| þ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| (Exact Name of Registrant as Specified in Its Charter) |
| Georgia | 62-0342590 | |
| (State or Other Jurisdiction of | (I.R.S. Employer | |
| Incorporation or Organization) | Identification No.) | |
| 504 Thrasher Street, Norcross, Georgia | 30071 | |
| (Address of Principal Executive Offices) | (Zip Code) |
| Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o |
| Class | Outstanding as of February 5, 2006 | |
| Class A Common Stock, $0.01 par value | 36,445,675 |
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Three Months Ended
December 31,
December 31,
2005
2004
$
490,448
$
385,817
430,840
330,816
59,608
55,001
57,178
45,801
970
476
1,460
8,724
(13,860
)
(6,448
)
52
176
1,552
143
(1,298
)
(865
)
(12,094
)
1,730
(3,118
)
1,248
$
(8,976
)
$
482
35,831
35,881
$
(0.25
)
$
0.01
$
0.09
$
0.09
Table of Contents
December 31,
September 30,
2005
2005
$
16,495
$
26,839
192,751
199,493
196,650
201,965
42,107
30,484
5,082
3,435
453,085
462,216
265,622
267,212
1,292,525
1,287,505
10,524
10,473
5,653
5,623
1,574,324
1,570,813
(701,706
)
(685,808
)
872,618
885,005
349,187
350,941
66,338
67,992
40,088
32,280
$
1,781,316
$
1,798,434
$
96,720
$
62,079
114,274
116,423
44,096
50,887
54,442
49,821
309,532
279,210
794,420
840,747
11,813
12,255
806,233
853,002
110,931
106,767
86,184
82,974
3,613
3,655
17,455
16,604
—
—
364
363
164,678
162,408
313,788
326,041
(31,462
)
(32,590
)
447,368
456,222
$
1,781,316
$
1,798,434
Table of Contents
Three Months Ended
December 31,
December 31,
2005
2004
$
(8,976
)
$
482
25,786
18,451
3,935
1,177
—
125
723
400
58
65
1,298
865
(1,552
)
(143
)
4,301
3,349
—
(857
)
(66
)
383
6,797
23,576
5,351
(5,292
)
(6,307
)
(3,469
)
(2,163
)
(11,929
)
(9,396
)
(3,555
)
(2,484
)
(1,239
)
17,305
22,389
(13,512
)
(10,174
)
—
(89,560
)
—
84,560
(18
)
(75
)
292
2,043
(13,238
)
(13,206
)
58,243
—
(91,900
)
—
26,000
—
(3,934
)
(6,104
)
(242
)
(64
)
1,591
1,824
58
—
(3,277
)
(3,222
)
(525
)
(525
)
(13,986
)
(8,091
)
(425
)
205
(10,344
)
1,297
26,839
28,661
$
16,495
$
29,958
$
2,418
$
2,001
7,344
313
Table of Contents
Table of Contents
Three Months Ended
December 31,
December 31,
2005
2004
$
(8,976
)
$
482
(521
)
8,131
1,649
236
1,128
8,367
$
(7,848
)
$
8,849
Three Months Ended
December 31,
December 31,
2005
2004
$
(8,976
)
$
482
35,831
35,318
—
563
35,831
35,881
$
(0.25
)
$
0.01
$
(0.25
)
$
0.01
Table of Contents
(In thousands, except per share data)
$
508,081
$
1,765
$
0.05
Table of Contents
Severance
and Other
Equipment
Initiative
Net Property,
Employee
and
Facility
and
Plant and
Related
Inventory
Carrying
Segment
Period
Equipment
(a)
Costs
Relocation
Costs
Other
Total
Current Qtr.
$
—
$
(1
)
$
—
$
35
$
—
$
34
Fiscal 2006
—
(1
)
—
35
—
34
Cumulative
105
164
59
231
10
569
Expected
105
164
59
281
10
619
Current Qtr.
—
(5
)
53
53
(57
)
44
Fiscal 2006
—
(5
)
53
53
(57
)
44
Cumulative
14,549
1,943
788
821
78
18,179
Expected
14,549
1,943
888
1,121
78
18,579
Current Qtr.
(11
)
—
123
—
—
112
Fiscal 2006
(11
)
—
123
—
—
112
Cumulative
(11
)
229
415
—
—
633
Expected
(11
)
229
440
150
100
908
Current Qtr.
—
471
5
—
—
476
Fiscal 2006
—
471
5
—
—
476
Cumulative
2,488
471
5
—
—
2,964
Expected
2,488
546
30
200
225
3,489
Current Qtr.
(22
)
25
17
—
284
304
Fiscal 2006
(22
)
25
17
—
284
304
Cumulative
(23
)
26
16
—
285
304
Expected
(23
)
26
16
—
485
504
Current Qtr.
$
(33
)
$
490
$
198
$
88
$
227
$
970
Fiscal 2006
(33
)
490
198
88
227
970
Cumulative
17,108
2,833
1,283
1,052
373
22,649
Expected
17,108
2,908
1,433
1,752
898
24,099
(a)
For purposes of the tables in this Note 6, we have defined “
Net property plant
and equipment
”
as: property, plant and equipment impairment losses, and subsequent
adjustments to fair value for assets classified as held for sale, subsequent (gains) or losses
on sales of property, plant and equipment, and property, plant and equipment related parts and
supplies.
Table of Contents
Reserve at
Reserve at
September 30,
Restructuring
Adjustment
December 31,
2005
Charges
Payments
to Accrual
2005
$
1,566
$
449
$
(391
)
$
(16
)
$
1,608
77
—
—
(57
)
20
$
1,643
$
449
$
(391
)
$
(73
)
$
1,628
Adjustment to accrual (see table above)
(73
)
Severance and other employee costs
57
Facility carrying costs
88
Net property, plant and equipment
(33
)
Equipment and inventory relocation
198
Other
284
Total restructuring and other costs
$
970
Reserve at
Reserve at
September 30,
Restructuring
Adjustment
December 31,
2005
Charges
Payments
to Accrual
2005
$
1,504
$
—
$
(1,149
)
$
—
$
355
Reserve at
Reserve at
September 30,
Restructuring
Adjustment
December 31,
2004
Charges
Payments
to Accrual
2004
$
1,029
$
785
$
(590
)
$
(93
)
$
1,131
123
—
—
(80
)
43
$
1,152
$
785
$
(590
)
$
(173
)
$
1,174
Adjustment to accrual (see table above)
(173
)
Net property, plant and equipment
(878
)
Severance and other employee costs
268
Equipment and inventory relocation
181
Facility carrying costs
197
Tax restructuring project
59
Other
37
Total restructuring and other costs
$
476
Table of Contents
Table of Contents
Three Months
Ended
December 31, 2004
$
482
248
(882
)
$
(152
)
$
0.01
$
0.00
$
0.01
$
0.00
Weighted
Weighted
Average
Aggregate
Average
Remaining
Intrinsic
Exercise
Contractual
Value
Shares
Price
Term
(in thousands)
3,986,103
$
13.90
—
—
(52,000
)
11.14
(22,767
)
16.71
(2,000
)
14.01
3,909,336
$
13.92
5.8 years
$
54,401
3,664,337
$
13.90
5.7 years
$
50,925
Table of Contents
Table of Contents
December 31,
September 30,
2005
2005
$
125,135
$
134,144
65,401
59,905
31,676
30,735
222,212
224,784
(25,562
)
(22,819
)
$
196,650
$
201,965
December 31,
September 30,
2005
2005
$
99,818
$
99,812
2,305
2,374
102,123
102,186
249,618
249,601
9,508
9,881
259,126
259,482
250,000
250,000
182,344
216,000
77,200
55,000
30,120
30,120
2,040
2,293
902,953
915,081
96,720
62,079
$
806,233
$
853,002
$
891,140
$
902,826
11,813
12,255
$
902,953
$
915,081
Table of Contents
(a)
The Senior Credit Facility includes revolving credit, swing, and term loan
facilities in the aggregate principal amount of $700 million. The Senior Credit Facility is
pre-payable at any time and is scheduled to expire on June 6, 2010. At December 31, 2005, we
had aggregate outstanding letters of credit under this facility of approximately $44 million.
At December 31, 2005, due to the restrictive covenants on the revolving credit facility,
maximum additional available borrowings under this facility were approximately $68 million.
The applicable margin for determining the interest rate applicable to Base Rate Loans ranges
from 0.000% to 0.750% of the aggregate borrowing availability based on the ratio of our
consolidated funded debt to Credit Agreement EBITDA. The applicable percentage for determining
the facility commitment fee ranges from 0.175% to 0.400% of the aggregate borrowing
availability based on the ratio of our consolidated funded debt to Credit Agreement EBITDA. At
December 31, 2005, the applicable margin for determining the interest rate applicable to LIBOR
Loans and the applicable margin for determining the interest rate applicable to Base Rate
Loans were 1.75% and 0.75%, respectively. At September 30, 2005, the applicable margin for
determining the interest rate applicable to LIBOR Loans and the applicable margin for
determining the interest rate applicable to Base Rate Loans were 1.50% and 0.50%,
respectively. The facility commitment fee at December 31, 2005 and September 30, 2005 was
0.40% and 0.325% of the unused amount, respectively.
(b)
On October 26, 2005, we increased the receivables-backed financing facility
(
“Receivables Facility”
) from $75.0 to $100.0 million. The new facility is scheduled to expire
on October 25, 2006. Borrowing availability under this facility is based on the eligible
underlying receivables. At December 31, 2005, we had drawn the
maximum available under this facility.
The borrowing rate, which consisted of a daily commercial paper rate plus a fee for the used
portion of the facility, was 4.63% as of December 31, 2005. The borrowing rate at September
30, 2005 was 4.10%.
Table of Contents
Three Months Ended
December 31,
December 31,
2005
2004
$
2,326
$
2,055
4,550
4,264
( 4,966
)
(4,668
)
29
(188
)
1,964
1,822
—
(58
)
3,903
3,227
133
124
$
4,036
$
3,351
Table of Contents
•
With respect to each of two sites, while we have been identified as a PRP, our records
reflect no evidence that we are associated with the site. Accordingly, if we are
considered to be a PRP, we believe that we should be categorized as an unproven PRP.
•
With respect to each of eight sites, we preliminarily determined that, while we may be
associated with the site and while it is probable that we have incurred a liability with
respect to the site, one of the following conclusions was applicable:
•
With respect to each of six sites, we determined that it was appropriate to conclude
that, while it was not estimable, the potential liability was reasonably likely to be a
de minimis
amount and immaterial.
•
With respect to each of two sites, we have preliminarily determined that it was
appropriate to conclude that the potential liability was best reflected by a range of
reasonably possible liabilities, all of which we expect to be
de minimis
and
immaterial.
•
We have a 49% ownership interest in Seven Hills, a joint venture. The partners of the
joint venture guarantee funding of net losses in proportion to their share of ownership.
•
We lease certain manufacturing and warehousing facilities and equipment under various
operating leases. A substantial number of these leases require us to indemnify the lessor
in the event that additional taxes are assessed due to a change in the tax law. We are
unable to estimate our maximum exposure under these leases because it is dependent on
changes in the tax law.
Table of Contents
Three Months Ended
December 31,
December 31,
2005
2004
$
301,086
$
221,764
75,396
79,510
187,666
128,703
$
564,148
$
429,977
$
(430
)
$
(811
)
(1,339
)
(1,169
)
(71,931
)
(42,180
)
$
(73,700
)
$
(44,160
)
$
300,656
$
220,953
74,057
78,341
115,735
86,523
$
490,448
$
385,817
$
6,817
$
5,274
3,188
2,688
(992
)
4,354
9,013
12,316
( 970
)
(476
)
( 5,031
)
(2,973
)
( 13,860
)
(6,448
)
52
176
(1,298
)
(865
)
$
(12,094
)
$
1,730
Table of Contents
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
First
Second
Third
Fourth
Fiscal
($ In Millions)
Quarter
Quarter
Quarter
Quarter
Year
$
385.8
$
394.4
$
424.6
$
528.7
$
1,733.5
$
490.4
27.1
%
First
Second
Third
Fourth
Fiscal
($ In Millions)
Quarter
Quarter
Quarter
Quarter
Year
$
330.8
$
336.0
$
352.8
$
439.6
$
1,459.2
85.7
%
85.2
%
83.1
%
83.2
%
84.2
%
$
430.8
87.8
%
Table of Contents
First
Second
Third
Fourth
Fiscal
($ In Millions)
Quarter
Quarter
Quarter
Quarter
Year
$
45.8
$
47.9
$
49.9
$
61.3
$
204.9
11.9
%
12.1
%
11.8
%
11.6
%
11.8
%
$
57.2
11.7
%
Table of Contents
First
Second
Third
Fourth
Fiscal
($ In Millions)
Quarter
Quarter
Quarter
Quarter
Year
$
0.5
$
0.2
$
12.0
$
4.9
$
17.6
0.1
%
0.1
%
2.8
%
0.9
%
1.0
%
$
(9.0
)
(1.8
)%
Net Sales
Operating
Return
(Aggregate)
Income
on Sales
(In millions, except percentages)
$
221.8
$
5.3
2.4
%
218.8
5.7
2.6
239.2
10.6
4.5
314.2
11.8
3.7
$
994.0
$
33.4
3.4
%
$
301.1
$
6.8
2.3
%
Table of Contents
Net Sales
Operating
Return
(Aggregate)
Income
on Sales
(In millions, except percentages)
$
79.5
$
2.7
3.4
%
86.1
4.8
5.6
83.5
6.4
7.7
84.7
7.2
8.5
$
333.8
$
21.1
6.3
%
$
75.4
$
3.2
4.2
%
Coated and
Specialty
Recycled
Bleached
Paperboard
Corrugated
Paperboard
SBSK Pulp
Net Sales
Operating
Tons
Medium Tons
Tons
Tons
Average
(Aggregate)
Income
Return
Shipped (a)
Shipped
Shipped (b)
Shipped (b)
Price (c)
(In Millions)
(In Millions)
On Sales
(In Thousands)
(In Thousands)
(In Thousands)
(In Thousands)
(Per Ton)
$
128.7
$
4.4
3.4
%
210.6
42.7
n/a
n/a
$
467
131.8
3.6
2.8
209.7
45.2
n/a
n/a
472
155.0
7.6
4.9
211.6
44.8
26.7
6.9
491
199.9
16.0
8.0
209.7
44.8
84.2
23.1
523
$
615.4
$
31.6
5.1
%
841.6
177.5
110.9
30.0
$
492
$
187.7
$
(1.0
)
(0.5
)%
208.3
45.0
79.2
15.0
$
522
(a)
Recycled Paperboard Tons Shipped and Average Price Per Ton include tons shipped by Seven
Hills, our joint venture with Lafarge.
(b)
Bleached paperboard and southern bleached softwood kraft (“
SBSK
”) pulp tons shipped begin in
June 2005 as a result of the GSPP Acquisition.
(c)
Beginning in the third quarter of fiscal 2005, Average Price Per Ton includes coated and
specialty recycled paperboard, corrugated medium, bleached paperboard and southern bleached
softwood kraft pulp.
Table of Contents
Table of Contents
Table of Contents
December 31,
September 30,
March 31,
2005
2005
2005
$
96,720
$
62,079
$
75,090
806,233
853,002
390,691
902,953
915,081
465,781
(11,813
)
(12,255
)
(18,702
)
—
—
8,937
891,140
902,826
456,016
(16,495
)
(26,839
)
(28,505
)
—
—
(31,230
)
$
874,645
$
875,987
$
396,281
Table of Contents
Table of Contents
ROCK-TENN COMPANY
(Registrant)
By:
/s/ Steven C. Voorhees
Steven C. Voorhees
Executive Vice President & Chief Financial Officer
(Principal Financial Officer, Chief Accounting
Officer and duly authorized officer)
Table of Contents
Asset Purchase Agreement dated as of April 28, 2005 among
the Registrant, Gulf States Paper Corporation, a Delaware
corporation, Rock-Tenn Packaging and Paperboard, LLC, a
Georgia limited liability company, GSPC Enterprises, Inc., a
Delaware corporation, Gulf States-Texas, L.L.C., a Delaware
limited liability company, and Gulf States-Texas, L.P., a
Delaware limited partnership (the schedules and exhibits
have been omitted pursuant to Item 601(b)(2) of Regulation
S-K; however the Registrant hereby agrees to furnish
supplementally a copy of any omitted schedule or other
attachment to the SEC upon request) (incorporated by
reference to Exhibit 2.1 to the Registrant’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2005).
Amendment No. 1 to Asset Purchase Agreement dated as of June
5, 2005 among the parties to the Asset Purchase Agreement
(incorporated by reference to Exhibit 2.1 to the
Registrant’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2005).
Restated and Amended Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant’s Registration Statement on Form S-1, File No
33-73312)
Articles of Amendment to the Registrant’s Restated and
Amended Articles of Incorporation (incorporated by reference
to Exhibit 3.2 of the Registrant’s Annual Report on Form
10-K for the year ended September 30, 2000)
Bylaws of the Registrant (incorporated by reference to
Exhibit 3.3 of the Registrant’s Annual Report on Form 10-K
for the year ended September 30, 2003)
The rights of the Registrant’s equity security holders are
defined in Article II of the Restated and Amended Articles
of Incorporation of the Registrant and Article II of the
Articles of Amendment to the Registrant’s Restated and
Amended Articles of Incorporation. See Exhibits 3.1 and 3.2
Amended and Restated Credit and Security Agreement dated as
of October 26, 2005 among Rock-Tenn Financial, Inc., as
Borrower, Rock-Tenn Converting Company, as Servicer, the
Liquidity Banks from time to time party hereto, SunTrust
Capital Markets, Inc., as TPF Agent and a Co-Agent and
Wachovia Bank, National Association, as Blue Ridge Agent, a
Co-Agent and Administrative Agent.
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.
Amendment to Rock-Tenn Company Supplemental Executive
Retirement Plan Effective as of November 11, 2005.
Amended and Restated Rock-Tenn Company Supplemental
Retirement Savings Plan Effective as of January 1, 2006.
Certification Accompanying Periodic Report Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, executed by
James A. Rubright, Chairman of the Board and Chief Executive
Officer of Rock-Tenn Company.
Certification Accompanying Periodic Report Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, executed by
Steven C. Voorhees, Executive Vice President and Chief
Financial Officer of Rock-Tenn Company.
*
Management contract or compensatory plan or arrangement.
Table of Contents
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, executed by James A. Rubright, Chairman
of the Board and Chief Executive Officer of Rock-Tenn Company, and by Steven C.
Voorhees, Executive Vice President and Chief Financial Officer of Rock-Tenn Company.
Exhibit 10.1
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
DATED AS OF OCTOBER 26, 2005
AMONG
ROCK-TENN FINANCIAL, INC., AS BORROWER,
ROCK-TENN CONVERTING COMPANY, AS SERVICER,
THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO,
SUNTRUST CAPITAL MARKETS, INC., AS TPF AGENT AND A CO-AGENT
AND
WACHOVIA BANK, NATIONAL ASSOCIATION, AS BLUE RIDGE AGENT, A CO-AGENT
AND ADMINISTRATIVE AGENT
TABLE OF CONTENTS
Page
----
ARTICLE I. THE ADVANCES.................................................. 2
Section 1.1 Credit Facility.......................................... 2
Section 1.2 Increases................................................ 2
Section 1.3 Decreases................................................ 3
Section 1.4 Deemed Collections; Borrowing Limit...................... 3
Section 1.5 Payment Requirements..................................... 4
Section 1.6 Ratable Loans; Funding Mechanics; Liquidity Fundings..... 4
ARTICLE II. PAYMENTS AND COLLECTIONS..................................... 5
Section 2.1 Payments................................................. 5
Section 2.2 Collections Prior to Amortization........................ 6
Section 2.3 Collections Following Amortization....................... 6
Section 2.4 Payment Recission........................................ 7
ARTICLE III. BLUE RIDGE FUNDING.......................................... 7
Section 3.1 CP Costs................................................. 7
Section 3.2 Calculation of CP Costs.................................. 7
Section 3.3 CP Costs Payments........................................ 7
Section 3.4 Default Rate............................................. 7
ARTICLE IV. LIQUIDITY BANK FUNDING....................................... 7
Section 4.1 Liquidity Bank Funding................................... 7
Section 4.2 Interest Payments........................................ 8
Section 4.3 Selection and Continuation of Interest Periods........... 8
Section 4.4 Liquidity Bank Interest Rates............................ 8
Section 4.5 Suspension of the LIBO Rate.............................. 8
Section 4.6 Default Rate............................................. 9
ARTICLE V. REPRESENTATIONS AND WARRANTIES................................ 9
Section 5.1 Representations and Warranties of the Loan Parties....... 9
Section 5.2 Liquidity Bank Representations and Warranties............ 13
ARTICLE VI. CONDITIONS OF ADVANCES....................................... 14
Section 6.1 Conditions Precedent to Initial Advance.................. 14
Section 6.2 Conditions Precedent to All Advances..................... 14
ARTICLE VII. COVENANTS................................................... 14
Section 7.1 Affirmative Covenants of the Loan Parties................ 14
Section 7.2 Negative Covenants of the Loan Parties................... 22
ARTICLE VIII. ADMINISTRATION AND COLLECTION.............................. 24
Section 8.1 Designation of Servicer.................................. 24
Section 8.2 Duties of Servicer....................................... 24
Section 8.3 Collection Notices....................................... 25
Section 8.4 Responsibilities of Borrower............................. 26
Section 8.5 Monthly Reports.......................................... 26
Section 8.6 Servicing Fee............................................ 26
ARTICLE IX. AMORTIZATION EVENTS.......................................... 26
Section 9.1 Amortization Events...................................... 26
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Section 9.2 Remedies................................................. 29 ARTICLE X. INDEMNIFICATION............................................... 29 Section 10.1 Indemnities by the Loan Parties.......................... 29 Section 10.2 Increased Cost and Reduced Return........................ 32 Section 10.3 Other Costs and Expenses................................. 32 ARTICLE XI. THE AGENT.................................................... 32 Section 11.1 Authorization and Action................................. 32 Section 11.2 Delegation of Duties..................................... 34 Section 11.3 Exculpatory Provisions................................... 34 Section 11.4 Reliance by Agent........................................ 34 Section 11.5 Non-Reliance on Agent and Other Lenders.................. 35 Section 11.6 Reimbursement and Indemnification........................ 35 Section 11.7 Agent in its Individual Capacity......................... 35 Section 11.8 Successor Agent.......................................... 36 ARTICLE XII. ASSIGNMENTS; PARTICIPATIONS................................. 36 Section 12.1 Assignments.............................................. 36 Section 12.2 Participations........................................... 38 ARTICLE XIII. SECURITY INTEREST.......................................... 38 Section 13.1 Grant of Security Interest............................... 38 Section 13.2 Termination after Final Payout Date...................... 38 ARTICLE XIV. MISCELLANEOUS............................................... 38 Section 14.1 Waivers and Amendments................................... 38 Section 14.2 Notices.................................................. 39 Section 14.3 Ratable Payments......................................... 40 Section 14.4 Protection of Agent's Security Interest.................. 40 Section 14.5 Confidentiality.......................................... 41 Section 14.6 Bankruptcy Petition...................................... 41 Section 14.7 Limitation of Liability.................................. 41 Section 14.8 CHOICE OF LAW............................................ 42 Section 14.9 CONSENT TO JURISDICTION.................................. 42 Section 14.10 WAIVER OF JURY TRIAL..................................... 42 Section 14.11 Integration; Binding Effect; Survival of Terms........... 42 Section 14.12 Counterparts; Severability; Section References........... 43 Section 14.13 Wachovia Roles........................................... 43 |
EXHIBITS AND SCHEDULES
Exhibit I Definitions
Exhibit II-A Form of Borrowing Notice
Exhibit II-B Form of Reduction Notice
Exhibit III Places of Business of the Loan Parties; Locations of Records;
Federal Employer Identification Number(s)
Exhibit IV Form of Compliance Certificate
Exhibit V Form of Assignment Agreement
Exhibit VI Form of Monthly Report
Exhibit VII Form of Performance Undertaking
Schedule A Commitments
Schedule B Closing Documents
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AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT, dated as of
October 26, 2005 is entered into by and among:
(a) Rock-Tenn Financial, Inc., a Delaware corporation ("BORROWER"),
(b) Rock-Tenn Converting Company, a Georgia corporation ("CONVERTING"), as initial Servicer (the Servicer together with Borrower, the "LOAN PARTIES" and each, a "LOAN PARTY"),
(c) Blue Ridge Asset Funding Corporation, a Delaware corporation ("BLUE RIDGE" or a "CONDUIT"), and Wachovia Bank, National Association, in its capacity as liquidity provider to Blue Ridge (together with its successor, "WACHOVIA" and together with Blue Ridge, the "BLUE RIDGE GROUP" or a "CONDUIT GROUP"),
(d) Three Pillars Funding LLC, a Delaware limited liability company ("TPF" or a "CONDUIT"), and SunTrust Bank, in its capacity as liquidity provider to TPF (together with its successor, "SUNTRUST" and together with TPF, the "TPF GROUP" or a "CONDUIT GROUP"),
(e) Wachovia Bank, National Association, in its capacity as agent for the Blue Ridge Group (together with its successors and assigns in such capacity, the "BLUE RIDGE AGENT" or a "CO-AGENT"), and SunTrust Capital Markets, Inc., in its capacity as agent for the TPF Group (together with its successors and assigns in such capacity, the "TPF AGENT" or a "CO-AGENT"), and
(f) Wachovia Bank, National Association, in it capacity as administrative agent for the Lenders hereunder or any successor administrative agent hereunder (together with its successors and assigns hereunder, the "ADMINISTRATIVE AGENT" AND TOGETHER WITH THE CO-AGENTS, THE "AGENTS"),
and amends and restates in its entirety that certain Credit and Security Agreement dated as of November 14, 2000, as amended, by and among the Loan Parties, Blue Ridge and Wachovia, individually and as agent thereunder (the "EXISTING AGREEMENT").
Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Borrower desires to borrow from the Lenders from time to time.
The Conduits may, in their absolute and sole discretion, make Advances to Borrower from time to time. In the event that any Conduit declines to make its Group's Percentage of any Advance, the applicable Conduit's Liquidity Bank(s) shall, at the request of Borrower, make such Group's Percentage of such Advance.
Wachovia Bank, National Association, has been requested and is willing to act as Administrative Agent on behalf of the Co-Agents and the Conduit Groups in accordance with the terms hereof.
ARTICLE I.
THE ADVANCES
Section 1.1 Credit Facility.
(a) Upon the terms and subject to the conditions hereof, from time to time prior to the Facility Termination Date:
(i) Borrower may request Advances in an aggregate principal amount at any one time outstanding not to exceed the lesser of the Aggregate Commitment and the Borrowing Base (such lesser amount, the "BORROWING LIMIT"); and
(ii) upon receipt of a copy of each Borrowing Notice from Borrower, each of the Co-Agents shall determine whether its Conduit will fund a Loan in an amount equal to its Group's Percentage of the requested Advance specified in such Borrowing Notice. In the event that a Conduit elects not to make any such Loan to Borrower, the applicable Co-Agent shall promptly notify Borrower and, unless Borrower cancels its Borrowing Notice, each of such Conduit's Liquidity Banks severally agrees to make its Pro Rata Share of its Conduit Group's Percentage of such Loan to Borrower, on the terms and subject to the conditions hereof, PROVIDED THAT at no time may the aggregate principal amount of such Conduit's and such Conduit's Liquidity Banks' Loans outstanding exceed the lesser of (x) the aggregate amount of such Conduit's Liquidity Banks' Commitments, and (y) such Conduit's Group's Percentage of the Borrowing Base (such lesser amount, the "CONDUIT ALLOCATION LIMIT").
Each of the Advances, and all other Obligations of Borrower, shall be secured by the Collateral as provided in Article XIII. It is the intent of the Conduits to fund all Advances by the issuance of Commercial Paper.
(b) Borrower may, upon at least 10 Business Days' notice to the Co-Agents, terminate in whole or reduce in part, ratably among the Liquidity Banks in each Group in accordance with such Conduit Group's Percentage, the unused portion of the Aggregate Commitment; PROVIDED THAT each partial reduction of the Aggregate Commitment shall be in an amount equal to $5,000,000 per Conduit Group (or a larger integral multiple of $1,000,000 if in excess thereof) and shall reduce the Commitments of the Liquidity Banks ratably in accordance with their respective Pro Rata Shares.
Section 1.2 Increases. Not later than 4:00 p.m. (New York City time) on the second (2nd) Business Day prior to a proposed borrowing, Borrower shall provide the Co-Agents with written notice of each Advance in the form set forth as Exhibit II-A hereto (each, a "BORROWING NOTICE"). Each Borrowing Notice shall be subject to Section 6.2 hereof and, except as set forth below, shall be irrevocable and shall specify the requested increase in Aggregate Principal (which shall not be less than $1,000,000 per Conduit Group or a larger integral multiple of $100,000 per Conduit Group) and the Borrowing Date (which, in the case of any Advance after
the initial Advance hereunder, shall only be on a Settlement Date) and, in the case of an Advance to be funded by the Liquidity Banks, the requested Interest Rate and Interest Period. If a Conduit declines to make its Percentage of a proposed Advance, Borrower may cancel the Borrowing Notice or, in the absence of such a cancellation, the Advance will be made by such Conduit's Liquidity Banks. On the date of each Advance, upon satisfaction of the applicable conditions precedent set forth in Article VI, the applicable Conduit or the Conduit's Liquidity Banks, as applicable, shall make the proceeds of its Loan comprising such Conduit Group's Percentage of such requested Advance available to its Co-Agent in immediately available funds on the proposed date of borrowing. Upon receipt by a Co-Agent of such Loan proceeds, such Co-Agent shall deposit to the Facility Account, in immediately available funds, no later than [2:00 P.M.] (New York time), an amount equal to (i) in the case of a Conduit, such Conduit's Group's Percentage of the principal amount of the requested Advance or (ii) in the case of a Conduit's Liquidity Bank, each such Liquidity Bank's Pro Rata Share of such Liquidity Bank's Group's Percentage of the principal amount of the requested Advance.
Section 1.3 Decreases. Except as provided in Section 1.4, Borrower shall provide the Co-Agents with prior written notice of any proposed reduction of Aggregate Principal in the form of Exhibit II-B hereto in conformity with the Required Notice Period (each, a "REDUCTION NOTICE"). Such Reduction Notice shall designate (i) the date (the "PROPOSED REDUCTION DATE") upon which any such reduction of Aggregate Principal shall occur (which date shall give effect to the applicable Required Notice Period), and (ii) the amount of Aggregate Principal to be reduced which shall be applied ratably to the Loans of the Conduits and the Liquidity Banks in accordance with the amount of principal (if any) owing to the Conduits (ratably, based on their Group's Percentage of such reduction), on the one hand, and the amount of principal (if any) owing to the Liquidity Banks (ratably, based on their respective Pro Rata Shares of their Group's Percentage of such reduction), on the other hand (the "AGGREGATE REDUCTION"). Only one (1) Reduction Notice with respect to any Proposed Reduction Date shall be outstanding at any time.
Section 1.4 Deemed Collections; Borrowing Limit.
(a) If on any day:
(i) the Outstanding Balance of any Receivable is reduced as a result of any defective or rejected goods or services, any cash discount or any other adjustment by any Originator or any Affiliate thereof, or
(ii) the Outstanding Balance of any Receivable is reduced or canceled as a result of a setoff in respect of any claim by the Obligor thereof (whether such claim arises out of the same or a related or an unrelated transaction), or
(iii) the Outstanding Balance of any Receivable is reduced on account of the obligation of any Originator or any Affiliate thereof to pay to the related Obligor any rebate or refund, or
(iv) the Outstanding Balance of any Receivable is less than the amount included in calculating the Net Pool Balance for purposes of any Monthly Report (for any reason
other than receipt of Collections thereon or such Receivable becoming a Defaulted Receivable), or
(v) any of the representations or warranties of Borrower set forth in Section 5.1(i), (j), (r), (s), (t) or (u) were not true when made with respect to any Receivable,
then, on such day, Borrower shall be deemed to have received a Collection of such Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such reduction or cancellation or the difference between the actual Outstanding Balance and the amount included in calculating such Net Pool Balance, as applicable; and (B) in the case of clause (v) above, in the amount of the Outstanding Balance of such Receivable and, effective as of the date on which the next succeeding Monthly Report is required to be delivered, the Borrowing Base shall be reduced by the amount of such Deemed Collection.
(b) Borrower shall ensure that the Aggregate Principal at no time exceeds the Borrowing Limit. If at any time the aggregate outstanding principal amount of the Loans from any Group exceeds such Group's Conduit Allocation Limit, or the aggregate principal amount of the Loans outstanding from such Group's Conduit exceeds the Liquidity Commitments of such Group's Liquidity Banks pursuant to such Group's Liquidity Agreement divided by 102%, Borrower shall prepay such Loans by wire transfer to the applicable Co-Agent received not later than 12:00 noon (New York City time) on the next succeeding Settlement Date of an amount sufficient to eliminate such excess, together with accrued and unpaid interest on the amount prepaid (as allocated by the applicable Co-Agent), such that after giving effect to such payment the Aggregate Principal is less than or equal to the Borrowing Limit and the applicable Conduit Group's Percentage of the Aggregate Principal is less than or equal to the applicable Group's Conduit Allocation Limit.
Section 1.5 Payment Requirements. All amounts to be paid or deposited by any Loan Party pursuant to any provision of this Agreement shall be paid or deposited in accordance with the terms hereof no later than 12:00 noon (New York City time) on the day when due in immediately available funds, and if not received before 12:00 noon (New York City time) shall be deemed to be received on the next succeeding Business Day. If such amounts are payable to a Lender they shall be paid to the applicable Co-Agent Account, for the account of such Lender, until otherwise notified by such Co-Agent. Upon notice to Borrower, a Co-Agent may debit the Facility Account for all amounts due and payable to it hereunder. All computations of CP Costs, Interest, per annum fees calculated as part of any CP Costs, per annum fees hereunder and per annum fees under the Fee Letter shall be made on the basis of a year of 360 days for the actual number of days elapsed. 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 1.6 Advances; Ratable Loans; Funding Mechanics; Liquidity Fundings.
(a) Each Advance hereunder shall be made on a pro rata basis in accordance with each Conduit Group's Percentage; PROVIDED THAT the first Advance on or after the date hereof will be made in such amounts that, after giving effect thereto, the principal balance then outstanding shall be ratable with such Percentages.
(b) Each Advance hereunder shall consist of one or more Loans made by the Conduits and/or the applicable Liquidity Banks.
(c) Each Lender funding any Loan shall wire transfer the principal amount of its Loan to its Co-Agent in immediately available funds as soon as possible and in no event later than 2:00 p.m. (New York City time) on the applicable Borrowing Date and, subject to such Co-Agent's receipt of such Loan proceeds, such Co-Agent shall wire transfer such funds to the account specified by Borrower in its Borrowing Notice promptly after receipt.
(d) While it is the intent of each Conduit to fund and maintain each
requested Advance through the issuance of its respective Commercial Paper, the
parties acknowledge that if any Conduit is unable, or determines that it is
undesirable, to issue Commercial Paper to fund all or any portion of its Loans,
or is unable to repay such Commercial Paper upon the maturity thereof, such
Conduit shall put all or any portion of its Loans to its Liquidity Banks at any
time pursuant to its applicable Liquidity Agreement to finance or refinance the
necessary portion of its Loans through a Liquidity Funding to the extent
available. The Liquidity Fundings may be Alternate Base Rate Loans or LIBO Rate
Loans, or a combination thereof, selected by Borrower in accordance with Article
IV. Regardless of whether a Liquidity Funding constitutes the direct funding of
a Loan, an assignment of a Loan made by a Conduit or the sale of one or more
participations in a Loan made by a Conduit, each Liquidity Bank in such
Conduit's Group participating in a Liquidity Funding shall have the rights of a
"Lender" hereunder with the same force and effect as if it had directly made a
Loan to Borrower in the amount of its Liquidity Funding.
(e) Nothing herein shall be deemed to commit any Conduit to make Loans.
ARTICLE II.
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Borrower hereby promises to pay:
(a) the Aggregate Principal on and after the Facility Termination Date as and when Collections are received;
(b) the fees set forth in the Fee Letter on the dates specified therein;
(c) all accrued and unpaid Interest on the Alternate Base Rate Loans on each Settlement Date applicable thereto;
(d) all accrued and unpaid Interest on the LIBO Rate Loans on the last day of each Interest Period applicable thereto;
(e) all accrued and unpaid CP Costs on the CP Rate Loans on each Settlement Date; and
(f) all Broken Funding Costs and Indemnified Amounts upon demand.
Section 2.2 Collections Prior to Amortization. On each Settlement Date prior to the Amortization Date, the Servicer shall deposit to the applicable Co-Agent Account, for distribution to the applicable Lenders, a portion of the Collections received by it during the preceding Settlement Period (after deduction of its Servicing Fee) equal to the sum of the following amounts for application to the Obligations in the order specified:
FIRST, ratably to the payment of all accrued and unpaid CP Costs, Interest and Broken Funding Costs (if any) that are then due and owing,
SECOND, ratably to the payment of all accrued and unpaid fees under the Fee Letter (if any) that are then due and owing to the applicable Conduit or its Co-Agent,
THIRD, if required under Section 1.3 or 1.4, to the ratable reduction of the applicable Conduit's Percentage of the Aggregate Principal, and
FOURTH, for the ratable payment of all other unpaid Obligations of Borrower, if any, that are then due and owing.
The balance, if any, shall be paid to Borrower or otherwise in accordance with Borrower's instructions. Collections applied to the payment of Obligations of Borrower shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.2, shall be shared ratably (within each priority) among the applicable Co-Agent and the Lenders in its Conduit Group in accordance with the amount of such Obligations owing to each of them in respect of each such priority.
Section 2.3 Collections Following Amortization. On the Amortization Date and on each day thereafter, the Servicer shall set aside and hold in trust, for the Secured Parties, all Collections received on such day. On and after the Amortization Date, the Servicer shall, on each Settlement Date and on each other Business Day specified by the Administrative Agent at the direction of any Co-Agent (after deduction of any accrued and unpaid Servicing Fee as of such date): (i) remit to the applicable Co-Agent Account the applicable Conduit Group's Percentage of the amounts set aside and held in trust pursuant to the preceding sentence, and (ii) apply such amounts to reduce the Obligations of Borrower as follows:
FIRST, to the reimbursement of the applicable Conduit Group's Percentage Share of the Administrative Agent's costs of collection and enforcement of this Agreement,
SECOND, ratably to the payment of all accrued and unpaid CP Costs, Interest and Broken Funding Costs (if any),
THIRD, ratably to the payment of all accrued and unpaid fees under the Fee Letter,
FOURTH, to the ratable reduction of such Conduit's Percentage of the Aggregate Principal,
FIFTH, for the ratable payment of all other unpaid Obligations of Borrower, and
SIXTH, after the Obligations of Borrower have been indefeasibly reduced to zero, to Borrower.
Collections applied to the payment of Obligations of Borrower shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.3, shall be shared ratably (within each priority) among the Co-Agents and the Lenders in accordance with the amount of such Obligations owing to each of them in respect of each such priority.
Section 2.4 Payment Rescission. No payment of any of the Obligations shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. Borrower shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to the applicable Co-Agent Account (for application to the Person or Persons who suffered such rescission, return or refund) the full amount thereof, plus Interest on such amount at the Default Rate from the date of any such rescission, return or refunding.
ARTICLE III.
CONDUIT FUNDING
Section 3.1 CP Costs. Borrower shall pay CP Costs with respect to the principal balance of the Loans from time to time outstanding. Each Loan of a Conduit that is funded substantially with Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon the percentage share that the principal in respect of such Loan represents in relation to all assets held by such Conduit and funded substantially with related Pooled Commercial Paper on such day.
Section 3.2 Calculation of CP Costs. Not later than the 3rd Business Day immediately preceding each Monthly Reporting Date, each Conduit shall calculate the aggregate amount of CP Costs applicable to its CP Rate Loans for the Calculation Period then most recently ended and shall notify Borrower of such aggregate amount.
Section 3.3 CP Costs Payments. On each Settlement Date, Borrower shall pay to each of the Co-Agents (for the benefit of its respective Conduit) an aggregate amount equal to all accrued and unpaid CP Costs in respect of the principal associated with all CP Rate Loans of such Conduit for the calendar month then most recently ended in accordance with Article II.
Section 3.4 Default Rate. From and after the occurrence of an Amortization Event, all Loans of the Conduits shall accrue Interest at the Default Rate and shall cease to be CP Rate Loans.
