether
such software is
owned by such Originator or is owned by others and used by such
Originator under
license agreements with respect thereto; PROVIDED THAT should the
consent of any
licensor of such software be required for the grant of the license
described
herein, to be effective, such Originator hereby agrees that upon
the request of
Buyer (or Buyer's assignee), such Originator will use its
reasonable efforts to
obtain the consent of such third-party licensor. If any software
used by any
Originator to account for the Receivables originated by it
prohibits such
Originator from granting the license to use described herein, or
if, after
reasonable efforts, consent of any licensor of such software for
the grant of
the license described herein is not obtained, there shall be no
transfer of such
software hereunder or any grant by such Originator of the license
to use
described herein. The license granted hereby shall be irrevocable
until the
later to occur of (i) indefeasible payment in full of the
Obligations (as
defined in the Credit and Security Agreement), and (ii) the
7
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date each of this Agreement and the Credit and Security Agreement
terminates in
accordance with its terms.
(b) Each Originator (i) shall take such action requested by
Buyer
and/or the Administrative Agent (as Buyer's assignee), from time to
time
hereafter, that may be necessary or appropriate to ensure that
Buyer and its
assigns have an enforceable ownership interest in the Records
relating to the
Receivables distributed by purchased from such Originator
hereunder, and (ii)
shall use its reasonable efforts to ensure that Buyer, the
Administrative Agent
and the Servicer each has an enforceable right (whether by license
or sublicense
or otherwise) to use all of the computer software used to account
for such
Receivables and/or to recreate such Records.
Section 1.7 Characterization. If, notwithstanding the intention of
the
parties expressed in Section 1.2(c), any sale or contribution by an
Originator
or Parent to Buyer of Receivables hereunder shall be characterized
as a secured
loan and not a sale or contribution or such transfer shall for any
reason be
ineffective or unenforceable, then this Agreement shall be deemed
to constitute
a security agreement under the UCC and other applicable law. For
this purpose
and without being in derogation of the parties' intention that each
conveyance
of Receivables by an Originator or Parent hereunder shall
constitute a true sale
or other absolute assignment thereof: (i) Parent hereby grants to
Buyer a duly
perfected security interest in all of Parent's right, title and
interest in and
to the Initial Contributed Assets and all proceeds thereof to
secure the prompt
and complete payment of a loan deemed to have been made in an
amount equal to
the credit to Buyer's paid-in capital and capital surplus booked at
the time of
the issuance to Parent of Buyer's Equity Interests, together with
all other
obligations of Parent to Buyer hereunder, which security interest
shall be prior
to all other Adverse Claims (except as created under the
Transaction Documents),
and (ii) such Originator hereby grants to Buyer a duly perfected
security
interest in all of such Originator's right, title and interest in,
to and under
all Receivables of such Originator which are now existing or
hereafter arising,
all Collections and Related Security with respect thereto, each
Lock-Box and
Collection Account, all other rights and payments relating to such
Receivables
and all proceeds of the foregoing to secure the prompt and complete
payment of a
loan deemed to have been made in an amount equal to the Purchase
Price owing to
such Originator. Buyer and its assigns shall have, in addition to
the rights and
remedies which they may have under this Agreement, all other rights
and remedies
provided to a secured creditor under the UCC and other applicable
law, which
rights and remedies shall be cumulative.
8
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties. Parent hereby
represents and
warrants to Buyer and its assigns on the date hereof, and each
Originator hereby
represents and warrants to Parent, Buyer and Buyer's assigns, on
the date hereof
and on each date that any Receivable is originated by such
Originator on or
after the date hereof, that:
(a) Existence and Power. Such Transferor is a corporation, duly
organized under the laws of the state set forth after its name in
the preamble
to this Agreement (the "APPLICABLE STATE"), and no other state or
jurisdiction,
and as to which such Applicable State must maintain a public record
showing such
corporation to have been organized. Such Transferor is validly
existing and in
good standing under the laws of its Applicable State and is duly
qualified to do
business and is in good standing as a foreign entity, and has and
holds all
power and all governmental licenses, authorizations, consents and
approvals
required to carry on its business in each jurisdiction in which its
business is
conducted except where the failure to so qualify or so hold could
not reasonably
be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and
Delivery.
