EXHIBIT 4.9
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CERTIFICATE PURCHASE AGREEMENT
(SERIES 1996-1, CLASS B)
dated as of May 29, 1996
among
NOTEPAD FUNDING CORPORATION,
AMERICAN PAD & PAPER COMPANY OF DELAWARE, INC.,
and
CAISSE NATIONALE DE CREDIT AGRICOLE,
as Purchaser
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
SECTION 1.1 Definitions ........................................... 1
ARTICLE 2 PURCHASE AND SALE OF CERTIFICATE
SECTION 2.1 The Purchase; Percentages; Requisite Persons .......... 1
SECTION 2.2 Closing ............................................... 2
SECTION 2.3 Certificate ........................................... 2
ARTICLE 3 FEES AND YIELD PROTECTION
SECTION 3.1 Yield Protection ...................................... 2
SECTION 3.2 Indemnity ............................................. 4
SECTION 3.3 Illegality; Unavailability ............................ 5
SECTION 3.4 Taxes ................................................. 6
SECTION 3.5 Time and Method of Payment ............................ 7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Transferor ............................................ 7
SECTION 4.2 APP ................................................... 8
SECTION 4.3 Purchaser ............................................. 9
ARTICLE 5 CONDITIONS
SECTION 5.1 Conditions to Purchase ................................ 9
SECTION 5.2 Additional Conditions ................................. 13
ARTICLE 6 COVENANTS
SECTION 6.1 Covenants ............................................. 13
SECTION 6.2 Transfers ............................................. 14
ARTICLE 7 MISCELLANEOUS PROVISIONS
SECTION 7.1 Amendments ............................................ 14
SECTION 7.2 No Waiver; Remedies ................................... 15
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SECTION 7.3 Successors and Assigns; Assignments ................... 15
SECTION 7.4 Survival of Agreement ................................. 18
SECTION 7.5 Expenses; Indemnification ............................. 18
SECTION 7.6 Entire Agreement ...................................... 20
SECTION 7.7 Notices ............................................... 20
SECTION 7.8 No Third Party Beneficiaries .......................... 20
SECTION 7.9 Severability of Provisions ............................ 20
SECTION 7.10 Counterparts .......................................... 20
SECTION 7.11 Governing Law ......................................... 20
SECTION 7.12 Tax Characterization .................................. 21
SECTION 7.13 No Proceedings ........................................ 21
SECTION 7.14 No Recourse ........................................... 21
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SCHEDULE I Stated Amounts and Percentages
EXHIBITS
EXHIBIT A Form of Pooling and Servicing Agreement
EXHIBIT B Form of Receivables Purchase Agreement
EXHIBIT C Form of Series 1996-1 Supplement
EXHIBIT D Form of Assignment Agreement
APPENDIX
APPENDIX X Index of Additional Defined Terms
iii
This CERTIFICATE PURCHASE AGREEMENT, dated as of May 29, 1996 (this
"Agreement"), is made among NOTEPAD FUNDING CORPORATION, a Delaware corporation
("Transferor"), AMERICAN PAD & PAPER COMPANY OF DELAWARE, INC., a Delaware
corporation ("Servicer" or "APP"), and CAISSE NATIONALE DE CREDIT AGRICOLE
("Purchaser").
BACKGROUND
1. Transferor (a) is party to an Amended and Restated Pooling and Servicing
Agreement substantially in the form of Exhibit A (the "Pooling Agreement") with
APP, as initial Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New
York banking corporation, as trustee (in that capacity, together with any
successors in that capacity, the "Trustee"), (b) is party to an Amended and
Restated Receivables Purchase Agreement substantially in the form of Exhibit B
and (c) will enter into a Series 1996-1 Supplement to the Pooling Agreement
substantially in the form of Exhibit C (the "Supplement"). Pursuant to the
Pooling Agreement and the Supplement, Transferor will obtain the Series 1996-1,
Class B Certificate (the "Class B Certificate"), which will represent a
fractional undivided beneficial interest in the assets of the Notepad Funding
Receivables Master Trust (the "Trust"), a trust organized pursuant to the
Pooling Agreement.