ARTICLE IV.
LIQUIDITY BANK FUNDING
Section 4.1 Liquidity Bank Funding. Prior to the occurrence of an Amortization Event, the outstanding principal balance of each Liquidity Funding shall accrue interest for each day during its Interest Period at either the LIBO Rate or the Alternate Base Rate in accordance
with the terms and conditions hereof. Until Borrower gives notice to the applicable Co-Agent of another Interest Rate in accordance with Section 4.4, the initial Interest Rate for any Loan transferred to the Liquidity Banks by the applicable Conduit pursuant to the applicable Liquidity Agreement shall be the Alternate Base Rate (unless the Default Rate is then applicable). If the applicable Liquidity Banks acquire by assignment from the applicable Conduit any Loan pursuant to the applicable Liquidity Agreement, each Loan so assigned shall each be deemed to have an Interest Period commencing on the date of any such assignment.
Section 4.2 Interest Payments. On the Settlement Date for each Liquidity Funding, Borrower shall pay to the applicable Co-Agent (for the benefit of the Liquidity Banks in its Conduit Group) an aggregate amount equal to the accrued and unpaid Interest for the entire Interest Period of each such Liquidity Funding in accordance with Article II.
Section 4.3 Selection and Continuation of Interest Periods.
(a) With consultation from the applicable Co-Agent, Borrower shall from time to time request Interest Periods for the Liquidity Fundings, PROVIDED THAT if at any time any Liquidity Funding is outstanding, Borrower shall always request Interest Periods such that at least one Interest Period shall end on the date specified in clause (A) of the definition of Settlement Date.
(b) Borrower or the applicable Co-Agent, upon notice to and consent by the other received at least three (3) Business Days prior to the end of an Interest Period (the "TERMINATING TRANCHE") for any Liquidity Funding, may, effective on the last day of the Terminating Tranche: (i) divide any such Liquidity Funding into multiple Liquidity Fundings, (ii) combine any such Liquidity Funding with one or more other Liquidity Fundings that have a Terminating Tranche ending on the same day as such Terminating Tranche or (iii) combine any such Liquidity Funding with a new Liquidity Funding to be made by the Liquidity Banks on the day such Terminating Tranche ends.
Section 4.4 Liquidity Bank Interest Rates. Borrower may select the LIBO Rate or the Alternate Base Rate for each Liquidity Funding. Borrower shall by 12:00 noon (New York time): (i) at least three (3) Business Days prior to the expiration of any Terminating Tranche with respect to which the LIBO Rate is being requested as a new Interest Rate and (ii) at least one (1) Business Day prior to the expiration of any Terminating Tranche with respect to which the Alternate Base Rate is being requested as a new Interest Rate, give the applicable Co-Agent irrevocable notice of the new Interest Rate for the Liquidity Funding associated with such Terminating Tranche. Until Borrower gives notice to the Applicable Co-Agent of another Interest Rate, the initial Interest Rate for any Loan transferred to the applicable Liquidity Banks pursuant to the applicable Liquidity Agreement shall be the Alternate Base Rate (unless the Default Rate is then applicable).
Section 4.5 Suspension of the LIBO Rate
(a) If any Liquidity Bank notifies its applicable Co-Agent that it has determined that funding its Pro Rata Share of its Conduit Group's Percentage of the Liquidity Fundings at a LIBO 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 Liquidity Funding at such LIBO Rate are not available or (ii) such LIBO Rate does not accurately reflect the cost of acquiring or maintaining a Liquidity Funding at such LIBO Rate, then such Co-Agent shall suspend the availability of such LIBO Rate and require Borrower to select the Alternate Base Rate for any Liquidity Funding of such Liquidity Bank accruing Interest at such LIBO Rate.
(b) If less than all of the Liquidity Banks of any applicable Conduit Group give a notice to such Group's Co-Agent pursuant to Section 4.5(a), each Liquidity Bank which gave such a notice shall be obliged, at the request of Borrower, the applicable Conduit or the applicable Co-Agent, to assign all of its rights and obligations hereunder to (i) another Liquidity Bank in its Conduit Group or (ii) another funding entity nominated by Borrower or the applicable Co-Agent that is an Eligible Assignee willing to participate in this Agreement through the Liquidity Termination Date in the place of such notifying Liquidity Bank; PROVIDED THAT (i) the notifying Liquidity Bank receives payment in full, pursuant to an Assignment Agreement, of all Obligations owing to it (whether due or accrued), and (ii) the replacement Liquidity Bank otherwise satisfies the requirements of Section 12.1(b).
Section 4.6 Default Rate. From and after the occurrence of an Amortization Event, all Liquidity Fundings shall accrue Interest at the Default Rate.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Loan Parties. Each Loan Party hereby represents and warrants to the Agents and the Lenders, as to itself, as of the date hereof, as of the date of each Advance and as of each Settlement Date that:
(a) Existence and Power. Such Loan Party's jurisdiction of organization is correctly set forth in the preamble to this Agreement. Such Loan Party is duly organized under the laws of that jurisdiction and no other state or jurisdiction, and such jurisdiction must maintain a public record showing the organization to have been organized. Such Loan Party is validly existing and in good standing under the laws of its state of organization. Such Loan Party is duly qualified to do business and is in good standing as a foreign entity, and has and holds all organizational 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 would 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 Loan Party 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 Borrower, Borrower's use of the proceeds of Advances made hereunder, are within its corporate powers and authority and have been duly authorized by all necessary corporate action on its part. This Agreement and each other Transaction Document to which such Loan Party is a party has been duly executed and delivered by such Loan Party.
(c) No Conflict. The execution and delivery by such Loan Party 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 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 such Loan Party or its Subsidiaries (except as created hereunder) except, in any case, where such contravention or violation would 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 Loan Party of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings pending, or to the best of such Loan Party's knowledge, threatened, against or affecting such Loan Party, or any of its properties, in or before any court, arbitrator or other body, that would reasonably be expected to have a Material Adverse Effect. Such Loan Party is not in default with respect to any order of any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction Document to which such Loan Party is a party constitute the legal, valid and binding obligations of such Loan Party enforceable against such Loan Party 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 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 Loan Party or any of its Affiliates to the Agents or the Lenders 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 Loan Party or any of its Affiliates to the Agents or the Lenders 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 materially misleading.
(h) Use of Proceeds. Borrower represents and warrants that no proceeds of any Advance hereunder will be used (i) for a purpose that violates, or would be inconsistent with, (A) Section 7.2(e) of this Agreement or (B) Regulation 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 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) Good Title. Borrower represents and warrants that: (i) Borrower is the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents, and (ii) 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 Borrower's ownership interest in each Receivable, its Collections and the Related Security.
(j) Perfection. Borrower represents and warrants that: (i) this Agreement is effective to create a valid security interest in favor of the Administrative Agent for the benefit of the Secured Parties in the Collateral to secure payment of the Obligations, free and clear of any Adverse Claim except as created by the Transactions Documents, and (ii) there have been or (within 2 Business Days after the date of any Advance) will be 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 the Administrative Agent's (on behalf of the Secured Parties) security interest in the Collateral. Each of the Loan Parties represents and warrants that such Loan Party'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 places
of business and chief executive office of such Loan Party and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit III
or such other locations of which the Administrative Agent has been notified in
accordance with Section 7.2(a) in jurisdictions where all action required by
Section 14.4(a) has been taken and completed. Borrower's Federal Employer
Identification Number is correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and duly performed. The names, addresses and jurisdictions of organization of all Collection Banks, together with the account numbers of the Collection Accounts of Borrower at each Collection Bank and the post office box number of each Lock-Box, are listed on Exhibit III to the Receivables Sale Agreement. While Borrower has granted Servicer access to the Lock-Boxes and Collection Accounts prior to delivery of a Collection Notice, Borrower has not granted any Person, other than the Administrative Agent or the TPF 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 such Lock-Box or Collection Account at a future time or upon the occurrence of a future event.
(m) Material Adverse Effect. (i) The initial Servicer represents and warrants that since June 30, 2005, no event has occurred that would have a material adverse effect on the
financial condition or operations of the initial Servicer or the ability of the initial Servicer to perform its obligations under this Agreement, and (ii) Borrower represents and warrants that since the date of this Agreement, no event has occurred that would have a material adverse effect on (A) the financial condition or operations of Borrower, (B) the ability of Borrower to perform its obligations under the Transaction Documents, or (C) the collectibility of the Receivables generally or any material portion of the Receivables.
(n) Names. Borrower represents and warrants that: (i) the name in which Borrower has executed this Agreement is identical to the name of Borrower as indicated on the public record of its state of organization which shows Borrower to have been organized, and (ii) in the past five (5) years, Borrower has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement.
(o) Ownership of Borrower. Rock-Tenn Company owns, directly or indirectly, 100% of the issued and outstanding Equity Interest of Borrower, free and clear of any Adverse Claim. Such Equity Interests are validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Borrower.
(p) Not a Holding Company or an Investment Company. Such Loan Party 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 Loan Party is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or any successor statute.
(q) Compliance with Law. Such Loan Party 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 would not reasonably be expected to have a Material Adverse Effect. Borrower represents and warrants that 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 would not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Loan Party has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any change to such Credit and Collection Policy, except such material change as to which the Administrative Agent has been notified in accordance with Section 7.1(a)(vii).
(s) Payments to Applicable Originator. Borrower represents and warrants that: (i) with respect to each Receivable transferred to Borrower under the Receivables Sale Agreement, Borrower has given reasonably equivalent value to the applicable Originator in consideration therefor and such transfer was not made for or on account of an antecedent debt, and (ii) no transfer by any Originator of any Receivable under the Receivables Sale Agreement 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. Borrower represents and warrants that each Contract with respect to each Receivable 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 included in the Net Pool Balance as an Eligible Receivable on the date of any Monthly Report was an Eligible Receivable on such date.
(v) Borrowing Limit. Immediately after giving effect to each Advance and each settlement on any Settlement Date hereunder, the Aggregate Principal is less than or equal to the Borrowing Limit.
(w) Accounting. The manner in which such Loan Party accounts for the transactions contemplated by this Agreement and the Receivables Sale Agreement does not jeopardize the true sale analysis.
Section 5.2 Liquidity Bank Representations and Warranties. Each Liquidity Bank hereby represents and warrants to the Agents, Conduits and the Loan Parties that:
(a) Existence and Power. Such Liquidity Bank is a banking association duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has all organizational power to perform its obligations hereunder and under the Liquidity Agreement.
(b) No Conflict. The execution and delivery by such Liquidity Bank of
this Agreement and the Liquidity Agreement and the performance of its
obligations hereunder and thereunder 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 and the Liquidity
Agreement have been duly authorized, executed and delivered by such Liquidity
Bank.
(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 and delivery by such Liquidity Bank of this Agreement or the Liquidity Agreement and the performance of its obligations hereunder or thereunder.
(d) Binding Effect. Each of this Agreement and the Liquidity Agreement constitutes the legal, valid and binding obligation of such Liquidity Bank enforceable against such Liquidity Bank 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 such enforcement is sought in a proceeding in equity or at law).
ARTICLE VI.
CONDITIONS OF ADVANCES
Section 6.1 Conditions Precedent to Initial Advance. The initial Advance under this Agreement is subject to the conditions precedent that (a) the Administrative Agent shall have received on or before the date of such Advance those documents listed on Schedule A to the Receivables Sale Agreement and those documents listed on Schedule B to this Agreement, (b) the Rating Agency Condition shall have been satisfied, and (c) the Administrative Agent shall have received all fees and expenses required to be paid on such date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Advances. Each Advance and each
rollover or continuation of any Advance shall be subject to the further
conditions precedent that (a) the Servicer shall have delivered to the
Administrative Agent on or prior to the date thereof, in form and substance
satisfactory to the Administrative Agent, all Monthly Reports as and when due
under Section 8.5; (b) the Facility Termination Date shall not have occurred;
(c) the Administrative Agent shall have received such other approvals, opinions
or documents as it may reasonably request; and (d) on the date thereof, the
following statements shall be true (and acceptance of the proceeds of such
Advance shall be deemed a representation and warranty by Borrower that such
statements are then true):
(i) the representations and warranties set forth in Section 5.1 are true and correct on and as of the date of such Advance (or such Settlement Date, as the case may be) as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result from such Advance (or the continuation thereof), that will constitute (A) an Amortization Event or (B) an Unmatured Amortization Event; and
(iii) after giving effect to such Advance (or the continuation thereof), the Aggregate Principal will not exceed the Borrowing Limit.
ARTICLE VII.
COVENANTS
Section 7.1 Affirmative Covenants of the Loan Parties. Until the Final Payout date, each Loan Party hereby covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Loan Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Administrative Agent:
(i) Annual Reporting. Within 90 days after the close of each of its respective fiscal years: (A) audited, unqualified, consolidated financial statements (which shall include consolidated balance sheets, statements of income and retained earnings and a statement of cash flows) for Rock-Tenn Company for such fiscal year certified in a manner acceptable to the Administrative Agent by independent public accountants reasonably acceptable to the Administrative Agent, and (B) financial statements (which shall include balance sheets, statements of income and retained earnings and a statement of cash flows) for Borrower for such fiscal year certified in a manner acceptable to the Administrative Agent by independent public accountants reasonably acceptable to the Administrative Agent.
(ii) Quarterly Reporting. Within 45 days after the close of the
first three (3) quarterly periods of each of its respective fiscal years:
(A) consolidated balance sheets of Rock-Tenn Company as at the close of
each such period and consolidated statements of income and retained
earnings and a consolidated 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, and (B) balance sheets of Borrower as at the
close of each such 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 such Loan Party's Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof to the shareholders of such Loan Party copies of all financial statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which any Loan Party or any of its Affiliates files with the Securities and Exchange Commission.
(vi) Copies of Notices. Promptly 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 Administrative Agent or any Lender, copies of the same.
(vii) 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 change or
amendment, and (B) if such proposed change or
amendment would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting the Administrative Agent's consent thereto.
(viii) Other Information. Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of such Loan Party as the Administrative Agent may from time to time reasonably request in order to protect the interests of the Administrative Agent and the Lenders under or as contemplated by this Agreement.
(b) Notices. Such Loan Party will notify the Administrative Agent in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:
(i) Amortization Events or Unmatured Amortization Events. The occurrence of each Amortization Event and each Unmatured Amortization Event, by a statement of an Authorized Officer of such Loan Party.
(ii) Termination Date. The occurrence of the Termination Date under the Receivables Sale Agreement.
(iii) Notices under Receivables Sale Agreement. Copies of all notices delivered under the Receivables Sale Agreement.
(iv) Downgrade of Performance Guarantor. Any downgrade in the rating of any Debt of Performance Guarantor by S&P or Moody's, setting forth the Debt affected and the nature of such change.
(v) Material Adverse Effect. The occurrence of any other event or condition that has had, or would reasonably be expected to have, a Material Adverse Effect.
(c) Compliance with Laws and Preservation of Corporate Existence. Such Loan Party will comply 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 would not reasonably be expected to have a Material Adverse Effect. Such Loan Party will preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where its business is conducted, except where the failure to so preserve and maintain or qualify would not reasonably be expected to have a Material Adverse Effect.
(d) Audits. Such Loan Party will furnish to each of the Co-Agents from
time to time such information with respect to it and the Receivables as the
Co-Agents may reasonably request. Such Loan Party will, from time to time during
regular business hours as requested by either of the Co-Agents upon reasonable
notice and at the sole cost of such Loan Party, permit each of the Co-Agents, or
its agents or representatives (and shall cause each Originator to permit each of
the Co-Agents 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 such
Person relating to the Collateral, including, without limitation, the related
Contracts, and (ii) to visit the offices and properties of such Person for the
purpose of examining such materials described in clause (i) above, and to
discuss matters relating to such Person's financial condition or the Collateral
or any Person's performance under any of the Transaction Documents or any
Person's performance under the Contracts and, in each case, with any of the
officers or employees of Borrower or the Servicer having knowledge of such
matters (each of the foregoing examinations and visits, a "REVIEW"); PROVIDED,
HOWEVER, that, so long as no Amortization Event has occurred and is continuing,
(A) the Loan Parties shall only be responsible for the costs and expenses of one
(1) Review in any one calendar year, and (B) the Co-Agents will not request more
than four (4) Reviews in any one calendar year.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause each 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 Servicer will (and will cause each Originator to) give the Agents notice of any material change in the administrative and operating procedures referred to in the previous sentence.
(ii) Such Loan Party will (and will cause each Originator to):
(A) on or prior to the date hereof, mark its master data processing records
and other books and records relating to the Loans with a legend, acceptable
to the Agents, describing the Administrative Agent's security interest in
the Collateral and (B) upon the request of the Agents following the
occurrence of an Amortization Event: (x) mark each Contract with a legend
describing the Administrative Agent's security interest and (y) deliver to
the Administrative Agent all Contracts (including, without limitation, all
multiple originals of any such Contract constituting an instrument, a
certificated security or chattel paper) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such Loan Party will (and will cause each Originator to) 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, and (ii) comply in all respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.
(g) Maintenance and Enforcement of Receivables Sale Agreement and Performance Undertaking. Borrower will maintain the effectiveness of, and continue to perform under the Receivables Sale Agreement and the Performance Undertaking, such that it does not amend, restate, supplement, cancel, terminate or otherwise modify the Receivables Sale Agreement or the Performance Undertaking, or give any consent, waiver, directive or approval thereunder or waive any default, action, omission or breach under the Receivables Sale Agreement or the Performance Undertaking or otherwise grant any indulgence thereunder, without (in each case) the prior written consent of the Administrative Agent. Borrower will, and will require each Originator to, perform each of their respective obligations and undertakings under and pursuant to the Receivables Sale Agreement, will purchase Receivables thereunder in strict compliance with the terms thereof and will vigorously enforce the rights and remedies accorded to Borrower under the Receivables Sale Agreement. Borrower will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agents and the Lenders as assignees of Borrower) under the Receivables Sale Agreement as any of the Agents 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 Receivables Sale Agreement.
(h) Ownership. Borrower will (or will cause each Originator to) take all necessary action to (i) vest legal and equitable title to the Collateral purchased under the Receivables Sale Agreement irrevocably in Borrower, free and clear of any Adverse Claims (other than Adverse Claims in favor of the Administrative Agent, for the benefit of the Secured Parties) 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 Borrower's interest in such Collateral and such other action to perfect, protect or more fully evidence the interest of Borrower therein as any of the Agents may reasonably request), and (ii) establish and maintain, in favor of the Administrative Agent, for the benefit of the Secured Parties, a valid and perfected first priority security interest in all Collateral, free and clear of any Adverse Claims, 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 the Administrative Agent's (for the benefit of the Secured Parties) security interest in the Collateral and such other action to perfect, protect or more fully evidence the interest of the Administrative Agent for the benefit of the Secured Parties as any of the Agents may reasonably request.
(i) Lenders' Reliance. Borrower acknowledges that the Agents and the Lenders are entering into the transactions contemplated by this Agreement in reliance upon Borrower's identity as a legal entity that is separate from each Originator. Therefore, from and after the date of execution and delivery of this Agreement, Borrower shall take all reasonable steps, including, without limitation, all steps that any Agent or any Lender may from time to time reasonably request, to maintain Borrower's identity as a separate legal entity and to make it
manifest to third parties that Borrower is an entity with assets and liabilities distinct from those of each Originator and any Affiliates thereof (other than Borrower) and not just a division of any Originator or any such Affiliate. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, Borrower will:
(i) maintain books, financial records and bank accounts in a manner so that it will not be difficult or costly to segregate, ascertain and otherwise identify the assets and liabilities of Borrower;
(ii) not commingle any of its assets, funds, liabilities or business functions with the assets, funds, liabilities or business functions of any other person or entity except for payments that may be received in any Lock-Box prior to 30 days after the date of this Agreement;
(iii) observe all appropriate corporation procedures and formalities;
(iv) pay its own liabilities, losses and expenses only out of its own funds;
(v) maintain separate annual and quarterly financial statements prepared in accordance with generally accepted accounting principles, consistently applied, showing its assets and liabilities separate and distinct from those of any other person or entity;
(vi) pay or bear the cost (or if such statements are consolidated, the pro-rata cost) of the preparation of its financial statements, and have such financial statements audited by a certified public accounting firm that is not affiliated with Borrower or its Affiliates;
(vii) not guarantee or become obligated for the debts or obligations of any other entity or person;
(viii) not hold out its credit as being available to satisfy the debts or obligations of any other person or entity;
(ix) hold itself out as an entity separate and distinct from any other person or entity (including its Affiliates);
(x) correct any known misunderstanding regarding its separate identity;
(xi) use separate stationery, business cards, purchase orders, invoices, checks and the like bearing its own name;
(xii) compensate all consultants, independent contractors and agents from its own funds for services provided to it by such consultants, independent contractors and agents;
(xiii) to the extent that Borrower and any of its Affiliates occupy any premises in the same location, allocate fairly, appropriately and nonarbitrarily any rent and overhead expenses among and between such entities with the result that each entity bears its fair share of all such rent and expenses;
(xiv) to the extent that Borrower and any of its Affiliates share the same officers, allocate fairly, appropriately and nonarbitrarily any salaries and expenses related to providing benefits to such officers between or among such entities, with the result that each such entity will bear its fair share of the salary and benefit costs associated with all such common or shared officers;
(xv) to the extent that Borrower and any of its Affiliates jointly contract or do business with vendors or service providers or share overhead expenses, allocate fairly, appropriately and nonarbitrarily any costs and expenses incurred in so doing between or among such entities, with the result that each such entity bears its fair share of all such costs and expenses;
(xvi) to the extent Borrower contracts or does business with vendors or service providers where the goods or services are wholly or partially for the benefit of its Affiliates, allocate fairly, appropriately and nonarbitrarily any costs incurred in so doing to the entity for whose benefit such goods or services are provided, with the result that each such entity bears its fair share of all such costs;
(xvii) not make any loans to any person or entity (other than such intercompany loans between Borrower and each Originator contemplated by this Agreement) or buy or hold any indebtedness issued by any other person or entity (except for cash and investment-grade securities);
(xviii) conduct its own business in its own name;
(xix) hold all of its assets in its own name;
(xx) maintain an arm's-length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis;
(xxi) not pledge its assets for the benefit of any other Person;
(xxii) not identify itself as a division or department of any other entity;
(xxiii) maintain adequate capital in light of its contemplated business operations and in no event less than the Required Capital Amount (as defined in the Receivables Sale Agreement) and refrain from making any dividend, distribution, redemption of capital stock or payment of any subordinated indebtedness which would cause the Required Capital Amount to cease to be so maintained;
(xxiv) conduct transactions between Borrower and third parties in the name of Borrower and as an entity separate and independent from each of its Affiliates;
(xxv) cause representatives and agents of Borrower to hold themselves out to third parties as being representatives or agents, as the case may be, of Borrower;
(xxvi) cause transactions and agreements between Borrower, on the one hand, and any one or more of its Affiliates, on the other hand (including transactions and agreements pursuant to which the assets or property of one is used or to be used by the other), to be entered into in the names of the entities that are parties to the transaction or agreement, to be formally documented in writing and to be approved in advance by the Board (including the affirmative vote of the Independent Director);
(xxvii) cause the pricing and other material terms of all such transactions and agreements to be established at the inception of the particular transaction or agreement on commercially reasonable terms (substantially similar to the terms that would have been established in a transaction between unrelated third parties) by written agreement (by formula or otherwise);
(xxviii) not acquire or assume the obligations or acquire the securities of its Affiliates or owners, including partners of its Affiliates, provided, however, that notwithstanding the foregoing, Borrower is authorized to engage in and consummate each of the transactions contemplated by each Transaction Document and Borrower is authorized to perform its obligations under each Transaction Document;
(xxix) maintain its corporate charter in conformity with this Agreement, such that it does not amend, restate, supplement or otherwise modify 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 7.1(i) of this Agreement;
(xxx) maintain its corporate separateness such that it does 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, nor at any time create, have, acquire, maintain or hold any interest in any Subsidiary; and
(xxxi) take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by King & Spalding, as counsel for Borrower, in connection with the closing or initial Advance 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.
(j) Collections. Such Loan Party will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and Collection Account to be subject at all times to a Collection Account Agreement that is in full force and effect; PROVIDED, HOWEVER, that the Collection Account at Wachovia need not be subject to a Collection Account Agreement until December 9, 2005. In the event any payments relating to the Collateral are remitted directly to Borrower or any Affiliate of
Borrower, Borrower will remit (or will cause all such payments to be remitted)
directly to a Collection Bank and deposited into a Collection Account within two
(2) Business Days following receipt thereof, and, at all times prior to such
remittance, Borrower will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Agents and the
Lenders. Borrower will maintain exclusive ownership, dominion and control
(subject to the terms of this Agreement) of each Lock-Box and Collection Account
and shall not grant the right to take dominion and control of any Lock-Box or
Collection Account at a future time or upon the occurrence of a future event to
any Person, except to the Administrative Agent or the TPF Agent as contemplated
by this Agreement and except for access granted to Servicer prior to delivery of
Collection Notices.
(k) Taxes. Such Loan Party will file all tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing, except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. Borrower will pay when due any and all present and future stamp, documentary, and other similar taxes and governmental charges payable in connection with the Receivables, and hold each of the Indemnified Parties harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes and governmental charges.
(l) Payment to Applicable Originator. With respect to any Receivable purchased by Borrower from any Originator, such sale shall be effected under, and in strict compliance with the terms of, the Receivables Sale Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to such Originator in respect of the purchase price for such Receivable.
Section 7.2 Negative Covenants of the Loan Parties. Until the Final Payout Date, each Loan Party hereby covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Loan Party will not change
its name, identity or structure (within the meaning of any applicable enactment
of the UCC), relocate its chief executive office at any time while the location
of its chief executive office is relevant to perfection of the Administrative
Agent's security interest, for the benefit of the Secured Parties, in the
Receivables, Related Security and Collections, or change any office where
Records are kept unless it shall have: (i) given the Agents at least forty-five
(45) days' prior written notice thereof and (ii) delivered to the Administrative
Agent all financing statements, instruments and other documents requested by any
Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be required by the Administrative Agent pursuant to Section 8.2(b), such Loan Party will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection Account, unless the Administrative Agent shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box; PROVIDED, HOWEVER, that the Servicer may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. Such Loan Party will not, and will not permit any Originator to, make any change to the Credit and Collection Policy that could adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables. Except as provided in Section 8.2(d), the Servicer will not, and will not permit any Originator to, 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. Borrower will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any of the Collateral, or assign any right to receive income with respect thereto (other than, in each case, the creation of a security interest therein in favor of the Administrative Agent as provided for herein), and Borrower will defend the right, title and interest of the Secured Parties in, to and under any of the foregoing property, against all claims of third parties claiming through or under Borrower or any Originator.
(e) Use of Proceeds. Borrower will not use the proceeds of the Advances for any purpose other than (i) paying for Receivables and Related Security under and in accordance with the Receivables Sale Agreement, including without limitation, making payments on the Subordinated Notes to the extent permitted thereunder and under the Receivables Sale Agreement, (ii) making demand loans to the Parent or the Originators at any time prior to the Facility Termination Date while no Amortization Event or Unmatured Amortization Event exists and is continuing, (iii) paying its ordinary and necessary operating expenses when and as due, and (iv) making Restricted Junior Payments to the extent permitted under this Agreement.
(f) Termination Date Determination. Borrower will not designate the Termination Date, or send any written notice to any Originator in respect thereof, without the prior written consent of the Administrative Agent, except with respect to the occurrence of a Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
(g) Restricted Junior Payments. Borrower will not make any Restricted Junior Payment if after giving effect thereto, Borrower's Net Worth (as defined in the Receivables Sale Agreement) would be less than the Required Capital Amount (as defined in the Receivables Sale Agreement).
(h) Borrower Debt. Borrower will not incur or permit to exist any Debt or liability on account of deposits except: (i) the Obligations, (ii) the Subordinated Loans, and (iii) other current accounts payable arising in the ordinary course of business and not overdue.
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 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 8.1. Converting is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms of this Agreement. After the occurrence of an Amortization Event, the Co-Agents may at any time designate as Servicer any Person to succeed Converting or any successor Servicer PROVIDED THAT the Rating Agency Condition is satisfied.
(b) Without the prior written consent of the Agents and the Required Liquidity Banks, Converting shall not be permitted to delegate any of its duties or responsibilities as Servicer to any Person other than Shared Services, LLC and, with respect to certain Defaulted Receivables, outside collection agencies in accordance with its customary practices. Notwithstanding the foregoing, so long as Converting remains the Servicer hereunder: (i) Converting shall be and remain liable to the Agents and the Lenders for the full and prompt performance of all duties and responsibilities of the Servicer hereunder and (ii) the Agents and the Lenders shall be entitled to deal exclusively with Converting in matters relating to the discharge by the Servicer of its duties and responsibilities hereunder.
Section 8.2 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 will instruct all Obligors to pay all Collections directly to a Lock-Box or Collection Account. The Servicer shall effect a Collection Account Agreement substantially in the form of Exhibit VIII to the Receivables Sale Agreement with each bank party to a Collection Account at any time; PROVIDED, HOWEVER, that the Collection Account at Wachovia need not be subject to a Collection Account Agreement until December 9, 2005. In the case of any remittances received in any Lock-Box or 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 Servicer shall promptly remit such items to the Person identified to it as being the owner of such remittances. From and after the date the Administrative Agent delivers to any Collection Bank a Collection Notice pursuant to Section 8.3, any Agent may request that the Servicer, and the Servicer thereupon promptly shall instruct all Obligors with respect to the Receivables, to remit all payments thereon to a new depositary account specified by the Administrative Agent and, at all times thereafter, Borrower and the Servicer shall not deposit or otherwise credit, and shall not permit any other Person to deposit or otherwise credit to such new depositary account any cash or payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance with the procedures described herein and in Article II. The Servicer shall set aside and hold in trust for the account of Borrower and the Lenders their respective shares of the Collections in accordance with Article II. The Servicer shall, upon the request of any Agent, segregate, in a manner acceptable to the Agents, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of the Servicer or Borrower prior to the remittance thereof in accordance with Article II. 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 Administrative Agent such allocable share of Collections of Receivables set aside for the Lenders on the first Business Day following receipt by the Servicer of such Collections, duly endorsed or with duly executed instruments of transfer.
(d) 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 determines to be appropriate to maximize Collections thereof; PROVIDED, however, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable or Defaulted Receivable or limit the rights of the Agents or the Lenders under this Agreement. Notwithstanding anything to the contrary contained herein, from and after the occurrence of an Amortization Event, the Administrative 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.
(e) The Servicer shall hold in trust for Borrower and the Lenders all Records that (i) evidence or relate to the Receivables, the related Contracts and Related Security or (ii) are otherwise necessary or desirable to collect the Receivables and shall, as soon as practicable upon demand of the Administrative Agent following the occurrence of an Amortization Event, deliver or make available to the Administrative Agent all such Records, at a place selected by the Administrative Agent. The Servicer shall, as soon as practicable following receipt thereof turn over to Borrower any cash collections or other cash proceeds received with respect to Debt not constituting Receivables or proceeds of Collateral. The Servicer shall, from time to time at the request of any Lender, furnish to the Lenders (promptly after any such request) a calculation of the amounts set aside for the Lenders pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed by it to Originator or Borrower shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by a Co-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 8.3 Collection Notices. The Administrative Agent and, if applicable, the TPF Agent are authorized at any time after the occurrence of an Amortization Event to date and to deliver to the Collection Banks the Collection Notices. Borrower hereby transfers to the Administrative Agent and, if applicable, the TPF Agent for the benefit of the Agents and the Lenders, effective when the Administrative Agent or, if applicable, the TPF Agent delivers such notice, the exclusive ownership and control of each Lock-Box and the Collection Accounts. In case any authorized signatory of Borrower 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. Borrower hereby authorizes the Administrative Agent, and agrees that the Administrative Agent shall be entitled (i) at any time after delivery of the Collection Notices, to endorse Borrower's name on checks and other instruments representing Collections, (ii) at any time after the occurrence of an Amortization Event, to enforce the Receivables, the related Contracts and the Related Security, and (iii) at any time after the occurrence of an Amortization Event, to 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 Administrative Agent rather than Borrower.
Section 8.4 Responsibilities of Borrower. Anything herein to the contrary notwithstanding, the exercise by the Administrative Agent on behalf of the Co-Agents and the Lenders of their rights hereunder shall not release the Servicer, any Originator or Borrower from any of their duties or obligations with respect to any Receivables or under the related Contracts. The Lenders 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 Borrower. Moreover, the ultimate responsibility for the servicing of the Receivables shall be borne by Borrower.
Section 8.5 Monthly Reports. The Servicer shall prepare and forward to the Agents (i) on each Monthly Reporting Date, a Monthly Report and an electronic file of the data contained therein and (ii) at such times as the Co-Agents shall reasonably request, a listing by Obligor of all Receivables together with an aging of such Receivables.
Section 8.6 Servicing Fee. As compensation for the Servicer's servicing activities on their behalf, Borrower shall pay the Servicer the Servicing Fee, which fee shall be paid from Collections in arrears on each Settlement Date.
ARTICLE IX.
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of the following events shall constitute an Amortization Event:
(a) Any Loan Party or Performance Guarantor shall fail to make any payment or deposit required to be made by it under the Transaction Documents when due and, for any such payment or deposit which is not in respect of principal, such failure continues for 3 consecutive Business Days.
(b) Any representation, warranty, certification or statement made by Performance Guarantor or any Loan Party in any Transaction Document to which it is a party or in any other document delivered pursuant thereto shall prove to have been materially incorrect when made or deemed made; PROVIDED that the materiality threshold in the preceding clause shall not be applicable with respect to any representation or warranty that itself contains a materiality threshold.
(c) Any Loan Party shall fail to perform or observe any covenant contained in Section 7.2 or 8.5 when due.
(d) Any Loan Party or Performance Guarantor shall fail to perform or observe any other covenant or agreement under any Transaction Documents and such failure shall remain unremedied for 30 days after the earlier of (i) an Executive Officer of any of such Persons obtaining knowledge thereof, or (ii) written notice thereof shall have been given to any Loan Party or Performance Guarantor by any of the Agents or any Lender.
(e) Failure of Borrower to pay any Debt (other than the Obligations) when due or the default by Borrower in the performance of any term, provision or condition contained in any agreement under which any such Debt was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Debt to cause, such Debt to become due prior to its stated maturity; or any such Debt of Borrower shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof.
(f) Failure of Performance Guarantor or the Servicer or any of their respective Subsidiaries other than Borrower to pay Debt in excess of $10,000,000 in aggregate principal amount (hereinafter, "MATERIAL DEBT") when due; or the default by Performance Guarantor or any of its Subsidiaries other than Borrower in the performance of any term, provision or condition contained in any agreement under which any Material Debt was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Material Debt to cause, such Material Debt to become due prior to its stated maturity; or any Material Debt of Performance Guarantor, the Servicer or any of their respective Subsidiaries other than Borrower shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof.
(g) An Event of Bankruptcy shall occur with respect to Performance Guarantor or any Loan Party.
(h) As at the end of any Calculation Period:
(i) the three-month rolling average Delinquency Ratio shall exceed 5.75%,
(ii) the three-month rolling average Default Ratio shall exceed 3.00%, or
(iii) the three-month rolling average Dilution Ratio shall exceed 4.50%.
(i) A Change of Control shall occur.
(j) (i) One or more final judgments for the payment of money in an aggregate amount of $10,750 or more shall be entered against Borrower or (ii) one or more final judgments for the payment of money in an amount in excess of $10,000,000, individually or in the aggregate, shall be entered against Performance Guarantor or any of its Subsidiaries (other than Borrower on claims not covered by insurance or as to which the insurance carrier has denied its responsibility, and such judgment shall continue unsatisfied and in effect for thirty (30) consecutive days without a stay of execution.
(k) The "TERMINATION DATE" shall occur under the Receivables Sale Agreement as to any Material Originator or any Material Originator shall for any reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be incapable of transferring Receivables to Borrower under the Receivables Sale Agreement.
(l) This Agreement shall terminate in whole or in part (except in accordance with its terms), or shall cease to be effective or to be the legally valid, binding and enforceable obligation of Borrower, or any Obligor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability, or the Administrative Agent for the benefit of the Lenders shall cease to have a valid and perfected first priority security interest in the Collateral.
(m) On any Settlement Date, after giving effect to payments made under
Section 1.4(b) on such date and the turnover of Collections by the Servicer on
such date and the application thereof to the Obligations in accordance with this
Agreement, the Aggregate Principal shall exceed the Borrowing Limit.
(n) The Performance Undertaking shall cease to be effective or to be the legally valid, binding and enforceable obligation of Performance Guarantor, or Performance Guarantor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability of its obligations thereunder.
(o) The Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Tax Code with regard to any of the Collateral and such lien shall not have been released within fifteen (15) days, or the PBGC shall, or shall indicate its intention to, file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the Collateral.
(p) Any Plan of Performance Guarantor or any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum
funding standard required by applicable law, the terms of such Plan,
Section 412 of the Tax Code or Section 302 of ERISA for any plan year or a
waiver of such standard is sought or granted with respect to such Plan
under applicable law, the terms of such Plan or Section 412 of the Tax Code
or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of termination proceedings under applicable law or the terms of such Plan; or
(iii) shall require Performance Guarantor or any of its ERISA Affiliates to provide security under applicable law, the terms of such Plan, Section 401 or 412 of the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to Performance Guarantor or any of its ERISA Affiliates under applicable law, the terms of such Plan, or Title IV ERISA,
and there shall result from any such failure, waiver, termination or other event a liability to the PBGC or a Plan that would have a Material Adverse Effect.
(q) Any event shall occur which (i) materially and adversely impairs the ability of the Originators to originate Receivables of a credit quality that is at least equal to the credit quality of the Receivables sold or contributed to Borrower on the date of this Agreement or (ii) has, or would be reasonably expected to have, a Material Adverse Effect.
(r) Except as otherwise permitted in Section 7.1(j), any Collection Account fails to be subject to a Collection Account Agreement at any time.
Section 9.2 Remedies. Upon the occurrence and during the continuation of an Amortization Event, the Administrative Agent may, or upon the direction of any of the Co-Agents or the Required Liquidity Banks shall, take any of the following actions: (i) replace the Person then acting as Servicer if the Administrative Agent has not already done so, (ii) declare the Amortization Date to have occurred, whereupon the Aggregate Commitment shall immediately terminate and the Amortization Date shall forthwith occur, all without demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party; PROVIDED, HOWEVER, that upon the occurrence of an Event of Bankruptcy with respect to any Loan Party, the Amortization Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by each Loan Party, (iii) deliver the Collection Notices to the Collection Banks, (iv) exercise all rights and remedies of a secured party upon default under the UCC and other applicable laws, and (v) notify Obligors of the Administrative Agent's security interest in the Receivables and other Collateral. The aforementioned rights and remedies shall be without limitation, and shall be in addition to all other rights and remedies of the Agents and the Lenders otherwise available under any other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative.
ARTICLE X.