The execution and delivery by such Person of this Agreement and
each other
Transaction Document to which it is a party, and the performance of
its
obligations hereunder and thereunder, and, in the case of any
Originator, such
Originator's use of the proceeds of the Purchase made from it
hereunder, are
within its organizational powers and authority and have been duly
authorized by
all necessary organizational action on its part. This Agreement and
each other
Transaction Document to which such Transferor is a party has been
duly executed
and delivered by such Transferor.
(c) No Conflict. The execution and delivery by such Transferor of
this
Agreement and each other Transaction Document to which it is a
party, and the
performance of its obligations hereunder and thereunder do not
result in the
creation or imposition of any Adverse Claim on assets of such
Transferor, or
contravene or violate (i) its Organizational Documents, (ii) any
law, rule or
regulation applicable to it, (iii) any restrictions under any
agreement,
contract or instrument to which it is a party or by which it or any
of its
property is bound, or (iv) any order, writ, judgment, award,
injunction or
decree binding on or affecting it or its property (except as
created under the
Transaction Documents) except, in any case, where such
contravention or
violation could not reasonably be expected to have a Material
Adverse Effect;
and no transaction contemplated hereby requires compliance with any
bulk sales
act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing
statements required hereunder, no authorization or approval or
other action by,
and no notice to or filing with, any governmental authority or
regulatory body
is required for the due execution and delivery by such Transferor
of this
Agreement and each other Transaction Document to which it is a
party and the
performance of its obligations hereunder and thereunder.
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(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Transferor's knowledge, threatened,
against or
affecting such Transferor, or any of its properties, in or before
any court,
arbitrator or other body, that could reasonably be expected to have
a Material
Adverse Effect.
(f) Binding Effect. Each of the Transaction Document to which
such
Transferor is a party constitutes the legal, valid and binding
obligation of
such Transferor enforceable against such Transferor in accordance
with its
respective terms, except as such enforcement may be limited by
applicable
bankruptcy, insolvency, reorganization or other similar laws
relating to or
limiting creditors' rights generally and by general principles of
equity
(regardless of whether enforcement is sought in a proceeding in
equity or at
law).
(g) Accuracy of Information. All information heretofore furnished
by
such Transferor or any of its Affiliates to Buyer (or its assigns)
for purposes
of or in connection with this Agreement, any of the other
Transaction Documents
or any transaction contemplated hereby or thereby is, and all such
information
hereafter furnished by such Transferor or any of its Affiliates to
Buyer (or its
assigns) will be, true and accurate in every material respect on
the date such
information is stated or certified and does not and will not
contain any
material misstatement of fact or omit to state a material fact or
any fact
necessary to make the statements contained therein, taken as a
whole, not
misleading.
(h) Use of Proceeds. No portion of any Purchase Price payment
hereunder will be used (i) for a purpose that violates, or would be
inconsistent
with, any law, rule or regulation applicable to such Transferor or
(ii) to
acquire any security in any transaction which is subject to Section
12, 13 or 14
of the Securities Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to the distribution of
Initial
Contributed Assets by such Originator (if applicable) to Parent and
the Purchase
from such Originator hereunder and upon the creation of each
Receivable
originated by such Originator after the Initial Cut-Off Date, such
Originator
(i) is the legal and beneficial owner of such Receivables and (ii)
is the legal
and beneficial owner of the Related Security with respect thereto
or possesses a
valid and perfected security interest therein, in each case, free
and clear of
any Adverse Claim, except as created by the Transaction Documents.
Immediately
prior to Parent's contribution of the Initial Contributed Assets to
Buyer's
capital, Parent is the legal and beneficial owner of the Initial
Contributed
Assets, free and clear of any Adverse Claim, except as created by
the
Transaction Documents
(j) Perfection. This Agreement, together with the filing of the
financing statements and assignments contemplated hereby, is
effective to
transfer to Buyer (and Buyer shall acquire from such Transferor,
directly or
indirectly): (i) legal and equitable title to, with the right to
sell and
encumber each Receivable originated by such Originator, whether now
existing and
hereafter arising, together with the Collections with respect
thereto, and (ii)
all of such Originator's right, title and interest in the Related
Security
associated with each such Receivable, in each case, free and clear
of any
Adverse Claim, except as created by the
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Transaction Documents. There have been duly filed all financing
statements or
other similar instruments or documents necessary under the UCC (or
any
comparable law) of all appropriate jurisdictions to perfect Buyer's
ownership
interest in such Receivables, the Related Security and the
Collections. Such
Transferor's jurisdiction of organization is a jurisdiction whose
law generally
requires information concerning the existence of a nonpossessory
security
interest to be made generally available in a filing, record or
registration
system as a condition or result of such a security interest's
obtaining priority
over the rights of a lien creditor which respect to collateral.