2. Transferor wishes to sell the Certificate to the Purchaser and obtain
its commitment to purchase a fractional undivided beneficial interest in the
assets of the Trust (each a "Trust Interest") that will be evidenced by the
Certificate. Subject to the terms and conditions of this Agreement, the
Purchaser is willing to purchase a Class B Certificate in the principal amount
of $10,000,000 (the "Certificate"). APP has joined in this Agreement to confirm
certain representations, warranties and covenants for the benefit of the
Purchaser.
ARTICLE 1 DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used and not otherwise defined
herein have the meanings assigned to them in the Supplement or, if not defined
in the Supplement, in Appendix A to the Pooling Agreement. An index of terms
defined directly in this Agreement is attached as Appendix X.
ARTICLE 2 PURCHASE AND SALE OF CERTIFICATE
SECTION 2.1 The Purchase; Percentages; Requisite Persons. (a) The
Transferor will issue and sell to the Purchaser and, subject to the terms and
conditions of this Agreement, the Pooling Agreement and the Supplement, the
Purchaser will purchase (such purchase being a "Purchase") from the Transferor,
at the time and place provided for in Section 2.2, the Certificate for a
purchase price equal to 100% of the principal amount of such Certificate.
(b) For purposes of this Agreement, (i) "Class Percentage" means the
percentage equivalent (carried out to twelve decimal places) of a fraction, the
numerator of which is the Stated Amount of the Purchaser's Certificate and the
denominator of which is the sum of the Stated Amounts of all Class B
Certificates, and (ii) "Series Percentage" means the percentage equivalent
(carried out to twelve decimal places) of a fraction, the numerator of which is
the Stated Amount of the Purchaser's Certificate and the denominator of which is
the sum of the Stated Amounts for all of the Series 1996-1 Certificates. The
Class Percentages and Series Percentages of the Purchaser are set forth opposite
its name in Schedule I.
(c) For so long as the Caisse Nationale de Credit Agricole holds a
Certificate, it shall be a "Requisite Person".
SECTION 2.2 Closing. The sale of the Certificate shall take place at the
offices of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois
60603 at noon, Chicago time, on May 29, 1996 (the "Closing"). At the Closing,
the Transferor will deliver to the Purchaser the Certificate, dated the date of
such Closing and registered in the name of the Purchaser (or in the name of the
Purchaser's nominee, as indicated in writing by the Purchaser to the Transferor
prior to the Closing), against delivery by the Purchaser to the Transferor or
its order of immediately available funds in the amount of the purchase price
therefor to Manufacturers & Traders Trust Company, Corporate Trust Department,
One M&T Plaza, 7th Floor, Buffalo, New York 14203-2399, Attention: Russell
Whitley.
SECTION 2.3 Certificate. The Certificate shall be substantially in the form
of Exhibit A (Part 2) to the Supplement.
ARTICLE 3 FEES AND YIELD PROTECTION
SECTION 3.1 Yield Protection. (a) Notwithstanding any other provision
herein, if, after the date hereof, either:
(i) any law, rule or regulation (including any imposition or increase
of reserve requirements) or any interpretation or administration of any
law, rule or regulation by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or
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(ii) the compliance by the Purchaser with any guideline or request
from any central bank or other Governmental Authority or quasi-governmental
authority exercising control over banks or financial institutions generally
(whether or not having the force of law),
shall subject the Purchaser to the imposition or modification of any reserve
(including any imposed by the Federal Reserve Board), special deposit or similar
requirement (including a reserve, special deposit or similar requirement that
takes the form of a tax) against assets of, deposits with or for the account of,
or credit extended by, the Purchaser or the office from time to time that it
designates to the Transferor as the office through which it makes and maintains
its Purchases comprising the Certificate (its "LIBOR Office") or impose any
other condition on the Purchaser affecting the Certificate or its obligations
hereunder, and as a result of either of the foregoing there shall be any
increase in the cost to the Purchaser of agreeing to make or making, funding or
maintaining its Purchase, or there shall be a reduction in the amount received
or receivable by the Purchaser or its LIBOR Office, then, upon written notice
from the Purchaser to Transferor and Servicer, signed by an officer of the
Purchaser with knowledge of and responsibility for such matters, and setting
forth in reasonable detail the calculation used to arrive at the amounts,
additional amounts sufficient to indemnify the Purchaser on an after-tax basis
against the increased cost or reduction in amounts received or receivable shall
constitute "Additional Amounts" for purposes of the Supplement, and the
Purchaser shall be entitled to receive these additional amounts, solely from
amounts allocated thereto and paid pursuant to the Supplement.