INDEMNIFICATION
Section 10.1 Indemnities by the Loan Parties. Without limiting any other
rights that the Administrative Agent or any Lender may have hereunder or under
applicable law, (A) Borrower hereby agrees to indemnify (and pay upon demand to)
each of the Agents, each of the Conduits, each of the Liquidity Banks and each
of the respective assigns, officers, directors, agents and employees of the
foregoing (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 actually incurred (which attorneys
may be employees of the Administrative Agent or such Lender) and disbursements
(all of the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS")
awarded against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Lender of an
interest in the Receivables, and (B) the Servicer hereby agrees to indemnify
(and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded
against or incurred by any of them arising out of the Servicer's activities as
Servicer hereunder EXCLUDING, HOWEVER, in all of the foregoing instances under
the preceding clauses (A) and (B):
(a) Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or
(c) taxes imposed on or measured by such Indemnified Party's net income, and franchise taxes and branch profit taxes imposed on it, by the jurisdiction under the laws of which such Indemnified Party is organized or any political subdivision thereof, and taxes imposed on or measured by such Indemnified Party's net income, and franchise taxes and branch profit taxes imposed on it, by the jurisdiction in which such Indemnified Party's principal executive office is located or any political subdivision thereof;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the liability of any Loan Party or limit the recourse of the Lenders to any Loan Party for amounts otherwise specifically provided to be paid by such Loan Party under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, Borrower shall indemnify the Agents and the Lenders for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to such Loan Party) relating to or resulting from:
(i) any representation or warranty made by any Loan Party or any Originator (or any officers of any such Person) under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by any such Person pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made;
(ii) the failure by Borrower, the Servicer or any Originator to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of any Originator to keep or perform any of its obligations, express or implied, with respect to any Contract;
(iii) any failure of Borrower, the Servicer or any Originator to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit, or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than a defense related to the financial condition, or discharge in bankruptcy, of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the
merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time with other funds;
(vii) any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of any Advance, the Collateral or any other investigation, litigation or proceeding relating to Borrower, the Servicer or any Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in respect of any Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event;
(x) any failure of Borrower to acquire and maintain legal and equitable title to, and ownership of any of the Collateral from the applicable Originator, free and clear of any Adverse Claim (other than as created hereunder); or any failure of Borrower to give reasonably equivalent value to any Originator under the Receivables Sale Agreement in consideration of the transfer by such Originator of any Receivable, or any attempt by any Person to void such transfer under statutory provisions or common law or equitable action;
(xi) any failure to vest and maintain vested in the Administrative Agent for the benefit of the Lenders, or to transfer to the Administrative Agent for the benefit of the Secured Parties, a valid first priority perfected security interests in the Collateral, free and clear of any Adverse Claim (except as created by the Transaction Documents);
(xii) the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Collateral, and the proceeds thereof, whether at the time of any Advance or at any subsequent time;
(xiii) any action or omission by any Loan Party which reduces or impairs the rights of the Administrative Agent or the Lenders with respect to any Collateral or the value of any Collateral;
(xiv) any attempt by any Person to void any Advance or the Administrative Agent's security interest in the Collateral under statutory provisions or common law or equitable action; and
(xv) the failure of any Receivable included in the calculation of the Net Pool Balance as an Eligible Receivable to be an Eligible Receivable at the time so included.
Notwithstanding the foregoing, (A) the foregoing indemnification is not intended to, and shall not, constitute a guarantee of the collectibility or payment of the Receivables; and (B) nothing in
this Section 10.1 shall require Borrower to indemnify the Indemnified Parties for Receivables which are not collected, not paid or otherwise uncollectible on account of the insolvency, bankruptcy, credit-worthiness or financial inability to pay of the applicable Obligor.
Section 10.2 Increased Cost and Reduced Return. If after the date hereof,
any Funding Source shall be charged any fee, expense or increased cost on
account of any Regulatory Change (i) that 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 taxes excluded by
Section 10.1) or (ii) that 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) that
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 applicable Co-Agent,
Borrower shall pay to such Co-Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction.
Section 10.3 Other Costs and Expenses. Subject to Section 7.1(d), Borrower shall pay to the Agents and the Conduits on demand all costs and out-of-pocket expenses in connection with the preparation, execution, delivery and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder, including without limitation, the reasonable fees and out-of-pocket expenses of legal counsel for the Agents and the Conduits (which such counsel may be employees of the Agents or the Conduits) with respect thereto and with respect to advising the Agents and the Conduits as to their respective rights and remedies under this Agreement. Borrower shall pay to the Agents on demand any and all costs and expenses of the Agents and the Lenders, 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 an Amortization Event.
ARTICLE XI.
THE AGENTS
Section 11.1 Authorization and Action.
(a) Each member of the Blue Ridge Group hereby irrevocably designates and appoints Wachovia Bank, National Association as Blue Ridge Agent hereunder and under the other Transaction Documents to which the Blue Ridge Agent is a party and authorizes the Blue
Ridge Agent to take such action on its behalf under the provisions of the Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Blue Ridge Agent by the terms of the Transaction Documents, together with such other powers as are reasonably incidental thereto. Each member of the TPF Group hereby irrevocably designates and appoints SunTrust as TPF Agent hereunder and under the other Transaction Documents to which the TPF Agent is a party, and authorizes the TPF Agent to take such action on its behalf under the provisions of the Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the TPF Agent by the terms of the Transaction Documents, together with such other powers as are reasonably incidental thereto. Each member of any other Group that becomes a party to this Agreement after the date hereof shall designate and appoint an agent and authorize such agent to take such action on its behalf under the provision of the Transaction Documents, and to exercise such powers and perform such duties as are expressly delegated to such agent by the terms of the Transaction Documents, together with such other powers as are reasonably incidental thereto. Each of the Lenders and the Co-Agents hereby irrevocably designates and appoints Wachovia Bank, National Association as Administrative Agent hereunder and under the Transaction Documents to which the Administrative Agent is a party, and each Lender and Co-Agent that becomes a party to this Agreement hereafter ratifies such designation and appointment and authorizes the Administrative Agent to take such action on its behalf under the provisions of the Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of the Transaction Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, none of the Agents shall have any duties or responsibilities, except those expressly set forth in the Transaction Documents to which it is a party, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of such Agent shall be read into any Transaction Document or otherwise exist against such Agent.
(b) The provisions of this Article XI are solely for the benefit of the Agents and the Lenders, and none of the Loan Parties shall have any rights as a third-party beneficiary or otherwise under any of the provisions of this Article XI, except that this Article XI shall not affect any obligations which any of the Agents or Lenders may have to any of the Loan Parties under the other provisions of this Agreement.
(c) In performing its functions and duties hereunder, (i) the Blue
Ridge Agent shall act solely as the agent of the members of the Blue Ridge Group
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any of the Loan Parties or any of
their respective successors and assigns, (ii) the TPF Agent shall act solely as
the agent of the members of the TPF Group and does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with or
for any of the Loan Parties or any of their respective successors and assigns,
(iii) the agent for the member of any Group that becomes a party hereto after
the date hereof shall act solely as the agent of the members of such Group and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any of the Loan Parties or their
respective successors or assigns, and (iv) the Administrative Agent shall act
solely as the agent of the Secured Parties and does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with or
for any of the Loan Parties or any of their respective successors and assigns.
Section 11.2 Delegation of Duties. Each of the Agents may execute any of its duties under the Liquidity Agreement and each 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. None of the Agents shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. None of the Agents 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 Lenders or other Agents for any recitals, statements, representations or warranties made by any Loan Party 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 any Loan Party to perform its obligations hereunder or thereunder, or for the satisfaction of any condition specified in Article VI, or for the perfection, priority, condition, value or sufficiency of any collateral pledged in connection herewith. None of the Agents shall be under any obligation to any other Agent or any Lender 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 Loan Parties. None of the Agents shall be deemed to have knowledge of any Amortization Event or Unmatured Amortization Event unless such Agent has received notice from Borrower, another Agent or a Lender.
Section 11.4 Reliance by Agents.
(a) Each of the Agents 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 Borrower), independent accountants and other experts selected by such Agent. Each of the Agents 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 such of the Lenders or Liquidity Banks in its Group as it deems appropriate and it shall first be indemnified to its satisfaction by the Liquidity Banks in its Group against any and all liability, cost and expense which may be incurred by it by reason of taking or continuing to take any such action, PROVIDED THAT unless and until an Agent shall have received such advice, such Agent may take or refrain from taking any action, as the Agent shall deem advisable and in the best interests of the Lenders.
(b) The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of the Co-Agents or the Required Liquidity Banks or all of the Lenders, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.
(c) Any action taken by any of the Agents in accordance with Section 11.4 shall be binding upon all of the Agents and the Lenders.
Section 11.5 Non-Reliance on Other Agents and Other Lenders. Each Lender expressly acknowledges that none of the Agents, 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 any Agent hereafter taken, including, without limitation, any review of the affairs of any Loan Party, shall be deemed to constitute any representation or warranty by such Agent. Each Lender represents and warrants to each Agent that it has and will, independently and without reliance upon any Agent or any other Lender 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 Borrower and made its own decision to enter into the Liquidity Agreement, the Transaction Documents and all other documents related thereto.
Section 11.6 Reimbursement and Indemnification. Each Liquidity Banks agree to reimburse and indemnify (a) its applicable Co-Agent, (b) the Administrative Agent and its officers, directors, employees, representatives and agents ratably according to their Pro Rata Shares of their Conduit Group's Percentage of the Obligations, to the extent not paid or reimbursed by the Loan Parties (i) for any amounts for which such Agent, acting in its capacity as Agent, is entitled to reimbursement by the Loan Parties hereunder and (ii) for any other expenses incurred by such Agent, in its capacity as Agent and acting on behalf of the Lenders, in connection with the administration and enforcement of the Liquidity Agreements and the Transaction Documents.
Section 11.7 Agents in their Individual Capacities. Each of the Agents and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with Borrower or any Affiliate of Borrower as though such Agent were not an Agent hereunder. With respect to the making of Loans pursuant to this Agreement, each of the Agents shall have the same rights and powers under the Liquidity Agreements and the Transaction Documents in its individual capacity as any Lender and may exercise the same as though it were not an Agent, and the terms "LIQUIDITY BANK," "LENDER," "LIQUIDITY BANKS" and "LENDERS" shall include each of the Agents in its individual capacity.
Section 11.8 Conflict Waivers. Each Co-Agent acts, or may in the future act: (i) as administrative agent for such Co-Agent's Conduit, (ii) as issuing and paying agent for such Conduit's Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for such Conduit's Commercial Paper and (iv) to provide other services from time to time for such Conduit (collectively, the "CO-AGENT ROLES"). Without limiting the generality of Sections 11.1 and 11.8, each of the other Agents and the Lenders hereby acknowledges and consents to any and all Co-Agent Roles and agrees that in connection with any Co-Agent Role, a Co-Agent 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 its Conduit, the giving of notice to the Liquidity Banks in its Group of a mandatory purchase pursuant to the Liquidity Agreement for such Group, and hereby acknowledges that neither the applicable Co-Agent nor any of its Affiliates has any fiduciary duties hereunder to any Lender (other than its Conduit) arising out of any Co-Agent Roles.
Section 11.9 UCC Filings. Each of the Secured Parties hereby expressly recognizes and agrees that the Administrative Agent may be listed as the assignee or secured party of record on the various UCC filings required to be made under the Transaction Documents in order to perfect their respective interests in the Collateral, that such listing shall be for administrative convenience only in creating a record or nominee holder to take certain actions hereunder on behalf of the Secured Parties and that such listing will not affect in any way the status of the Secured Parties as the true parties in interest with respect to the Collateral. In addition, such listing shall impose no duties on the Administrative Agent other than those expressly and specifically undertaken in accordance with this Article XI.
Section 11.10 Successor Administrative Agent. The Administrative Agent, upon five (5) days' notice to the Loan Parties, the other Agents and the Lenders, may voluntarily resign and may be removed at any time, with or without cause, by the Required Liquidity Lenders; PROVIDED, HOWEVER, that Wachovia shall not voluntarily resign as the Administrative Agent so long as any of the Liquidity Commitments remain in effect or Blue Ridge has any outstanding Loans. If the Administrative Agent (other than Wachovia) shall voluntarily resign or be removed as Agent under this Agreement, then the Required Liquidity Lenders during such five-day period shall appoint, with the consent of Borrower from among the remaining Liquidity Banks, a successor Administrative Agent, whereupon such successor Administrative Agent shall succeed to the rights, powers and duties of the Administrative Agent and the term "Administrative Agent" shall mean such successor agent, effective upon its appointment, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement. Upon resignation or replacement of any Agent in accordance with this Section 11.10, the retiring Administrative Agent shall execute such UCC-3 assignments and amendments, and assignments and amendments of the Liquidity Agreements and the Transaction Documents, as may be necessary to give effect to its replacement by a successor Administrative Agent. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article XI and Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.
ARTICLE XII.
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments.
(a) Each of the Agents, the Loan Parties and the Liquidity Banks hereby agrees and consents to the complete or partial assignment by each Conduit of all or any portion of its rights under, interest in, title to and obligations under this Agreement to the Liquidity Banks in its Group pursuant to its Liquidity Agreement.
(b) Any Liquidity Bank may at any time and from time to time assign to one or more Eligible Assignees (each, a "PURCHASING LIQUIDITY BANK") all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement substantially in the form set forth in Exhibit V hereto (an "ASSIGNMENT AGREEMENT") executed by such Purchasing Liquidity Bank and such selling Liquidity Bank; PROVIDED, HOWEVER, that any assignment of a
Liquidity Bank's rights and obligations hereunder shall include a pro rata
assignment of its rights and obligations under the applicable Liquidity
Agreement. The consent of the applicable Conduit shall be required prior to the
effectiveness of any such assignment by a Liquidity Bank in such Conduit's
Group. Each assignee of a Liquidity Bank must (i) be an Eligible Assignee and
(ii) agree to deliver to the applicable Co-Agent, promptly following any request
therefor by the applicable Co-Agent or the applicable Conduit, an enforceability
opinion in form and substance satisfactory to such Co-Agent and such Conduit.
Upon delivery of an executed Assignment Agreement to the applicable Co-Agent,
such selling Liquidity Bank shall be released from its obligations hereunder and
under the Liquidity Agreement to the extent of such assignment. Thereafter the
Purchasing Liquidity Bank shall for all purposes be a Liquidity Bank party to
this Agreement and the applicable Liquidity Agreement and shall have all the
rights and obligations of a Liquidity Bank hereunder and thereunder to the same
extent as if it were an original party hereto and thereto and no further consent
or action by Borrower, the Lenders or the Agents shall be required.
(c) Each of the Liquidity Banks agrees that in the event that it shall suffer a Downgrading Event, such Downgraded Liquidity Bank shall be obliged, at the request of the applicable Conduit, Co-Agent or Borrower, to (i) collateralize its Commitment and its Liquidity Commitment in a manner acceptable to the applicable Co-Agent, or (ii) assign all of its rights and obligations hereunder and under the Liquidity Agreement to an Eligible Assignee nominated by the applicable Co-Agent or a Loan Party and acceptable to the applicable Conduit and willing to participate in this Agreement and the Liquidity Agreement through the Liquidity Termination Date in the place of such Downgraded Liquidity Bank; PROVIDED THAT the Downgraded Liquidity Bank receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such Liquidity Bank's Pro Rata Share of such Liquidity Bank's Group's Percentage of the Obligations owing to the Liquidity Banks of such Group; PROVIDED FURTHER THAT if either conditions set forth above in clause (i) or (ii) is not met with respect in such Downgraded Liquidity Bank, the Liquidity Termination Date shall not occur if (x) the Groups that do not have a Downgraded Liquidity Bank as a member elect to increase their Conduit Allocation Limit and the related Liquidity Commitments in such amounts that total the then existing Aggregate Commitment, (y) the Aggregate Commitment is reduced by an amount equal to the commitments of the Liquidity Banks in such Downgraded Liquidity Bank's Group, or (z) another Conduit Group agrees to replace such Downgraded Liquidity Bank's Conduit Group on the terms and conditions set forth herein (except for any amendments or modifications as are acceptable to the remaining Conduit Groups, in their sole discretion), in each case, prior to the end of the thirty day period set forth in the definition of "Liquidity Termination Date" and with the consent of the remaining Conduit Groups (which consent shall be in such Conduit Group's sole discretion).
(d) No Loan Party may assign any of its rights or obligations under this Agreement without the prior written consent of each of the Agents and each of the Lenders and without satisfying the Rating Agency Condition, if applicable.
Section 12.2 Participations. Any Liquidity Bank 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 its Group's Percentage of
Aggregate Commitment, its Loans, its Liquidity Commitment or any other interest
of such Liquidity Bank hereunder or under the Liquidity Agreement.
Notwithstanding any such sale by a Liquidity Bank of a participating interest to
a Participant, such Liquidity Bank's rights and obligations under this Agreement
and such Liquidity Agreement shall remain unchanged, such Liquidity Bank shall
remain solely responsible for the performance of its obligations hereunder and
under the Liquidity Agreement, and the Loan Parties, the Conduits and the Agents
shall continue to deal solely and directly with such Liquidity Bank in
connection with such Liquidity Bank's rights and obligations under this
Agreement and the applicable Liquidity Agreement. Each Liquidity Bank agrees
that any agreement between such Liquidity Bank and any such Participant in
respect of such participating interest shall not restrict such Liquidity Bank'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 14.1(b)(i).
ARTICLE XIII.
SECURITY INTEREST
Section 13.1 Grant of Security Interest. To secure the due and punctual payment of the Obligations, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, including, without limitation, all Indemnified Amounts, in each case pro rata according to the respective amounts thereof, Borrower hereby grants to the Administrative Agent, for the benefit of the Secured Parties, a security interest in, all of Borrower's right, title and interest, whether now owned and existing or hereafter arising in and to all of the Receivables, the Related Security, the Collections and all proceeds of the foregoing (collectively, the "COLLATERAL").
Section 13.2 Termination after Final Payout Date. Each of the Secured Parties hereby authorizes the Administrative Agent, and the Administrative Agent hereby agrees, promptly after the Final Payout Date to execute and deliver to Borrower such UCC termination statements as may be necessary to terminate the Administrative Agent's security interest in and Lien upon the Collateral, all at Borrower's expense. Upon the Final Payout Date, all right, title and interest of the Administrative Agent and the other Secured Parties in and to the Collateral shall terminate.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 Waivers and Amendments.
(a) No failure or delay on the part of any Agent or any Lender in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 14.1(b). The Conduits, Borrower and the Administrative Agent, at the
direction of the Required Liquidity Banks, 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 Lender, (A) extend the Liquidity Termination Date or the date of any payment or deposit of Collections by Borrower or the Servicer, (B) reduce the rate or extend the time of payment of Interest or any CP Costs (or any component of Interest or CP Costs), (C) reduce any fee payable to any Agent for the benefit of the Lenders, (D) except pursuant to Article XII hereof, change the amount of the principal of any Lender, any Liquidity Bank's Pro Rata Share or any Liquidity Bank's Commitment, (E) amend, modify or waive any provision of the definition of Required Liquidity Banks or this Section 14.1(b), (F) consent to or permit the assignment or transfer by Borrower of any of its rights and obligations under this Agreement, (G) change the definition of "ELIGIBLE RECEIVABLE," "LOSS RESERVE," "DILUTION RESERVE," "YIELD RESERVE," "SERVICING RESERVE," "SERVICING FEE RATE," "REQUIRED RESERVE" or "REQUIRED RESERVE FACTOR FLOOR" 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 that would circumvent the intention of the restrictions set forth in such clauses; or
(ii) without the written consent of any affected Agent, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of such Agent,
AND ANY MATERIAL AMENDMENT, WAIVER OR OTHER MODIFICATION OF THIS AGREEMENT SHALL
REQUIRE SATISFACTION OF THE RATING AGENCY CONDITION, TO THE EXTENT THE RATING
AGENCY CONDITION IS REQUIRED OF ANY CONDUIT. Notwithstanding the foregoing, (i)
without the consent of the Liquidity Banks, but with the consent of Borrower,
the applicable Co-Agent may direct the Administrative Agent to amend this
Agreement solely to add additional Persons as Liquidity Banks hereunder and (ii)
the Agents, the Required Liquidity Banks and the Conduits may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
Borrower, PROVIDED THAT such amendment has no negative impact upon Borrower. Any
modification or waiver made in accordance with this Section 14.1 shall apply to
each of the Lenders equally and shall be binding upon Borrower, the Lenders and
the Agents.
Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Borrower hereby authorizes the Co-Agents to effect Advances and
Interest Period and Interest Rate
selections based on telephonic notices made by any Person whom the applicable Co-Agent in good faith believes to be acting on behalf of Borrower. Borrower agrees to deliver promptly to the applicable Co-Agent a written confirmation of each telephonic notice signed by an authorized officer of Borrower; PROVIDED, 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 applicable Co-Agent, the records of the applicable Co-Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If (a) any Lender, whether by setoff or otherwise, has payment made to it with respect to any portion of the Obligations owing to such Lender (other than payments received pursuant to Section 10.2 or 10.3) in a greater proportion than that received by any other Lender in such Lender's Group entitled to receive a ratable share of such Obligations, such Lender agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of such Obligations held by the other Lenders in such Lender's Group so that after such purchase each Lender in such Group will hold its Pro Rata Share of such Obligations and (b) any Group, whether by set off or otherwise, has payment made to such Group (other than payments received pursuant to Section 10.2 or 10.3) in a greater proportion than that received by any other Group entitled to receive a ratable share of such Obligations, the Lenders in such Group agree, promptly upon demand, to purchase for cash without recourse or warranty a portion of such Obligations held by the other Groups so that after such purchase each Lender in such Group, taken together, will hold its Group's Percentage of such Obligations; PROVIDED THAT in the case of the preceding clauses (a) and (b), if all or any portion of such excess amount is thereafter recovered from such Lender or Group, as applicable, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.
Section 14.4 Protection of Administrative Agent's Security Interest.
(a) Borrower 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 any of the Agents may request, to perfect, protect or more fully evidence the Administrative Agent's security interest in the Collateral, or to enable the Agents or the Lenders to exercise and enforce their rights and remedies hereunder. At any time after the occurrence of an Amortization Event, the Administrative Agent may, or the Administrative Agent may direct Borrower or the Servicer to, notify the Obligors of Receivables, at Borrower's expense, of the ownership or security interests of the Lenders 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 Administrative Agent or its designee. Borrower or the Servicer (as applicable) shall, at any Lender's request, withhold the identity of such Lender in any such notification.
(b) If any Loan Party fails to perform any of its obligations hereunder, the Administrative Agent or any Lender may (but shall not be required to) perform, or cause performance of, such obligations, and the Administrative Agent's or such Lender's costs and expenses incurred in connection therewith shall be payable by Borrower as provided in Section 10.3. Each Loan Party irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent, and appoints the Administrative Agent as its attorney-in-fact, to act on behalf of such Loan Party (i) to execute on behalf of Borrower as debtor and to file financing statements necessary or desirable in the Administrative Agent's sole discretion to perfect and to maintain the perfection and priority of the interest of the
Lenders 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 Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent's security interest in the Collateral, for the benefit of the Secured Parties. This appointment is coupled with an interest and is irrevocable.
Section 14.5 Confidentiality.
(a) Each Loan Party and each Lender shall maintain and shall cause each of its employees and officers to maintain the confidentiality of the Fee Letter and the other confidential or proprietary information with respect to the Agents and the Conduits and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Loan Party and such Lender and its officers and employees may disclose such information to such Loan Party's and such Lender's external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Loan Party hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Agents, the Conduits or the Liquidity Banks by each other, (ii) by the any of the Agents or the Lenders to any prospective or actual assignee or participant of any of them and (iii) by the Agents to any rating agency, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Conduit or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which Wachovia or SunTrust 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 addition, the Conduits, the Agents and the Lenders 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 14.6 Bankruptcy Petition. Borrower, the Servicer, the Administrative Agent and each Liquidity Bank hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any Conduit, it will not institute against, or join any other Person in instituting against, such Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.
Section 14.7 Limitation of Liability. Except with respect to any claim arising out of the willful misconduct or gross negligence of any Conduit, the Agents or any Liquidity Bank, no claim may be made by any Loan Party or any other Person against any Conduit, the Agents or any Liquidity Bank 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 each Loan Party hereby waives, releases, and agrees not to sue upon any claim for
any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF (EXCEPT IN THE CASE OF THE OTHER TRANSACTION DOCUMENTS, TO THE EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTEREST OF BORROWER OR THE SECURITY INTEREST OF THE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, IN ANY OF THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF GEORGIA.
Section 14.9 CONSENT TO JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR GEORGIA STATE COURT SITTING IN FULTON COUNTY, GEORGIA, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY 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 LENDER TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY LOAN PARTY AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH LOAN PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN FULTON COUNTY, GEORGIA.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY LOAN PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy). This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; PROVIDED, HOWEVER, that the rights and remedies with respect to (i) any breach of any representation and warranty made by any Loan Party pursuant to Article V, (ii) the indemnification and payment provisions of Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any termination of this Agreement.
Section 14.12 Counterparts; Severability; Section References. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise expressly indicated, all references herein to "ARTICLE," "SECTION," "SCHEDULE" or "EXHIBIT" shall mean articles and sections of, and schedules and exhibits to, this Agreement.
Section 14.13 Wachovia Roles. Each of the Liquidity Banks acknowledges that Wachovia acts, or may in the future act: (i) as administrative agent for Blue Ridge or any Liquidity Bank, (ii) as an issuing and paying agent for the Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for the Commercial Paper, and/or (iv) to provide other services from time to time for Blue Ridge or any Liquidity Bank (collectively, the "WACHOVIA ROLES"). Without limiting the generality of this Section 14.13, each Liquidity Bank hereby acknowledges and consents to any and all Wachovia Roles and agrees that in connection with any Wachovia Role, Wachovia may take, or refrain from taking, any action that it, in its discretion, deems appropriate, including, without limitation, in its role as administrative agent for Blue Ridge, and the giving of notice of a mandatory purchase pursuant to the Liquidity Agreements.
<signature pages follow>
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.
ROCK-TENN FINANCIAL, INC., AS BORROWER
By: /s/ Nikolai Mondi
------------------------------------
Name: Nikolai Mondi
Title: Treasurer
Address: 5921 Grassy Creek Blvd.
Winston-Salem,
North Carolina 27105
Attn: Gregory L. King
Phone: (336)661-1700
Fax: (336)661-0584
|
ROCK-TENN CONVERTING COMPANY,
AS SERVICER
By: /s/ Gregory L. King
------------------------------------
Name: Gregory L. King
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 504 Thrasher Street
Norcross, Georgia 30071
Attn: Gregory L. King
Phone: (770)263-4480
Fax: (770)246-4642
|
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA CAPITAL MARKETS, LLC,
ITS ATTORNEY-IN-FACT
By: /s/ Douglas R. Wilson, Sr.
------------------------------------
Name: Douglas R. Wilson, Sr.
Title: Vice President
ADDRESS: Blue Ridge Asset
Funding Corporation
301 S. College St.
FLR TW 16 NC0171
Charlotte, NC 28288
Attn: Douglas R. Wilson, Sr.
Phone: (704)374-2520
Fax: (704)383-9579
|
WITH A COPY TO:
Blue Ridge Asset
Funding Corporation
c/o AMACAR Group, L.L.C.
6525 Morrison Blvd., Suite 318
Charlotte, North Carolina 28211
Attention: Douglas K. Johnson
Phone: (704)365-0569
Fax: (704)365-1362
WACHOVIA BANK, NATIONAL ASSOCIATION,
AS BLUE RIDGE AGENT, A LIQUIDITY BANK
AND AS ADMINISTRATIVE AGENT
By: /s/ Cecil Noble
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Name: Cecil Noble
Title: Vice President
Address: Wachovia Bank,
National Association
171 17th Street, N.W.,
4th Floor
Mail-stop GA4524
Atlanta, Georgia 30363
Attention: Cecil Noble
Phone: (404)214-5449
Fax: (404)214-5481
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THREE PILLARS FUNDING LLC
By: /s/ Doris J. Hearn
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Name: Doris J. Hearn
Title: Vice President
Address: c/o AMACAR Group, L.L.C.
6525 Morrison Boulevard
Suite 319
Charlotte, North Carolina 28211
Attention: Doris J. Hearn
Phone: (704)365-0569
Fax: (704)365-1362
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SUNTRUST CAPITAL MARKETS, INC.,
AS TPF AGENT, AND AS A LIQUIDITY BANK
By: /s/ James R. Bennison
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Name: James R. Bennison
Title: Managing Director
Address: SunTrust Capital Markets, Inc.
24th Floor, MC3950
303 Peachtree Street
Atlanta, Georgia 30308
Attention: Robert Anderson
Phone: (404)588-7607
Fax: (404)230-1344
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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):
"ADJUSTED DILUTION RATIO" means, at any time, the rolling average of the Dilution Ratio for the 12 Calculation Periods then most recently ended.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount of the several Loans made on the same Borrowing Date.
"ADVERSE CLAIM" means a Lien.
"AFFILIATE" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person. A Person shall be deemed to control another Person if (a) the controlling Person owns 10-50% of any class of voting securities of the controlled Person only if it also possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise, or (b) if the controlling Person owns more than 50% of any class of voting securities of the controlled Person.
"AGENTS" has the meaning set forth in the preamble to this Agreement.
"AGGREGATE COMMITMENT" means, on any date of determination, the aggregate amount of the Liquidity Banks' Commitments to make Loans hereunder. As of the date hereof, the Aggregate Commitment is $100,000,000.
"AGGREGATE PRINCIPAL" means, on any date of determination, the aggregate outstanding principal amount of all Advances outstanding on such date.
"AGGREGATE REDUCTION" has the meaning specified in Section 1.3.
"AGREEMENT" means this Amended and Restated Credit and Security Agreement, as it may be amended or modified and in effect from time to time.
"ALTERNATE BASE RATE" means for any day, the rate per annum equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half of one percent (0.50%) above the Federal Funds Rate. For purposes of determining the Alternate Base Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall be effective on the date of each such change.
"ALTERNATE BASE RATE LOAN" means a Loan which bears interest at the Alternate Base Rate or the Default Rate.
"AMORTIZATION DATE" means the earliest to occur of (i) the day on
which any of the conditions precedent set forth in Section 6.2 (other than
Section 6.2(d)(ii)(B)) are not satisfied, (ii) the Business Day immediately
prior to the occurrence of an Event of Bankruptcy with respect to any Loan
Party, (iii) the Business Day specified in a written notice from the
Administrative Agent following the occurrence of any other Amortization Event,
and (iv) the date which is 10 Business Days after the Administrative Agent's
receipt of written notice from Borrower that it wishes to terminate the facility
evidenced by this Agreement.
"AMORTIZATION EVENT" has the meaning specified in Article IX.
"APPLICABLE PERCENTAGE" means the applicable margin set forth in the Parent Credit Agreement, determined in accordance with the table attached as Schedule 1.01(a) thereto.
"ASSIGNMENT AGREEMENT" has the meaning set forth in Section 12.1(b).
"AUTHORIZED OFFICER" means, with respect to any Person, its president, corporate controller, treasurer or chief financial officer.
"BANKRUPTCY CODE" means the Bankruptcy Code of 1978, as amended and in effect from time to time (11 U.S.C. Section 101 et seq.) and any successor statute thereto.
"BLUE RIDGE" has the meaning set forth in the preamble to this Agreement.
"BLUE RIDGE AGENT" has the meaning set forth in the preamble to this Agreement.
"BLUE RIDGE AGENT'S ACCOUNT" means account #200001038492 at Wachovia Bank, National Association, ABA #053000219.
"BLUE RIDGE GROUP" has the meaning set forth in the preamble to this Agreement.
"BLUE RIDGE LIQUIDITY AGREEMENT" means that certain liquidity asset purchase agreement dated as of the date hereof by and among Blue Ridge, the Blue Ridge Liquidity Banks and Wachovia as Blue Ridge Agent and liquidity agent, as the same may be amended, restated and/or otherwise modified from time to time.
"BLUE RIDGE LIQUIDITY BANKS" means Wachovia and its successor and permitted assigns under the Blue Ridge Liquidity Agreement.
"BORROWER" has the meaning set forth in the preamble to this Agreement.
"BORROWING BASE" means, on any date of determination, the Net Pool Balance as of the last day of the period covered by the most recent Monthly Report, MINUS the Required Reserve as of the last day of the period covered by the most recent Monthly Report, and MINUS Deemed Collections that have occurred since the most recent Cut-Off Date to the extent that such Deemed Collections exceed the Dilution Reserve.
"BORROWING DATE" means a Business Day on which an Advance is made hereunder.
"BORROWING LIMIT" has the meaning set forth in Section 1.1(a)(i).
"BORROWING NOTICE" has the meaning set forth in Section 1.2.
"BROKEN FUNDING COSTS" means for any CP Rate Loan or LIBO Rate Loan which: (a) in the case of a CP Rate Loan, has its principal reduced without compliance by Borrower with the notice requirements hereunder, (b) in the case of a CP Rate Loan or a LIBO Rate Loan, does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice, (c) in the case of a CP Rate Loan, is assigned under the Liquidity Agreement, or (d) in the case of a LIBO Rate Loan, is terminated or reduced prior to the last day of its Interest Period, an amount equal to the excess, if any, of (i) the CP Costs or Interest (as applicable) that would have accrued during the remainder of the Interest Periods or the tranche periods for Commercial Paper determined by the Administrative Agent to relate to such Loan (as applicable) subsequent to the date of such reduction, assignment or termination (or in respect of clause (b) above, the date such Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of the principal of such Loan if such reduction, assignment or termination had not occurred or such Reduction Notice had not been delivered, over (ii) the sum of (x) to the extent all or a portion of such principal is allocated to another Loan, the amount of CP Costs or Interest actually accrued during the remainder of such period on such principal for the new Loan, and (y) to the extent such principal is not allocated to another Loan, the income, if any, actually received during the remainder of such period by the holder of such Loan from investing the portion of such principal not so allocated. In the event that the amount referred to in clause (B) exceeds the amount referred to in clause (A), the relevant Lender or Lenders agree to pay to Borrower the amount of such excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
"BUSINESS DAY" means any day on which banks are not authorized or required to close in New York, New York or Atlanta, Georgia, and The Depository Trust Company of New York is open for business, and, if the applicable Business Day relates to any computation or payment to be made with respect to the LIBO Rate, any day on which dealings in dollar deposits are carried on in the London interbank market.
"CALCULATION PERIOD" means each calendar month or portion thereof which elapses during the term of the Agreement. The first Calculation Period shall commence on the date of the initial Advance hereunder and the final Calculation Period shall terminate on the Final Payout Date.
"CANADIAN RECEIVABLE" means a Receivable owing from an Obligor domiciled in, or organized under the laws of, Canada or one of its political subdivisions.
"CHANGE OF CONTROL" has the meaning provided in the Receivables Sale Agreement.
"CO-AGENT" has the meaning set forth in the preamble to this Agreement.
"CO-AGENT ACCOUNT" means the account set up to receive payments for the applicable Group including without limitation, the Blue Ridge Agent's Account and the TPF Agent's Account.
"COLLATERAL" has the meaning set forth in Section 13.1.
"COLLECTION ACCOUNT" has the meaning provided in the Receivables Sale Agreement.
"COLLECTION ACCOUNT AGREEMENT" has the meaning provided in the Receivables Sale Agreement.
"COLLECTION BANK" means, at any time, any of the banks holding one or more Collection Accounts.
"COLLECTION NOTICE" means a notice from the Administrative Agent to a Collection Bank in the form attached to each Collection Account Agreement.
"COLLECTIONS" has the meaning provided in the Receivables Sale Agreement.
"COMMERCIAL PAPER" means promissory notes of any Conduit issued by such Conduit, in each case, in the commercial paper market.
"COMMITMENT" means, for each Liquidity Bank, the commitment of such Liquidity Bank to make its Pro Rata Share of its Group's Percentage of Loans to Borrower hereunder in the event the applicable Conduit elects not to fund any Advance in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Liquidity Bank's name on Schedule A to this Agreement.
"CONDUIT" has the meaning set forth in the preamble to this Agreement.
"CONDUIT ALLOCATION LIMIT" has the meaning set forth in Section 1.1(a).
"CONDUIT GROUP" has the meaning set forth in the preamble to this Agreement.
"CONTINGENT OBLIGATION" of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or application for a letter of credit.
"CONTRACT" has the meaning provided in the Receivables Sale Agreement.
"CONTRACTUAL DILUTION AMOUNT" means, as of any Cut-Off Date, the product of (i) 1.25 and (ii) the highest aggregate amount of cash discounts granted in any calendar month during the previous twelve completed calendar months.
"CP COSTS" means, (A) for TPF, for each day, the sum of (i) discount or interest accrued on its Related Commercial Paper at the TPF Commercial Paper Rate on such day, plus (ii) any and all accrued commissions and fees of placement agents, dealers and issuing and
paying agents incurred in respect of such Related Commercial Paper for such day; and (B) for Blue Ridge, for each day, the sum of (i) discount or interest accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions in respect of placement agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day from investment of collections received under all receivable purchase facilities funded substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of Broken Funding Costs related to the prepayment of any Loan of Blue Ridge pursuant to the terms of any receivable purchase facilities funded substantially with Pooled Commercial Paper. In addition to the foregoing costs, if Borrower shall request any Advance during any period of time determined by the Blue Ridge Agent in its sole discretion to result in incrementally higher CP Costs applicable to Blue Ridge's Percentage of such Advance, the principal associated with any such Advance shall, during such period, be deemed to be funded by Blue Ridge in a special pool (which may include capital associated with other receivable purchase or financing facilities) for purposes of determining such additional CP Costs applicable only to such special pool and charged each day during such period against such principal.
"CP RATE LOAN" means, for each Loan of a Conduit prior to the time, if any, when (i) it is refinanced with a Liquidity Funding pursuant to the Liquidity Agreement, or (ii) the occurrence of an Amortization Event and the commencement of the accrual of Interest thereon at the Default Rate.
"CP TRANCHE PERIOD" means with respect to any Loan of TPF that is funded with Commercial Paper, a period of days from 1 Business Day up to the number of days necessary to extend such period to include the next Settlement Date, commencing on a Business Day, which period is either (i) requested by Borrower and agreed to by TPF or the TPF Agent or (ii) in the absence of such request and agreement, selected by TPF or the TPF Agent (it being understood that the goal shall be to select a period which ends on or as close to the next Settlement Date as possible).
"CREDIT AND COLLECTION POLICY" has the meaning provided in the Receivables Sale Agreement.
"CUT-OFF DATE" means the last day of a Calculation Period.
"DAYS SALES OUTSTANDING" means, as of any day, an amount equal to the product of (x) 91, multiplied by (y) the amount obtained by dividing (i) the aggregate outstanding balance of Receivables as of the most recent Cut-Off Date, by (ii) the aggregate amount of Receivables created during the three (3) Calculation Periods including and immediately preceding such Cut-Off Date.
"DEBT" has the meaning provided in the Receivables Sale Agreement.
"DEEMED COLLECTIONS" means Collections deemed received by Borrower under Section 1.4(a).
"DEFAULT HORIZON RATIO" means, as of any Cut-Off Date, the ratio (expressed as a decimal) computed by dividing (i) the aggregate sales generated by the Originators during the 4 Calculation Periods ending on such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-off Date.
"DEFAULT RATE" means a rate per annum equal to the sum of (i) the Prime Rate plus (ii) 2.00%, changing when and as the Prime Rate changes.
"DEFAULT RATIO" means, as of any Cut-Off Date, the ratio (expressed as a percentage) computed by dividing (x) the total amount of Receivables which became Defaulted Receivables during the Calculation Period that includes such Cut-Off Date, by (y) the aggregate sales generated by the Originators during the Calculation Period occurring 4 months prior to the Calculation Period ending on such Cut-Off Date.
"DEFAULTED RECEIVABLE" means a Receivable: (i) as to which the Obligor thereof has suffered an Event of Bankruptcy; (ii) which, consistent with the Credit and Collection Policy, would be written off Borrower's books as uncollectible; or (iii) as to which any payment, or part thereof, remains unpaid for 91 days or more from the original invoice date for such payment.
"DELINQUENCY RATIO" means, at any time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were Delinquent Receivables at such time divided by (ii) the aggregate Outstanding Balance of all Receivables at such time.
"DELINQUENT RECEIVABLE" means a Receivable as to which any payment, or part thereof, remains unpaid for 61-90 days from the original invoice date for such payment.
"DILUTION" means the amount of any reduction or cancellation of the Outstanding Balance of a Receivable as described in Section 1.4(a).
"DILUTION HORIZON RATIO" means, as of any Cut-off Date, a ratio (expressed as a decimal), computed by dividing (i) the aggregate sales generated by the Originators during the two Calculation Periods ending on such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off Date.
"DILUTION RATIO" means, as of any Cut-Off Date, a ratio (expressed as a percentage), computed by dividing (i) the total amount of decreases in Outstanding Balances due to Dilutions (other than cash discounts) during the Calculation Period ending on such Cut-Off Date, by (ii) the aggregate sales generated by the Originators during the second Calculation Period prior to the Calculation Period ending on such Cut-Off Date.
"DILUTION RESERVE" means, for any Calculation Period, the product (expressed as a percentage) of:
(a) the sum of (i) two (2) times the Adjusted Dilution Ratio as of the immediately preceding Cut-Off Date, plus (ii) the Dilution Volatility Component as of the immediately preceding Cut-Off Date, TIMES
(b) the Dilution Horizon Ratio as of the immediately preceding Cut-Off Date.
"DILUTION VOLATILITY COMPONENT" means the product (expressed as a percentage) of (i) the difference between (a) the highest three (3)-month rolling average Dilution Ratio over the past 12 Calculation Periods and (b) the Adjusted Dilution Ratio, and (ii) a fraction, the numerator of which is equal to the amount calculated in (i)(a) of this definition and the denominator of which is equal to the amount calculated in (i)(b) of this definition.
"DOWNGRADED LIQUIDITY BANK" means a Liquidity Bank which has been the subject of a Downgrading Event.