(k) Places of Business and Locations of Records. The principal
place
of business and chief executive office of such Transferor and the
offices where
it keeps all of its Records are located at the address(es) listed
on Exhibit II
or such other locations of which Buyer has been notified in
accordance with
Section 4.2(a) in jurisdictions where all action required by
Section 4.2(a) has
been taken and completed. Such Transferor's Federal Employer
Identification
Number is correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in
Section
4.1(j) have at all times been satisfied and duly performed. The
names and
addresses of all Collection Banks, together with the account
numbers of the
Collection Accounts of such Transferor at each Collection Bank and
the post
office box number of each Lock-Box, are listed on Exhibit III. Such
Originator
has not granted any Person, other than Buyer (and its assigns)
dominion and
control of any Lock-Box or Collection Account, or the right to take
dominion and
control of any such Lock-Box or Collection Account at a future time
or upon the
occurrence of a future event.
(m) Material Adverse Effect. Since June 30, 2005, no event has
occurred that would have a Material Adverse Effect.
(n) Names. The name in which such Transferor has executed this
Agreement is identical to the name of such Transferor as indicated
on the public
record of its state of organization which shows such Transferor to
have been
organized. In the past five (5) years, such Transferor has not used
any
corporate names, trade names or assumed names other than the name
in which it
has executed this Agreement and as listed on Exhibit II.
(o) Ownership of Buyer. Parent owns, directly or indirectly, 100%
of
the issued and outstanding Equity Interests of each Originator and
Buyer. Such
Equity Interests are validly issued, fully paid and nonassessable,
and there are
no options, warrants or other rights to acquire securities of Buyer
or any
Originator.
(p) Not a Holding Company or an Investment Company. Such Transferor
is
not a "holding company" or a "subsidiary holding company" of a
"holding company"
within the meaning of the Public Utility Holding Company Act of
1935, as
amended, or any successor statute. Such Transferor is not an
"investment
company" within the meaning of the Investment Company Act of 1940,
as amended,
or any successor statute.
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(q) Compliance with Law. Such Transferor has complied in all
respects
with all applicable laws, rules, regulations, orders, writs,
judgments,
injunctions, decrees or awards to which it may be subject, except
where the
failure to so comply could not reasonably be expected to have a
Material Adverse
Effect. Each Receivable, together with the Contract related
thereto, does not
contravene any laws, rules or regulations applicable thereto
(INCLUDING, WITHOUT
LIMITATION, laws, rules and regulations relating to truth in
lending, fair
credit billing, fair credit reporting, equal credit opportunity,
fair debt
collection practices and privacy), and no part of such Contract is
in violation
of any such law, rule or regulation, except where such
contravention or
violation could not reasonably be expected to have a Material
Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Transferor
has
complied in all material respects with the Credit and Collection
Policy with
regard to each Receivable originated or contributed by it that was
reflected in
any Purchase Report as an Eligible Receivable and was an Eligible
Receivable on
the date of its acquisition by Buyer hereunder, and with regard to
each Contract
with respect to such Receivable, and has not made any change to
such Credit and
Collection Policy, except such material change as to which Buyer
(and its
assigns) have been notified in accordance with Section
4.1(a)(vii).
(s) Payments to such Originator. With respect to each
Receivable
originated by such Originator and sold to Buyer hereunder, the
Purchase Price
received by such Originator constitutes reasonably equivalent value
in
consideration therefor. No transfer hereunder by such Originator of
any
Receivable originated by such Originator is or may be voidable
under any section
of the Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101 et
seq.), as
amended.