(b) If the Purchaser shall reasonably determine that the adoption after the
date hereof of any law, rule or regulation regarding capital adequacy or capital
maintenance, or any change after the date hereof in any of the foregoing or in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Purchaser, any of its lending
offices or its holding company with any new or revised request or directive
regarding capital adequacy or capital maintenance (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Purchaser's capital or the capital of its holding company as a consequence of
this Agreement or the Purchase made by the Purchaser pursuant hereto to a level
below what the Purchaser or its holding company could have achieved but for the
adoption, change or compliance (taking into consideration the Purchaser's
policies, and the policies of its holding company, with respect to capital
adequacy), then, upon written notice from the Purchaser to Transferor and
Servicer, signed by an officer of the Purchaser with
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knowledge of and responsibility for such matters, and setting forth in
reasonable detail the calculation used to arrive at the amounts, any additional
amounts as will compensate the Purchaser or its holding company on an after-tax
basis for the reduction shall constitute "Additional Amounts" for purposes of
the Supplement, and the Purchaser shall be entitled to receive these additional
amounts, solely from amounts allocated thereto and paid pursuant to the
Supplement.
(c) A Purchaser shall promptly notify Transferor and Servicer in writing of
any event of which it has knowledge occurring after the date hereof that will
entitle it to compensation pursuant to this section. A certificate of the
Purchaser, signed by an officer of the Purchaser with knowledge of and
responsibility for such matters, and setting forth in reasonable detail the
calculation used to arrive at the amounts necessary to compensate the Purchaser
or its holding company as specified in subsection (a) or (b), as the case may be
shall be delivered to Transferor and Servicer and shall be conclusive absent
demonstrable error.
(d) Failure on the part of the Purchaser to demand compensation for any
amounts as specified in subsection (a) or (b) with respect to any period shall
not constitute a waiver of its right to demand compensation with respect to that
period or any other period. The protection of this section shall be available to
the Purchaser regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition that shall have occurred or been imposed.
(e) Promptly after giving any notice to Transferor pursuant to this
section, the Purchaser will seek to designate one of its offices located at an
address other than that previously designated pursuant to this Agreement as the
office from which its Purchases will be made after the designation if it will
avoid the need for, or materially reduce the amount of, any payment to which the
Purchaser would otherwise be entitled pursuant to this section and will not, in
the sole discretion of the Purchaser, be otherwise disadvantageous to the
Purchaser.
SECTION 3.2 Indemnity. If the Purchaser shall incur any losses, expenses or
liabilities (including any interest paid to lenders of funds borrowed by it to
fund its Purchase of the Certificate and any loss sustained in connection with
the re-deployment of such funds) as a result of (a) the failure of the Purchase
to be made on the date specified for the Closing pursuant to Section 2.2 (other
than any such failure resulting from the Purchaser's default in the performance
of its obligations hereunder) or (b) any payment of the Certificate on a date
that is not the last day of the Interest Period applicable thereto or on any
date specified in a notice of payment given by Servicer,
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then, upon written notice (which notice shall be signed by an officer of the
Purchaser with knowledge of and responsibility for such matters and shall set
forth in reasonable detail the basis for requesting the amounts) from the
Purchaser to Transferor and Servicer, additional amounts sufficient to indemnify
the Purchaser against the losses, expenses and liabilities, but not for any lost
profits associated therewith, shall constitute "Additional Amounts" for purposes
of the Supplement, and the Purchaser shall be entitled to receive these
additional amounts, solely from amounts allocated thereto and paid pursuant to
the Supplement.