"DOWNGRADING EVENT" with respect to any Person means the lowering of the rating with regard to the short-term securities of such Person to below (i) A-1 by S&P, or (ii) P-1 by Moody's.
"ELIGIBLE ASSIGNEE" means a commercial bank having a combined capital and surplus of at least $250,000,000 with a rating of its (or its parent holding company's) short-term securities equal to or higher than (i) A-1 by S&P and (ii) P-1 by Moody's.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a resident of the United States or Canada or, if a corporation or other business organization, is organized under the laws of the United States, Canada or any political subdivision of the United States or Canada and has its chief executive office in the United States or Canada; (b) is not an Affiliate of any of the parties hereto; and (c) is not a government or a governmental subdivision or agency; PROVIDED, that in no event may the amount of Canadian Receivables that are included as Eligible Receivables exceed 4% of total Receivables at any time,
(ii) which is not a Defaulted Receivable,
(iii) which is not owing from an Obligor as to which more than 50% of the aggregate Outstanding Balance of all Receivables owing from such Obligor are Defaulted Receivables,
(iv) which has not had its payment terms extended more than once,
(v) which is an "account" within the meaning of Article 9 of the UCC of all applicable jurisdictions,
(vi) which is denominated and payable only in United States dollars in the United States,
(vii) which arises under a 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 against such Obligor in accordance with its terms subject to no offset, counterclaim or other defense; PROVIDED, HOWEVER, that if such dispute, offset, counterclaim or defense affects only a portion of the Outstanding Balance of such Receivable then such Receivable may be deemed an Eligible Receivable to the extent of the portion of such Outstanding Balance which is not so affected;
(viii) which arises under a Contract which (A) does not require the Obligor under such Contract to consent to the transfer, sale, pledge or assignment of the rights and duties of the applicable Originator or any of its assignees under such Contract and (B) does not contain a confidentiality provision that purports to restrict the ability of any Lender to exercise its rights under this Agreement, including, without limitation, its right to review the Contract,
(ix) which arises under a Contract that contains an obligation to pay a specified sum of money, contingent only upon the sale of goods or the provision of services by the applicable Originator,
(x) which, together with the Contract related thereto, 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) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation,
(xi) which satisfies all applicable requirements of the Credit and Collection Policy,
(xii) which was generated in the ordinary course of the applicable Originator's business,
(xiii) which arises solely from the sale of goods or the provision of services to the related Obligor by the applicable Originator, and not by any other Person (in whole or in part),
(xiv) which is not subject to any dispute, counterclaim, right of rescission, set-off, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor against the applicable Originator or any other Adverse Claim, and the Obligor thereon holds no right as against such Originator to cause such Originator to repurchase the goods or merchandise the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Contract, or defective goods returned in accordance with the terms of the Contract); PROVIDED, HOWEVER, that if such dispute, offset, counterclaim or defense affects only a portion of the Outstanding Balance of such Receivable, then such Receivable may be deemed an Eligible Receivable to the extent of the portion of such Outstanding Balance which is not so affected, and PROVIDED, FURTHER, that Receivables of any Obligor which has any accounts payable by the applicable Originator or by a wholly-owned Subsidiary of such Originator (thus giving rise to a potential offset against such
Receivables) may be treated as Eligible Receivables to the extent that the Obligor of such Receivables has agreed pursuant to a written agreement in form and substance satisfactory to the Administrative Agent, that such Receivables shall not be subject to such offset,
(xv) as to which the applicable 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,
(xvi) as to which each of the representations and warranties contained in Sections 5.1(i), (j), (r), (s), (t) and (u) is true and correct, and
(xvii) all right, title and interest to and in which has been validly transferred by the applicable Originator directly to Borrower under and in accordance with the Receivables Sale Agreement, and Borrower has good and marketable title thereto free and clear of any Adverse Claim.
"EQUITY INTERESTS" has the meaning provided in the Receivables Sale Agreement.
"ERISA" has the meaning provided in the Receivables Sale Agreement.
"ERISA AFFILIATE" has the meaning provided in the Receivables Sale Agreement.
"EVENT OF BANKRUPTCY" shall be deemed to have occurred with respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets, or any similar action with respect to such Person under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee (other than a trustee under a deed of trust, indenture or similar instrument), custodian, sequestrator (or other similar official) for, such Person or for any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall be adjudicated insolvent, or admit in writing its inability to pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors shall vote to implement any of the foregoing.
"EXECUTIVE OFFICER" has the meaning provided in the Receivables Sale Agreement.
"EXCESS TERMS ALLOWANCE" means the excess, if any, of the aggregate Outstanding Balance of all Eligible Receivables which by its terms are due and payable greater than 60 days from the original invoice date thereof that exceeds 5.0% of the Outstanding Balance of all Eligible Receivables.
"FACILITY ACCOUNT" means Borrower's account no. 8800849666 at SunTrust.
"FACILITY TERMINATION DATE" means the earlier of (i) the Liquidity Termination Date and (ii) the Amortization Date.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating interest rate per annum for each day during such period equal to (a) 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. Government Securities; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:30 a.m. (New York time) for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.
"FEE LETTER" means that certain letter agreement dated as of the date hereof among Parent, Borrower and the Agents, as it may be amended or modified and in effect from time to time.
"FINAL PAYOUT DATE" means the date on which all Obligations have been paid in full and the Aggregate Commitment has been terminated.
"FINANCE CHARGES" has the meaning provided in the Receivables Sale Agreement.
"FOREIGN RECEIVABLE" means any Receivable denominated and payable in United States Dollars, the Obligor of which is organized under the laws of, or has its chief executive office in, any jurisdiction other than the United States or Canada (or any political subdivision thereof).
"FOREIGN RECEIVABLE EXCESS" means the excess, if any, of the aggregate Outstanding Balance of all Eligible Foreign Receivables over 5.0% of the Outstanding Balance of all Eligible Receivables.
"FUNDING AGREEMENT" means (i) this Agreement, (ii) the Liquidity Agreement and (iii) any other agreement or instrument executed by any Funding Source with or for the benefit of a Conduit.
"FUNDING SOURCE" means (i) any Liquidity Bank or (ii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or back-up purchase support or facilities to a Conduit.
"GAAP" means generally accepted accounting principles in effect in the United States of America as of the date of this Agreement.
"INDEMNIFIED AMOUNTS" has the meaning specified in Section 10.1.
"INDEMNIFIED PARTY" has the meaning specified in Section 10.1.
"INDEPENDENT DIRECTOR" means a director of Borrower who is not at the time of initial appointment and has not been at any time during the five (5) years preceding such appointment: (i) an equity holder, director (other than an Independent Director), officer, employee, member, manager, attorney or partner of Borrower or any of its Affiliates; (ii) a customer, supplier or other person who derives more than 1% of its purchases or revenues from its activities with Borrower or any of its Affiliates; (iii) a person or other entity controlling or under common control with any such equity holder, partner, member, customer, supplier or other person; (iv) a member of the immediate family of any such equity holder, director, officer, employee, member, manager, partner, customer, supplier or other person; or (v) a trustee in bankruptcy for Borrower or any of its Affiliates. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership of voting securities, by contract or otherwise.
"INTEREST" means for each respective Interest Period relating to Loans of the Liquidity Banks, an amount equal to the product of the applicable Interest Rate for each Loan multiplied by the principal of such Loan for each day elapsed during such Interest Period, annualized on a 360 day basis.
"INTEREST PERIOD" means, with respect to any Loan held by a Liquidity Bank:
(a) if Interest for such Loan is calculated on the basis of the LIBO Rate, a period of one, two, three or six months, or such other period as may be mutually agreeable to the applicable Co-Agent and Borrower, commencing on a Business Day selected by Borrower or such Co-Agent pursuant to this Agreement. Such Interest Period shall end on the day in the applicable succeeding calendar month which corresponds numerically to the beginning day of such Interest Period, PROVIDED, HOWEVER, that if there is no such numerically corresponding day in such succeeding month, such Interest Period shall end on the last Business Day of such succeeding month; or
(b) if Interest for such Loan is calculated on the basis of the Alternate Base Rate, a period commencing on a Business Day selected by Borrower and agreed to by the applicable Co-Agent, PROVIDED THAT no such period shall exceed one month.
If any Interest Period would end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, PROVIDED, HOWEVER, that in the case of Interest Periods corresponding to the LIBO Rate, if such next succeeding Business Day falls in a new month,
such Interest Period shall end on the immediately preceding Business Day. In the case of any Interest Period for any Loan which commences before the Amortization Date and would otherwise end on a date occurring after the Amortization Date, such Interest Period shall end on the Amortization Date. The duration of each Interest Period which commences after the Amortization Date shall be of such duration as selected by the applicable Co-Agent.
"INTEREST RATE" means, with respect to each Loan of the Liquidity Banks, the LIBO Rate, the Alternate Base Rate or the Default Rate, as applicable.
"INTEREST RESERVE" means, for any Calculation Period, the product (expressed as a percentage) of (i) 1.5 times (ii) the Alternate Base Rate as of the immediately preceding Cut-Off Date times (iii) a fraction the numerator of which is the highest Days Sales Outstanding for the most recent 12 Calculation Periods and the denominator of which is 360.
"LENDER" means each Conduit and each Liquidity Bank.
"LIBO RATE" means, for any Interest Period, the rate per annum determined on the basis of the offered rate for deposits in U.S. dollars of amounts equal or comparable to the principal amount of the related Loan offered for a term comparable to such Interest Period, which rates appear on a Bloomberg L.P. terminal, displayed under the address "US0001M <Index> Q <Go>" effective as of 11:00 A.M., London time, two Business Days prior to the first day of such Interest Period, PROVIDED that if no such offered rates appear on such page, the LIBO Rate for such Interest Period will be the arithmetic average (rounded upwards, if necessary, to the next higher 1/100th of 1%) of rates quoted by not less than two major banks in New York, New York, selected by the Administrative Agent, at approximately 10:00 a.m.(New York time), two Business Days prior to the first day of such Interest Period, for deposits in U.S. dollars offered by leading European banks for a period comparable to such Interest Period in an amount comparable to the principal amount of such Loan, divided by (b) one minus the maximum aggregate reserve requirement (including all basic, supplemental, marginal or other reserves) which is imposed against the Administrative Agent 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 (expressed as a decimal), applicable to such Interest Period plus (ii) the Applicable Percentage per annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
"LIBO RATE LOAN" means a Loan which bears interest at the LIBO Rate.
"LIEN" has the meaning specified in the Receivables Sale Agreement.
"LIQUIDITY AGREEMENTS" means the liquidity asset purchase agreement between the Conduit of any Group and the Liquidity Banks of such Group.
"LIQUIDITY BANKS" means, with respect to each Group, the banks or other financial institutions and their respective successors and permitted assigns under each Group's Liquidity Agreement.
"LIQUIDITY COMMITMENT" means, as to each Liquidity Bank in any Group, its commitment to such Group's Conduit under the Liquidity Agreements, (which shall equal 102% of such Group's Percentage of the Aggregate Commitment hereunder).
"LIQUIDITY FUNDING" means (a) a purchase made by any Liquidity Bank pursuant to its Liquidity Commitment of all or any portion of, or any undivided interest in, an applicable Conduit's Loans, or (b) any Loan made by a Liquidity Bank in lieu of such Conduit pursuant to Section 1.1.
"LIQUIDITY TERMINATION DATE" means, as to any of the Conduits, except as otherwise set forth in this Agreement, the earlier to occur of the following:
(a) the date on which the Liquidity Agreement between Blue Ridge and Wachovia terminates;
(b) the date on which the Liquidity Agreement between TPF and SunTrust terminates; or
(b) the date on which a Downgrading Event with respect to a Liquidity Bank shall have occurred and been continuing for not less than 30 days, and either (i) the Downgraded Liquidity Bank shall not have been replaced by an Eligible Assignee pursuant to the applicable Liquidity Agreement, or (ii) the Liquidity Commitment of such Downgraded Liquidity Bank shall not have been funded or collateralized in such a manner that will avoid a reduction in or withdrawal of the credit rating applied to the Commercial Paper to which such Liquidity Agreement applies by any of the rating agencies then rating such Commercial Paper.
"LOAN" means any loan made by a Lender to Borrower pursuant to this Agreement (including, without limitation, any Liquidity Funding). Each Loan shall either be a CP Rate Loan, an Alternate Base Rate Loan or a LIBO Rate Loan, selected in accordance with the terms of this Agreement.
"LOAN PARTIES" has the meaning set forth in the preamble to this Agreement.
"LOCK-BOX" has the meaning provided in the Receivables Sale Agreement.
"LOSS RESERVE" means, for any Calculation Period, the product (expressed as a percentage) of (a) 2.0, times (b) the highest three-month rolling average Default Ratio during the 12 Calculation Periods ending on the immediately preceding Cut-Off Date, times (c) the Default Horizon Ratio as of the immediately preceding Cut-Off Date.
"MATERIAL" means, SOLELY WHEN CAPITALIZED, the measure of a matter of significance which shall be determined as being more than an amount equal to the greater of (i) Ten Million Dollars ($10,000,000) or (ii) ten percent (10%) of the Consolidated Net Worth (as defined in the Parent Credit Agreement).
"MATERIAL ADVERSE EFFECT" means (i) any Material adverse effect on the business, operations, financial condition or assets of the Parent and its Restricted Subsidiaries, taken as a
whole, (ii) any Material adverse effect on the ability of any Loan Party or to
perform its obligations under the Transaction Documents to which it is a party,
(iii) any material adverse effect on the legality, validity or enforceability of
the Agreement or any other Transaction Document, (iv) any material adverse
effect on the Administrative Agent's interest in the Receivables generally or in
any significant portion of the Receivables, the Related Security or Collections
with respect thereto, or (v) any material adverse effect on the collectibility
of the Receivables generally or of any material portion of the Receivables.
"MONTHLY REPORT" means a report, in substantially the form of Exhibit V hereto (appropriately completed), furnished by the Servicer to the Administrative Agent pursuant to Section 8.5.
"MONTHLY REPORTING DATE" means the 15th day of each month after the date of this Agreement (or if any such day is not a Business Day, the next succeeding Business Day thereafter).
"MOODY'S" means Moody's Investors Service, Inc.
"NET POOL BALANCE" means, at any time, the aggregate Outstanding Balance of all Eligible Receivables at such time reduced by (i) the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Obligor Concentration Limit for such Obligor, (ii) the Excess Terms Allowance, (iii) the Foreign Receivable Excess and (iv) the Contractual Dilution Amount.
"OBLIGATIONS" means, at any time, any and all obligations of either of the Loan Parties to any of the Secured Parties arising under or in connection with the Transaction Documents, whether now existing or hereafter arising, due or accrued, absolute or contingent, including, without limitation, obligations in respect of Aggregate Principal, CP Costs, Interest, fees under the Fee Letter, Broken Funding Costs and Indemnified Amounts.
"OBLIGOR" means a Person obligated to make payments pursuant to a Contract.
"OBLIGOR CONCENTRATION LIMIT" means, at any time, in relation to the aggregate Outstanding Balance of Receivables owed by any single Obligor and its Affiliates (if any), the applicable concentration limit shall be determined as follows for Obligors who have short term unsecured debt ratings currently assigned to them by S&P and Moody's (or in the absence thereof, the equivalent long term unsecured senior debt ratings), the applicable concentration limit shall be determined according to the following table:
Allowable % of Eligible
S&P Rating Moody's Rating Receivables
-------------------------------- ------------------------- -----------------------
A-1+ P-1 10%
A-1 P-1 8%
A-2 P-2 6%
A-3 P-3 3%
Below A-3 or Not Rated by either Below P-3 or Not Rated by
S&P or Moody's either S&P or Moody's 2.5%
|
; PROVIDED, HOWEVER, that (a) if any Obligor has a split rating, the applicable rating will be the lower of the two, (b) if any Obligor is not rated by either S&P or Moody's, the applicable Obligor Concentration Limit shall be the one set forth in the last line of the table above, and (c) subject to satisfaction of the Rating Agency Condition and/or an increase in the percentage set forth in clause (a)(i) of the definition of "REQUIRED RESERVE," upon Borrower's request from time to time, the Administrative Agent may agree to a higher percentage of Eligible Receivables for a particular Obligor and its Affiliates (each such higher percentage, a "SPECIAL CONCENTRATION LIMIT"), it being understood that any Special Concentration Limit may be cancelled by the Administrative Agent upon not less than five (5) Business Days' written notice to the Loan Parties.
"ORIGINATOR" means each of Rock-Tenn Company, a Georgia corporation, 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.
"OUTSTANDING BALANCE" of any Receivable at any time means the then outstanding principal balance thereof.
"PARENT" means Rock-Tenn Company, a Georgia corporation.
"PARENT CREDIT AGREEMENT" means that certain Credit Agreement, dated as of June 6, 2005, among Rock-Tenn Company, Rock-Tenn Company of Canada, the guarantors from time to time party thereto, the lenders from time to time party thereto, Wachovia Bank, National Association, as administrative agent, SunTrust Bank, as syndication agent, and Bank of America, N.A., as documentation agent, as the same may be amended from time to time in accordance with the terms thereof.
"PARTICIPANT" has the meaning set forth in Section 12.2.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which Performance Guarantor sponsors or maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a multiple employer
plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years.
"PERCENTAGE" means fifty percent (50%) with respect to the Blue Ridge Group and fifty percent (50%) with respect to the TPF Group.
"PERFORMANCE GUARANTOR" means Parent.
"PERFORMANCE UNDERTAKING" means that certain Performance Undertaking, dated as of October 26, 2005 by Performance Guarantor in favor of Borrower, substantially in the form of Exhibit VII, as the same may be amended, restated or otherwise modified from time to time.
"PERSON" means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of ERISA) which Performance Guarantor or any of its ERISA Affiliates sponsors or maintains or to which Performance Guarantor or any of its ERISA Affiliates makes, is making, or is obligated to make contributions and includes any Pension Plan, other than a Plan maintained outside the United States primarily for the benefit of Persons who are not U.S. residents.
"POOLED COMMERCIAL PAPER" means Commercial Paper notes of a Conduit subject to any particular pooling arrangement by such Conduit, but excluding Commercial Paper issued by such Conduit for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by such Conduit.
"PRIME RATE" has the meaning set forth in the Parent Credit Agreement.
"PRO RATA SHARE" means, with respect to each Group on any date of determination, the ratio which the Liquidity Commitment of a Liquidity Bank in such Group bears to the sum of the Liquidity Commitments of all Liquidity Banks in such Group..
"PROPOSED REDUCTION DATE" has the meaning set forth in Section 1.3.
"PURCHASING LIQUIDITY BANK" has the meaning set forth in Section 12.1(b).
"RATING AGENCY CONDITION" means, if applicable, that a Conduit has received written notice from S&P and Moody's or any other rating agency then rating such Conduit's Commercial Paper that the execution and delivery of, or an amendment, a change or a waiver of, this Agreement or the Receivables Sale Agreement will not result in a withdrawal or downgrade of the then current ratings on such Conduit's Commercial Paper.
"RECEIVABLE" means all indebtedness and other obligations owed to an Originator (at the times it arises, and before giving effect to any transfer or conveyance under the Receivables Sale Agreement) (including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible) arising in connection with the sale of goods or the rendering of services by such Originator to customers
that are domiciled in the United States or Canada and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto; PROVIDED, HOWEVER, that the term "Receivable" shall exclude any indebtedness or other obligations owed to an Originator by an Affiliate that is 100% owned, directly or indirectly, by an Originator or a Loan Party. Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; PROVIDED, FURTHER, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless or whether the account debtor or such Originator treats such indebtedness, rights or obligations as a separate payment obligation.
"RECEIVABLES SALE AGREEMENT" means that certain Amended and Restated Receivables Sale Agreement, dated as of October 26, 2005, among Parent, the Originators and Borrower, as the same may be amended, restated or otherwise modified from time to time.
"RECORDS" has the meaning provided in the Receivables Sale Agreement.
"REDUCTION NOTICE" has the meaning set forth in Section 1.3.
"REGULATORY CHANGE" means any change after the date of this Agreement in United States (federal, state or municipal) or foreign laws, regulations (including Regulation D) or accounting principles or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks (including the Liquidity Banks) of or under any United States (federal, state or municipal) or foreign laws, regulations (whether or not having the force of law) or accounting principles by any court, governmental or monetary authority, or accounting board or authority (whether or not part of government) charged with the establishment, interpretation or administration thereof. For the avoidance of doubt, any interpretation of Accounting Research Bulletin No. 51 by the Financial Accounting Standards Board shall constitute a Regulatory Change.
"RELATED COMMERCIAL PAPER" means, for any period with respect to TPF, any Commercial Paper of TPF issued or deemed issued for purposes of financing or maintaining any Loan by TPF (including any discount, yield, or interest thereon) outstanding on any day during such period.
"RELATED SECURITY" means, with respect to any Receivable: (i) all of
Borrower's interest in the Related Security (under and as defined in the
Receivables Sale Agreement), (ii) all of Borrower's right, title and interest
in, to and under the Receivables Sale Agreement in respect of such Receivable,
(iii) all of Borrower's right, title and interest in, to and under the
Performance Undertaking, and (iv) all proceeds of any of the foregoing.
"REQUIRED LIQUIDITY BANKS" means, at any time, (i) for each Group (other than as set forth in clause (ii) of this definition), Liquidity Banks in such Group with Commitments in excess of 50% of such Group's Percentage of the Aggregate Commitment and (ii) for purposes of Section 11.10 and 14.1(b), 50% of the Aggregate Commitment of the Liquidity Banks in all Groups.
"REQUIRED NOTICE PERIOD" means two (2) Business Days.
"REQUIRED RESERVE" means, on any day during a Calculation Period, the product of (a) the greater of (i) the Required Reserve Factor Floor and (ii) the sum of the Loss Reserve, the Interest Reserve, the Dilution Reserve and the Servicing Reserve, times (b) the Net Pool Balance as of the Cut-Off Date immediately preceding such Calculation Period.
"REQUIRED RESERVE FACTOR FLOOR" means, for any Calculation Period, the sum (expressed as a percentage) of (a) 20% plus (b) the product of the Adjusted Dilution Ratio and the Dilution Horizon Ratio, in each case, as of the immediately preceding Cut-Off Date.
"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 Borrower now or hereafter outstanding, except a dividend payable solely in shares of that class of stock or in any junior class of stock of Borrower, (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 Borrower now or hereafter outstanding, (iii) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to the Subordinated Loans (as defined in the Receivables Sale Agreement), (iv) 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 Borrower now or hereafter outstanding, and (v) any payment of management fees by Borrower (except for reasonable management fees to any Originator or its Affiliates in reimbursement of actual management services performed).
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw Hill Companies, Inc.
"SECURED PARTIES" means the Indemnified Parties.
"SERVICER" means at any time the Person (which may be the Administrative Agent) then authorized pursuant to Article VIII to service, administer and collect Receivables.
"SERVICING FEE" means, for each day in a Calculation Period:
(a) an amount equal to (i) the Servicing Fee Rate (or, at any time while CONVERTING or one of its Affiliates is the Servicer, such lesser percentage as may be agreed between Borrower and the Servicer on an arms' length basis based on then prevailing market terms for similar services), TIMES (ii) the aggregate Outstanding Balance of all Receivables at the close of business on the Cut-Off Date immediately preceding such Calculation Period, TIMES (iii) 1/360; or
(b) on and after the Servicer's reasonable request made at any time when CONVERTING or one of its Affiliates is no longer acting as Servicer hereunder, an alternative amount specified by the successor Servicer not exceeding (i) 110% of such Servicer's reasonable costs and expenses of performing its obligations under this
Agreement during the preceding Calculation Period, DIVIDED BY (ii) the number of days in the current Calculation Period.
"SERVICING FEE RATE" means 1.0% per annum.
"SERVICING RESERVE" means, for any Calculation Period, the product (expressed as a percentage) of (a) the Servicing Fee Rate, TIMES (b) a fraction, the numerator of which is the highest Days Sales Outstanding for the most recent 12 Calculation Periods and the denominator of which is 360.
"SETTLEMENT DATE" means (A) the 2nd Business Day after each Monthly Reporting Date, and (B) the last day of the relevant Interest Period in respect of each Loan of the Liquidity Banks.
"SETTLEMENT PERIOD" means (A) in respect of each Loan of Blue Ridge and of TPF, the immediately preceding Calculation Period, and (B) in respect of each Loan of the Liquidity Banks, the entire Interest Period of such Loan.
"STCM" means SunTrust Capital Markets, Inc., a Tennessee corporation, and its successors and assigns.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited liability company, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.
"TAX CODE" means the Internal Revenue Code of 1986, as the same may be amended from time to time.
"TERMINATION DATE" has the meaning set forth in the Receivables Sale Agreement.
"TERMINATING TRANCHE" has the meaning set forth in Section 4.3(b).
"TPF" has the meaning set forth in the preamble to this Agreement.
"TPF AGENT" has the meaning set forth in the preamble to this Agreement.
"TPF AGENT'S ACCOUNT" means account # 8800171236 at SunTrust Bank, ABA No. 061000104, Reference: Rock-Ten, Attention: Janice Taylor with respect to the TPF Group.
"TPF COMMERCIAL PAPER RATE" means, for any CP Tranche Period of TPF, a rate per annum equal to the sum of (i) the rate or, if more than one rate, the weighted average of the rates, determined by converting to an interest-bearing equivalent rate per annum the discount rate (or rates) at which TPF's Related Commercial Paper outstanding during such CP Tranche Period has been or may be sold by any placement agent or commercial paper dealer selected by the TPF
Agent, plus (ii) the commissions and charges charged by such placement agent or commercial paper dealer with respect to such Related Commercial Paper, expressed as a percentage of the face amount thereof and converted to an interest-bearing equivalent rate per annum.
"TPF GROUP" has the meaning set forth in the preamble to this Agreement.
"TPF LIQUIDITY AGREEMENT" means that certain liquidity asset purchase agreement dated as of the date hereof by and among TPF, the TPF Liquidity Banks and STCM, as TPF Agent and liquidity agent, as the same may be amended, restated and/or otherwise modified from time to time.
"TPF LIQUIDITY BANKS" means SunTrust Bank and its successors and assigns under the TPF Liquidity Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each Borrowing Notice, the Receivables Sale Agreement, each Collection Account Agreement, the Performance Undertaking, the Fee Letter, each Subordinated Note (as defined in the Receivables Sale Agreement) and all other instruments, documents and agreements executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.
"UNMATURED AMORTIZATION EVENT" means an event which, with the passage of time or the giving of notice, or both, would constitute an Amortization Event.
"WACHOVIA" means Wachovia Bank, National Association in its individual capacity and its capacity as a Co-Agent and as Administrative Agent.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE CONSTRUED IN ACCORDANCE WITH GAAP. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE STATE OF GEORGIA, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS DEFINED IN SUCH ARTICLE 9.
EXHIBIT II-A
FORM OF BORROWING NOTICE
ROCK-TENN FINANCIAL, INC.
BORROWING NOTICE
DATED ______________, 20__
FOR BORROWING ON ________________, 20__
[Applicable Co-Agent]
Attention: [________________________]
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit and Security Agreement dated as of October 26, 2005 (as amended, supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT") among Rock-Tenn Financial, Inc. (the "BORROWER"), Rock-Tenn Converting Company, as initial Servicer, Blue Ridge Asset Funding Corporation, Three Pillars Funding Corporation, each other Conduit party from time to time thereto, SunTrust Capital Markets, Inc., individually and as co-agent and Wachovia Bank, National Association, individually, as co-agent, each other co-agent from time to time party thereto and as Administrative Agent for the Agents and the Lenders. Capitalized terms defined in the Credit Agreement are used herein with the same meanings.
1. The [Servicer, on behalf of the] Borrower hereby certifies, represents and warrants to the Agents and the Lenders that on and as of the Borrowing Date (as hereinafter defined):
(a) all applicable conditions precedent set forth in Article VI of the Credit Agreement have been satisfied;
(b) each of its representations and warranties contained in Section 5.1 of the Credit Agreement will be true and correct, in all material respects, as if made on and as of the Borrowing Date;
(c) no event will have occurred and is continuing, or would result from the requested Purchase, that constitutes an Amortization Event or Unmatured Amortization Event;
(d) the Facility Termination Date has not occurred; and
(e) after giving effect to the Loans comprising the Advance requested below, the Aggregate Principal will not exceed the Borrowing Limit.
2. The [Servicer, on behalf of the] Borrower hereby requests that the Conduits (or their respective Liquidity Banks) make an Advance on ___________, 20__ (the "BORROWING DATE") as follows:
(a) Aggregate Amount of Advance: $__________
(i) Blue Ridge Group's Percentage of Advance: $__________
(ii) TPF Group's Percentage of Advance: $__________
(iii) [Other Group's Percentage of Advance: $__________]
(b) If the Advance is not funded by the applicable Conduits, [Servicer on behalf of the] Borrower requests that the Liquidity Banks for such Conduit's Group make an Alternate Base Rate Loan that converts into LIBO Rate Loan with an Interest Period of __________ months on the third Business Day after the Borrowing Date).
3. Please disburse the proceeds of the Loans as follows:
(i) Blue Ridge Group: [Apply $__________ to payment of principal and interest of existing Loans due on the Borrowing Date]. [Apply $__________ to payment of fees due on the Borrowing Date]. [Wire transfer $__________ to account no. __________ at _____________ Bank, in [city, state], ABA No. __________, Reference: ________].
(ii) TPF Group: [Apply $__________ to payment of principal and interest of existing Loans due on the Borrowing Date]. [Apply $__________ to payment of fees due on the Borrowing Date]. [Wire transfer $__________ to account no. ________ at ___________ Bank, in [city, state], ABA No. __________, Reference: ________].
(iii) [Other Group]: [Apply $__________ to payment of principal and interest of existing Loans due on the Borrowing Date]. [Apply $__________ to payment of fees due on the Borrowing Date]. [Wire transfer $__________ to account no. ________ at ___________ Bank, in [city, state], ABA No. __________, Reference: ________].
IN WITNESS WHEREOF, the [Servicer, on behalf of the] Borrower has caused this Borrowing Notice to be executed and delivered as of this ____ day of ___________, _____.
[ROCK-TENN CONVERTING COMPANY,
as Servicer, on behalf of:]
ROCK-TENN FINANCIAL, INC., as Borrower
EXHIBIT II-B
FORM OF REDUCTION NOTICE
ROCK-TENN FINANCIAL, INC.
REDUCTION NOTICE
DATED ______________, 20__
FOR REDUCTION TO OCCUR ON ________________, 20__
[Applicable Co-Agent]
Attention: [________________________]
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit and Security Agreement dated as of October 26, 2005 (as amended, supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT") among Rock-Tenn Financial, Inc. (the "BORROWER"), Rock-Tenn Converting Company, as initial Servicer, Blue Ridge Asset Funding Corporation, Three Pillars Funding Corporation, each other Conduit party from time to time thereto, SunTrust Capital Markets, Inc., individually and as co-agent and Wachovia Bank, National Association, individually, as co-agent, each other co-agent from time to time party thereto and as Administrative Agent for the Agents and the Lenders. Capitalized terms defined in the Credit Agreement are used herein with the same meanings.
You are hereby irrevocably notified that the Borrower wishes to make an Aggregate Reduction in the amount of $__________ on ___________, 20__ (the "PROPOSED REDUCTION DATE").
The Blue Ridge Group's Percentage of such Aggregate Reduction will be $__________; and the TPF Group's Percentage of such Aggregate Reduction will be $__________].
IN WITNESS WHEREOF, the [Servicer, on behalf of the] Borrower has caused this Reduction Notice to be executed and delivered as of the date set forth above.
[ROCK-TENN CONVERTING COMPANY,
as Servicer, on behalf of:]
ROCK-TENN FINANCIAL, INC., as Borrower
EXHIBIT III
PLACES OF BUSINESS OF THE LOAN PARTIES; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
ROCK-TENN COMPANY
Place of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer identification Number: 62-0342590
Legal, Trade and Assumed Names: None
Organizational Identification Number: J518706
ROCK-TENN CONVERTING COMPANY
Place of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer identification Number: 58-1271825
Legal, Trade and Assumed Names: Alliance, a Rock-Tenn Company, Voxgrafica
Organizational Identification Number: J518594
EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
To: Wachovia Bank, National Association, as Administrative Agent
This Compliance Certificate is furnished pursuant to that certain Amended and Restated Credit and Security Agreement dated as of October 26, 2005 among Rock-Tenn Financial, Inc. (the "BORROWER"), Rock-Tenn Converting Company (the "SERVICER"), the Lenders party thereto, the Co-Agents party thereto and Wachovia Bank, National Association, as administrative agent for such Co-Agents and such Lenders (the "AGREEMENT").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________ of Borrower.
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 Borrower 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 an Amortization Event or Unmatured Amortization Event, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate[, except as set forth in paragraph 5 below].
4. Schedule I attached hereto sets forth financial data and computations evidencing the compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.
[5. 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 Borrower 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 as of ______________, 20__.
SCHEDULE I TO COMPLIANCE CERTIFICATE
A. Schedule of Compliance with Section 9.1(h) of the Agreement. Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.
This schedule relates to the month ended: _______________
EXHIBIT V
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "ASSIGNMENT AGREEMENT") is entered into as of the ___ day of ____________, ____, by and between ___________________ ("ASSIGNOR") and __________________ ("ASSIGNEE").
PRELIMINARY STATEMENTS
A. This Assignment Agreement is being executed and delivered in accordance with Section 12.1(b) of that certain Amended and Restated Credit and Security Agreement dated as of October 26, 2005 by and among Rock-Tenn Financial, Inc., as Borrower, Rock-Tenn Converting Company, as Servicer, the Lenders party thereto, the Co-Agents party thereto and Wachovia Bank, National Association, as administrative agent for such Co-Agents and such Lenders (as amended, modified or restated from time to time, the "CREDIT AND SECURITY AGREEMENT") and that applicable Liquidity Agreement. Capitalized terms used and not otherwise defined herein are used with the meanings set forth or incorporated by reference in the Credit and Security Agreement.
B. Assignor is a Liquidity Bank party to the Credit and Security Agreement and the Liquidity Agreement, and Assignee wishes to become a Liquidity Bank thereunder; and
C. Assignor is selling and assigning to Assignee an undivided ____________% (the "TRANSFERRED PERCENTAGE") interest in all of Assignor's rights and obligations under the Transaction Documents and the Liquidity Agreement, including, without limitation, Assignor's Commitment, Assignor's Liquidity Commitment and (if applicable) Assignor's Loans as set forth herein.
AGREEMENT
The parties hereto hereby agree as follows:
1. The sale, transfer and assignment effected by this Assignment
Agreement shall become effective (the "EFFECTIVE DATE") two (2) Business Days
(or such other date selected by the Administrative Agent in its sole discretion)
following the date on which a notice substantially in the form of Schedule II to
this Assignment Agreement ("EFFECTIVE NOTICE") is delivered by the applicable
Co-Agent to the Conduit in the Assignor's Conduit Group, Assignor and Assignee.
From and after the Effective Date, Assignee shall be a Liquidity Bank party to
the Credit and Security Agreement for all purposes thereof as if Assignee were
an original party thereto and Assignee agrees to be bound by all of the terms
and provisions contained therein.
2. If Assignor has no outstanding principal under the Credit and Security Agreement or its Liquidity Agreement, on the Effective Date, Assignor shall be deemed to have hereby transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and the Assignee shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of
Assignor's Commitment and Liquidity Commitment and all rights and obligations associated therewith under the terms of the Credit and Security Agreement and its Liquidity Agreement, including, without limitation, the Transferred Percentage of Assignor's future funding obligations under the Credit and Security Agreement and its Liquidity Agreement.
3. If Assignor has any outstanding principal under the Credit and Security Agreement and its Liquidity Agreement, at or before 12:00 noon, local time of Assignor, on the Effective Date Assignee shall pay to Assignor, in immediately available funds, an amount equal to the sum of (i) the Transferred Percentage of the outstanding principal of Assignor's Loans and, without duplication, Assignor's Percentage Interests (as defined in the Liquidity Agreement) (such amount, being hereinafter referred to as the "ASSIGNEE'S PRINCIPAL"); (ii) all accrued but unpaid (whether or not then due) Interest attributable to Assignee's Principal; and (iii) accruing but unpaid fees and other costs and expenses payable in respect of Assignee's Principal for the period commencing upon each date such unpaid amounts commence accruing, to and including the Effective Date (the "ASSIGNEE'S ACQUISITION COST"); whereupon, Assignor shall be deemed to have sold, transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and Assignee shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor's Commitment, Liquidity Commitment, Loans (if applicable) and Percentage Interests (if applicable) and all related rights and obligations under the Transaction Documents and its Liquidity Agreement, including, without limitation, the Transferred Percentage of Assignor's future funding obligations under the Credit and Security Agreement and its Liquidity Agreement.
4. Concurrently with the execution and delivery hereof, Assignor will provide to Assignee copies of all documents requested by Assignee which were delivered to Assignor pursuant to the Credit and Security Agreement or its Liquidity Agreement.
5. Each of the parties to this Assignment Agreement agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Assignment Agreement.
6. By executing and delivering this Assignment Agreement, Assignor and Assignee confirm to and agree with each other, the Agents and the Liquidity Banks as follows: (a) other than the representation and warranty that it has not created any Adverse Claim upon any interest being transferred hereunder, Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made by any other Person in or in connection with any of the Transaction Documents or its Liquidity Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of Assignee, the Credit and Security Agreement, its Liquidity Agreement or any other instrument or document furnished pursuant thereto or the perfection, priority, condition, value or sufficiency of any Collateral; (b) Assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower, any Obligor, any Affiliate of Borrower or the performance or observance by Borrower, any Obligor, any Affiliate of Borrower of any of their respective obligations under the Transaction Documents or any other instrument or document furnished pursuant thereto or in connection therewith; (c) Assignee confirms that it has received
a copy of each of the Transaction Documents and the Liquidity Agreement, and other documents and information as it has requested and deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (d) Assignee will, independently and without reliance upon the Agents, Conduits, Borrower or any other Liquidity Bank or Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Transaction Documents and the Liquidity Agreement; (e) Assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Transaction Documents and the Liquidity Agreement as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (f) Assignee agrees that it will perform in accordance with their terms all of the obligations which, by the terms of its Liquidity Agreement, the Credit and Security Agreement and the other Transaction Documents, are required to be performed by it as a Liquidity Bank or, when applicable, as a Lender.
7. Each party hereto represents and warrants to and agrees with the Administrative Agent that it is aware of and will comply with the provisions of the Credit and Security Agreement, including, without limitation, Sections 14.5 and 14.6 thereof.
8. Schedule I hereto sets forth the revised Commitment and Liquidity Commitment of Assignor and the Commitment and Liquidity Commitment of Assignee, as well as administrative information with respect to Assignee.
9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
10. Assignee hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all senior indebtedness for borrowed money of the Conduit in the Assignor's Conduit Group, it will not institute against, or join any other Person in instituting against, such Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed by their respective duly authorized officers of the date hereof.
[ASSIGNOR]
[ASSIGNEE]
SCHEDULE I TO ASSIGNMENT AGREEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
DATE: ______________, _______
TRANSFERRED PERCENTAGE: _____________%
C-1
A-1 LIQUIDITY C-2
COMMITMENT A-2 COMMITMENT LIQUIDITY
(PRIOR TO COMMITMENT (PRIOR TO COMMITMENT
GIVING EFFECT (AFTER GIVING B-1 B-2 GIVING EFFECT (AFTER GIVING
TO THE EFFECT TO THE OUTSTANDING RATABLE SHARE TO THE EFFECT TO THE
ASSIGNMENT ASSIGNMENT PRINCIPAL (IF OF OUTSTANDING ASSIGNMENT ASSIGNMENT
ASSIGNOR AGREEMENT) AGREEMENT) ANY) PRINCIPAL AGREEMENT) AGREEMENT)
-------- ------------- ------------- ------------- -------------- ------------- -------------
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C-1
A-1 LIQUIDITY C-2
COMMITMENT A-2 COMMITMENT LIQUIDITY
(PRIOR TO COMMITMENT (PRIOR TO COMMITMENT
GIVING EFFECT (AFTER GIVING B-1 B-2 GIVING EFFECT (AFTER GIVING
TO THE EFFECT TO THE OUTSTANDING RATABLE SHARE TO THE EFFECT TO THE
ASSIGNMENT ASSIGNMENT PRINCIPAL (IF OF OUTSTANDING ASSIGNMENT ASSIGNMENT
ASSIGNOR AGREEMENT) AGREEMENT) ANY) PRINCIPAL AGREEMENT) AGREEMENT)
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ADDRESS FOR NOTICES
Attention: __________________________
Phone: ______________________________
Fax: ________________________________
SCHEDULE II TO ASSIGNMENT AGREEMENT
EFFECTIVE NOTICE
TO: _______________________, Assignor
TO: _______________________, Assignee
The undersigned, as Administrative Agent under the Amended and Restated Credit and Security Agreement dated as of October 26, 2005 by and among Rock-Tenn Financial, Inc., as Borrower, Rock-Tenn Converting Company, as Servicer, the Lenders party thereto, the Co-Agents party thereto and Wachovia Bank, National Association, as administrative agent for such Co-Agents and such Lenders, hereby acknowledges receipt of executed counterparts of a completed Assignment Agreement dated as of ____________, 20__ between __________________, as Assignor, and __________________, as Assignee. Terms defined in such Assignment Agreement are used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the Effective Date will be ______________, ____.