(t) Enforceability of Contracts. Each Contract with respect to
each
Receivable that was reflected in any Purchase Report as an Eligible
Receivable
and was an Eligible Receivable on the date of its acquisition by
Buyer hereunder
is effective to create, and has created, a legal, valid and binding
obligation
of the related Obligor to pay the Outstanding Balance of the
Receivable created
thereunder and any accrued interest thereon, enforceable against
the Obligor in
accordance with its terms, except as such enforcement may be
limited by
applicable bankruptcy, insolvency, reorganization or other similar
laws relating
to or limiting creditors' rights generally and by general
principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at
law).
(u) Eligible Receivables. Each Receivable reflected in any
Purchase
Report as an Eligible Receivable was an Eligible Receivable on the
date of its
acquisition by Buyer hereunder.
(v) Accounting. The manner in which such Originator accounts for
the
transactions contemplated by this Agreement in its financial
statements does not
jeopardize the characterization of the transactions contemplated
herein as being
true sales.
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ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchase from
each
Originator under this Agreement is subject to the conditions
precedent that (a)
Buyer shall have been capitalized with the Initial Contributed
Assets, (b) Buyer
shall have received on or before the closing date of the Credit and
Security
Agreement those documents listed on Schedule A and (c) all of the
conditions to
the initial purchase under the Credit and Security Agreement shall
have been
satisfied on or before the closing date thereof or waived in
accordance with the
terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Buyer's
obligation
to pay for Receivables coming into existence after the Initial
Cutoff Date shall
be subject to the further conditions precedent that: (a) the
Facility
Termination Date shall not have occurred under the Credit and
Security
Agreement; (b) Buyer (or its assigns) shall have received such
other approvals,
opinions or documents as it may reasonably request, and (c) on the
date such
Receivable came into existence, the following statements shall be
true (and
acceptance of the proceeds of any payment for such Receivable shall
be deemed a
representation and warranty by such Originator that such statements
are then
true):
(i) the representations and warranties set forth in Article II
are
true and correct on and as of the date such Receivable came
into
existence as though made on and as of such date; and
(ii) no event has occurred and is continuing that will
constitute
a
Termination Event or an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of
the Purchase
Price for any Receivable originated by any Originator (whether by
payment of
cash or through an increase in the amounts outstanding under such
Originator's
Subordinated Note), title to such Receivable and the Related
Security and
Collections with respect thereto shall vest in Buyer, whether or
not the
conditions precedent to Buyer's obligation to pay for such
Receivable were in
fact satisfied. The failure of such Originator to satisfy any of
the foregoing
conditions precedent, however, shall give rise to a right of Buyer
to rescind
the related purchase and direct such Originator to pay to Buyer an
amount equal
to the Purchase Price payment that shall have been made with
respect to any
Receivables related thereto.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Transferors. Until the date on
which
this Agreement terminates in accordance with its terms:
(a) Financial Reporting. Parent agrees that it will maintain,
for
itself and each of its Subsidiaries, a system of accounting
established and
administered in accordance
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with GAAP, and Parent will, and, as applicable, will cause each
Originator to,
furnish to Buyer (and its assigns):
(i) Annual Reporting. Within 90 days after the close of each of
its fiscal years, the
annual audited report for that fiscal year for the
Parent and its Subsidiaries, containing a consolidated balance
sheet of the
Parent and its Subsidiaries as of the end of such fiscal year and
the
related consolidated statements of income, stockholders' equity and
cash
flows (together with all footnotes thereto) of the Parent and
its
Subsidiaries for such fiscal year, setting forth in each case
in
comparative form the figures for the previous fiscal year (which
financial
statements shall be reported on by the Parent's independent
certified
public accountants, such report to state that such financial
statements
fairly present in all material respects the consolidated
financial
condition and results of operation of the Parent and its
Subsidiaries in
accordance with GAAP and to be without any material qualifications
or
exceptions).