SECTION 3.3 Illegality; Unavailability. (a) In the event that on any date
the Purchaser shall have determined (which determination shall be final and
conclusive and binding upon all parties) that the making or continuation of its
Purchase as a Eurodollar Tranche has become unlawful by compliance by the
Purchaser in good faith with any law, governmental rule, regulation or order or
has become impossible as a result of a contingency occurring after the date
hereof that materially and adversely affects its interbank eurodollar market,
then, and in any such event, the Purchaser shall promptly give notice (by
telephone confirmed in writing) to Transferor and Servicer of that
determination. The obligation of the Purchaser to make or maintain its Purchase
as a Eurodollar Tranche during any such period shall be terminated at the
earlier of the termination of the Interest Period then in effect for the
Eurodollar Tranche or when required by law, and Transferor shall, no later than
the time specified for the termination, convert the Purchase into the ABR
Tranche.
(b) If, prior to the beginning of any Interest Period, the Purchaser shall
have determined (which determination shall be final and conclusive and binding
upon all parties) that: (i) Dollar deposits in the relevant amount and for the
Interest Period are not available in the relevant interbank eurodollar market;
or (ii) by reason of circumstances affecting the interbank eurodollar market,
that adequate and fair means do not exist for ascertaining the LIBOR rate
applicable to the Eurodollar Tranche, then the Purchaser shall promptly give
notice of this determination to Transferor and Servicer. Thereafter, and
continuing until the Purchaser shall notify Transferor and Servicer that the
circumstances giving rise to this determination no longer exist, (x) the
Eurodollar Tranche will, on the last day of the applicable Interest Period,
convert into the ABR Tranche, and (y) the right of Transferor to request a
Eurodollar Tranche shall be suspended.
SECTION 3.4 Taxes. (a) Any and all payments made to the Purchaser under its
Certificate shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, duties, charges, fees, deductions
or withholdings of any nature and whatever called, by whomsoever,
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on whomsoever and wherever imposed, levied, collected, withheld or assessed,
excluding taxes imposed by the jurisdiction in which the Purchaser's principal
office (and/or the office where it books its investment in its Certificate) is
located on all or part of the net income, profits or gains of the Purchaser
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise)
(all the nonexcluded taxes, levies, imposts, charges, deductions, withholdings
and liabilities being hereinafter referred to as "Taxes"). If Trustee is
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Certificate to the Purchaser, then the sum payable shall
be increased by the amount necessary to yield to the Purchaser (after payment of
all Taxes) an amount equal to the sum it would have received had no deductions
been made, and the additional amount shall constitute "Additional Amounts" for
purposes of the Supplement, and the Purchaser shall be entitled to receive these
additional amounts, solely from amounts allocated thereto and paid pursuant to
the Supplement.