2. Each of the undersigned hereby consents to the Assignment Agreement as required by Section 12.1(b) of the Credit and Security Agreement.
[3. Pursuant to such Assignment Agreement, the Assignee is required to pay $____________ to Assignor at or before 12:00 noon (local time of Assignor) on the Effective Date in immediately available funds.]
Very truly yours,
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent
[INSERT APPLICABLE CONDUIT'S NAME]
EXHIBIT VI
FORM OF MONTHLY REPORT
[SEE ATTACHED]
EXHIBIT VII
FORM OF PERFORMANCE UNDERTAKING
THIS PERFORMANCE UNDERTAKING (this "UNDERTAKING"), dated as of October 26, 2005, is executed by Rock-Tenn Company, a Georgia corporation (the "PERFORMANCE GUARANTOR" or "PARENT") in favor of Rock-Tenn Financial, Inc., a Georgia (together with its successors and assigns, "RECIPIENT").
RECITALS
1. Rock-Tenn Company, a Georgia corporation, 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, Waldorf Corporation, a Delaware corporation (collectively, the "ORIGINATORS"), Parent and Recipient have entered into an Amended and Restated Receivables Sale Agreement, dated as of October 26, 2005 (as amended, restated or otherwise modified from time to time, the "SALE AGREEMENT"), pursuant to which Originators, subject to the terms and conditions contained therein, are dividending all of their respective right, title and interest in certain of their accounts receivable to Parent, which Parent is then contributing to Recipient, and each of the Originators is selling all of their respective right, title and interest in and to their remaining accounts receivable to Recipient.
2. Performance Guarantor owns one hundred percent (100%) of the capital stock of each of the Originators and Recipient, and each of the Originators and Performance Guarantor is expected to receive substantial direct and indirect benefits from their sale or contribution of receivables to Recipient pursuant to the Sale Agreement (which benefits are hereby acknowledged).
3. As an inducement for Recipient to acquire Originators' accounts receivable pursuant to the Sale Agreement and to make certain demand loans from time to time to Originators, Performance Guarantor has agreed to guaranty the due and punctual performance (a) by Originators of their obligations under the Sale Agreement, (b) by each Originator, of its obligations in respect of any demand loan made by Recipient to such Originator, and (c) by each Originator of its Servicing Related Obligations (as hereinafter defined).
4. Performance Guarantor wishes to guaranty the due and punctual performance by Originators of the obligations described in clause 3 above as provided herein.
AGREEMENT
NOW, THEREFORE, Performance Guarantor hereby agrees as follows:
Section 1. Definitions. Capitalized terms used herein and not defined herein shall the respective meanings assigned thereto in the Sale Agreement or the Credit and Security Agreement (as hereinafter defined). In addition:
"AGREEMENTS" means the Sale Agreement and the Credit and Security Agreement.
"CREDIT AND SECURITY AGREEMENT" means that certain Amended and Restated Credit and Security Agreement, dated as of October 26, 2005 by and among Recipient, as Borrower, Rock-Tenn Converting Company, as Servicer, the Lenders party thereto, the Co-Agents party thereto and Wachovia Bank, National Association, as Administrative Agent for such Co-Agents and such Lenders, as amended, restated or otherwise modified from time to time in accordance with the terms thereof.
"GUARANTEED OBLIGATIONS" means, collectively:
(a) all covenants, agreements, terms, conditions and indemnities to be performed and observed by any Originator under and pursuant to the Sale Agreement and each other document executed and delivered by any Originator pursuant to the Sale Agreement, including, without limitation, the due and punctual payment of all sums which are or may become due and owing by any Originator under the Sale Agreement, whether for fees, expenses (including reasonable counsel fees), indemnified amounts or otherwise, whether upon any termination or for any other reason;
(b) all obligations of any Originator to repay, upon demand, all principal of and interest on any demand loan or demand advance made by Recipient to such Originator on any date after the date hereof [(except for loans made pursuant to that Line of Credit Loan Agreement, date as of the date hereof, by each Originator, as borrower, and Recipient, as lender)]; and
(c) all Servicing Related Obligations.
"SERVICING RELATED OBLIGATIONS" means, collectively, all obligations of Rock-Tenn Converting Company as Servicer under the Credit and Security Agreement or which arise pursuant to Sections 8.2, 8.3 or 14.4(a) of the Credit and Security Agreement as a result of its termination as Servicer.
Section 2. Guaranty of Performance of Guaranteed Obligations. Performance Guarantor hereby guarantees to Recipient, the full and punctual payment and performance by each Originator of its respective Guaranteed Obligations. This Undertaking is an absolute, unconditional and continuing guaranty of the full and punctual performance of all Guaranteed Obligations of each Originator under the Agreements and each other document executed and delivered by any Originator pursuant to the Agreements and is in no way conditioned upon any requirement that Recipient first attempt to collect any amounts owing by any Originator to Recipient, the Agents or the Lenders from any other Person or resort to any collateral security, any balance of any deposit account or credit on the books of Recipient, the Agents or any Lender in favor of any Originator or any other Person or other means of obtaining payment. Should any Originator default in the payment or performance of any of its Guaranteed Obligations, Recipient (or its assigns) may cause the immediate performance by Performance Guarantor of the Guaranteed Obligations and cause any payment Guaranteed Obligations to become forthwith due and payable to Recipient (or its assigns), without demand or notice of any nature (other than as expressly provided herein), all of which are hereby expressly waived by Performance Guarantor.
Notwithstanding the foregoing, this Undertaking is not a guarantee of the collection of any of the Receivables and Performance Guarantor shall not be responsible for any Guaranteed Obligations to the extent the failure to perform such Guaranteed Obligations by any Originator results from Receivables being uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; PROVIDED THAT nothing herein shall relieve any Originator from performing in full its Guaranteed Obligations under the Agreements or Performance Guarantor of its undertaking hereunder with respect to the full performance of such duties.
Section 3. Performance Guarantor's Further Agreements to Pay. Performance Guarantor further agrees, as the principal obligor and not as a guarantor only, to pay to Recipient (and its assigns), forthwith upon demand in funds immediately available to Recipient, all reasonable costs and expenses (including court costs and reasonable legal expenses) incurred or expended by Recipient in connection with the Guaranteed Obligations, this Undertaking and the enforcement thereof, together with interest on amounts recoverable under this Undertaking from the time when such amounts become due until payment, at a rate of interest (computed for the actual number of days elapsed based on a 360 day year) equal to the Prime Rate plus 2% per annum, such rate of interest changing when and as the Prime Rate changes.
Section 4. Waivers by Performance Guarantor. Performance Guarantor waives notice of acceptance of this Undertaking, notice of any action taken or omitted by Recipient (or its assigns) in reliance on this Undertaking, and any requirement that Recipient (or its assigns) be diligent or prompt in making demands under this Undertaking, giving notice of any Termination Event, Amortization Event, other default or omission by any Originator or asserting any other rights of Recipient under this Undertaking. Performance Guarantor warrants that it has adequate means to obtain from each Originator, on a continuing basis, information concerning the financial condition of such Originator, and that it is not relying on Recipient to provide such information, now or in the future. Performance Guarantor also irrevocably waives all defenses (i) that at any time may be available in respect of the Obligations by virtue of any statute of limitations, valuation, stay, moratorium law or other similar law now or hereafter in effect or (ii) that arise under the law of suretyship, including impairment of collateral. Recipient (and its assigns) shall be at liberty, without giving notice to or obtaining the assent of Performance Guarantor and without relieving Performance Guarantor of any liability under this Undertaking, to deal with each Originator and with each other party who now is or after the date hereof becomes liable in any manner for any of the Guaranteed Obligations, in such manner as Recipient in its sole discretion deems fit, and to this end Performance Guarantor agrees that the validity and enforceability of this Undertaking, including without limitation, the provisions of Section 7 hereof, shall not be impaired or affected by any of the following: (a) any extension, modification or renewal of, or indulgence with respect to, or substitutions for, the Guaranteed Obligations or any part thereof or any agreement relating thereto at any time; (b) any failure or omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or any collateral securing the Guaranteed Obligations or any part thereof; (c) any waiver of any right, power or remedy or of any Termination Event, Amortization Event, or default with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto; (d) any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any other obligation of any person or entity with respect to the Guaranteed Obligations or any part thereof; (e) the enforceability or validity of the Guaranteed Obligations or any part thereof or the
genuineness, enforceability or validity of any agreement relating thereto or with respect to the Guaranteed Obligations or any part thereof; (f) the application of payments received from any source to the payment of any payment Obligations of any Originator or any part thereof or amounts which are not covered by this Undertaking even though Recipient (or its assigns) might lawfully have elected to apply such payments to any part or all of the payment Obligations of such Originator or to amounts which are not covered by this Undertaking; (g) the existence of any claim, setoff or other rights which Performance Guarantor may have at any time against any Originator in connection herewith or any unrelated transaction; (h) any assignment or transfer of the Guaranteed Obligations or any part thereof; or (i) any failure on the part of any Originator to perform or comply with any term of the Agreements or any other document executed in connection therewith or delivered thereunder, all whether or not Performance Guarantor shall have had notice or knowledge of any act or omission referred to in the foregoing clauses (a) through (i) of this Section 4.
Section 5. Unenforceability of Guaranteed Obligations Against Originators. Notwithstanding (a) any change of ownership of any Originator or the insolvency, bankruptcy or any other change in the legal status of any Originator; (b) the change in or the imposition of any law, decree, regulation or other governmental act which does or might impair, delay or in any way affect the validity, enforceability or the payment when due of the Guaranteed Obligations; (c) the failure of any Originator or Performance Guarantor to maintain in full force, validity or effect or to obtain or renew when required all governmental and other approvals, licenses or consents required in connection with the Guaranteed Obligations or this Undertaking, or to take any other action required in connection with the performance of all obligations pursuant to the Guaranteed Obligations or this Undertaking; or (d) if any of the moneys included in the Guaranteed Obligations have become irrecoverable from any Originator for any other reason other than final payment in full of the payment Obligations in accordance with their terms, this Undertaking shall nevertheless be binding on Performance Guarantor. This Undertaking shall be in addition to any other guaranty or other security for the Guaranteed Obligations, and it shall not be rendered unenforceable by the invalidity of any such other guaranty or security. In the event that acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Originator or for any other reason with respect to any Originator, all such amounts then due and owing with respect to the Guaranteed Obligations under the terms of the Agreements, or any other agreement evidencing, securing or otherwise executed in connection with the Guaranteed Obligations, shall be immediately due and payable by Performance Guarantor.
Section 6. Representations and Warranties. Performance Guarantor hereby represents and warrants to Recipient that:
(a) Existence and Standing. Performance Guarantor is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. Performance Guarantor is duly qualified to do business and is in good standing as a foreign corporation, and has and holds 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 except where the failure to so qualify or so hold would not reasonably be expected to have a Material Adverse Effect.
(b) Authorization, Execution and Delivery; Binding Effect. The execution and delivery by Performance Guarantor of this Undertaking, and the performance of its obligations hereunder, are within its corporate powers and authority and have been duly authorized by all necessary corporate action on its part. This Undertaking has been duly executed and delivered by Performance Guarantor. This Undertaking constitutes the legal, valid and binding obligation of Performance Guarantor enforceable against Performance Guarantor 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 and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(c) No Conflict; Government Consent. The execution and delivery by Performance Guarantor of this Undertaking, and the performance of its obligations hereunder 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 Performance Guarantor or its Subsidiaries (except as created hereunder) except, in any case, where such contravention or violation would not reasonably be expected to have a Material Adverse Effect.
(d) Financial Statements. The consolidated financial statements of Performance Guarantor and its consolidated Subsidiaries dated as of June 30, 2005 heretofore delivered to Recipient have been prepared in accordance with generally accepted accounting principles consistently applied and fairly present in all material respects the consolidated financial condition and results of operations of Performance Guarantor and its consolidated Subsidiaries as of such dates and for the periods ended on such dates. Since the later of (i) June 30, 2005 and (ii) the last time this representation was made or deemed made, no event has occurred which would reasonably be expected to have a Material Adverse Effect.
(e) Taxes. Performance Guarantor has filed all United States federal tax returns and all other tax returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by Performance Guarantor or any of its Subsidiaries, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. No federal or state tax liens have been filed and no claims are being asserted with respect to any such taxes. The charges, accruals and reserves on the books of Performance Guarantor in respect of any taxes or other governmental charges are adequate.
(f) Litigation and Contingent Obligations. Except as disclosed in the filings made by Performance Guarantor with the Securities and Exchange Commission, there are no actions, suits or proceedings pending or, to the best of Performance Guarantor's knowledge threatened against or affecting Performance Guarantor 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 on (i) the business, properties, condition (financial or otherwise) or results of operations of Performance Guarantor and its Subsidiaries taken as a whole, (ii) the ability of Performance Guarantor to perform its obligations under this Undertaking, or (iii) the validity or enforceability
of any of this Undertaking or the rights or remedies of Recipient hereunder. Performance Guarantor does not have any material Contingent Obligations not provided for or disclosed in the financial statements referred to in Section 6(d).
Section 7. Subrogation; Subordination. Notwithstanding anything to the contrary contained herein, until the Guaranteed Obligations are paid in full Performance Guarantor: (a) will not enforce or otherwise exercise any right of subrogation to any of the rights of Recipient, the Agents or any Lender against any Originator, (b) hereby waives all rights of subrogation (whether contractual, under Section 509 of the United States Bankruptcy Code, at law or in equity or otherwise) to the claims of Recipient, the Agents and the Lenders against any Originator and all contractual, statutory or legal or equitable rights of contribution, reimbursement, indemnification and similar rights and "claims" (as that term is defined in the United States Bankruptcy Code) which Performance Guarantor might now have or hereafter acquire against any Originator that arise from the existence or performance of Performance Guarantor's obligations hereunder, (c) will not claim any setoff, recoupment or counterclaim against any Originator in respect of any liability of Performance Guarantor to such Originator and (d) waives any benefit of and any right to participate in any collateral security which may be held by Recipient, the Agents or the Lenders. The payment of any amounts due with respect to any indebtedness of any Originator now or hereafter owed to Performance Guarantor is hereby subordinated to the prior payment in full of all of the Guaranteed Obligations. Performance Guarantor agrees that, after the occurrence of any default in the payment or performance of any of the Guaranteed Obligations, Performance Guarantor will not demand, sue for or otherwise attempt to collect any such indebtedness of any Originator to Performance Guarantor until all of the Guaranteed Obligations shall have been paid and performed in full. If, notwithstanding the foregoing sentence, Performance Guarantor shall collect, enforce or receive any amounts in respect of such indebtedness while any Obligations are still unperformed or outstanding, such amounts shall be collected, enforced and received by Performance Guarantor as trustee for Recipient (and its assigns) and be paid over to Recipient (or its assigns) on account of the Guaranteed Obligations without affecting in any manner the liability of Performance Guarantor under the other provisions of this Undertaking. The provisions of this Section 7 shall be supplemental to and not in derogation of any rights and remedies of Recipient under any separate subordination agreement which Recipient may at any time and from time to time enter into with Performance Guarantor.
Section 8. Termination of Performance Undertaking. Performance Guarantor's obligations hereunder shall continue in full force and effect until all Obligations are finally paid and satisfied in full and the Credit and Security Agreement is terminated, PROVIDED THAT this Undertaking shall continue to be effective or shall be reinstated, as the case may be, if at any time payment or other satisfaction of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the bankruptcy, insolvency, or reorganization of any Originator or otherwise, as though such payment had not been made or other satisfaction occurred, whether or not Recipient (or its assigns) is in possession of this Undertaking. No invalidity, irregularity or unenforceability by reason of the Bankruptcy Code or any insolvency or other similar law, or any law or order of any government or agency thereof purporting to reduce, amend or otherwise affect the Guaranteed Obligations shall impair, affect, be a defense to or claim against the obligations of Performance Guarantor under this Undertaking.
Section 9. Effect of Bankruptcy. This Performance Undertaking shall survive the insolvency of any Originator and the commencement of any case or proceeding by or against any Originator under the Bankruptcy Code or other federal, state or other applicable bankruptcy, insolvency or reorganization statutes. No automatic stay under the Bankruptcy Code with respect to any Originator or other federal, state or other applicable bankruptcy, insolvency or reorganization statutes to which any Originator is subject shall postpone the obligations of Performance Guarantor under this Undertaking.
Section 10. Setoff. Regardless of the other means of obtaining payment of any of the Guaranteed Obligations, Recipient (and its assigns) is hereby authorized at any time and from time to time, without notice to Performance Guarantor (any such notice being expressly waived by Performance Guarantor) and to the fullest extent permitted by law, to set off and apply any deposits and other sums against the obligations of Performance Guarantor under this Undertaking, whether or not Recipient (or any such assign) shall have made any demand under this Undertaking and although such Obligations may be contingent or unmatured.
Section 11. Taxes. All payments to be made by Performance Guarantor hereunder shall be made free and clear of any deduction or withholding. If Performance Guarantor is required by law to make any deduction or withholding on account of tax or otherwise from any such payment, the sum due from it in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, Recipient receive a net sum equal to the sum which they would have received had no deduction or withholding been made.
Section 12. Further Assurances. Performance Guarantor agrees that it will from time to time, at the request of Recipient (or its assigns), provide information relating to the business and affairs of Performance Guarantor as Recipient may reasonably request. Performance Guarantor also agrees to do all such things and execute all such documents as Recipient (or its assigns) may reasonably consider necessary or desirable to give full effect to this Undertaking and to perfect and preserve the rights and powers of Recipient hereunder.
Section 13. Successors and Assigns. This Performance Undertaking shall be binding upon Performance Guarantor, its successors and permitted assigns, and shall inure to the benefit of and be enforceable by Recipient and its successors and assigns. Performance Guarantor may not assign or transfer any of its obligations hereunder without the prior written consent of each of Recipient and each Agent. Without limiting the generality of the foregoing sentence, Recipient may assign or otherwise transfer the Agreements, any other documents executed in connection therewith or delivered thereunder or any other agreement or note held by them evidencing, securing or otherwise executed in connection with the Guaranteed Obligations, or sell participations in any interest therein, to any other entity or other person, and such other entity or other person shall thereupon become vested, to the extent set forth in the agreement evidencing such assignment, transfer or participation, with all the rights in respect thereof granted to the Recipient herein.
Section 14. Amendments and Waivers. No amendment or waiver of any provision of this Undertaking nor consent to any departure by Performance Guarantor therefrom shall be effective unless the same shall be in writing and signed by Recipient, the Agents and
Performance Guarantor. No failure on the part of Recipient to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.
Section 15. Notices. All notices and other communications provided for hereunder shall be made in writing and shall be addressed as follows: if to Performance Guarantor, at the address set forth beneath its signature hereto, and if to Recipient, at the addresses set forth beneath its signature hereto, or at such other addresses as each of Performance Guarantor or any Recipient may designate in writing to the other. Each such notice or other communication shall be effective (1) if given by telecopy, upon the receipt thereof, (2) if given by mail, three (3) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (3) if given by any other means, when received at the address specified in this Section 15.
Section 16. GOVERNING LAW. THIS UNDERTAKING SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF GEORGIA.
Section 17. CONSENT TO JURISDICTION. EACH OF PROVIDER AND RECIPIENT HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR GEORGIA STATE COURT SITTING IN THE FULTON COUNTY, GEORGIA, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS UNDERTAKING, THE AGREEMENTS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER AND EACH OF THE PERFORMANCE GUARANTOR AND RECIPIENT 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.
Section 18. Bankruptcy Petition. Performance Guarantor hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior Debt of Recipient, it will not institute against, or join any other Person in instituting against, Recipient 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 19. Miscellaneous. This Undertaking constitutes the entire agreement of Performance Guarantor with respect to the matters set forth herein. The rights and remedies herein provided are cumulative and not exclusive of any remedies provided by law or any other agreement, and this Undertaking shall be in addition to any other guaranty of or collateral security for any of the Guaranteed Obligations. The provisions of this Undertaking are severable, and in any action or proceeding involving any state corporate law, or any state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of Performance Guarantor hereunder would otherwise be held or
determined to be avoidable, invalid or unenforceable on account of the amount of Performance Guarantor's liability under this Undertaking, then, notwithstanding any other provision of this Undertaking to the contrary, the amount of such liability shall, without any further action by Performance Guarantor or Recipient, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding. Any provisions of this Undertaking which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise specified, references herein to "SECTION" shall mean a reference to sections of this Undertaking.
IN WITNESS WHEREOF, Performance Guarantor has caused this Undertaking to be executed and delivered as of the date first above written.
ROCK-TENN COMPANY
SCHEDULE A
COMMITMENTS OF LIQUIDITY BANKS
BLUE RIDGE LIQUIDITY BANKS COMMITMENT
-------------------------- -----------
Wachovia Bank, National Association $50,000,000
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TPF LIQUIDITY BANKS COMMITMENT ------------------- ----------- SunTrust Bank $50,000,000 |
SCHEDULE B
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE
1. Executed copies of the Credit and Security Agreement, duly executed by the parties thereto.
2. Copy of the Resolutions of the Board of Directors of each Loan Party and Performance Guarantor certified by its Secretary authorizing such Person's execution, delivery and performance of this Agreement and the other documents to be delivered by it hereunder.
3. Articles or Certificate of Incorporation of each Loan Party and Performance Guarantor certified by the Secretary of State of its jurisdiction of incorporation on or within thirty (30) days prior to the initial Advance.
4. Good Standing Certificate for each Loan Party and Performance Guarantor issued by the Secretaries of State of its state of incorporation and each jurisdiction where it has material operations, each of which is listed below:
a. Borrower: Delaware b. Servicer: Georgia c. Performance Guarantor: Georgia |
5. A certificate of the Secretary of each Loan Party and Performance Guarantor certifying (i) the names and signatures of the officers authorized on its behalf to execute this Agreement and any other documents to be delivered by it hereunder and (ii) a copy of such Person's By-Laws.
6. Pre-filing state and federal tax lien, judgment lien and UCC lien searches against the Loan Parties from the following jurisdictions:
a. Borrower: Delaware
b. Originators: Delaware, Georgia, California (as applicable)
7. Duly executed financing statements [Forms UCC-1 and UCC-3, as applicable], in form suitable for filing under the UCC, in all jurisdictions as may be necessary or, in the opinion of the Administrative Agent, desirable, under the UCC of all appropriate jurisdictions in order to perfect (and, as applicable, continue the perfection of) the security interests contemplated by this Agreement.
8. Duly executed UCC termination statements, in form suitable for filing under the UCC, in all jurisdictions, if any, necessary to release all security interests and other
rights of any Person in the Receivables, Contracts or Related Security previously granted by Borrower or any Originator.
9. Executed copies of Collection Account Agreements for each Lock-Box and Collection Account.
10. A favorable opinion of legal counsel for the Loan Parties and Performance Guarantor reasonably acceptable to the Administrative Agent which addresses the following matters and such other matters as the Administrative Agent may reasonably request:
(a) Each of the Loan Parties and Performance Guarantor is a corporation duly organized, validly existing, and in good standing under the laws of the state of its incorporation.
(b) Each of the Loan Parties and Performance Guarantor has all requisite authority to conduct its business in each jurisdiction where failure to be so qualified would have a material adverse effect on such entity's business.
(c) The execution and delivery by each of the Loan Parties and Performance Guarantor of the Transaction Document to which it is a party and its performance of its obligations thereunder have been duly authorized by all necessary organizational action and proceedings on the part of such entity and will not:
(i) require any action by or in respect of, or filing with, any governmental body, agency or official (other than the filing of UCC financing statements);
(ii) contravene, or constitute a default under, any provision of applicable law or regulation or of its articles or certificate of incorporation or bylaws or of any agreement, judgment, injunction, order, decree or other instrument binding upon such entity; or
(iii) result in the creation or imposition of any Adverse Claim on assets of such entity or any of its Subsidiaries (except as contemplated by the Transaction Documents).
(d) Each of the Transaction Documents to which each of the Loan Parties and Performance Guarantor is a party has been duly executed and delivered by such entity and constitutes the legally valid, and binding obligation of such entity enforceable in accordance with its terms, except to the extent the enforcement thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and subject also to the availability of equitable remedies if equitable remedies are sought.
(e) The provisions of the Credit and Security Agreement are effective to create valid security interests in favor of the Administrative Agent, for the benefit of the Secured Parties, in all of Borrower's right, title and interest in and to the Receivables and Related Security described therein which constitute "accounts" or "general intangibles" (each as defined in the UCC) (collectively, the "OPINION COLLATERAL"), as security for the payment of the Obligations.
(f) Each of the UCC-1 Financing Statements naming Borrower as debtor, and Agent, as secured party, to be filed in the [describe filing offices], is in appropriate form for filing therein. Upon filing of such UCC-1 Financing Statements in such filing offices and payment of the required filing fees, the security interest in favor of the Administrative Agent, for the benefit of the Secured Parties, in the Opinion Collateral will be perfected.
(g) Based solely on our review of the [describe UCC Search Reports], and assuming (i) the filing of the Financing Statements and payment of the required filing fees in accordance with paragraph (f) and (ii) the absence of any intervening filings between the date and time of the Search Reports and the date and time of the filing of the Financing Statements, the security interest of the Administrative Agent in the Opinion Collateral is prior to any security interest granted in the Opinion Collateral by Borrower, the priority of which is determined solely by the filing of a financing statement in the [describe filing offices].
(h) Neither of the Loan Parties is 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 an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
11. A Compliance Certificate.
12. The Fee Letter.
13. A Monthly Report as at September 30, 2005.
14. Executed copies of (i) all consents from and authorizations by any Persons and (ii) all waivers and amendments to existing credit facilities, that are necessary in connection with this Agreement.
15. If applicable, a direction letter executed by each of the Loan Parties authorizing the Agents, and directing warehousemen to allow the Agents to inspect and make copies from such Loan Party's books and records maintained at off-site data processing or storage facilities.
16. The Liquidity Agreements, duly executed by each of the parties thereto.
17. Resolutions of Rock-Tenn Company's board of directors certified by its Secretary ratifying the Performance Undertaking and the other Transaction Documents to which it is a party.
Exhibit 10.2
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
DATED AS OF OCTOBER 26, 2005
AMONG
ROCK-TENN COMPANY, AS PARENT,
ROCK-TENN COMPANY OF TEXAS, ROCK-TENN CONVERTING COMPANY,
ROCK-TENN MILL COMPANY, LLC, ROCK-TENN PACKAGING AND
PAPERBOARD, LLC, PCPC, INC. AND WALDORF CORPORATION,
AS ORIGINATORS,
AND
ROCK-TENN FINANCIAL, INC.,
AS BUYER
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE............................... 2
Section 1.1 Initial Dividend and Contribution of Receivables........... 2
Section 1.2 Purchase of Receivables (Other than Initial Contributed
Receivables)............................................... 3
Section 1.3 Payment for the Purchases.................................. 5
Section 1.4 Purchase Price Credit Adjustments.......................... 6
Section 1.5 Payments and Computations, Etc............................. 7
Section 1.6 License of Software........................................ 7
Section 1.7 Characterization........................................... 8
ARTICLE II REPRESENTATIONS AND WARRANTIES................................. 9
Section 2.1 Representations and Warranties............................. 9
(a) Existence and Power.............................................. 9
(b) Power and Authority; Due Authorization, Execution and Delivery... 9
(c) No Conflict...................................................... 9
(d) Governmental Authorization....................................... 9
(e) Actions, Suits................................................... 10
(f) Binding Effect................................................... 10
(g) Accuracy of Information.......................................... 10
(h) Use of Proceeds.................................................. 10
(i) Good Title....................................................... 10
(j) Perfection....................................................... 10
(k) Places of Business and Locations of Records...................... 11
(l) Collections...................................................... 11
(m) Material Adverse Effect.......................................... 11
(n) Names............................................................ 11
(o) Ownership of Buyer............................................... 11
(p) Not a Holding Company or an Investment Company................... 11
(q) Compliance with Law.............................................. 12
(r) Compliance with Credit and Collection Policy..................... 12
(s) Payments to such Originator...................................... 12
(t) Enforceability of Contracts...................................... 12
(u) Eligible Receivables............................................. 12
(v) Accounting....................................................... 12
ARTICLE III CONDITIONS OF PURCHASE........................................ 13
Section 3.1 Conditions Precedent to Purchase........................... 13
Section 3.2 Conditions Precedent to Subsequent Payments................ 13
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ARTICLE IV COVENANTS...................................................... 13
Section 4.1 Affirmative Covenants of Transferors....................... 13
(a) Financial Reporting.............................................. 13
(i) Annual Reporting............................................ 14
(ii) Quarterly Reporting......................................... 14
(iii) Compliance Certificate...................................... 14
(iv) Shareholders Statements and Reports......................... 14
(v) Auditors Reports and Management Letters..................... 14
(b) Other Notices and Information.................................... 15
(i) Reportable Events........................................... 15
(ii) Change in Credit and Collection Policy...................... 15
(iii) Other Information........................................... 15
(iv) Termination Events or Unmatured Termination Events.......... 15
(v) Downgrade of Parent......................................... 15
(vi) Material Adverse Effect..................................... 15
(c) Compliance with Laws and Preservation of Existence............... 15
(d) Audits........................................................... 16
(e) Keeping and Marking of Records and Books......................... 16
(f) Compliance with Contracts and Credit and Collection Policy....... 17
(g) Ownership........................................................ 17
(h) Lenders' Reliance................................................ 17
(i) Collections...................................................... 18
(j) Taxes............................................................ 18
Section 4.2 Negative Covenants of Transferors.......................... 18
(a) Name Change, Offices and Records................................. 18
(b) Change in Payment Instructions to Obligors....................... 18
(c) Modifications to Contracts and Credit and Collection Policy...... 19
(d) Sales, Liens..................................................... 19
(e) Accounting for Purchase.......................................... 19
ARTICLE V TERMINATION EVENTS.............................................. 19
Section 5.1 Termination Events......................................... 19
Section 5.2 Remedies................................................... 22
ARTICLE VI INDEMNIFICATION................................................ 22
Section 6.1 Indemnities by Transferors................................. 22
Section 6.2 Other Costs and Expenses................................... 25
ARTICLE VII MISCELLANEOUS................................................. 25
Section 7.1 Waivers and Amendments..................................... 25
Section 7.2 Notices.................................................... 25
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Section 7.3 Protection of Ownership Interests of Buyer................. 25 Section 7.4 Confidentiality............................................ 27 Section 7.5 Bankruptcy Petition........................................ 27 Section 7.6 Limitation of Liability.................................... 27 Section 7.7 CHOICE OF LAW.............................................. 28 Section 7.8 CONSENT TO JURISDICTION.................................... 28 Section 7.9 WAIVER OF JURY TRIAL....................................... 28 Section 7.10 Integration; Binding Effect; Survival of Terms............. 29 Section 7.11 Counterparts; Severability; Section References............. 29 |
EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records; Federal
Employer Identification Number; Other Names
|
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate Exhibit V - Copy of Credit and Collection Policy Exhibit VI - Form of Subordinated Note |
Exhibit VII - Form of Purchase Report
Schedule A - List of Documents to Be Delivered to Buyer Prior to the Purchases
AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT
THIS AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as of
October 26, 2005, is by and among:
(a) Rock-Tenn Company, a Georgia corporation ("PARENT"),
(b) Rock-Tenn Company of Texas, a Georgia corporation, Rock-Tenn Converting Company, a Georgia corporation, Rock-Tenn Mill Company, LLC, a Georgia limited liability company, Rock-Tenn Packaging and Paperboard, LLC, a Georgia limited liability company, PCPC, Inc., a California corporation, and Waldorf Corporation, a Delaware corporation (each of the foregoing, an "ORIGINATOR" and collectively, the "ORIGINATORS"), and
(c) Rock-Tenn Financial, Inc., a Delaware corporation ("BUYER"),
and amends and restates in its entirety that certain Receivables Sale Agreement dated as of November 1, 2000 by and among Parent, certain of the Originators (or their predecessors) and Buyer (the "EXISTING AGREEMENT").
UNLESS DEFINED ELSEWHERE HEREIN, CAPITALIZED TERMS USED IN THIS AGREEMENT SHALL HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN EXHIBIT I HERETO.
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time hereafter will own, Receivables.
On the date of the Existing Agreement, each of the Originators party to the Existing Agreement made a dividend to Parent of all of such Originator's right, title and interest in and to 100% of its Receivables in existence as of the close of business on its Initial Cutoff Date, together with the associated Related Security and Collections, and Parent contributed all of such Receivables and the associated Related Security and Collections to Buyer's capital (such Receivables, the "INITIAL CONTRIBUTED RECEIVABLES" and, together with the associated Related Security and Collections, the "INITIAL CONTRIBUTED ASSETS") in exchange for 100% of the authorized Equity Interests of Buyer.
Parent intended the contribution of the Initial Contributed Assets to be an absolute conveyance by Parent to Buyer thereof, providing Buyer with the full benefits of ownership of such Initial Contributed Assets, and neither Parent nor Buyer intended such contribution to be, or for any purpose to be characterized as, a loan from Buyer to Parent.
Each of the Originators wishes to sell and assign to Buyer, and Buyer wishes to purchase from each Originator, all of such Originator's right, title and
interest in and to its Receivables (other than Initial Contributed Receivables), together with the Related Security and Collections with respect thereto.
Each of the Originators and Buyer intend the transactions contemplated hereby to be true sales to Buyer by such Originator of the Receivables originated by it, providing Buyer with the full benefits of ownership of such Receivables, and none of the Originators nor Buyer intends these transactions to be, or for any purpose to be characterized as, loans from Buyer to such Originator.
Buyer may finance its purchase of Receivables from the Originators, in part, by borrowing pursuant to that certain Amended and Restated Credit and Security Agreement dated as of October 26, 2005 (as amended, restated, replaced and/or otherwise modified from time to time in accordance with the terms thereof, the "CREDIT AND SECURITY AGREEMENT") among Buyer, Rock-Tenn Converting Company, as initial Servicer, Blue Ridge Asset Funding Corporation, Three Pillars Funding LLC, SunTrust Bank, SunTrust Capital Markets, Inc., as TPF Agent, and Wachovia Bank, National Association, individually, as Blue Ridge Agent and as administrative agent (in such last capacity, the "ADMINISTRATIVE AGENT").
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Initial Dividend and Contribution of Receivables. On the date hereof:
(a) Each of the Originators party to the Existing Agreement confirms that it made a dividend to Parent of the Initial Contributed Assets; and
(b) Parent hereby confirms that it contributed, assigned, transferred, set-over and otherwise conveyed to Buyer, and Buyer hereby confirms that it accepted from Parent, the Initial Contributed Assets, in exchange for the issuance of 100% of Buyer's Equity Interests.
(c) It is the intention of the parties hereto that (i) the distribution by each Originator party to the Existing Agreement to Parent of the Initial Contributed Assets originated by such Originator, and (ii) the subsequent contribution thereof by Parent to Buyer hereunder, each constituted an outright assignment of such Initial Contributed Assets, which assignment was absolute and irrevocable and provided Buyer with the full benefits of ownership of the Initial Contributed Assets. The distribution to Parent of Initial Contributed Assets
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
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
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
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,
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
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.
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.
(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
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.
(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.
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
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
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,
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
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 the interest of Buyer as Buyer (or its assigns) may reasonably request).
(h) Lenders' Reliance. Such Transferor acknowledges that the Administrative Agent and the Lenders are entering into the transactions contemplated by the Credit and Security Agreement in reliance upon Buyer's identity as a legal entity that is separate from such Transferor and any Affiliates thereof. Therefore, from and after the date of execution and delivery of this Agreement, such Transferor will take all reasonable steps including, without limitation, all steps that Buyer or any assignee of Buyer may from time to time reasonably request to maintain Buyer's identity as a separate legal entity and to make it manifest to third parties that Buyer is an entity with assets and liabilities distinct from those of such Transferor and any Affiliates thereof and not just a division of such Transferor or any such Affiliate. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, such Transferor (i) will not hold itself out to third parties as liable for the debts of Buyer nor purport to own any of the Receivables and other assets acquired by Buyer, (ii) will take all other actions necessary on its part to ensure that Buyer is at all times in compliance with the "separateness covenants" set forth in Section 7.1(i) of the Credit and Security Agreement and (iii) will cause all tax liabilities arising in connection with the transactions contemplated herein or otherwise to be allocated between such Transferor and Buyer on an arm's-length basis and in
a manner consistent with the procedures set forth in U.S. Treasury Regulations Sections 1.1502-33(d) and 1.1552-1.
(i) Collections. Such Transferor will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and Collection Account to be subject at all times to a Collection Account Agreement that is in full force and effect. In the event any payments relating to Receivables are remitted directly to such Transferor or any Affiliate of such Transferor, such Transferor will remit (or will cause all such payments to be remitted) directly to a Collection Bank and deposited into a Collection Account within three (3) Business Days following receipt thereof and, at all times prior to such remittance, such Transferor will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of Buyer and its assigns. Such Transferor will transfer exclusive ownership, dominion and control of each Lock-Box and Collection Account to Buyer and, will not grant the right to take dominion and control of any Lock-Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to Buyer (or its assigns) as contemplated by this Agreement and the Credit and Security Agreement.
(j) Taxes. Such Transferor will file all tax returns and reports required by law to be filed by it and promptly pay all taxes and governmental charges at any time owing, except any such taxes which are not yet delinquent or are being contested in good faith by appropriate and timely proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. Such Transferor will pay when due any and all present and future stamp, documentary, and other similar taxes and governmental charges payable in connection with the Receivables originated by it, and hold Buyer and its assigns harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes and governmental charges.
Section 4.2 Negative Covenants of Transferors. Until the date on which this Agreement terminates in accordance with its terms, each Transferor hereby covenants that:
(a) Name Change, Offices and Records. Such Transferor will not change its (i) state of organization, (ii) name, (iii) identity or structure (within the meaning of Article 9 of any applicable enactment of the UCC) or relocate its chief executive office at any time while the location of its chief executive office is relevant to perfection of Buyer's interest in the Receivables or the associated Related Security and Collections or any office where Records are kept unless it shall have: (i) given Buyer (and the Administrative Agent, as its assignee) at least forty-five (45) days' prior written notice thereof and (ii) delivered to the Administrative Agent (as Buyer's assignee) all financing statements, instruments and other documents requested by the Administrative Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Such Transferor will not add or terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection Account, unless Buyer
(or its assigns) shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account or Lock-Box, an executed Collection Account Agreement with respect to the new Collection Account or Lock-Box; PROVIDED, HOWEVER, that such Transferor may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. Such Transferor will not make any change to the Credit and Collection Policy that could reasonably be expected to adversely affect the collectibility of the Receivables originated by it or decrease the credit quality of any of its newly created Receivables. Except as otherwise permitted in its capacity as Servicer pursuant to the Credit and Security Agreement, such Transferor will not extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Such Transferor will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under which any Receivable arises, or any Lock-Box or Collection Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of Buyer provided for herein), and such Transferor will defend the right, title and interest of Buyer in, to and under any of the foregoing property, against all claims of third parties claiming through or under such Transferor.
(e) Accounting for Purchase. Such Transferor will not, and will not permit any Affiliate to, financially account (whether in financial statements or otherwise) for the transactions contemplated hereby in any manner other than the sale or other outright conveyance by such Transferor to Buyer of the Receivables originated by such Transferor and the associated Related Security or in any other respect account for or treat the transactions contemplated hereby in any manner other than as a sale of such Receivables and Related Security by such Transferor to Buyer except to the extent that such transactions are not recognized on account of consolidated financial reporting in accordance with generally accepted accounting principles.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more of the following events shall constitute a Termination Event:
(a) Any Transferor shall fail to make any payment or deposit required hereunder when due and such failure shall continue for three (3) Business Days.