(ii) Quarterly Reporting. Within 45 days after the close of the
first three (3) quarterly periods of each of its fiscal years,
the
quarterly unaudited consolidated balance sheet of the Parent and
its
Subsidiaries as of the end of such fiscal quarter and the related
unaudited
consolidated statements of income and cash flows (together with
all
footnotes thereto) of the Parent and its Subsidiaries for such
fiscal
quarter and the then elapsed portion of such fiscal year, setting
forth in
each
case in comparative form the figures for the corresponding quarter
and
the
corresponding portion of Parent's previous fiscal year, accompanied
by
a
certificate, dated the date of furnishing, signed by a Financial
Officer
of
the Parent to the effect that such financial statements
accurately
present in all material respects the consolidated financial
condition of
the
Parent and its Subsidiaries and that such financial statements
have
been
prepared in accordance with GAAP consistently applied (subject to
year
end
adjustments).
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in
substantially
the
form of Exhibit IV signed by a Financial Officer of Parent and
dated
the
date of such annual financial statement or such quarterly
financial
statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
filing thereof or otherwise becoming available, copies of all
financial
statements, annual, quarterly and special reports, proxy statements
and
notices sent or made available generally by Parent to its public
security
holders, of all regular and periodic reports and all
registration
statements and prospectuses, if any, filed by any of them with
any
securities exchange or with the Securities and Exchange Commission,
and of
all
press releases and other statements made available generally to
the
public containing Material developments in the business or
financial
condition of Parent and its Restricted Subsidiaries.
(v) Auditors Reports and Management Letters. Promptly upon
receipt thereof, copies of all financial statements of, and all
reports
submitted by, independent public accountants to Parent in
connection with
each
annual, interim, or special audit of Parent's
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<PAGE>
financial statements, including without limitation, the comment
letter
submitted by such accountants to management in connection with
their annual
audit;
(b) Other Notices and Information. Each Transferor will deliver
to
Buyer and its assigns:
(i) Reportable Events. As soon as possible and in any event
within thirty (30) days after such Transferor or any Restricted
Subsidiary
knows or has reason to know that any "REPORTABLE EVENT" (as defined
in
Section 4043(b) of ERISA) with respect to any Plan has occurred
(other than
such
a Reportable Event for which the PBGC has waived the 30-day
notice
requirement under Section 4043(a) of ERISA) and such Reportable
Event
involves a matter that has had, or is reasonably likely to have, a
Material
Adverse Effect, a statement of a Financial Officer of such
Transferor or
such
Restricted Subsidiary setting forth details as to such
Reportable
Event and the action which the Parent or such Restricted
Subsidiary
proposes to take with respect thereto, together with a copy of the
notice
of
such Reportable Event given to the PBGC if a copy of such notice
is
available to the Parent or such Restricted Subsidiary;
(ii) Change in Credit and Collection Policy. At least thirty
(30)
days
prior to the effectiveness of any material change in or
material
amendment to the Credit and Collection Policy, a copy of the Credit
and
Collection Policy then in effect and a notice (A) indicating such
proposed
change or amendment, and (B) if such proposed change or amendment
would be
reasonably likely to materially adversely affect the collectibility
of the
Receivables or decrease the credit quality of any newly created
Receivables, requesting Buyer's (and the Administrative Agent's, as
Buyer's
assignee) consent thereto.
(iii) Other Information. Promptly, from time to time, such
other
information, documents, records or reports relating to the
Receivables
originated or contributed by such Transferor or the condition
or
operations, financial or otherwise, of such Originator as Buyer (or
its
assigns) may from time to time reasonably request in order to
protect the
interests of Buyer (and its assigns) under or as contemplated by
this
Agreement.
(iv) Termination Events or Unmatured Termination Events. The
occurrence of each Termination Event and each Unmatured Termination
Event,
by a
statement of a Financial Officer of such Transferor.
(v) Downgrade of Parent. Promptly after the occurrence thereof,
any
downgrade in the rating of any rated Debt of any Transferor by
S&P or
by
Moody's, setting forth the Debt affected and the nature of such
change.
(vi) Material Adverse Effect. Promptly upon learning thereof,
the
occurrence of any event or condition that has had, or could
reasonably be
expected to have, a Material Adverse Effect.