(b) Whenever any Taxes are paid by Trustee pursuant to subsection (a), as
promptly as possible thereafter Servicer shall send to the Purchaser the
original or a certified copy of an original official receipt showing payment
thereof (if any) or any other evidence of the payment as may be available to
Servicer through the exercise of its reasonable efforts. If Trustee fails to pay
any Taxes when due to the appropriate taxing authority or fails to remit to the
Purchaser the required receipts or other required documentary evidence, the
Purchaser shall be entitled to receive, solely from amounts allocated with
respect thereto and paid pursuant to the Supplement, additional amounts
necessary to indemnify it for any incremental taxes, interest or penalties that
may become payable by the Purchaser as a result of any such failure, and the
amounts shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
(c) On or before the date it becomes a party to this Agreement (and, so
long as it may properly do so, periodically thereafter, as requested by
Servicer, to keep forms up to date), the Purchaser shall deliver to Trustee any
certificates, documents or other evidence that shall be required by the Internal
Revenue Code or Treasury Regulations issued pursuant thereto to establish that,
assuming the Certificates are properly characterized as indebtedness, it is
exempt from existing United States Federal withholding requirements, including
(i) two original copies of Internal Revenue Service Form 1001 or Form 4224 or
successor applicable form, properly completed and duly executed by the Purchaser
certifying that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States
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Federal income taxes, and (ii) an original copy of Internal Revenue Service Form
W-8 or W-9 or applicable successor form, properly completed and duly executed;
provided, that if the Purchaser does not comply with this subsection 3.4(c),
amounts payable to the Purchaser under this Section 3.4 shall be limited to
amounts that would have been payable under this section if the Purchaser had so
complied.
SECTION 3.5 Time and Method of Payment. All amounts payable to any
Purchaser hereunder or with respect to its Certificate shall be made to the
Purchaser by wire transfer of immediately available funds in Dollars not later
than 2:00 p.m., New York City time, on the date due. Any funds received after
that time will be deemed to have been received on the next Business Day.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Transferor. As of the date hereof, Transferor represents and
warrants to the Purchaser that each of its representations and warranties in the
Pooling Agreement and Purchase Agreement is true and correct, as if made on the
date hereof, and further represents and warrants that:
(a) no Early Amortization Event or Unmatured Early Amortization Event
exists;
(b) assuming the accuracy of the Purchaser's representations set out in
Section 4.3 and that the Purchaser (and no Person acting on the Purchaser's
behalf) has not made a general solicitation or general advertising within the
meaning of the Securities Act, the offer and sale of the Certificate in the
manner contemplated by this Agreement is a transaction exempt from the
registration requirements of the Securities Act, and the Pooling Agreement is
not required to be qualified under the Trust Indenture Act of 1939, as amended;
(c) except for BT Securities Corporation, in its capacity as financial
advisor for Transferor ("Financial Advisor"), Transferor has not dealt with any
financial advisor, or other Person who may be entitled to any commission or
compensation in connection with the sale of the Certificate, and the fees of the
Financial Advisor shall not be an obligation of the Purchaser;
(d) no information supplied by or on behalf of Transferor or APP to the
Purchaser in connection with the Transaction Documents contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or
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therein not misleading in light of the circumstances under which they were made;
(e) the Certificate has been duly and validly authorized by Transferor and,
from and after the date on which such Certificate is executed by Transferor and
authenticated by the Trustee in accordance with the terms of the Pooling
Agreement and the Supplement and delivered to and paid for by the Purchaser in
accordance with the terms of this Agreement, will be validly issued and
outstanding and will constitute valid and legally binding obligations of the
Trust entitled to the benefits of the Pooling Agreement and the Supplement and
enforceable against the Trust in accordance with its terms; and
(f) the Certificate is not subject to any Adverse Claim and the Transferor
is conveying to the Purchaser all of its right, title and interest in such
Certificate.
SECTION 4.2 APP. As of the date hereof, APP represents and warrants to the
Purchaser that:
(a) each of its representations and warranties in the Pooling Agreement (in
its capacity as Servicer) and the Purchase Agreement (in its capacity as a
Seller) is true and correct, as if made on the date hereof with the same effect
as if made on that date (unless specifically stated to relate to an earlier
date);
(b) the Pro Forma Financial Data present fairly in all material respects
the pro forma financial position, results of operations and cash flows of APP
and its consolidated Subsidiaries at the dates specified therein and for the
periods to which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein;
(c) since September 30, 1995 through the date hereof (and except as
contemplated in the Pro Forma Financial Data) (i) there has been no material
adverse change in the condition, financial or otherwise, or the earnings,
business affairs or business prospects of Transferor or APP, whether or not
arising in the ordinary course of business, and (ii) there have been no
transactions entered into by Transferor or APP that are material with respect to
the condition, financial or otherwise, or the earnings, business affairs or
business prospects of Transferor or APP; and
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(d) no information supplied by or on behalf of Transferor or APP to
the Purchaser in connection with the Transaction Documents contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which they were made.