(b) Any Transferor shall fail to observe or perform any covenant or agreement contained in Section 4.1(b)(iv) or 4.2.
(c) Any Transferor shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those referred to in Sections 5.1(a) and (b)), and such failure shall remain unremedied for 30 days after the earlier of (i) an Executive Officer of any of the Transferors obtaining knowledge thereof, or (ii) written notice thereof shall have been given to Any of the Transferors by Buyer or any of its assigns.
(d) Any representation, warranty, certification or statement made by such Transferor in this Agreement, any other Transaction Document or in any other document delivered pursuant hereto or thereto shall prove to have been incorrect in any material respect when made or deemed made; provided that the materiality threshold in the preceding clause shall not be applicable with respect to any representation or warranty which itself contains a materiality threshold and provided further, that any misrepresentation or certification for which Buyer has actually received a Purchase Price Credit shall not constitute a Termination Event hereunder.
(e) Any of the Transferors or any of its Restricted Subsidiaries shall fail to make when due (whether at stated maturity, by acceleration, on demand or otherwise, and after giving effect to any applicable grace period) any payment of principal of or interest on any Debt (other than the Obligations) exceeding $10,000,000 individually or in the aggregate, or any of the Transferors or any of its Restricted Subsidiaries shall fail to observe or perform within any applicable grace period any covenants or agreements contained in any agreements or instruments relating to any of its Debt exceeding $10,000,000 individually or in the aggregate, or any other event shall occur if the effect of such failure or other event is to accelerate, or to permit the holder of such Debt or any other Person to accelerate, the maturity of such Debt; or any such Debt shall be required to be prepaid (other than by a regularly scheduled required prepayment) in whole or in part prior to its stated maturity.
(f) Any of the Transferors or any Restricted Subsidiary shall commence a voluntary case concerning itself under the Bankruptcy Code or applicable foreign bankruptcy laws; or an involuntary case for bankruptcy is commenced against any of the Transferors or any of its Restricted Subsidiaries and the petition is not controverted within 30 days, or is not dismissed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) or similar official under applicable foreign bankruptcy laws is appointed for, or takes charge of, all or any substantial part of the property of any of the Transferors or any of its Restricted Subsidiaries; or any of the Transferors or any of its Restricted Subsidiaries commences proceedings of its own bankruptcy or to be granted a suspension of payments or any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction, whether now or hereafter in effect, relating to any of the Transferors or any of its Restricted Subsidiaries or there is commenced against any of the Transferors or any of its Restricted Subsidiaries any such proceeding which remains undismissed for a period of 60 days; or any of the Transferors or any
of its Restricted Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or any of the Transferors or any of its Restricted Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or any of the Transferors or any of its Restricted Subsidiaries makes a general assignment for the benefit of creditors; or any of the Transferors or any of its Restricted Subsidiaries shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or any of the Transferors or any of its Restricted Subsidiaries shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; or any of the Transferors or any of its Restricted Subsidiaries shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate action is taken by any of the Transferors or any of its Restricted Subsidiaries for the purpose of effecting any of the foregoing.
(g) A Change of Control shall occur.
(h) A Plan of any of the Transferors or any Restricted Subsidiary or a
Plan subject to Title IV of ERISA of any of its ERISA Affiliates: (i) shall fail
to be funded in accordance with the minimum funding standard required by
applicable law, the terms of such Plan, Section 412 of the Tax Code or Section
302 of ERISA for any plan year or a waiver of such standard is sought or granted
with respect to such Plan under applicable law, the terms of such Plan or
Section 412 of the Tax Code or Section 303 of ERISA; or (ii) is being, or has
been, terminated or the subject of termination proceedings under applicable law
or the terms of such Plan; or (iii) shall require any of the Transferors or any
Restricted Subsidiary to provide security under applicable law, the terms of
such Plan, Section 401 or 412 of the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to any of the Transferors or any Restricted
Subsidiary under applicable law, the terms of such Plan, or Title IV of ERISA;
and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC or a Plan that would have a Material Adverse Effect.
(i) Judgments or orders for the payment of money in excess of $10,000,000 individually or in the aggregate or otherwise having a Material Adverse Effect shall be rendered against any of the Transferors or any Restricted Subsidiary and such judgment or order shall continue unsatisfied (in the case of a money judgment) and in effect for a period of 30 days during which execution shall not be effectively stayed or deferred (whether by action of a court, by agreement or otherwise).
(j) Any Transaction Document ceases to be in full force and effect or the validity or enforceability thereof is disaffirmed by or on behalf of any Transferor or any Restricted Subsidiary, or at any time it is or becomes unlawful for any Transferor or any Restricted Subsidiary to perform or comply with its obligations under any Transaction Document, or the obligations of Any of the Transferors or any Restricted Subsidiary under any Transaction Document are not or cease to be legal, valid and binding on any of the Transferors or any Restricted Subsidiary.
(k) There shall occur any loss, termination, cancellation or other material impairment of any governmental license, certificate, or permit by any Transferor or any Restricted Subsidiary which is reasonably likely to have a Material Adverse Effect.
Section 5.2 Remedies. Upon the occurrence and during the continuation of a
Termination Event, Buyer may take any of the following actions: (i) declare the
applicable Termination Date to have occurred, whereupon the applicable
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Transferor;
PROVIDED, HOWEVER, that upon the occurrence of a Termination Event described in
Section 5.1(f) with respect to any Transferor, or of an actual or deemed entry
of an order for relief with respect to any Transferor under the Bankruptcy Code,
the applicable Termination Date shall automatically occur, without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
each Transferor and (ii) to the fullest extent permitted by applicable law,
declare that the Default Rate shall accrue with respect to any amounts then due
and owing by such Transferor to Buyer. The aforementioned rights and remedies
shall be without limitation and shall be in addition to all other rights and
remedies of Buyer and its assigns otherwise available under any other provision
of this Agreement, by operation of law, at equity or otherwise, all of which are
hereby expressly preserved, including, without limitation, all rights and
remedies provided under the UCC, all of which rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Transferors. Without limiting any other rights that Buyer may have hereunder or under applicable law, each Transferor hereby agrees to indemnify (and pay upon demand to) Buyer and its assigns, officers, directors, agents and employees (each an "INDEMNIFIED PARTY") from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable, including reasonable attorneys' fees (which attorneys may be employees of Buyer or any such assign) and disbursements (all of the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of them arising out of or as a result of this Agreement or the acquisition, either directly or indirectly, by Buyer of an interest in the Receivables originated by such Transferor, EXCLUDING, HOWEVER:
(a) Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in respect of Receivables originated by such Transferor that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or
(c) taxes imposed on or measured by such Indemnified Party's net income, and franchise taxes and branch profit taxes imposed on it, by the jurisdiction under the laws of which such Indemnified Party is organized or any political subdivision thereof, and taxes imposed on or measured by such Indemnified Party's net income, and franchise taxes and branch profit taxes imposed on it, by the jurisdiction in which such Indemnified Party's principal executive office is located or any political subdivision thereof;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the liability of such Transferor or limit the recourse of Buyer to such Transferor for amounts otherwise specifically provided to be paid by such Transferor under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, but subject in each case to clauses (a), (b) and (c) above, each Transferor shall indemnify Buyer for Indemnified Amounts relating to or resulting from:
(i) any representation or warranty made by such Transferor (or any officers of such Transferor) under or in connection with any Purchase Report, this Agreement, any other Transaction Document or any other information or report delivered by such Transferor pursuant hereto or thereto for which Buyer has not received a Purchase Price Credit that shall have been false or incorrect when made or deemed made;
(ii) the failure by such Transferor, to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of such Transferor to keep or perform any of its obligations, express or implied, with respect to any Contract;
(iii) any failure of such Transferor to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage, suit or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than a defense related to the financial condition, or discharge in bankruptcy, of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time with other funds;
(vii) any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, such Transferor's use of the proceeds of the Purchase from it hereunder, the ownership of the Receivables originated by such Transferor or any other investigation, litigation or proceeding relating to such Transferor in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in respect of any Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding;
(ix) any Termination Event described in Section 5.1(f);
(x) any failure to vest and maintain vested in Buyer, or to transfer to Buyer, legal and equitable title to, and ownership of, the Receivables originated by such Transferor and the associated Collections, and all of such Transferor's right, title and interest in the Related Security associated with such Receivables, in each case, free and clear of any Adverse Claim;
(xi) the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable originated by such Transferor, the Related Security and Collections with respect thereto, and the proceeds of any thereof, whether at the time of the Purchase from such Transferor hereunder or at any subsequent time;
(xii) any action or omission by such Transferor which reduces or impairs the rights of Buyer with respect to any Receivable or the value of any such Receivable;
(xiii) any attempt by any Person to void the Purchase from such Transferor hereunder under statutory provisions or common law or equitable action; and
(xiv) the failure of any Receivable reflected as an Eligible Receivable on any Purchase Report prepared by such Transferor to be an Eligible Receivable at the time acquired by Buyer.
Notwithstanding the foregoing, (i) the foregoing indemnification is not intended to, and shall not, constitute a guarantee of the collectibility or payment of the Receivables conveyed hereunder; and (ii) nothing in the Section 6.1 shall require a Transferor to indemnify any Indemnified Party for Receivables which are not collected, not paid or otherwise uncollectible on account of the insolvency, bankruptcy, creditworthiness or financial inability to pay of the applicable Obligor.
Section 6.2 Other Costs and Expenses. Each Transferor shall pay to Buyer on demand all costs and out-of-pocket expenses in connection with the preparation, execution, delivery and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder. Each Transferor shall pay to Buyer on demand any and all costs and expenses of Buyer, if any, including reasonable counsel fees and expenses actually incurred in connection with the enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following a Termination Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its assigns) in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified or waived except in writing signed by each Transferor and Buyer and, to the extent required under the Credit and Security Agreement, the Administrative Agent and the Liquidity Banks or the Required Liquidity Banks. Any material amendment, supplement, modification or waiver will required satisfaction of the Rating Agency Condition.
Section 7.2 Notices. All communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof or at such other address or telecopy number as such Person may hereafter specify for the purpose of notice to each of the other parties hereto. Each such notice or other communication shall be effective (a) if given by telecopy, upon the receipt thereof, (b) if given by mail, five (5) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (c) if given by any other means, when received at the address specified in this Section 7.2.
Section 7.3 Protection of Ownership Interests of Buyer.
(a) Each Transferor agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or desirable, or that Buyer (or its assigns) may
request, to perfect, protect or more fully evidence the interest of Buyer hereunder and the interest of the Administrative Agent (on behalf of the Lenders) under the Credit and Security Agreement, or to enable Buyer (or its assigns) to exercise and enforce their rights and remedies hereunder. At any time, Buyer (or its assigns) may, at such Transferor's sole cost and expense, direct such Transferor to notify the Obligors of Receivables of the ownership interests of Buyer under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to Buyer or its designee.
(b) If any Transferor fails to perform any of its obligations hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or cause performance of, such obligations, and Buyer's (or such assigns') costs and expenses incurred in connection therewith shall be payable by such Transferor as provided in Section 6.2. Each Transferor irrevocably authorizes Buyer (and its assigns) at any time and from time to time in the sole discretion of Buyer (or its assigns), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact, to act on behalf of such Transferor (i) to execute on behalf of such Transferor as debtor and to file financing statements necessary or desirable in Buyer's (or its assigns') sole discretion to perfect and to maintain the perfection and priority of the interest of Buyer in the Receivables originated by such Transferor and the associated Related Security and Collections and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as Buyer (or its assigns) in their sole discretion deem necessary or desirable to perfect and to maintain the perfection and priority of Buyer's interests in such Receivables. This appointment is coupled with an interest and is irrevocable. From and after July 1, 2001, if any Transferor fails to perform any of its obligations hereunder: (A) such Transferor hereby authorizes Buyer (or its assigns) to file financing statements and other filing or recording documents with respect to the Receivables and Related Security (including any amendments thereto, or continuation or termination statements thereof), without the signature or other authorization of such Transferor, in such form and in such offices as Buyer (or any of its assigns) reasonably determines appropriate to perfect or maintain the perfection of the ownership or security interests of Buyer (or its assigns) hereunder, (B) such Transferor acknowledges and agrees that it is not authorized to, and will not, file financing statements or other filing or recording documents with respect to the Receivables or Related Security (including any amendments thereto, or continuation or termination statements thereof), without the express prior written approval by the Administrative Agent (as Buyer's assignee), consenting to the form and substance of such filing or recording document, and (C) such Transferor approves, authorizes and ratifies any filings or recordings made by or on behalf of the Administrative Agent (as Buyer's assign) in connection with the perfection of the ownership or security interests in favor of Buyer or the Administrative Agent (as Buyer's assign).
Section 7.4 Confidentiality.
(a) Each Transferor and Buyer shall maintain and shall cause each of its employees and officers to maintain the confidentiality of the Fee Letter and the other confidential or proprietary information with respect to the Administrative Agent and the Conduits and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Transferor and its officers and employees may disclose such information to such Transferor's external accountants, attorneys and other advisors and as required by any applicable law or order of any judicial or administrative proceeding.
(b) Each Transferor hereby consents to the disclosure of any nonpublic information with respect to it (i) to Buyer, the Agents, the Liquidity Banks or the Conduits by each other, (ii) to any prospective or actual assignee or participant of any of the Persons described in clause (i), and (iii) to any rating agency, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to a Conduit or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which Wachovia acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, PROVIDED each such Person described in the foregoing clauses (ii) and (iii) is informed of the confidential nature of such information. In addition, the Lenders and the Administrative Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).
Section 7.5 Bankruptcy Petition.
(a) Each Transferor and Buyer each hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of a Conduit, it will not institute against, or join any other Person in instituting against, such Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.
(b) Each Transferor covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding obligations of Buyer under the Credit and Security Agreement, it will not institute against, or join any other Person in instituting against, Buyer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.
Section 7.6 Limitation of Liability. Except with respect to any claim arising out of the willful misconduct or gross negligence of any Transferor, Buyer, any Conduit, any
Agent or any Liquidity Bank, no claim may be made by any such Person (or its Affiliates, directors, officers, employees, attorneys or agents) against any such other Person (or its Affiliates, directors, officers, employees, attorneys or agents) for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each of the parties hereto, on behalf of itself and its Affiliates, directors, officers, employees, attorneys, agents, successors and assigns, hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF GEORGIA.
Section 7.8 CONSENT TO JURISDICTION. EACH TRANSFEROR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR GEORGIA STATE COURT SITTING IN THE STATE OF GEORGIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH TRANSFEROR PURSUANT TO THIS AGREEMENT AND SUCH TRANSFEROR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST SUCH TRANSFEROR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY SUCH TRANSFEROR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH TRANSFEROR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN THE STATE OF GEORGIA.
Section 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY SUCH TRANSFEROR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of
the Transferors, Buyer and their respective successors and permitted assigns
(including any trustee in bankruptcy). No Transferor may assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of any Transferor. Without limiting the foregoing, each Transferor
acknowledges that Buyer, pursuant to the Credit and Security Agreement, may
assign to the Administrative Agent, for the benefit of the Lenders, its rights,
remedies, powers and privileges hereunder and that the Administrative Agent may
further assign such rights, remedies, powers and privileges to the extent
permitted in the Credit and Security Agreement. Each Transferor agrees that the
Administrative Agent, as the assignee of Buyer, shall, subject to the terms of
the Credit and Security Agreement, have the right to enforce this Agreement and
to exercise directly all of Buyer's rights and remedies under this Agreement
(including, without limitation, the right to give or withhold any consents or
approvals of Buyer to be given or withheld hereunder) and each Transferor agrees
to cooperate fully with the Administrative Agent in the exercise of such rights
and remedies. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until terminated in accordance with its terms;
PROVIDED, HOWEVER, that the rights and remedies with respect to (i) any breach
of any representation and warranty made by any Transferor pursuant to Article
II; (ii) the indemnification and payment provisions of Article VI; and (iii)
Section 7.5 shall be continuing and shall survive any termination of this
Agreement.
Section 7.11 Counterparts; Severability; Section References. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise expressly indicated, all references herein to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and sections of, and schedules and exhibits to, this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
ROCK-TENN COMPANY, as Parent
By: /s/ Gregory L. King
------------------------------------
Name Printed: Gregory L. King
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 504 Thrasher Street
Norcross, GA 30071
Attn: Gregory L. King
|
ROCK-TENN MILL COMPANY, LLC,
as Originator
By: /s/ Gregory L. King
------------------------------------
Name Printed: Gregory L. King
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 504 Thrasher Street
Norcross, GA 30071
Attn: Gregory L. King
|
ROCK-TENN PACKAGING AND PAPERBOARD, LLC,
as Originator
By: /s/ Gregory L. King
------------------------------------
Name Printed: Gregory L. King
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 504 Thrasher Street
Norcross, GA 30071
Attn: Gregory L. King
|
[Amended and Restated Receivables Sale Agreement]
ROCK-TENN COMPANY OF TEXAS,
as Originator
By: /s/ Gregory L. King
------------------------------------
Name Printed: Gregory L. King
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 504 Thrasher Street
Norcross, GA 30071
Attn: Gregory L. King
|
ROCK-TENN CONVERTING COMPANY,
as Originator
By: /s/ Gregory L. King
------------------------------------
Name Printed: Gregory L. King
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 504 Thrasher Street
Norcross, GA 30071
Attn: Gregory L. King
|
WALDORF CORPORATION, as Originator
By: /s/ Gregory L. King
------------------------------------
Name Printed: Gregory L. King
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 504 Thrasher Street
Norcross, GA 30071
Attn: Gregory L. King
|
[Amended and Restated Receivables Sale Agreement]
PCPC, INC., as Originator
By: /s/ Gregory L. King
------------------------------------
Name Printed: Gregory L. King
Title: Vice President Risk Management,
Treasurer and Assistant Secretary
Address: 504 Thrasher Street
Norcross, GA 30071
Attn: Gregory L. King
|
ROCK-TENN FINANCIAL, INC., as Buyer
By: /s/ Nikolai Mondi
------------------------------------
Name Printed: Nikolai Mondi
Title: Treasurer
Address: 5921 Grassy Creek Blvd.
Winston-Salem, NC 27105
Attn: Gregory L. King
|
[Amended and Restated Receivables Sale Agreement]
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined).
(a) Capitalized terms used and not otherwise defined in the Agreement or this Exhibit are used with the meanings attributed thereto in the Credit and Security Agreement.
(c) As used in the Agreement and the Exhibits and Schedules thereto, capitalized terms have the meanings set forth in this Exhibit I (such meanings to be equally applicable to the singular and plural forms thereof).
"ADVERSE CLAIM" means a Lien.
"AFFILIATES" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person. A Person shall be deemed to control another Person if the controlling Person owns 10-50% of any class of voting securities of the controlled Person only if it also possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise, or (b) if the controlling Person owns more than 50% of any class of voting securities of the controlled Person.
"ADMINISTRATIVE AGENT" has the meaning set forth in the Preliminary Statements to the Agreement.
"AGREEMENT" means the Amended and Restated Receivables Sale Agreement, dated as of October 26, 2005, among Parent, Originators and Buyer, as the same may be amended, restated or otherwise modified.
"APPLICABLE STATE" has the meaning set forth in Section 2.1(a).
"BANKRUPTCY CODE" means the Bankruptcy Code of 1978, as amended and in effect from time to time (11 U.S.C. Section 101 et seq.) and any successor statute thereto.
"BUSINESS DAY" means any day on which banks are not authorized or required to close in New York, New York, or Atlanta, Georgia, and The Depository Trust Company of New York is open for business.
"BUYER" has the meaning set forth in the preamble to the Agreement.
"CALCULATION PERIOD" means each calendar month or portion thereof which elapses during the term of the Agreement. The first Calculation Period shall commence on the
date of the Purchases hereunder and the final Calculation Period shall terminate on the applicable Termination Date.
"CAPITALIZED LEASE" means any lease the obligation for rentals with respect to which is required to be capitalized on a balance sheet of the lessee in accordance with GAAP.
"CHANGE OF CONTROL" means (a) as applied to Parent, that, during any
period of twelve consecutive calendar months, (i) more than 50% of the members
of the Board of Directors of Parent who were members on the first day of such
period shall have resigned or been removed or replaced, other than as a result
of death, disability, or change in personal circumstances, or (ii) any Person or
"Group" (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, but excluding (A) any employee benefit or stock ownership plans of
Parent, and (B) members of the Board of Directors and executive officers of
Parent as of the date of this Agreement, members of the immediate families of
such members and executive officers, and family trusts and partnerships
established by or for the benefit of any of the foregoing individuals) shall
have acquired more than 50% of the outstanding voting Equity Interests of
Parent, except that Parent's purchase of its common stock outstanding on the
date hereof which results in one or more of Parent's shareholders of record as
of the date of this Agreement controlling more than 50% of the outstanding
voting Equity Interests of Parent shall not constitute an acquisition hereunder,
(b) Parent ceases to own, directly or indirectly, a majority of the outstanding
voting Equity Interests of any Originator, or (c) Parent ceases to own a
majority of the outstanding voting Equity Interests of Buyer.
"COLLECTION ACCOUNT" means each concentration account, depository account, lock-box account or similar account in which any Collections are collected or deposited and which is listed on Exhibit III hereto.
"COLLECTION ACCOUNT AGREEMENT" means an agreement in form reasonably acceptable to the Administrative Agent among an Originator, Servicer, Buyer, the Administrative Agent and a Collection Bank.
"COLLECTION BANK" means, at any time, any of the banks holding one or more Collection Accounts.
"COLLECTIONS" means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable; PROVIDED, HOWEVER, that the term "COLLECTIONS" shall not include any payment made for the account of a third-party service provider or sub-contractor whose services were not included in the amount invoiced for the applicable Receivable.
"COMMERCIAL PAPER" means promissory notes issued by a Conduit in the commercial paper market.
"CONSOLIDATED SUBSIDIARIES" means, at any date as of which the same is to be determined, any Subsidiary or other entity the accounts of which would be consolidated with those of Parent in its consolidated financial statements if such statements were prepared as of such date in accordance with GAAP.
"CONTRACT" means, with respect to any Receivable, any and all instruments, agreements, invoices or other writings pursuant to which such Receivable arises or which evidences such Receivable.
"CREDIT AND COLLECTION POLICY" means the Originators' credit and collection policies and practices relating to Contracts and Receivables existing on the date hereof and summarized in EXHIBIT V, as modified from time to time in accordance with the Agreement.
"CREDIT AND SECURITY AGREEMENT" has the meaning set forth in the Preliminary Statements to the Agreement.
"DEBT" means, with respect to any Person at any date, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such Person as lessee
under Capitalized Leases, (v) all obligations of such Person to purchase
securities (or other property) which arise out of or in connection with the sale
of the same or substantially similar securities or property, (vi) all
obligations of such Person to reimburse any bank or other person in respect of
amounts paid under a letter of credit or similar instrument, (vii) all Debt of
others secured by a lien on any asset of such Person to the extent of the fair
market value of such asset, whether or not such Debt is assumed by such Person,
(viii) all Synthetic Lease Liabilities of such Person, and (ix) all Debt of
others guaranteed by such Person to the extent such Debt represents a liability
of such Person; provided that liabilities resulting from the recognition of
other post-retirement benefits required by Financial Accounting Standard No. 106
shall not constitute "DEBT."
"DEFAULT RATE" means a rate per annum equal to the sum of (i) the Prime Rate, PLUS (ii) 2.00%, changing when and as the Prime Rate changes.
"DEFAULT RATIO" has the meaning set forth in the Credit and Security Agreement.
"DISCOUNT FACTOR" means a percentage calculated to provide Buyer with a reasonable return on its investment in the Receivables purchased from each Originator after taking account of (i) the time value of money based upon the anticipated dates of collection of such Receivables and the cost to Buyer of financing its investment in such Receivables during such period, (ii) the risk of nonpayment by the Obligors, (iii) servicing costs, and (iv) factoring expenses. Each Originator and Buyer may agree from time to time to change the Discount Factor based on changes in one or more of the items affecting the calculation thereof, PROVIDED THAT any change to the Discount Factor shall take effect as of the commencement of a Calculation Period, shall apply only prospectively and shall not affect the Purchase Price payment made prior
to the Calculation Period during which such Originator and Buyer agree to make such change. As of the date hereof, the Discount Factor in respect of Eligible Receivables is 1.4% and the Discount Factor in respect of all other Receivables is 1.4%.
"EQUITY INTERESTS" means, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non-voting), of capital of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, whether outstanding on the date hereof or issued after the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with any Originator within the meaning of
Section 414(b) or (c) of the Tax Code (and Sections 414(m) and (o) of the Tax
Code for purposes of provisions relating to Section 412 of the Tax Code).
"ERISA EVENT" has the meaning provided in the Parent Credit Agreement.
"EXECUTIVE OFFICER" shall mean with respect to any Person, the Chief Executive Officer, President, Vice Presidents (if elected by the Board of Directors of such Person), Chief Financial Officer, Treasurer, Secretary and any Person holding comparable offices or duties (if elected by the Board of Directors of such Person).
"FINANCE CHARGES" means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Contract.
"FINANCIAL OFFICER" means with respect to the Parent, any of the Chief Financial Officer, Vice President of Finance, and Treasurer.
"GAAP" means generally accepted accounting principles in effect in the United States of America as of the date of this Agreement.
"INDEMNIFIED AMOUNTS" has the meaning set forth in Section 6.1.
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.1.
"INITIAL CONTRIBUTED ASSETS" has the meaning set forth in the Preliminary Statements.
"INITIAL CONTRIBUTED RECEIVABLES" has the meaning set forth in the Preliminary Statements.
"INITIAL CUTOFF DATE" means, for each Originator, the close of business on the Business Day immediately preceding that date on which such Originator became a party to this Agreement.
"LIEN" means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).
"LOCK-BOX" means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Exhibit III hereto.
"MATERIAL" means, SOLELY WHEN CAPITALIZED, the measure of a matter of significance which shall be determined as being more than an amount equal to the greater of (i) Ten Million Dollars ($10,000,000) or (ii) ten percent (10%) of the Consolidated Net Worth (as defined in the Parent Credit Agreement).
"MATERIAL ADVERSE EFFECT" means (i) any Material adverse effect on the business, operations, financial condition or assets of the Parent and its Restricted Subsidiaries, taken as a whole, (ii) any Material adverse effect on the ability of any Transferor to perform its obligations under the Transaction Documents to which it is a party, (iii) any material adverse effect on the legality, validity or enforceability of the Agreement or any other Transaction Document, (iv) any material adverse effect on any Transferor's, Buyer's, the Administrative Agent's or any Lender's interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or Collections with respect thereto, or (v) any material adverse effect on the collectibility of the Receivables generally or of any material portion of the Receivables.
"MOODY'S" means Moody's Investors Service, Inc.
"NET WORTH" means as of the last Business Day of each Calculation
Period preceding any date of determination, the excess, if any, of (a) the
aggregate Outstanding Balance of the Receivables at such time plus cash-on-hand,
OVER (b) the sum of (i) the Aggregate Principal outstanding at such time, PLUS
(ii) the aggregate outstanding principal balance of the Subordinated Loans
(including any Subordinated Loan proposed to be made on the date of
determination).
"OBLIGOR" means a Person obligated to make payments pursuant to a Contract.
"ORGANIZATIONAL DOCUMENTS" means, for any Person, the documents for its formation and organization, which, for example, (a) for a corporation are its corporate charter and bylaws, (b) for a partnership are its certificate of partnership (if applicable) and partnership agreement, (c) for a limited liability company are its certificate of formation or organization and
its operating agreement, regulations or the like and (d) for a trust is the trust agreement, declaration of trust, indenture or bylaws under which it is created.
"ORIGINAL BALANCE" means, with respect to any Receivable coming into existence after the Initial Cutoff Date, the Outstanding Balance of such Receivable on the date it was created.
"ORIGINATOR" has the meaning set forth in the preamble to the Agreement.
"OUTSTANDING BALANCE" of any Receivable at any time means the then outstanding principal balance thereof.
"PARENT" has the meaning set forth in the preamble to the Agreement.
"PARENT CREDIT AGREEMENT" means that certain Credit Agreement, dated as of June 6, 2005, among Rock-Tenn Company, Rock-Tenn Company of Canada, the guarantors from time to time party thereto, the lenders from time to time party thereto, Wachovia Bank, National Association, as administrative agent, SunTrust Bank, as syndication agent, and Bank of America, N.A., as documentation agent, as the same may be amended from time to time in accordance with the terms thereof.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.
"PERSON" means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
"PLAN" has the meaning provided in the Parent Credit Agreement.
"PRIME RATE" means a rate per annum equal to the prime rate of interest announced from time to time by Wachovia (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.
"PURCHASE" means the purchase by Buyer from an Originator pursuant to
Section 1.2(a) of the Agreement of the Receivables originated by such Originator
(other than Initial Contributed Receivables) and the Related Security and
Collections related thereto, together with all related rights in connection
therewith.
"PURCHASE PRICE" means, with respect to the Purchase from each
Originator, the aggregate price to be paid by Buyer to such Originator for such
Purchase in accordance with Section 1.3 of the Agreement for the Receivables
originated by such Originator and the associated Collections and Related
Security being sold to Buyer, which price shall equal on any date (i) the
product of (x) the Outstanding Balance of such Receivables on such date,
MULTIPLIED BY (y) one minus the Discount Factor in effect on such date, minus
(ii) any Purchase Price
Credits to be credited against the Purchase Price otherwise payable in accordance with Section 1.4 of the Agreement.
"PURCHASE PRICE CREDIT" has the meaning set forth in Section 1.4 of the Agreement.
"PURCHASE REPORT" has the meaning set forth in Section 1.2(b) of the Agreement.
"RECEIVABLE" means all indebtedness and other obligations owed to an Originator (at the times it arises, and before giving effect to any transfer or conveyance under this Agreement) (including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible) arising in connection with the sale of goods or the rendering of services by such Originator to customers that are domiciled in the United States or Canada and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto. Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; PROVIDED, FURTHER, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless or whether the account debtor or such Originator treats such indebtedness, rights or obligations as a separate payment obligation.
"RECORDS" means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the applicable Originator's interest in the inventory and goods (including returned or repossessed inventory or goods), if any, the sale, financing or lease of which by such Originator gave rise to such Receivable, and all insurance contracts with respect thereto,
(ii) all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of the applicable Originator's right, title and interest in each Lock-Box and each Collection Account, and
(vii) all proceeds of any of the foregoing.
"REPORTABLE EVENT" has the meaning set forth in Section 403(b) of
ERISA.
"REQUIRED CAPITAL AMOUNT" means, as of any date of determination, an amount equal to the greater of (a) 3% of the Aggregate Commitment under the Credit and Security Agreement, and (b) the product of (i) 1.5 times the product of the Default Ratio times the Default Horizon Ratio, each as determined from the most recent Monthly Report received from the Servicer under the Credit and Security Agreement, and (ii) the Outstanding Balance of all Receivables as of such date, as determined from the most recent Monthly Report received from the Servicer under the Credit and Security Agreement.
"REQUIRED LIQUIDITY BANKS" has the meaning set forth in the Credit and Security Agreement.
"RESTRICTED SUBSIDIARY" has the meaning provided in the Parent Credit Agreement.
"REVIEW" has the meaning set forth in Section 4.1(d).
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw Hill Companies, Inc.
"SERVICER" means at any time the Person (which may be the Administrative Agent) then authorized pursuant to the Credit and Security Agreement to service administer and collect Receivables.
"SETTLEMENT DATE" means, with respect to each Calculation Period, the date that is the 15th calendar day of the month following such Calculation Period.
"SUBORDINATED LOAN" has the meaning set forth in Section 1.3(a) of the Agreement.
"SUBORDINATED NOTE" means a promissory note in substantially the form of Exhibit VI hereto as more fully described in Section 1.3 of the Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited liability company, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.
"SYNTHETIC LEASE LIABILITIES" of a Person means any liability under any tax retention operating lease or so-called "synthetic" lease transaction, or any obligations arising with respect to any other similar transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person and its Subsidiaries (other than leases which do not have an attributable interest component that are not Capitalized Leases).
"TAX CODE" means the Internal Revenue Code of 1986, as the same may be amended from time to time.
"TERMINATION DATE" means, as to each Originator, the earliest to occur of (i) the Business Day immediately prior to the occurrence of a Termination Event set forth in Section 5.1(f) with respect to such Originator, (ii) the Business Day specified in a written notice from Buyer to such Originator following the occurrence of any other Termination Event, and (iii) the date which is 10 Business Days after Buyer's receipt of written notice from such Originator that it wishes to terminate the facility evidenced by this Agreement.
"TERMINATION EVENT" has the meaning set forth in Section 5.1 of the Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each Collection Account Agreement, the Subordinated Note, and all other instruments, documents and agreements executed and delivered in connection herewith.
"TRANSFEROR" means (a) as to the Initial Contributed Assets, each applicable Originator and Parent, and (b) as to all other Receivables, together with the associated Related Security and Collections, the applicable Originator.
"UCC" means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.
"UNMATURED TERMINATION EVENT" means an event which, with the passage of time or the giving of notice, or both, would constitute a Termination Event.
"WACHOVIA" means Wachovia Bank, National Association in its individual capacity and its successors.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE CONSTRUED IN ACCORDANCE WITH GAAP. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE STATE OF GEORGIA, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS DEFINED IN SUCH ARTICLE 9.
EXHIBIT II
Places of Business; Locations of Records;
Federal Employer Identification Number(s); Other Names
ROCK-TENN COMPANY
Places of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer Identification Number: 62-0342590
Legal, Trade and Assumed Names: none
Organizational Identification Number: J518706
ROCK-TENN CONVERTING COMPANY
Place of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer identification Number: 58-1271825
Legal, Trade and Assumed Names: Alliance, a Rock-Tenn Company, Voxgrafica
Organizational Identification Number: J518594
ROCK-TENN COMPANY OF TEXAS
Places of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer Identification Number: 58-1973639
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
ROCK-TENN MILL COMPANY, LLC
Places of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer Identification Number: __________________
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
ROCK-TENN PACKAGING AND PAPERBOARD, LLC
Places of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer Identification Number: __________________
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
WALDORF CORPORATION
Places of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer Identification Number: 41-1598295
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
PCPC, INC.
Places of Business: 504 Thrasher Street, Norcross, GA 30071
Locations of Records: 504 Thrasher Street, Norcross, GA 30071
Federal Employer Identification Number: __________________
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
ROCK-TENN FINANCIAL, INC.
Places of Business: 5921 Grassy Creek Blvd., Winston-Salem, NC 27105
Locations of Records: 5921 Grassy Creek Blvd., Winston-Salem, NC 27105
Federal Employer Identification Number: 58-2579090
Legal, Trade and Assumed Names: none
Organizational Identification Number: __________________
EXHIBIT III
Lock-boxes; Collection Accounts; Collection Banks
LOCK-BOX RELATED COLLECTION ACCOUNT
-------- --------------------------
P.O. Box 102064 Account No. 8800849666 at
Atlanta, Georgia 30368 SunTrust Bank in Atlanta, Georgia
ABA No. 061000104
P.O. Box 751241 Account No. 2018661618358 at
Charlotte, N.C. 28275 Wachovia Bank in Charlotte, North Carolina
ABA No. 0530000219
|
EXHIBIT IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that certain Amended and Restated Receivables Sale Agreement dated as of October 26, 2005, among Rock-Tenn Company (the "PARENT"), and certain of its subsidiaries, as Originators, and Rock-Tenn Financial, Inc., as buyer (the "AGREEMENT"). Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of the Parent.
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Parent and its Subsidiaries during the accounting period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Termination Event or an Unmatured Termination Event, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate[, except as set forth below].
[4. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Originator has taken, is taking, or
proposes to take with respect to each such condition or event:
_______________________________].
The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this ____ day of ______________, 200_.
EXHIBIT V
Credit and Collection Policy
[SEE ATTACHED]
EXHIBIT VI
Form of Subordinated Note
SUBORDINATED NOTE
October 26, 2005
1. Note. FOR VALUE RECEIVED, the undersigned, Rock-Tenn Financial,
Inc., a Delaware corporation ("SPV"), hereby unconditionally promises to pay to
the order of [ORIGINATOR NAME], a(n) __________ ***[corporation] [limited
liability company] [partnership]*** ("ORIGINATOR"), in lawful money of the
United States of America and in immediately available funds, on or before the
date following the applicable Termination Date which is one year and one day
after the date on which (i) the Outstanding Balance of all Receivables sold by
Originator under the "Sale Agreement" referred to below has been reduced to zero
and (ii) Originator has paid to Buyer all indemnities, adjustments and other
amounts which may be owed thereunder in connection with the Purchase thereunder
(the "COLLECTION DATE"), the aggregate unpaid principal sum outstanding of all
"Subordinated Loans" made from time to time by Originator to SPV pursuant to and
in accordance with the terms of that certain Amended and Restated Receivables
Sale Agreement dated as of October 26, 2005 among Originator and certain of its
affiliates, as sellers, and SPV, as buyer (as amended, restated, supplemented or
otherwise modified from time to time, the "SALE AGREEMENT"). Reference to
Section 1.3 of the Sale Agreement is hereby made for a statement of the terms
and conditions under which the loans evidenced hereby have been and will be
made. All terms which are capitalized and used herein and which are not
otherwise specifically defined herein shall have the meanings ascribed to such
terms in the Sale Agreement.
2. Interest. SPV further promises to pay interest on the outstanding unpaid principal amount hereof from the date hereof until payment in full hereof at a rate equal to the 1-month LIBOR rate published in THE WALL STREET JOURNAL on the first Business Day of each month (or portion thereof) during the term of this Subordinated Note, computed for actual days elapsed on the basis of a year consisting of 360 days and changing on the first business day of each month hereafter ("LIBOR"); PROVIDED, HOWEVER, that if SPV shall default in the payment of any principal hereof, SPV promises to pay, on demand, interest at the rate equal to LIBOR plus 2.00% per annum on any such unpaid amounts, from the date such payment is due to the date of actual payment. Interest shall be payable on the first Business Day of each month in arrears; PROVIDED, HOWEVER, that SPV may elect on the date any interest payment is due hereunder to defer such payment and upon such election the amount of interest due but unpaid on such date shall constitute principal under this Subordinated Note. The outstanding principal of any loan made under this Subordinated Note shall be due and payable on the Collection Date and may be repaid or prepaid at any time without premium or penalty.
3. Principal Payments. Originator is authorized and directed by SPV to enter on the grid attached hereto, or, at its option, in its books and records, the date and amount of each loan made by it which is evidenced by this Subordinated Note and the amount of each payment of principal made by SPV, and absent manifest error, such entries shall constitute prima facie evidence of the accuracy of the information so entered; PROVIDED THAT neither the failure of Originator to make any such entry or any error therein shall expand, limit or affect the obligations of SPV hereunder.
4. Subordination. Originator shall have the right to receive, and SPV shall make, any and all payments and prepayments relating to the loans made under this Subordinated Note PROVIDED THAT, after giving effect to any such payment or prepayment, the aggregate Outstanding Balance of Receivables (as each such term is defined in the Credit and Security Agreement hereinafter referred to) owned by SPV at such time exceeds the sum of (a) the Obligations (as defined in the Credit and Security Agreement) outstanding at such time under the Credit and Security Agreement, plus (b) the aggregate outstanding principal balance of all loans made under this Subordinated Note. Originator hereby agrees that at any time during which the conditions set forth in the proviso of the immediately preceding sentence shall not be satisfied, Originator shall be subordinate in right of payment to the prior payment of any indebtedness or obligation of SPV owing to the Administrative Agent or any Lender under that certain Amended and Restated Credit and Security Agreement dated as of October 26, 2005 by and among SPV, Rock-Tenn Converting Company, as initial Servicer, various "Lenders" and "Co-Agents" from time to time party thereto, and Wachovia Bank, National Association, as the "Administrative Agent" (as amended, restated, supplemented or otherwise modified from time to time, the "CREDIT AND SECURITY AGREEMENT"). The subordination provisions contained herein are for the direct benefit of, and may be enforced by, the Administrative Agent and the Lenders and/or any of their respective assignees (collectively, the "SENIOR CLAIMANTS") under the Credit and Security Agreement. Until the date on which the "Aggregate Principal" outstanding under the Credit and Security Agreement has been repaid in full and all other obligations of SPV and/or the Servicer thereunder and under the "Fee Letter" referenced therein (all such obligations, collectively, the "SENIOR CLAIM") have been indefeasibly paid and satisfied in full, Originator shall not institute against SPV any proceeding of the type described in Section 5.1(f) of the Sale Agreement unless and until the Collection Date has occurred. Should any payment, distribution or security or proceeds thereof be received by Originator in violation of this Section 4, Originator agrees that such payment shall be segregated, received and held in trust for the benefit of, and deemed to be the property of, and shall be immediately paid over and delivered to the Administrative Agent for the benefit of the Senior Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of the type described in Section 5.1(f) of the Sale Agreement involving SPV as debtor, then and in any such event the Senior Claimants shall receive payment in full of all amounts due or to become due on or in respect of the Aggregate Principal and the Senior Claim (including "Interest" as defined and as accruing under the Credit and Security Agreement after the commencement of any such proceeding, whether or not any or all of such Interest is an allowable claim in any such proceeding) before Originator is entitled to receive payment on account of this Subordinated
Note, and to that end, any payment or distribution of assets of SPV of any kind or character, whether in cash, securities or other property, in any applicable insolvency proceeding, which would otherwise be payable to or deliverable upon or with respect to any or all indebtedness under this Subordinated Note, is hereby assigned to and shall be paid or delivered by the Person making such payment or delivery (whether a trustee in bankruptcy, a receiver, custodian or liquidating trustee or otherwise) directly to the Administrative Agent for application to, or as collateral for the payment of, the Senior Claim until such Senior Claim shall have been paid in full and satisfied.