(c) Compliance with Laws and Preservation of Existence. Each
Transferor will comply in all respects with all applicable laws,
rules,
regulations, orders, writs,
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judgments, injunctions, decrees or awards to which it may be
subject, except
where the failure to so comply could not reasonably be expected to
have a
Material Adverse Effect. Each Transferor will preserve and maintain
its legal
existence, rights, franchises and privileges in the jurisdiction of
its
organization, and qualify and remain qualified in good standing as
a foreign
entity in each jurisdiction where its business is conducted, except
where the
failure to so qualify or remain in good standing could not
reasonably be
expected to have a Material Adverse Effect.
(d) Audits. Each Transferor will furnish to Buyer (or its
assigns)
from time to time such information with respect to it and the
Receivables sold
or contributed by it as Buyer (or its assigns) may reasonably
request. Each
Transferor will, from time to time during regular business hours as
requested by
Buyer (or its assigns), upon reasonable notice and at the sole cost
of such
Transferor, permit Buyer (or its assigns) or their respective
agents or
representatives, (i) to examine and make copies of and abstracts
from all
Records in the possession or under the control of such Transferor
relating to
the Receivables and the Related Security, including, without
limitation, the
related Contracts, and (ii) to visit the offices and properties of
such
Transferor for the purpose of examining such materials described in
clause (i)
above, and to discuss matters relating to such Transferor's
financial condition
or the Receivables and the Related Security or such Transferor's
performance
under any of the Transaction Documents or such Transferor's
performance under
the Contracts and, in each case, with any of the officers or
employees of such
Transferor having knowledge of such matters (each of the foregoing
examinations
and visits, a "REVIEW"); PROVIDED, HOWEVER, that, so long as no
Amortization
Event (under and as defined in the Credit and Security Agreement)
has occurred
and is continuing: (A) the Transferors, collectively, shall only be
responsible
for the reasonable costs and expenses of one (1) Review in any one
calendar
year, and (B) the Administrative Agent (as Buyer's assignee) will
not request
more than four (4) Reviews in any one calendar year.
(e) Keeping and Marking of Records and Books.
(i) Such Transferor will maintain and implement administrative
and
operating procedures (including, without limitation, an ability
to
recreate records evidencing Receivables in the event of the
destruction of
the
originals thereof), and keep and maintain all documents, books,
records
and
other information reasonably necessary or advisable for the
collection
of
all Receivables (including, without limitation, records adequate
to
permit the immediate identification of each new Receivable and
all
Collections of and adjustments to each existing Receivable).
Such
Transferor will give Buyer (or its assigns) notice of any material
change
in
the administrative and operating procedures referred to in the
previous
sentence.
(ii) Such Transferor will (A) on or prior to the date hereof,
mark
its master data processing records and other books and records
relating to the Receivables with a legend, acceptable to Buyer (or
its
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assigns), describing Buyer's ownership interests in the Receivables
and
further describing the interest of the Administrative Agent (on
behalf of
the
Lenders) under the Credit and Security Agreement and (B) upon
the
request of Buyer (or its assigns): (x) mark each Contract with a
legend
describing Buyer's ownership interests in the Receivables
originated by
such
Transferor and further describing the interest of the
Administrative
Agent (on behalf of the Lenders) and (y) after the occurrence of
a
Termination Event, deliver to Buyer (or its assigns) all
Contracts
(including, without limitation, all multiple originals of any
such
Contract) relating to such Receivables.
(f) Compliance with Contracts and Credit and Collection Policy.
Such
Transferor will timely and fully (i) perform and comply with all
provisions,
covenants and other promises required to be observed by it under
the Contracts
related to the Receivables originated by it, and (ii) comply in all
respects
with the Credit and Collection Policy in regard to each such
Receivable and the
related Contract.
(g)
Ownership. Such Transferor, as applicable, will take all
necessary
action to establish and maintain, irrevocably in Buyer, (A) legal
and equitable
title to the Receivables originated by such Transferor and the
Collections and
(B) all of such Transferor's right, title and interest in the
Related Security
associated with the Receivables originated by such Transferor, in
each case,
free and clear of any Adverse Claims other than Adverse Claims in
favor of Buyer
(and its assigns) (INCLUDING, WITHOUT LIMITATION, the filing of all
financing
statements or other similar instruments or documents necessary
under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect
Buyer's interest
in such Receivables, Related Security and Collections and such
other action to
perfect, protect or more fully evidence