6. Amendments. This Subordinated Note shall not be amended or modified except in accordance with Section 7.1 of the Sale Agreement. The terms of this Subordinated Note may not be amended or otherwise modified without the prior written consent of the Administrative Agent for the benefit of the Lenders.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED IN THE STATE OF GEORGIA, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE OF GEORGIA. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS SUBORDINATED NOTE.
8. Waivers. All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment for payment, demand, protest and notice of dishonor. Originator additionally expressly waives all notice of the acceptance by any Senior Claimant of the subordination and other provisions of this Subordinated Note and expressly waives reliance by any Senior Claimant upon the subordination and other provisions herein provided.
9. Assignment. This Subordinated Note may not be assigned, pledged or otherwise transferred to any party other than Originator without the prior written consent of the Administrative Agent, and any such attempted transfer shall be void.
ROCK-TENN FINANCIAL, INC.
SCHEDULE
TO
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
AMOUNT OF AMOUNT OF UNPAID
SUBORDINATED PRINCIPAL PRINCIPAL NOTATION MADE BY
DATE LOAN PAID BALANCE (INITIALS)
---- ------------ --------- --------- ----------------
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EXHIBIT VII
[Form of] Purchase Report
For the Calculation Period beginning [date] and ending [date]
TO: BUYER AND THE ADMINISTRATIVE AGENT (AS BUYER'S ASSIGNEE)
Aggregate Outstanding Balance of all Receivables sold during the period: $_______ A LESS: Aggregate Outstanding Balance of all Receivables sold during such period which were not Eligible Receivables on the date when sold: ($_____) (B) EQUALS: Aggregate Outstanding Balance of all Eligible Receivables sold during the period (A - B): $_______ =C LESS: Purchase Price discount during the Period: ($_____) (D) EQUALS: Gross Purchase Price Payable during the period (C - D) $_______ =E LESS: Total Purchase Price Credits arising during the Period: ($_____) (F) EQUALS: Net Purchase Price payable during the Period (E - F): $_______ =G Cash Purchase Price Paid to Originator during the Period: $_______ H Subordinated Loans made during the Period: $_______ I LESS: Repayments of Subordinated Loans received during the Period: ($_____) (J) EQUALS: Purchase Price paid in Cash or Subordinated Loans during the period (H + I - J): $_______ =K |
SCHEDULE AB
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE DATE OF THIS AGREEMENT
1. Executed copies of the Receivables Sale Agreement, duly executed by the parties thereto.
2. Copy of the Credit and Collection Policy to attach to the Receivables Sale Agreement as an Exhibit.
3. A certificate of each Transferor's [Assistant] Secretary certifying:
(a) A copy of the Resolutions of the Board of Directors of such Transferor, authorizing such Transferor's execution, delivery and performance of the Receivables Sale Agreement and the other documents to be delivered by it thereunder;
(b) A copy of the Organizational Documents of such Transferor (also certified, to the extent that such documents are filed with any governmental authority, by the Secretary of State of the jurisdiction of organization of such Originator on or within thirty (30) days prior to closing);
(c) Good Standing Certificates for such Transferor issued by the Secretaries of State of its state of incorporation and each jurisdiction where it has material operations; and
(d) The names and signatures of the officers authorized on its behalf to execute the Receivables Sale Agreement and any other documents to be delivered by it thereunder.
4. Pre-filing state and federal tax lien, judgment lien and UCC lien searches against each Transferor from the following jurisdictions:
a.
b.
5. Time stamped receipt copies of proper financing statements, duly filed under the UCC on or before the date of the initial Purchase (as defined in the Receivables Sale Agreement) in all jurisdictions as may be necessary or, in the opinion of Buyer (or its assigns), desirable, under the UCC of all appropriate jurisdictions or any comparable law in order to perfect the ownership interests contemplated by the Receivables Sale Agreement.
6. Time stamped receipt copies of proper UCC termination statements, if any, necessary to release all security interests and other rights of any Person in the Receivables, Contracts or Related Security previously granted by each Transferor.
7. Executed Collection Account Agreements for each Lock-Box and Collection Account.
8. A favorable opinion of legal counsel for the Transferors licensed to give opinions under Georgia law reasonably acceptable to Buyer (and the Administrative Agent, as Buyer's assignee) as to the following:
(a) Due organization, valid existence, and in good standing of such Transferor.
(b) Requisite authority of such Transferor to conduct its business in each jurisdiction where failure to be so qualified would have a material adverse effect on such Originator's business.
(c) Due authorization, execution, delivery by such Transferor of the Receivables Sale Agreement and each other Transaction Document to which it is a party.
(d) No filings (other than financing statements) required and noncontravention of applicable laws, Organization Documents, Material contracts and court orders; or
(iii) No creation of any Adverse Claim (except as created under the Transaction Documents)
(d) Enforceability of the Receivables Sale Agreement and each other Transaction Document to which such Transferor is a party.
(e) Proper form for filing of UCC-1 and UCC-3 financing statements.
(f) Valid creation, perfection and filing priority of the security interests purported to be created by the Receivables Sale Agreement.
(h) Absence of any Material adverse litigation.
(i) Such Transferor is not an "investment company" as such term is defined in the Investment Company Act of 1940, as amended.
9. A "TRUE SALE/ABSOLUTE ASSIGNMENT" opinion and "SUBSTANTIVE CONSOLIDATION" opinion of counsel for the Transferors with respect to the transactions contemplated by the Receivables Sale Agreement.
10. A Certificate of a Financial Officer of Parent certifying that, as of the closing date, no Termination Event or Unmatured Termination Event exists and is continuing.
11. Executed copies of (i) all consents from and authorizations by any Persons and (ii) all waivers and amendments to existing credit facilities, that are necessary in connection with the Receivables Sale Agreement.
12. Executed Subordinated Note by Buyer in favor of each Originator.
13. If applicable, a direction letter executed by each Transferor authorizing Buyer (and the Administrative Agent, as its assignee) and directing warehousemen to allow Buyer (and the Administrative Agent, as its assignee) to inspect and make copies from such Transferor's books and records maintained at off-site data processing or storage facilities.
Exhibit 10.3
AMENDMENT NUMBER TWO TO THE
ROCK-TENN COMPANY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2003)
Pursuant to the power reserved in Section 8 of the Rock-Tenn Company Supplemental Executive Retirement Plan ("Plan"), the Committee hereby amends the Plan effective as of November 11, 2005, as follows:
Section 1.
By amending Section 2.1, Actuarial Equivalent, to read as follows:
2.1 Actuarial Equivalent. The term "Actuarial Equivalent" shall mean
(a) for purposes of Section 3.3(a), the same as actuarial equivalent as defined in the Pension Plan; or
(b) for purposes of Section 3.3(b) and Section 3.3(c), (1) the applicable mortality table set forth in Revenue Ruling 2001-62 and (2) an interest rate assumption which equals the average effective rate on 10-year Treasury securities for the month of (i) August which immediately precedes a Participant's Employment Termination Date, if such date occurs during the period beginning on October 1 and ending March 31 or (ii) February which immediately precedes a Participant's Employment Termination Date, if such date occurs during the period beginning on April 1 and ending on September 30.
Section 2.
By amending Section 2.6, Committee, to read as follows:
2.6. Committee. The term "Committee" shall mean the Compensation Committee of Rock Tenn's Board of Directors.
Section 3.
By amending Section 2.7, Compensation, to correct a scrivener's error effective retroactively to January 1, 2003 and to clarify that bonuses paid under the Annual Executive Bonus Program shall be taken into account and to read as follows:
2.7. Compensation. The term "Compensation" shall mean the same as compensation as defined in the Pension Plan except that for purposes of determining a benefit under Section 3.1(c)(1) and Section 3.1(d)(1) under this SERP, the limitation on compensation required under Code Section 401(a)(17) shall be
disregarded and a Participant's annual cash bonus payable from Rock-Tenn's or RTS' Key Employee Incentive Plan, if any, Annual Executive Bonus Program, if any, or any other annual bonus program designated by the Committee, if any, shall be included in his or her Compensation.
Section 4.
By amending Section 2.19, SERP Benefit, to read as follows:
2.19. SERP Benefit. The term "SERP Benefit" shall mean, in the case of a Participant's SERP I Benefit, SERP II Benefit, or SERP IV Benefit, whichever is applicable, a benefit payable in a single life annuity payable monthly beginning as of the Participant's Normal Retirement Date and shall mean, in the case of a SERP III Benefit, a lump sum payment.
Section 5.
By adding a new Section 2.27 to read as follows:
2.27. SERP IV Benefit. The term "SERP IV Benefit" shall mean the benefit described in Section 3.1(f).
Section 6.
By adding a new Section 2.28 to read as follows:
2.28. Early Retirement Date. The term "Early Retirement Date" shall mean the same as early retirement date as defined for each Participant in the Pension Plan.
Section 7.
By amending Section 3.1(a)(1), Committee or Chairman Action, to read as follows:
(1) Committee or Chairman Action. The Committee shall designate in writing whether a Participant who is a Rock-Tenn employee will be eligible for a SERP I Benefit, a SERP II Benefit, a SERP III Benefit or a SERP IV Benefit, and the Chairman shall designate in writing whether a Participant who is an RTS employee will be eligible for a SERP I Benefit, a SERP II Benefit, a SERP III Benefit or a SERP IV Benefit.
Section 8.
By amending Section 3.1(d) and (e) to read as follows:
(d) SERP III Benefit.
(1) General Rule. If a Participant is designated as eligible for a SERP III Benefit, his or her SERP Benefit shall equal [(A - B) x (C)] - D, where
A is a life only annuity payable as of the Participant's Normal Retirement Date where the annual benefit equals 3.5833% of his or her Final Average Compensation multiplied by the number of his or her years of Benefit Service (up to a maximum of 15 years of Benefit Service), and
B is a life only annuity payable as of the Participant's Normal Retirement Date where the annual benefit equals the sum of (1) his or her Social Security Benefit (expressed as an annual benefit) and (2) the benefits actually payable to, or on behalf of, the Participant under the Pension Plan (expressed as an annual benefit),
C equals the appropriate early retirement factors and lump sum conversion factors described in Section 3.3(b) (to convert (A - B) into a lump sum benefit payable under Section 3.3) and
D equals the amount of the benefits payable to, or on behalf of, the Participant from his or her matching account under the 401(k) Plan and the benefits payable to, or on behalf of, the Participant attributable to the credits to his or her employer credit account under the Supplemental Plan, all of which is determined as of his or her Employment Termination Date.
(2) Change in Control. In the event of a Change in Control, a Participant's benefit under this Section 3.1(d) shall be determined based on his or her Benefit Service as of the Change in Control Date if he or she is under age 60 on such date. However, if such Participant is age 60 or older as of the Change in Control Date, he or she will be deemed to have 15 years of Benefit Service for purposes of determining his or her benefit on the Change in Control Date.
(e) Offsets. A benefit shall be treated as payable to, or on behalf of, a Participant under Section 3.1(b)(1)(B), Section 3.1(c)(1)(B) and Section 3.1(d)(1)(B) if such benefit is payable to any person other than the Participant for any reason whatsoever and, if a Participant's benefit is payable to any other person as a result of a domestic relations order, the offsets called for under such sections of this Section 3.1 shall be effected on an Actuarial Equivalent basis.
Section 9.
By adding a new Section 3.1(f), SERP IV Benefit, to read as follows:
(f) SERP IV Benefit. Each Participant designated on Exhibit A attached hereto shall be eligible to accrue a benefit under this Plan as of December 31, 2005, December 31, 2006, December 31, 2007 and December 31, 2008 equal to the product of (a) times (b) where
(a) equals the lesser of (1) 2% or (2) the "Consumer Price Index Adjustment" immediately preceding each December 31 and
(b) equals the sum of the amounts in column 1 and column 2 set forth opposite each Participant's name on Exhibit A,
provided, however, he or she shall accrue a benefit as of a December 31 only if he or she is employed by Rock-Tenn Company on such December 31.
For purposes of this paragraph, "Consumer Price Index Adjustment" means the increase or decrease (expressed as a percentage) over the 12 month period ending on September 30, 2005 or, when applicable, over the 12 month period ending on the last day of each September thereafter in the U. S. Department of Labor's Consumer Price Index for All Urban Consumers for the U.S. City Average for All Items, 1982-84=100, as such index is reported without any seasonal adjustment.
Section 10.
By amending Section 3.2, Vested Benefit, to read as follows:
3.2 Vested Benefit. If a Participant is not fully vested in his or her accrued benefit under the Pension Plan (based on the actual number of years of vesting service he or she has completed under the Pension Plan) on his or her Employment Termination Date, he or she shall forfeit his or her benefit under this SERP, provided, however, a Participant's SERP IV Benefit shall be nonfeitable to the extent accrued under Section 3.1(f).
Section 11.
By amending Section 3.3, Payment, to read as follows:
3.3 Payment.
(a) Employment Termination Prior to November 11, 2005. The SERP Benefit I or II payable to, or on behalf of, a Participant under this Section 3 who had an Employment Termination Date prior to November 11, 2005 shall (consistent with
the payment limitations under Section 409A of the Code) be paid as of the same date, in the same benefit payment form and to the same person as the Participant's benefit under the Pension Plan, all as determined without taking into account any part of the Participant's benefit which is payable to any person pursuant to any qualified domestic relations order.
(b) Employment Termination On or After November 11, 2005. The SERP I,
II or IV Benefit payable to, or on behalf of a Participant under this Section 3
who has an Employment Termination Date on or after November 11, 2005 shall
(consistent with the payment limitations under Section 409A of the Code) be paid
as soon as practicable after his or her Employment Termination Date in a lump
sum which is the present value of the benefit (using the applicable "conversion
factors" and "early reduction factors" as set forth in paragraphs (i), (ii) and
(iii) below) payable to the Participant under this Plan, all as determined
without taking into account any part of the Participant's benefit which is
payable to any person pursuant to any qualified domestic relations order. The
appropriate conversion and early reduction factors shall be (1) determined by
the Plan's Actuary, (2) based on the Actuarial Equivalent factors set forth in
Section 2.1(b) as in effect on the Participant's Employment Termination Date and
(3) supplied by the Plan's Actuary as soon as practicable following the
Participant's Employment Termination Date.
(i) In the event a Participant's Employment Termination Date is on or after his or her Normal Retirement Date, his or her SERP Benefit shall be converted to a lump sum present value benefit using the "immediate lump sum factor".
(ii) In the event a Participant's Employment Termination Date is on or after his or her Early Retirement Date and before his or her Normal Retirement Date, his or her SERP Benefit shall be the greater of (A) the SERP Benefit (as first reduced by the applicable "early retirement reduction factors" used by the Actuary under the Pension Plan) converted to a lump sum present value benefit using the "immediate lump sum factor" or (B) the SERP Benefit converted to a lump sum present value benefit using the "deferred lump sum factor."
(iii) In the event a Participant's Employment Termination Date is before he or she reaches either his or her Normal Retirement Date or his or her Early Retirement Date, his or her SERP Benefit shall be converted to a lump sum present value using the "deferred lump sum factor. "
(c) SERP III Benefit. The SERP III Benefit payable to, or on behalf of
a Participant under this Section 3 who has an Employment Termination Date on or
after November 11, 2005 shall (consistent with the payment limitations under
Section 409A of the Code) be paid as soon as practicable after his or her
Employment Termination Date in a lump sum as determined under Section 3.1(d).
(d) Specified Employee. If the Participant is a "specified employee" within the meaning of Code Section 409A, any benefit payable as an annuity shall start, and any benefit payable as a lump sum shall be paid, to the Participant no earlier than 6 months after the Participant's Employment Termination Date and such benefit will be credited with interest (as determined under Section 2.1(b)(2)) until the date the benefit is paid to the Participant. If such Participant dies and an annuity or lump sum is payable to his or her beneficiary, such annuity shall start or such lump sum shall be paid to his or her beneficiary as soon as practicable following his or her death and such benefit will be credited with interest (as determined under Section 2.1(b)(2)) until the date the benefit is paid to the Participant's beneficiary.
The amendment made in this Section 11 is intended to comply with the guidance provided to date by the U. S. Treasury regarding Section 409A of the Code.
Section 12.
Except as hereinabove amended and modified, the Plan as amended and restated effective as of January 1, 2003, and as amended by Amendment Number One shall remain in full force and effect. However, this Plan shall be administered by the Committee in good faith to comply with the requirements of Section 409A of the Code pending the amendment of this Plan to comply with such requirements.
IN WITNESS WHEREOF, based on a resolution adopted by the Committee, Rock-Tenn Company has caused this Amendment Number Two to be executed by its duly authorized officer this 2nd day of February, 2006.
ROCK-TENN COMPANY
By: /s/ Steven C. Voorhees
------------------------------------
Title: Executive Vice President and
Chief Financial Officer
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EXHIBIT A
COLUMN 1(1) COLUMN 2(2)
----------- -----------
Thomas F. West $1,316.95 $1,136.84
Charles A. Obermeyer $ 804.81 $ 731.41
Kevin R. Sullivan $ 984.62 $ 902.97
Sam A. Johnson, III $6,745.16 $2,637.99
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(2) This amount represents each named Participant's frozen monthly accrued benefit under the Gulf States Paper Corporation Supplemental Executive Retirement Plan as of December 31, 2004.
Exhibit 10.4
ROCK-TENN COMPANY
SUPPLEMENTAL RETIREMENT SAVINGS PLAN
AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2006
ROCK-TENN COMPANY
SUPPLEMENTAL RETIREMENT SAVINGS PLAN
Effective as of the 1st day of January, 2006, Rock-Tenn Company (the "Controlling Company") hereby amends and restates the Rock-Tenn Company Supplemental Retirement Savings Plan (the "Plan").
BACKGROUND AND PURPOSE
A. Background. The Plan was initially adopted effective as of May 15, 2003. Effective January 1, 2006, the Plan, as set forth in this document, is intended and should be construed as a restatement and continuation of the Plan as previously in effect.
B. Goal. The Controlling Company desires (i) to provide its designated
key management employees (and those of its affiliated companies that participate
in the Plan) with an opportunity to defer the receipt and income taxation of a
portion of such employees' annual base salary and other designated payments, and
(ii) to provide certain of such employees with additional deferred compensation
as the Controlling Company and/or certain other participating companies may
determine.
C. Purpose. The purpose of the Plan document is to set forth the terms and conditions pursuant to which these deferrals and contributions may be made and to describe the nature and extent of the employees' rights to such amounts.
D. Type of Plan. The Plan constitutes an unfunded, nonqualified deferred compensation plan that benefits certain designated employees who are within a select group of key management or highly compensated employees. Except with regard to amounts that were earned and vested prior to January 1, 2005, it is intended that this Plan comply with the requirements of Section 409A of the Internal Revenue Code 1986, as amended.
STATEMENT OF AGREEMENT
To amend and restate the Plan with the purposes and goals as hereinabove described, the Controlling Company hereby sets forth the terms and provisions of the Plan as follows:
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.................................................... 1
1.1 Account........................................................ 1
1.2 Administrative Committee....................................... 1
1.3 Beneficiary.................................................... 1
1.4 Board.......................................................... 1
1.5 Code........................................................... 1
1.6 Compensation................................................... 1
1.7 Compensation Committee......................................... 1
1.8 Controlled Group............................................... 1
1.9 Controlling Company............................................ 1
1.10 Deferral Contributions......................................... 1
1.11 Deferral Election.............................................. 2
1.12 Effective Date................................................. 2
1.13 Eligible Employee.............................................. 2
1.14 ERISA.......................................................... 2
1.15 Financial Hardship............................................. 2
1.16 Investment Election............................................ 3
1.17 Investment Funds............................................... 3
1.18 Key Employee................................................... 3
1.19 Nonpayment Period.............................................. 3
1.20 Participant.................................................... 4
1.21 Participating Company.......................................... 4
1.22 Plan........................................................... 4
1.23 Plan Year...................................................... 4
1.24 RTS Controlled Group........................................... 4
1.25 Surviving Spouse............................................... 4
1.26 Trust or Trust Agreement....................................... 4
1.27 Trustee........................................................ 4
1.28 Trust Fund..................................................... 4
1.29 Valuation Date................................................. 4
ARTICLE II ELIGIBILITY AND PARTICIPATION................................. 5
2.1 Eligibility.................................................... 5
2.2 Procedure for Admission........................................ 5
2.3 Cessation of Eligibility....................................... 5
(a) Cessation of Eligible Status................................ 5
(b) Inactive Participant Status................................. 5
ARTICLE III PARTICIPANTS' ACCOUNTS; DEFERRALS AND CREDITING.............. 6
3.1 Participants' Accounts......................................... 6
(a) Establishment of Accounts................................... 6
(b) Nature of Contributions and Accounts........................ 6
(c) Several Liabilities......................................... 6
(d) General Creditors........................................... 6
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3.2 Deferral Contributions......................................... 6
3.3 Procedure for Elections........................................ 7
(a) Effective Date.............................................. 7
(b) Term........................................................ 7
(c) Amount...................................................... 7
(d) Revocation.................................................. 7
(e) Crediting of Deferred Compensation.......................... 8
3.4 Debiting of Distributions...................................... 8
3.5 Crediting of Earnings.......................................... 8
3.6 Vesting........................................................ 8
3.7 Notice to Participants of Account Balances..................... 8
3.8 Good Faith Valuation Binding................................... 8
3.9 Errors and Omissions in Accounts............................... 9
ARTICLE IV INVESTMENT FUNDS.............................................. 10
4.1 Selection by Administrative Committee.......................... 10
4.2 Participant Direction of Deemed Investments.................... 10
(a) Nature of Participant Direction............................. 10
(b) Participant Elections....................................... 10
(c) Administrative Committee Discretion......................... 10
ARTICLE V PAYMENT OF ACCOUNT BALANCES.................................... 11
5.1 Benefit Payments Upon Termination of Service for Reasons
Other Than Death............................................... 11
(a) General Rule Concerning Benefit Payments.................... 11
(b) Timing of Distribution...................................... 11
5.2 Form of Distribution........................................... 12
(a) Single-Sum Payment.......................................... 12
(b) Quarterly Installments...................................... 12
(c) Changing Form of Distribution............................... 12
5.3 Death Benefits................................................. 12
5.4 Hardship Distributions......................................... 13
5.5 Beneficiary Designation........................................ 13
(a) General..................................................... 13
(b) No Designation or Designee Dead or Missing.................. 13
5.6 Taxes.......................................................... 14
5.7 Offset of Benefit by Amounts Owed to the Controlling Company... 14
ARTICLE VI CLAIMS........................................................ 15
6.1 Rights......................................................... 15
6.2 Initial Claim.................................................. 15
6.3 Appeal......................................................... 15
6.4 Satisfaction of Claims......................................... 16
ARTICLE VII SOURCE OF FUNDS; TRUST....................................... 17
7.1 Source of Funds................................................ 17
7.2 Trust.......................................................... 17
(a) Establishment............................................... 17
(b) Distributions............................................... 17
(c) Status of the Trust......................................... 17
7.3 Controlling Company Guaranty................................... 17
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(a) Obligation Parameters....................................... 17
(b) Limit on Controlling Company's Obligation................... 18
(c) Nature of Obligation........................................ 18
7.4 Plan Expenses.................................................. 18
ARTICLE VIII ADMINISTRATIVE COMMITTEE.................................... 19
8.1 Action......................................................... 19
8.2 Rights and Duties.............................................. 19
8.3 Compensation, Indemnity and Liability.......................... 20
ARTICLE IX AMENDMENT AND TERMINATION..................................... 21
9.1 Amendments..................................................... 21
9.2 Termination of Plan............................................ 21
ARTICLE X MISCELLANEOUS.................................................. 23
10.1 Taxation....................................................... 23
10.2 No Employment Contract......................................... 23
10.3 Headings....................................................... 23
10.4 Gender and Number.............................................. 23
10.5 Assignment of Benefits......................................... 23
10.6 Legally Incompetent............................................ 24
10.7 Governing Law.................................................. 24
EXHIBIT A PARTICIPATING COMPANIES........................................ A-1
EXHIBIT B SENIOR EXECUTIVE SUBPLAN....................................... B-1
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ARTICLE I
DEFINITIONS
For purposes of the Plan, the following terms, when used with an initial capital letter, will have the meaning set forth below unless a different meaning plainly is required by the context.
1.1 Account means, with respect to a Participant or Beneficiary, the total dollar amount or value evidenced by the last balance posted and actually credited in accordance with the terms of the Plan to the account record established for such Participant or Beneficiary.
1.2 Administrative Committee means the committee appointed by the Compensation Committee to administer the Plan, as provided in Article VIII; provided, if for any period of time the Compensation Committee has not specifically appointed any individuals to serve as members of the Administrative Committee with respect to all or any portion of the Plan, the members of the Compensation Committee shall serve as the Administrative Committee with respect to the Plan or such portion of the Plan during such period.
1.3 Beneficiary means, with respect to a Participant, the person(s) designated or identified in accordance with Section 5.5 to receive any death benefits that may be payable under the Plan upon the death of the Participant.
1.4 Board means the Board of Directors of the Controlling Company.
1.5 Code means the Internal Revenue Code of 1986, as amended.
1.6 Compensation means, except as otherwise provided on an exhibit to the Plan, with respect to an employee for a Plan Year, such employee's base pay for such Plan Year as determined by the Administrative Committee, including any portion of such base pay that is deferred under the Plan or under a Code Section 401(k) plan or Code Section 125 plan maintained by a Participating Company but excluding any portion of such base pay that is paid or made available to the employee during the Plan Year while he is not an active Participant.
1.7 Compensation Committee means the Compensation Committee of the Board.
1.8 Controlled Group means all of the companies that are either (i) members
of the same controlled group of corporations [within the meaning of Code Section
414(b)] or (ii) under common control [within the meaning of Code Section 414(c)]
with the Controlling Company.
1.9 Controlling Company means Rock-Tenn Company.
1.10 Deferral Contributions mean, for each Plan Year, that portion of a Participant's Compensation deferred under the Plan pursuant to Section 3.2.
1.11 Deferral Election means, except as otherwise provided on an exhibit to the Plan, a written, electronic or other form of election pursuant to which a Participant may elect to defer under the Plan a portion of his Compensation.
1.12 Effective Date means January 1, 2006, the date that this restatement of the Plan generally will be effective. The Plan was initially effective as of May 15, 2003.
1.13 Eligible Employee means, for a Plan Year or portion of a Plan Year, a member of a select group of highly compensated or key management employees who is selected by the Administrative Committee or the Compensation Committee, on either an individual or group basis, as eligible to participate in the Plan. In general, the Administrative Committee will determine, based on annualized data for a portion of one Plan Year, (i) which employees of members of the Controlled Group will be highly compensated employees under Code Section 414(q) for the next Plan Year and (ii) which of the employees who are so determined to be highly compensated employees will be eligible to make Deferral Contributions and, therefore, actively participate in the Plan for such next Plan Year. In addition, the Compensation Committee may designate any other key management or highly compensated employees as eligible to actively participate in the Plan or any portion thereof for a Plan Year or any portion thereof.
1.14 ERISA means the Employee Retirement Income Security Act of 1974, as amended.
1.15 Financial Hardship means a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of the Participant's dependent [as defined in Code Section
152(a)], loss of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. Financial Hardship will be determined by
the Administrative Committee on the basis of the facts of each case, including
information supplied by the Participant in accordance with uniform guidelines
prescribed from time to time by the Administrative Committee; provided, the
Participant will be deemed not to have a Financial Hardship to the extent that
such hardship is or may be relieved:
(a) Through reimbursement or compensation by insurance or otherwise;
(b) By liquidation of the Participant's assets, to the extent the liquidation of assets would not itself cause severe financial hardship; or
(c) By cessation of deferrals under the Plan.
Examples of what are not considered to be unforeseeable emergencies include the need to send a Participant's child to college or the desire to purchase a home. Notwithstanding anything in the foregoing to the contrary, Financial Hardships shall be limited to circumstances constituting "unforeseeable emergencies" under Code Section 409A.
1.16 Investment Election means an election, made in such form as the Administrative Committee may direct, pursuant to which a Participant may elect the Investment Funds in which the amounts credited to his Account will be deemed to be invested.
1.17 Investment Funds mean the investment funds selected from time to time by the Administrative Committee for purposes of determining the rate of return on amounts deemed invested pursuant to the terms of the Plan.
1.18 Key Employee means an employee defined in Code Section 416(i) and the regulations promulgated thereunder [without regard to Code Section 416(i)(5)]. Generally, a Key Employee for a Plan Year means an employee, former employee or deceased employee who, at any time during the 12-month period ending on the September 30 immediately preceding the first day of such Plan Year, was either:
(a) An officer of a member of the Controlled Group having combined
annual Compensation from all members of the Controlled Group greater than
$130,000 [or such other amount as is applicable for the Plan Year under Code
Section 416(i)(1)(A)(i)]; provided, no more than 50 employees (or, if lesser,
the greater of 10 percent of all employees of a member of the Controlled Group
or 3) shall be treated as officers of a member of the Controlled Group;
(b) A 5-percent owner [or constructive owner within the meaning of Code Section 318, as modified by Code Section 416(i)(1)(B)(iii)] of a member of the Controlled Group; or
(c) A 1-percent owner (or constructive owner within the meaning of Code Section 318, as modified by Code Section 416(i)(1)(B)(iii) and the regulations promulgated thereunder) of a member of the Controlled Group having a combined annual Compensation from all members of the Controlled Group of more than $150,000.
Notwithstanding anything herein to the contrary, for purposes of determining whether an employee is a Key Employee, "Compensation" means (i) all amounts that are wages within the meaning of Code Section 3401(a) and all other payments of compensation to such employee by a member of the Controlled Group (in the course of the member's trade or business) for which the member of the Controlled Group is required to furnish the employee a written statement under Code Sections 6041(d), 6051(a)(3) and 6052 (i.e., all amounts reportable by the member of the Controlled Group on IRS Form W-2); provided, such amounts shall be determined without regard to any rules that limit the remuneration included in wages based on the nature or location of employment or the services performed [such as the exception for agricultural labor in Code Section 3401(a)(2)]; plus (ii) any elective deferral [as defined in Code Section 402(g)(3)], and any amount which is contributed or deferred by a member of the Controlled Group at the election of the employee and which is not includible in the gross income of the employee by reason of Code Section 125, 457 or 132(f)(4), including any amounts not available to an employee in cash in lieu of group health coverage because the employee is unable to certify that he has other health coverage.
1.19 Nonpayment Period has the meaning set forth in Section 7.3(a).
1.20 Participant means any person who has been admitted to, and has not been removed from, participation in the Plan pursuant to the provisions of Article II.
1.21 Participating Company means all members of the Controlled Group that have employees who are Participants (whether active or inactive) in the Plan. The Administrative Committee may specify such Participating Companies on Exhibit A hereto.
1.22 Plan means the Rock-Tenn Company Supplemental Retirement Savings Plan, as contained herein and all amendments hereto. For tax purposes and purposes of Title I of ERISA, the Plan is intended to be an unfunded, nonqualified deferred compensation plan covering certain designated employees who are within a select group of key management or highly compensated employees.
1.23 Plan Year means the 12-consecutive-month period ending on December 31 of each year.
1.24 RTS Controlled Group means RTS Packaging, LLC and all of the companies that are either (i) members of the same controlled group of corporations [within the meaning of Code Section 414(b)] or (ii) under common control [within the meaning of Code Section 414(c)] with RTS Packaging, LLC.
1.25 Surviving Spouse means, with respect to a Participant, the person who is treated as married to such Participant under the laws of the state in which the Participant resides. The determination of a Participant's Surviving Spouse will be made as of the date of such Participant's death.
1.26 Trust or Trust Agreement means the separate agreement or agreements between the Controlling Company and the Trustee governing the Trust Fund, and all amendments thereto.
1.27 Trustee means the party or parties so designated from time to time pursuant to the terms of the Trust Agreement.
1.28 Trust Fund means the total amount of cash and other property held by the Trustee (or any nominee thereof) at any time under the Trust Agreement.
1.29 Valuation Date means each day of the Plan Year on which the Plan's recordkeeper and the Trustee are each open to the public for business, or such other date(s) determined by the Administrative Committee in its sole discretion.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility.
Except as otherwise provided on an exhibit to the Plan, each individual who is an Eligible Employee as of the first day of a Plan Year will be eligible to participate in the Plan for the entire Plan Year. Such individual's participation will become effective as of the first day of such Plan Year (assuming he satisfies the procedures for admission described below).
2.2 Procedure for Admission.
Each Eligible Employee will become a Participant by completing such forms and providing such data in a timely manner, as are required by the Administrative Committee as a precondition of participation in the Plan. Such forms and data may include, without limitation, a Deferral Election, the Eligible Employee's acceptance of the terms and conditions of the Plan, and the designation of a Beneficiary or Beneficiaries to receive any death benefits payable hereunder.
2.3 Cessation of Eligibility.
(a) Cessation of Eligible Status. An employee will cease active participation in the Plan if, as of any day during a Plan Year, he separates from service with all members of the Controlled Group, in which case his deferrals under the Plan will cease.
(b) Inactive Participant Status. Even if his active participation in the Plan ends, an employee will remain an inactive Participant in the Plan until the earlier of (i) the date the full amount of his vested Account (if any) is distributed from the Plan, or (ii) the date he again becomes an Eligible Employee and recommences active participation in the Plan. During the period of time that an employee is an inactive Participant in the Plan, his Account will continue to be credited with earnings and/or losses as provided for in Section 3.5.
ARTICLE III
PARTICIPANTS' ACCOUNTS; DEFERRALS AND CREDITING
3.1 Participants' Accounts.
(a) Establishment of Accounts. The Administrative Committee will establish and maintain an Account on behalf of each Participant. To the extent provided herein, each Account will be credited with (i) Deferral Contributions, and (ii) earnings attributable to such Deferral Contributions, and will be debited by (A) losses attributable to such Deferral Contributions, and (B) the amount of all distributions. Each Account of a Participant will be maintained until the vested value thereof has been distributed to or on behalf of such Participant or his Beneficiary or Beneficiaries.
(b) Nature of Contributions and Accounts. The amounts credited to a Participant's Account will be represented solely by bookkeeping entries. Except as provided in Article VII, no monies or other assets will actually be set aside for such Participant, and all payments to a Participant or Beneficiary under the Plan will be made from the general assets of the Participating Companies.
(c) Several Liabilities. Each Participating Company will be severally (and not jointly) liable for the payment of benefits under the Plan in an amount equal to all undistributed Deferral Contributions withheld from Participant's Compensation paid or payable by each such Participating Company, as adjusted for earnings and/or losses pursuant to Section 3.5. The Administrative Committee will allocate the total liability to pay benefits under the Plan among the Participating Companies pursuant to this formula, and the Administrative Committee's determination will be final and binding.
(d) General Creditors. Any assets which may be acquired by a Participating Company in anticipation of its obligations under the Plan will be part of the general assets of such Participating Company. A Participating Company's obligation to pay benefits under the Plan constitutes a mere promise of such Participating Company to pay such benefits, and a Participant or Beneficiary will have and maintain no more rights than those of an unsecured, general creditor of such Participating Company.
3.2 Deferral Contributions.
Except as provided on a exhibit to the Plan, each Eligible Employee who is or becomes eligible to participate in the Plan for a Plan Year may elect to have Deferral Contributions made on his behalf for such Plan Year by completing and delivering to the Administrative Committee (or its designee) a Deferral Election setting forth the terms of his election. Subject to the terms and conditions set forth below, a Deferral Election will provide for the reduction of an Eligible Employee's Compensation in each regular paycheck payable during the Plan Year for which the Deferral Election is in effect.
3.3 Procedure for Elections. Except as otherwise provided on an exhibit to the Plan and subject to any modifications, additions or exceptions that the Administrative Committee, in its sole discretion, deems necessary, appropriate or helpful, the following terms will apply to Deferral Elections:
(a) Effective Date. A Participant's Deferral Election with respect to his Compensation for any Plan Year will be effective for the first regular paycheck that (i) is paid after the date the Deferral Election is submitted and becomes effective and (ii) relates to a payroll period ending no earlier than the last day of the immediately preceding Plan Year. To be effective, a Participant's Deferral Election must be made before the first day of the Plan Year for which Deferral Contributions will be made or at such earlier time as the Administrative Committee may prescribe. If an Eligible Employee fails to submit a Deferral Election in a timely manner, he will be deemed to have elected not to participate in the Plan for that Plan Year.
(b) Term. A Participant's Deferral Election will remain in effect only
for the Plan Year for which it is effective and will terminate on the earliest
of (i) the date the Participant ceases to be an active Participant, (ii) the
date the Participant's Deferral Election is revoked (as provided in subsection
(d) hereof), or (iii) the date on which is made the last payment of Compensation
relating to a payroll period ending prior to the last day of the Plan Year for
which the Deferral Election is effective. If a Participant is transferred from
the employment of one Participating Company to the employment of another
Participating Company, his Deferral Election with the first Participating
Company will remain in effect and will apply to his Compensation from the second
Participating Company until the earlier of those events set forth in the
preceding sentence.
(c) Amount. A Participant may elect to defer his Compensation payable in each regular paycheck in 1 percent increments, up to a maximum of 75 percent of his Compensation; provided, no Participant shall be permitted to defer more than $9,300 of his Compensation in any Plan Year; and, provided, further, the Administrative Committee may establish other maximum percentages and or amounts from time to time.
(d) Revocation.
(i) Automatic Revocation. If (i) a Participant receives a hardship distribution from any Code Section 401(k) plan maintain by a member of the Controlled Group, and (ii) the terms of such Code Section 401(k) plan provide for the suspension of elective contributions, such Participant's Deferral Election shall automatically be revoked and such Participant shall be prohibited from making Deferral Contributions for the period during which elective contributions are suspended under the terms of such Code Section 401(k) plan. A Participant whose Deferral Election is revoked may enter into a new Deferral Election with respect to his Compensation for any subsequent Plan Year by making such Deferral Election in accordance this Section and Section 3.2; provided, such Deferral Election shall become effective no earlier than the end of the suspension period provided under the terms of the applicable Code Section 401(k) plan.
(ii) Voluntary Revocation. A Participant who has suffered a
Financial Hardship during a Plan Year may revoke his Deferral Election for
such Plan Year by delivering an application for revocation to the
Administrative Committee, and such revocation will be effective as soon as
practicable after the date of the Administrative Committee's decision, made
in its sole discretion, that the Participant has suffered a Financial
Hardship. A Participant who revokes his Deferral Election may enter into a
new Deferral Election with respect to his Compensation for any subsequent
Plan Year by making such Deferral Election in accordance this Section and
Section 3.2.
(e) Crediting of Deferred Compensation. For each Plan Year that a Participant has a Deferral Election in effect, the Administrative Committee will credit the amount of such Participant's Deferral Contributions to his Account on, or as soon as practicable after, the Valuation Date on which such amount would have been paid to him but for his election hereunder.
3.4 Debiting of Distributions.
As of each Valuation Date, the Administrative Committee will debit each Participant's Account for any amount distributed from such Account since the immediately preceding Valuation Date.
3.5 Crediting of Earnings.
As of each Valuation Date, the Administrative Committee will credit to each Participant's Account the amount of earnings and/or losses applicable thereto for the period since the immediately preceding Valuation Date, based on the amount of the Participant's Account that was deemed invested in each Investment Fund.
3.6 Vesting.
A Participant will at all times be fully vested in his Deferral Contributions, as adjusted for earnings and/or losses pursuant to Section 3.5.
3.7 Notice to Participants of Account Balances.
At least once for each Plan Year, the Administrative Committee will cause a written statement of a Participant's Account balance to be distributed to the Participant.
3.8 Good Faith Valuation Binding.
In determining the value of the Accounts, the Administrative Committee will exercise its best judgment, and all such determinations of value (in the absence of bad faith) will be binding upon all Participants and their Beneficiaries.
3.9 Errors and Omissions in Accounts.
If an error or omission is discovered in the Account of a Participant or in the amount of a Participant's deferrals, the Administrative Committee, in its sole discretion, will cause appropriate, equitable adjustments to be made as soon as administratively practicable following the discovery of such error or omission.
ARTICLE IV
INVESTMENT FUNDS
4.1 Selection by Administrative Committee.
From time to time, the Administrative Committee will select two or more Investment Funds for purposes of determining the rate of return on amounts deemed invested in accordance with the terms of the Plan. The Administrative Committee may change, add or remove Investment Funds on a prospective basis at any time(s) and in any manner it deems appropriate.
4.2 Participant Direction of Deemed Investments.
Each Participant generally may direct the manner in which his Account will be deemed invested in and among the Investment Funds; provided, such investment directions will be made in accordance with the following terms:
(a) Nature of Participant Direction. The selection of Investment Funds by a Participant will be for the sole purpose of determining the rate of return to be credited to his Account, and will not be treated or interpreted in any manner whatsoever as a requirement or direction to actually invest assets in any Investment Fund or any other investment media. The Plan, as an unfunded, nonqualified deferred compensation plan, at no time will have any actual investment of assets relative to the benefits or Accounts hereunder.
(b) Participant Elections. Each Participant may make an Investment Election prescribing the percentage of his Account and/or future contributions that will be deemed invested in each Investment Fund and may modify such Investment Elections with respect to his existing Account and/or future contributions as of any Valuation Date; provided, any such modification will be effective after the Administrative Committee (or its designee) has a reasonable opportunity to process such modification pursuant to such procedures as the Administrative Committee may determine from time to time.
(c) Administrative Committee Discretion. The Administrative Committee will have complete discretion to adopt and revise procedures to be followed in making such Investment Elections. Such procedures may include, but are not limited to, the process of making elections, the permitted frequency of making elections, the incremental size of elections, the deadline for making elections, the effective date of such elections and whether and the extent to which to charge any Participant's Account an administrative fee for making such Investment Elections. Any procedures adopted by the Administrative Committee that are inconsistent with the deadlines or procedures specified in this Section will supersede such provisions of this Section without the necessity of a Plan amendment.
ARTICLE V
PAYMENT OF ACCOUNT BALANCES
5.1 Benefit Payments Upon Termination of Service for Reasons Other Than Death.
(a) General Rule Concerning Benefit Payments. In accordance with the terms of subsection (b) hereof, if a Participant separates from service with the Controlling Company, all other members of the Controlled Group and all members of the RTS Controlled Group for any reason other than death, he (or his Beneficiary or Beneficiaries, if he dies after such termination of employment but before distribution of his Account) will be entitled to receive or begin receiving a distribution of the total of: (i) the entire vested amount credited to his Account, determined as of the Valuation Date on which such distribution is processed; plus (ii) the vested amount of Deferral Contributions made since such Valuation Date. For purposes of this subsection (a), the "Valuation Date on which such distribution is processed" refers to the Valuation Date established for such purpose by administrative practice, even if actual payment is made or commenced at a later date due to delays in valuation, administration or any other procedure. For all purposes under the Plan, the term "separation from service" shall have the meaning determined under Code Section 409A and shall include a Participating Company ceasing to be a member of the Controlled Group to the extent permitted under Code Section 409A.
(b) Timing of Distribution.
(i) General Rule. Except as provided in subsection (b)(ii) or
(b)(iii) hereof, the distribution of the vested benefit payable to a
Participant under this Section will be made or commenced as soon as
administratively feasible after the date the Participant separates from
service with the Controlling Company, all other members of the Controlled
Group and all members of the RTS Controlled Group for any reason other than
death.
(ii) Distributions to Key Employees. Notwithstanding subsection
(b)(i) hereof, the distribution of the vested benefit payable under this
Section to a Participant who is a Key Employee will be made or commenced as
soon as administratively feasible after the earlier of (i) the 6-month
anniversary of the date the Participant separates from service with the
Controlling Company, all other members of the Controlled Group and all
members of the RTS Controlled Group for any reason other than death, or
(ii) the date of the Participant's death.
(iii) Distributions Following Change to Form of Distribution. Notwithstanding subsection (b)(i) hereof, the distribution of the vested benefit payable under this Section to a Participant who has changed his initially elected form of distribution pursuant to Section 5.2(c) hereof will be made or commenced as soon as administratively feasible after the 5-year anniversary of the date the Participant separates from service with the Controlling Company, all other members of the Controlled Group and all members of the RTS Controlled Group for any reason other than death.
5.2 Form of Distribution.
(a) Single-Sum Payment. Except as provided in subsection (b) hereof, the benefit payable to a Participant under Section 5.1 will be distributed in the form of a single-sum payment in cash.
(b) Quarterly Installments. A Participant may elect, at the time he
makes his initial Deferral Election, to have the benefit payable to him under
Section 5.1 paid in the form of quarterly installment payments in cash. The
following terms and conditions will apply to quarterly installment payments made
under the Plan:
(i) The quarterly installment payments will be made in substantially equal installments over a period of not less than 3 years and not more than 10 years (adjusted for earnings and/or losses between payments in the manner described in Section 3.5). The initial value of the obligation for the quarterly installment payments will be equal to the amount of the Participant's Account balance calculated in accordance with the terms of Section 5.1(a).
(ii) If the amount of the first such quarterly installment
payment is less than $100, the benefit payable to the Participant under
Section 5.1 will be distributed in the form of a single-sum payment in cash
without regard to the Participant's election of quarterly installment
payments.
(iii) If a Participant dies after payment of his benefit from the Plan has begun but before his entire benefit has been distributed, the remaining amount of his Account balance will be distributed to the Participant's designated Beneficiary or Beneficiaries in the form of a single-sum payment in cash.
(c) Changing Form of Distribution. After the time a Participant makes his initial Deferral Election, he may make one (and no more than one) change to the form in which the benefit payable to him under Section 5.1 will be distributed to another form otherwise available under subsection (a) or (b) hereof; provided, such change will not be effective if the Participant separates from service with all members of the Controlled Group and all members of the RTS Controlled Group within 12 months of the date his change is made; and, provided further, the date on which his distribution will be made or commenced will be delayed in accordance with Section 5.1(b)(iii).
5.3 Death Benefits.
If a Participant dies before payment of his benefit from the Plan is made or commenced, the Beneficiary or Beneficiaries designated by such Participant in his latest beneficiary designation form filed with the Administrative Committee will be entitled to receive a distribution of the total of (i) the entire vested amount credited to such Participant's Account, determined as of the Valuation Date on which such distribution is processed; plus (ii) the vested amount of any Deferral Contributions made since such Valuation Date. For purposes of this
Section, the "Valuation Date on which such distribution is processed" refers to the Valuation Date established for such purpose by administrative practice, even if actual payment is made or commenced at a later date due to delays in valuation, administration or any other procedure. The benefit will be distributed to such Beneficiary or Beneficiaries as soon as administratively feasible after the date of the Participant's death (without regard to whether the Participant was a Key Employee) in the form of a single-sum payment in cash.
5.4 Hardship Distributions.
Upon receipt of an application for an in-service hardship distribution and the Administrative Committee's decision, made in its sole discretion, that a Participant has suffered a Financial Hardship, such Participant will be entitled to receive an in-service distribution. Such distribution will be paid in a single-sum payment in cash as soon as administratively feasible after the Administrative Committee determines that the Participant has incurred a Financial Hardship. The amount of such single-sum payment will be limited to the amount of the Participant's vested Account that the Administrative Committee determines is reasonably necessary to meet the Participant's requirements resulting from the Financial Hardship. The amount of such distribution will reduce the Participant's Account balance as provided in Section 3.4. Notwithstanding anything in this Section to the contrary, all hardship distributions shall be subject to the requirements applicable to distributions on account of unforeseeable emergency under Code Section 409A.
5.5 Beneficiary Designation.
(a) General. Participants will designate and from time to time may redesignate their Beneficiaries in such form and manner as the Administrative Committee may determine.
(b) No Designation or Designee Dead or Missing. In the event that:
(i) a Participant dies without designating a Beneficiary;
(ii) the Beneficiary designated by a Participant is not surviving when a payment is to be made to such person under the Plan, and no contingent Beneficiary has been designated; or
(iii) the Beneficiary designated by a Participant cannot be located by the Administrative Committee within 1 year from the date benefits are to be paid to such person;
then, in any of such events, the Beneficiary of such Participant with respect to any benefits that remain payable under the Plan will be the Participant's Surviving Spouse, if any, and if not, the estate of the Participant.
5.6 Taxes.
If the whole or any part of any Participant's or Beneficiary's benefit hereunder becomes subject to any estate, inheritance, income, employment or other tax which a Participating Company is required to pay or withhold, the Participating Company will have the full power and authority to withhold and pay such tax out of any monies or other property in its hand for the account of the Participant or Beneficiary whose interests hereunder are so affected (including, without limitation, by reducing and offsetting the Participant's or Beneficiary's Account balance). Prior to making any payment, the Participating Company may require such releases or other documents from any lawful taxing authority as it deems necessary.
5.7 Offset of Benefit by Amounts Owed to the Controlling Company.
Notwithstanding anything in the Plan to the contrary, the Administrative Committee may, in its sole discretion, offset any payment or payments of benefit to a Participant under the Plan by any amount owed by such Participant to the Controlling Company or any member of the Controlled Group.
ARTICLE VI
CLAIMS
6.1 Rights.
All Plan benefit will be paid in accordance with Article V, but, if a Participant or Beneficiary has any grievance, complaint or claim concerning any aspect of the operation or administration of the Plan, including but not limited to claims for benefits (collectively referred to herein as "claim" or "claims"), the Participant or Beneficiary shall submit the claim in accordance with the procedures set forth in this Article VI. All such claims must be submitted within the "applicable limitations period." The "applicable limitations period" shall be 2 years, beginning on (i) in the case of any single-sum payment, the date on which the payment was made, (ii) in the case of a periodic payment, the date of the first in the series of payments, or (iii) for all other claims, the date on which the action complained of occurred. Additionally, upon denial of an appeal pursuant to Section 6.3, a Participant or Beneficiary shall have 90 days within which to bring suit against the Plan for any claim related to such denied appeal; any such suit initiated after such 90-day period shall be precluded.
6.2 Initial Claim.
Claims for benefits under the Plan may be filed with the Administrative Committee on forms or in such other written documents, as the Administrative Committee may prescribe. The Administrative Committee will furnish to the claimant written notice of the disposition of a claim within 90 days after the application therefor is filed; provided, if special circumstances require an extension of time for processing the claim, the Administrative Committee will furnish written notice of the extension to the claimant prior to the end of the initial 90-day period, and such extension will not exceed one additional, consecutive 90-day period. In the event the claim is denied, the notice of the disposition of the claim will provide the specific reasons for the denial, citations of the pertinent provisions of the Plan, and, where appropriate, an explanation as to how the claimant can perfect the claim and/or submit the claim for review.
6.3 Appeal.
Any Participant or Beneficiary who has been denied a benefit will be entitled, upon request to the Administrative Committee, to appeal the denial of his claim. The claimant (or his duly authorized representative) may review pertinent documents related to the Plan in the Administrative Committee's possession in order to prepare the appeal. The request for review, together with a written statement of the claimant's position, must be filed with the Administrative Committee no later than 60 days after receipt of the written notification of denial of a claim provided for in Section 6.2. The Administrative Committee's decision will be made within 60 days following the filing of the request for review and will be communicated in writing to the claimant; provided, if special circumstances require an extension of time for processing the appeal, the Administrative Committee will furnish written notice to the claimant prior to the end of the initial 60-day period, and such an extension will not exceed one additional 60-day period.
If unfavorable, the notice of the decision will explain the reasons for denial and indicate the provisions of the Plan or other documents used to arrive at the decision.
6.4 Satisfaction of Claims.
Any payment to a Participant or Beneficiary will to the extent thereof be in full satisfaction of all claims hereunder against the Administrative Committee and the Participating Companies, any of whom may require such Participant or Beneficiary, as a condition to such payment, to execute a receipt and release therefor in such form as determined by the Administrative Committee or the Participating Companies. If receipt and release is required but the Participant or Beneficiary (as applicable) does not provide such receipt and release in a timely enough manner to permit a timely distribution in accordance with the general timing of distribution provisions in the Plan, the payment of any affected distribution may be delayed until the Administrative Committee or the Participating Companies receive a proper receipt and release.
ARTICLE VII
SOURCE OF FUNDS; TRUST
7.1 Source of Funds.
Except as provided in this Section and Section 7.2 (relating to the Trust), each Participating Company will provide the benefits described in the Plan from its general assets. However, to the extent that funds in such Trust allocable to the benefits payable under the Plan are sufficient, the Trust assets may be used to pay benefits under the Plan. If such Trust assets are not sufficient to pay all benefits due under the Plan, then the appropriate Participating Company will have the obligation, and the Participant or Beneficiary, who is due such benefits, will look to such Participating Company to provide such benefits.
7.2 Trust.
(a) Establishment. To the extent determined by the Controlling Company, the Participating Companies will transfer to the Trustee the funds necessary to fund benefits accrued hereunder to be held and administered by the Trustee pursuant to the terms of the Trust Agreement. Except as otherwise provided in the Trust Agreement, each transfer into the Trust Fund will be irrevocable as long as a Participating Company has any liability or obligations under the Plan to pay benefits, such that the Trust property is in no way subject to use by the Participating Company; provided, it is the intent of the Controlling Company that the assets held by the Trust are and will remain at all times subject to the claims of the general creditors of the Participating Companies.
(b) Distributions. Pursuant to the Trust Agreement, the Trustee will make payments to Plan Participants and Beneficiaries in accordance with a payment schedule provided by a Participating Company. The Participating Company will make provisions for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and will pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Participating Company.
(c) Status of the Trust. No Participant or Beneficiary will have any interest in the assets held by the Trust or in the general assets of the Participating Companies other than as a general, unsecured creditor. Accordingly, a Participating Company will not grant a security interest in the assets held by the Trust in favor of the Participants, Beneficiaries or any creditor.
7.3 Controlling Company Guaranty.
(a) Obligation Parameters. During any period in which any Participating Company is insolvent or in bankruptcy or for any reason whatsoever does not have sufficient, available, liquid assets to fully satisfy its obligations under the Plan due and payable by such Participating Company (a "Nonpayment Period"), the Controlling Company, in the capacity of guarantor, will have the unconditional obligation to pay all of such Participating Company's Plan
benefit obligations to the Participants of such Participating Company. During
any Nonpayment Period with respect to a Participating Company, a Participant of
such Participating Company shall not be obligated or required before enforcing
this Section against the Controlling Company (i) to pursue any right or remedy
he may have against such Participating Company or to commence any suit or other
proceeding against such Participating Company in any court or other tribunal;
(ii) to make any claim in a liquidation or bankruptcy of such Participating
Company; or (iii) to wait more than 30 days after making an initial demand of
such Participating Company under the normal claims procedures set forth under
the Plan.
(b) Limit on Controlling Company's Obligation. Notwithstanding anything herein to the contrary, in the event that the Controlling Company or any of its affiliates ceases to own, directly or indirectly, in the aggregate, all of the ownership interest in a Participating Company, all obligations under the Plan applicable to such Participating Company shall be fixed as of the date of such cessation, and any such obligations of such Participating Company accruing after such date shall be expressly excluded from this Section.
(c) Nature of Obligation. Any assets which may be acquired by the Controlling Company in anticipation of its obligations under this Section shall be part of the general assets of the Controlling Company. The Controlling Company's obligation under this Section constitutes a mere promise to pay certain obligations under the Plan, and a Participant shall be and remain no more than an unsecured, general creditor of the Controlling Company.
7.4 Plan Expenses.
At the direction of the Administrative Committee, expenses incurred with respect to administering the Plan and Trust shall be charged against earnings and/or Participants' Account (on a per capita basis, in proportion to the value of such Accounts or on any other basis) to the extent such costs are not paid by the Participating Companies. The Administrative Committee may provide for any expenses specifically attributable to transactions involving an Account to be charged against such Account.
ARTICLE VIII
ADMINISTRATIVE COMMITTEE
8.1 Action.
Action of the Administrative Committee may be taken with or without a meeting of committee members; provided, action will be taken only upon the vote or other affirmative expression of a majority of the committee members qualified to vote with respect to such action. If a member of the committee is a Participant or Beneficiary, he will not participate in any decision which solely affects his own benefit under the Plan. For purposes of administering the Plan, the Administrative Committee will choose a secretary who will keep minutes of the committee's proceedings and all records and documents pertaining to the administration of the Plan. The secretary may execute any certificate or any other written direction on behalf of the Administrative Committee.
8.2 Rights and Duties.
The Administrative Committee will administer the Plan and will have all powers necessary to accomplish that purpose, including (but not limited to) the following:
(a) To construe, interpret and administer the Plan;
(b) To make determinations required by the Plan, and to maintain records regarding Participants' and Beneficiaries' benefits hereunder;
(c) To compute and certify to the Participating Companies the amount and kinds of benefits payable to Participants and Beneficiaries, and to determine the time and manner in which such benefits are to be paid;
(d) To authorize all disbursements by the Participating Companies pursuant to the Plan;
(e) To maintain all the necessary records of the administration of the Plan;
(f) To make and publish such rules for the regulation of the Plan as are not inconsistent with the terms hereof;
(g) To delegate to other individuals or entities from time to time the performance of any of its duties or responsibilities hereunder, and, to the extent the Administrative Committee makes any such delegations, any use of the term "Administrative Committee" in the Plan that relates to such area of delegation shall be interpreted to refer to and include such other individuals or entities; and
(h) To hire agents, accountants, actuaries, consultants and legal counsel to assist in operating and administering the Plan.
The Administrative Committee will have the exclusive right to construe and interpret the Plan, to decide all questions of eligibility for benefits and to determine the amount of such benefits, and its decisions on such matters will be final and conclusive on all parties.
8.3 Compensation, Indemnity and Liability.
The Administrative Committee and its members will serve as such without bond and without compensation for services hereunder. All expenses of the Administrative Committee will be paid by the Participating Companies. No member of the committee will be liable for any act or omission of any other member of the committee, nor for any act or omission on his own part, excepting his own willful misconduct. The Participating Companies will indemnify and hold harmless the Administrative Committee and each member thereof against any and all expenses and liabilities, including reasonable legal fees and expenses, arising out of his membership on the committee, excepting only expenses and liabilities arising out of his own willful misconduct.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Amendments.
The Administrative Committee will have the right, in its sole discretion, to amend the Plan in whole or in part at any time and from time to time; provided, any amendment that may (i) result in significantly increased expenses under the Plan or (ii) materially alter the design of the Plan must be approved by the Compensation Committee. Any amendment will be in writing and executed by a duly authorized member of the Administrative Committee. An amendment to the Plan may modify its terms in any respect whatsoever, and may include, without limitation, a permanent or temporary freezing of the Plan such that the Plan will remain in effect with respect to existing Account balances without permitting any new contributions; provided, no such action may reduce the amount already credited to a Participant's Account without the affected Participant's written consent. All Participants and Beneficiaries will be bound by such amendment.
9.2 Termination of Plan.
The Controlling Company reserves the right to discontinue and terminate the Plan at any time, for any reason. Any action to terminate the Plan will be taken by the Board or the Compensation Committee in the form of a written Plan amendment executed by a duly authorized officer of the Controlling Company. If the Plan is terminated, each Participant will become 100 percent vested in his Account which will be distributed in a single-sum payment in cash as soon as practicable after the date the Plan is terminated. The amount of any such distribution will be determined as of the Valuation Date such termination distribution is to be processed. Such termination will be binding on all Participants and Beneficiaries. Notwithstanding anything in the foregoing to the contrary, a Participant's Account shall be distributed upon Plan termination only if one or more of the following are satisfied:
(a) The Plan is terminated within 12 months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), provided that the amounts deferred under the Plan are included in Participants' gross incomes in the latest of:
(i) The calendar year in which the Plan termination occurs;
(ii) The calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or
(iii) The first calendar year in which the payment is administratively practicable.
(b) The Plan is terminated within the 30 days preceding or the 12 months following a change in control event (as defined under Code Section 409A). For purposes of this
subsection (b), the Plan will be treated as terminated only if all substantially similar arrangements sponsored by any member of the Controlled Group are terminated, so that all Participants and all participants under substantially similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within 12 months of the date of termination of the arrangements.
(c) Each of the following are satisfied:
(1) All arrangements sponsored by any member of the Controlled Group that would be aggregated with the Plan under Code Section 409A if the same service provider participated in all of the arrangements are terminated;
(2) No payments other than payments that would be payable under the terms of the arrangements if the termination had not occurred are made within 12 months of the termination of the arrangements;
(3) All payments are made within 24 months of the termination of the arrangements; and
(4) No member of the Controlled Group adopts a new arrangement that would be aggregated with any terminated arrangement under Code Section 409A if the same service provider participated in both arrangements, at any time within 5 years following the date of termination of the arrangements.
(d) The Plan is terminated in connection with such other events or under such other conditions as the Commissioner of the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.
ARTICLE X
MISCELLANEOUS
10.1 Taxation.
It is the intention of the Controlling Companies that the benefits
payable hereunder will not be deductible by the Participating Companies nor
taxable for federal income tax purposes to Participants or Beneficiaries until
such benefits are paid by the Participating Companies, or the Trust, as the case
may be, to such Participants or Beneficiaries. Without limiting the foregoing,
it is intended that the Plan meet the requirements of Code Section 409A (other
than with respect to amounts that were earned and vested prior to January 1,
2005), and the Administrative Committee shall use its reasonable best efforts to
interpret and administer the Plan in accordance with such requirements. Each
Participant will be taxed for purposes of the Federal Insurance Contributions
Act ("FICA") as of the later of (i) the date that contributions are credited to
the Participant's Account, or (ii) the date that such amounts become vested.
When such benefits are paid hereunder, it is the intention of the Participating
Companies that they will be deductible by the Participating Companies under Code
Section 162.
10.2 No Employment Contract.
Nothing herein contained is intended to be nor will be construed as constituting a contract or other arrangement between a Participating Company and any Participant to the effect that the Participant will be employed by the Participating Company for any specific period of time.
10.3 Headings.
The headings of the various articles and sections in the Plan are solely for convenience and will not be relied upon in construing any provisions hereof. Any reference to a section refers to a section of the Plan unless specified otherwise.
10.4 Gender and Number.
Use of any gender in the Plan will be deemed to include all genders when appropriate, and use of the singular number will be deemed to include the plural when appropriate, and vice versa in each instance.
10.5 Assignment of Benefits.
The right of a Participant or Beneficiary to receive payments under the Plan may not be anticipated, alienated, sold, assigned, transferred, pledged, encumbered, attached or garnished by creditors of such Participant or Beneficiary, except by will or by the laws of descent and distribution and then only to the extent permitted under the terms of the Plan.
10.6 Legally Incompetent.
The Administrative Committee, in its sole discretion, may direct that payment to be made to an incompetent or disabled person, whether because of minority or mental or physical disability, be made instead to the guardian of such person or to the person having custody of such person, without further liability on the part of a Participating Company for the amount of such payment to the person on whose account such payment is made.
10.7 Governing Law.
The Plan will be construed, administered and governed in all respects in accordance with applicable federal law (including ERISA) and, to the extent not preempted by federal law, in accordance with the laws of the State of Georgia. If any provisions of this instrument are held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof will continue to be fully effective.
IN WITNESS WHEREOF, the Controlling Company has caused the Plan to be executed by its duly authorized officer on the 14th day of December, 2005.
ROCK-TENN COMPANY
By: /s/ Steven C. Voorhees
------------------------------------
Title: Executive Vice President and
Chief Financial Officer
|
ROCK-TENN COMPANY
SUPPLEMENTAL RETIREMENT SAVINGS PLAN
EXHIBIT A
PARTICIPATING COMPANIES
Company Names Effective Date ------------- --------------- Rock-Tenn Converting Company May 15, 2003 PCPC, Inc. May 15, 2003 Rock-Tenn Services Inc. January 1, 2005 |
ROCK-TENN COMPANY
SUPPLEMENTAL RETIREMENT SAVINGS PLAN
EXHIBIT B
SENIOR EXECUTIVE SUBPLAN
Notwithstanding anything in the Plan to the contrary, the following provisions will apply with respect to those Participants whom the Compensation Committee has designated as eligible for the Senior Executive Subplan (as defined in Section B-1.11 below).
B-I Definitions.
For purposes of the Senior Executive Subplan, the following terms, when used with an initial capital letter, will have the meaning set forth below unless a different meaning plainly is required by the context.
B-1.1 Base Salary means, with respect to an employee for a Plan Year, such employee's base pay for such Plan Year as determined by the Administrative Committee, including any portion of such base pay that is deferred under the Plan or under a Code Section 401(k) plan or Code Section 125 plan maintained by a Participating Company but excluding any portion of such base pay that is paid or made available to the employee during the Plan Year either (i) while he is not an active Participant or (ii) prior to the first regular paycheck in such Plan Year from which no amount (other than catch-up contributions) is, or could be, withheld and contributed to the 401(k) Plan on account of whichever of the following first occurs: (A) such Participant's 401(k) elective contributions reach the Code Section 402(g) maximum deferral limit for such Plan Year, or (B) such Participant reaches the Code Section 401(a)(17) maximum compensation limit.
B-1.2 Base Salary Deferral Contributions mean, for each Plan Year, the portion of a Participant's Deferral Contributions attributable to his Base Salary Deferral Election for such Plan Year.
B-1.3 Base Salary Deferral Election means a written, electronic or other form of election pursuant to which a Participant may elect to defer under the Plan a portion of his Base Salary.
B-1.4 Bonus Deferral Contributions mean, for each Plan Year, the portion of a Participant's Deferral Contributions attributable to his Bonus Deferral Election for such Plan Year.
B-1.5 Bonus Deferral Election means a written, electronic or other form of election pursuant to which a Participant may elect to defer under the Plan all or a portion of his Bonus Payments.
B-1.6 Bonus Payments mean, with respect to an employee for a Plan Year, any amount paid to an employee under the Controlling Company's Key Employee Incentive Plan or Annual Executive Bonus Program, including any portion of such amount that is deferred under the Plan or under a Code Section 401(k) plan or Code Section 125 plan maintained by a Participating Company but excluding any portion of such amount that is paid or made available to the employee during the Plan Year while he is not an active Participant.
B-1.7 Compensation means, for a Participant for any Plan Year, the total of such Participant's Base Salary and his Bonus Payments for such Plan Year.
B-1.8 Deferral Election means a Participant's Base Salary Deferral Election and/or Bonus Deferral Election, as applicable.
B-1.9 401(k) Plan means the Rock-Tenn Company 401(k) Retirement Savings Plan for Salaried and Non-Union Hourly Employees.
B-1.10 Matching Contributions mean the amount (if any) credited to a Participant's Account pursuant to Section B-IV. Matching Contributions will be credited to Participant Accounts as Deferral Contributions are credited to such Accounts pursuant to Section 3.1(a). In addition to the payments for which each Participating Company is liable pursuant to Section 3.1(c), each Participating Company will also be severally (and not jointly) liable for the payment of benefits under the Plan attributable to undistributed Matching Contributions credited for the period a Participant was employed by such Participating Company, as adjusted for earnings and/or losses pursuant to Section 3.5.
B-1.11 Senior Executive Subplan means the Plan as modified by this Exhibit B as it applies to Participants who are designated as eligible for the Senior Executive Subplan by the Compensation Committee; provided, all Participants who had been designated by the Compensation Committee on or before November 11, 2005, as eligible for the Plan shall be deemed to have been designated as eligible for the Senior Executive Subplan.
B-II Interim Plan Year Participation.
Notwithstanding anything in Article II to the contrary, each individual who (i) becomes an Eligible Employee under the Senior Executive Subplan during a Plan Year and (ii) who had not previously been eligible to participate in, or covered under, any plan, arrangement or program of any member of the Controlled Group that would be required to be aggregated with the Plan under Code Section 409A, will be eligible to participate in the Senior Executive Subplan for a portion of such Plan Year. Such individual's participation will become effective as soon as administratively practicable after he satisfies the procedures for admission described in Section 2.2; provided, such procedures are satisfied within 30 days of the date he first became an Eligible Employee.
B-III Deferrals.
B-3.1 Deferral Contributions. Each Eligible Employee who is or becomes eligible to participate in the Senior Executive Subplan for all or any portion of a Plan Year may elect to have Deferral Contributions made on his behalf for such Plan Year by completing and delivering to the Administrative Committee (or its designee) a Base Salary Deferral Election and/or a Bonus Deferral Election setting forth the terms of his election; provided, the Administrative Committee may allow or require separate or combined deferral elections for the elections set forth below.
(a) Base Salary Deferral Election. Subject to the terms and conditions
set forth below, a Base Salary Deferral Election will provide for the reduction
of a Participant's Base Salary in each regular paycheck payable during the Plan
Year for which the Base Salary Deferral Election is in effect, beginning with
the first such regular paycheck for such Plan Year from which no amount (other
than catch-up contributions) is, or could be, withheld and contributed to the
401(k) Plan on account of whichever of the following first occurs: (i) such
Participant's 401(k) elective contributions reach the Code Section 402(g)
maximum deferral limit for such Plan Year, or (ii) such Participant reaches the
Code Section 401(a)(17) maximum compensation limit.
(b) Bonus Deferral Election. Subject to the terms and conditions set forth below, a Bonus Deferral Election will provide for the reduction of an Eligible Employee's Bonus Payment payable during the Plan Year for which the Bonus Deferral Election is in effect.
B-3.2 Procedure for Elections. Subject to any modifications, additions or exceptions that the Administrative Committee, in its sole discretion, deems necessary, appropriate or helpful, the following terms will apply to Base Salary Deferral Elections and Bonus Deferral Elections:
(a) Effective Date.
(i) Initial Base Salary Deferral Election. A Participant's initial Base Salary Deferral Election with respect to his Base Salary for any Plan Year will be effective for the first regular paycheck (A) which relates to a payroll period ending no earlier than the last day of the immediately preceding Plan Year and (B) from which no amount is withheld and contributed to the 401(k) Plan paid after the date the Base Salary Deferral Election is submitted and becomes effective. To be effective, a Participant's initial Base Salary Deferral Election must be made before the first day of the Plan Year for which Base Salary Deferral Contributions will be made, or, if later and if the Participant has never previously participated in, or been covered under, any plan, arrangement or program of any member of the Controlled Group that would be required to be aggregated with the Plan under Code Section 409A, within 30 days after the date on which his participation first becomes effective pursuant to Section B-II, or at such earlier time as the Administrative Committee may prescribe. If an Eligible Employee
fails to submit a Base Salary Deferral Election in a timely manner, he will be deemed to have elected not to participate in the Plan for that Plan Year with respect to his Base Salary.
(ii) Subsequent Base Salary Deferral Election. A Participant's subsequent Base Salary Deferral Election must be made on or before the last day of the Plan Year immediately preceding the Plan Year for which he desires to participate and in which the Base Salary to be deferred is paid or at such earlier time as the Administrative Committee may prescribe.
(b) Term. A Participant's Base Salary Deferral Election will remain in
effect only for the Plan Year for which it is effective and will terminate on
the earliest of (i) the date the Participant ceases to be an active Participant,
(ii) the date the Participant's Base Salary Deferral Election is revoked [as
provided in Section 3.3(d)], or (iii) the date on which is made the last payment
of Compensation relating to a payroll period ending prior to the last day of the
Plan Year for which the Deferral Election is effective. If a Participant is
transferred from the employment of one Participating Company to the employment
of another Participating Company, his Base Salary Deferral Election with the
first Participating Company will remain in effect and will apply to his Base
Salary from the second Participating Company until the earliest of those events
set forth in the preceding sentence.
(c) Amount. A Participant may elect to defer his Base Salary payable in each regular paycheck (beginning with the first regular paycheck from which no amount is withheld and contributed to the 401(k) Plan) in 1 percent increments, up to a maximum of 6 percent (or such other maximum percentage and/or amount, if any, established by the Administrative Committee from time to time).
(d) Impact on 401(k) Plan Elections. To the extent necessary to comply with the requirements of Code Section 409A, a Participant who makes a Base Salary Deferral Election for a Plan Year will not be permitted to modify or revoke his deferral election under the 401(k) Plan for such Plan Year; provided, unless otherwise necessary to comply with the requirements of Code Section 409A, such Participant will be permitted to modify or revoke a separate deferral election under the 401(k) Plan that applies only to catch-up contributions.
(e) Bonus Deferral Elections. A Participant may complete and deliver to the Administrative Committee a Bonus Deferral Election with respect to a Bonus Payment payable during a Plan Year. The terms of such Bonus Deferral Election will be determined by reference to the foregoing provisions of this Section; provided, to be effective, the Bonus Deferral Election must be made by the latest of the dates described in subsections (e)(i), (e)(ii) and (e)(iii) hereof, whichever are applicable, or at such earlier time as the Administrative Committee may prescribe.
(i) Performance-Based Compensation. If the Bonus Payment constitutes performance-based compensation under Code Section 409A, the
Bonus Deferral Election may be made on any date that is at least 6 months prior to the end of the fiscal year to which the Bonus Payment relates; provided, the Bonus Payment is not both substantially certain to be paid and readily ascertainable on such date; and, provided further, the Participant has been continuously employed by a member of the Controlled Group from the beginning of such fiscal year (or, if later, the date on which the performance criteria for the Bonus Payment are established in writing).
(ii) Initial Year of Participation. If the Participant becomes eligible to participate in the Senior Executive Subplan for a portion of the Plan Year pursuant to Section B-II after the date on which the performance criteria for the Bonus Payment are established in writing, the Bonus Deferral Election must be made within 30 days after the date on which his participation becomes effective; provided, such Bonus Deferral Election will only apply to a portion of the applicable Bonus Payment. Such portion shall equal the Participant's Bonus Payment multiplied by the ratio of (A) the number of days remaining in the fiscal year to which the Bonus Payment relates when the Participant makes his Bonus Deferral Election, divided by (B) the number of days remaining in such fiscal year when the Participant first became eligible for such Bonus Payment.
(iii) Default Rule. If subsections (e)(i) and (e)(ii) are inapplicable, the Bonus Deferral Election must be made prior to the first day of the Plan Year during which begins the fiscal year to which the Bonus Payment relates.
B-IV Matching Contributions.
The Administrative Committee will credit to the Account of any Eligible Employee who is eligible for the Senior Executive Subplan a Matching Contribution equal to 50% of the amount of each such Eligible Participant's Deferral Contributions for that Plan Year to the extent such Deferral Contributions do not exceed 6% of such Eligible Participant's Compensation for such Plan Year. Such Matching Contributions shall vest in accordance with the vesting schedule applicable to matching contributions under the 401(k) Plan and shall be credited with earnings and/or losses in accordance with Section 3.5.
B-V Payment of Account Balances.
B-5.1 Amount of Distributions. Notwithstanding anything in Section 5.1(a)
to the contrary, if a Participant who is eligible for the Senior Executive
Subplan separates from service with the Controlling Company, all other members
of the Controlled Group and all members of the RTS Controlled Group for any
reason other than death, he (or his Beneficiary or Beneficiaries, if he dies
after such termination of employment but before distribution of his Account)
will be entitled to receive or begin receiving a distribution of the total of:
(i) the entire vested amount credited to his Account, determined as of the
Valuation Date on which such distribution is processed; plus (ii) the vested
amount of Deferral and Matching Contributions made since such Valuation Date. In
addition,
notwithstanding anything in Section 5.3 to the contrary, if a Participant who is eligible for the Senior Executive Subplan dies before payment of his benefit from the Plan is made or commenced, the Beneficiary or Beneficiaries designated by such Participant in his latest beneficiary designation form filed with the Administrative Committee will be entitled to receive a distribution of the total of (i) the entire vested amount credited to such Participant's Account, determined as of the Valuation Date on which such distribution is processed; plus (ii) the vested amount of any Deferral and Matching Contributions made since such Valuation Date.
B-5.2 Separate Distribution Election for Senior Executive Subplan Benefits.
(a) In General. A Participant who becomes eligible for the Senior Executive Subplan after being otherwise eligible to participate in the Plan may elect, at the time he makes his initial Deferral Election under the Senior Executive Subplan, to have the portion of his Plan benefit relating to his participation in the Senior Executive Subplan distributed in quarterly installments pursuant to Section 5.2(b), without regard to whether he has made such an election with respect to the remainder of his Plan benefit.
(b) Separate Changes. A Participant described in subsection (a) hereof may make a one-time change to the form in which the portion of his Plan benefit relating to his participation in the Senior Executive Subplan will be distributed pursuant to Section 5.2(c), without regard to whether he has made such a change with respect to the portion of his Plan benefit that does not relate to his participation in the Senior Executive Subplan. Likewise, such a Participant may make a one-time change to the form in which the portion of his Plan benefit not relating to his participation in the Senior Executive Subplan will be distributed pursuant to Section 5.2(c), without regard to whether he has made such a change with respect to the portion of his Plan benefit that relates to his participation in the Senior Executive Subplan; provided, the Participant has not made such a change prior to the beginning of his participation in the Senior Executive Subplan.
(c) Separate Application of the 5-year Delay. If a Participant
described in subsection (a) hereof makes a change to the form in which the
portion of his Plan benefit relating to his participation in the Senior
Executive Subplan will be distributed pursuant to Section 5.2(c) and subsection
(b) hereof, the distribution of the portion of his Plan benefit relating to his
participation in the Senior Executive Subplan (but not the portion relating to
his participation outside of the Senior Executive Subplan) will be delayed in
accordance with Sections 5.1(b)(iii) and 5.2(c). Likewise, if such a Participant
makes a change to the form in which the portion of his Plan benefit not relating
to his participation in the Senior Executive Subplan will be distributed
pursuant to Section 5.2(c) and subsection (b) hereof, the distribution of the
portion of his Plan benefit relating to his participation outside of the Senior
Executive Subplan (but not the portion relating to his participation in the
Senior Executive Subplan) will be delayed in accordance with Sections
5.1(b)(iii) and 5.2(c).
B-5.3 Distributions of Pre-2005 Amounts. Any distribution pursuant to
Section 5.1 of an amount that relates to a Participant's vested Account balance
as of December
31, 2004, as adjusted for earnings and/or losses pursuant to Section 3.5, will be made in accordance with the timing rules of Section 5.1(b)(i) and will not be delayed pursuant to Section 5.1(b)(ii) or 5.1(b)(iii) without regard to whether the Participant is a Key Employee or has changed his initially elected form of distribution pursuant to Section 5.2(c).
EXHIBIT 31.1
CERTIFICATION ACCOMPANYING PERIODIC REPORT
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, James A. Rubright, Chairman of the Board and Chief Executive Officer, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Rock-Tenn Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 9, 2006 /s/ James A Rubright
----------------------------------------
James A. Rubright
Chairman of the Board and
Chief Executive Officer
|
A signed original of this written statement required by Section 302, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 302, has been provided to Rock-Tenn Company and will be retained by Rock-Tenn Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 31.2
CERTIFICATION ACCOMPANYING PERIODIC REPORT
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Steven C. Voorhees, Executive Vice President and Chief Financial Officer, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Rock-Tenn Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 9, 2006 /s/ Steven C. Voorhees
----------------------------------------
Steven C. Voorhees
Executive Vice President and
Chief Financial Officer
|
A signed original of this written statement required by Section 302, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 302, has been provided to Rock-Tenn Company and will be retained by Rock-Tenn Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Rock-Tenn
Company (the "CORPORATION"), for the quarter ended December 31, 2005, as filed
with the Securities and Exchange Commission on the date hereof (the "REPORT"),
the undersigned, James A. Rubright, Chairman of the Board and Chief Executive
Officer of the Corporation, and Steven C. Voorhees, Executive Vice President and
Chief Financial Officer of the Corporation, each certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
/s/ James A Rubright ------------------------------------- James A. Rubright Chairman of the Board and Chief Executive Officer February 9, 2006 /s/ Steven C. Voorhees ------------------------------------- Steven C. Voorhees Executive Vice President and Chief Financial Officer February 9, 2006 |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Rock-Tenn Company and will be retained by Rock-Tenn Company and furnished to the Securities and Exchange Commission or its staff upon request.