SECTION 4.3 Purchaser. As of the date hereof, the Purchaser represents and
warrants that:
(a) it is an "accredited investor" as that term is defined in any of
paragraphs (1), (2), (3) or (7) of Rule 501(a) under the Securities Act and
is not purchasing its Certificate with a view to making a distribution
thereof (within the meaning of the Securities Act); and
(b) it is not a pension, profit sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the assets being used to purchase its Certificate do not
constitute the assets of any "benefit plan investor" (as defined under
ERISA).
ARTICLE 5 CONDITIONS
SECTION 5.1 Conditions to Purchase. The obligation of the Purchaser to
Purchase its Certificate shall be subject to the satisfaction of the conditions
precedent that:
(i) the conditions precedent specified in Section 4.1 of the Purchase
Agreement and Sections 7.1 and 7.2 of the Class A Certificate Purchase
Agreement (other than those that relate to this Agreement) shall be
satisfied;
(ii) the Purchaser shall have received, a duly executed and
authenticated Class B Certificate registered in its name and in a principal
amount equal to $10,000,000,
(iii) the Purchaser shall have received certain fees and reimbursement
of any expenses referred to in Section 7.5 for which invoices have been
presented, and
(iv) the Purchaser shall have received an original (except as
indicated below) counterpart of the following (each of which, if not in a
form attached to this Agreement, shall be in form and substance
satisfactory to the Purchaser):
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(a) the Supplement, the Pooling Agreement, the Purchase Agreement and
the Guaranty, each of which shall be in full force and effect, and all
actions required to be taken under those documents in connection with the
issuance of the Certificate shall have been taken;
(b) photocopies of each Account Agreement;
(c) a certificate of the Secretary, or an Assistant Secretary, of each
of Transferor, Servicer, Guarantor and each Seller with respect to:
(i) attached copies of resolutions of its Board of Directors then
in full force and effect authorizing the execution, delivery and
performance of the Transaction Documents,
(ii) the incumbency and signatures of those of its officers
authorized to act with respect to the Transaction Documents,
(iii) attached copies of its certificate of incorporation and by-
laws;
(d) a certificate of an Authorized Officer of each of Servicer, and
each Seller as to the satisfaction of the conditions precedent set forth in
Section 5.2 and a certificate of Transferor that the representations and
warranties of the Transferor set out in this Agreement are true and correct
as of the date of such initial purchase and that, to the best of
Transferor's knowledge, no Early Amortization Event or Unmatured Early
Amortization Event exists;
(e) a certificate of an appropriate officer of Trustee stating that
the Pooling Agreement has been duly authorized, executed and delivered by
Trustee and the Certificate has been duly authenticated by Trustee in
accordance with the Pooling Agreement and an opinion of counsel to Trustee
as to related matters;
(f) the following opinions, in form and substance satisfactory to
Buyer:
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(i) opinions of Kirkland & Ellis as to certain corporate
matters, Federal and state tax and UCC matters, true sale and non-
consolidation; and
(ii) opinions of Hirsch & Westheimer as to certain Texas state
tax and UCC matters;
(g) the Daily Report for the date hereof;
(h) evidence, reasonably satisfactory to the Purchaser, of the
payment of all taxes, fees and other governmental charges, if any,
incidental to the issuance of the Certificate and to the consummation of
the transactions contemplated hereunder and under the Pooling Agreement;
(i) evidence that S&P has rated the Certificate "BBB";
(j) agreed-upon procedures letters, in form and substance
satisfactory to the Purchaser, from Price Waterhouse LLP and KPMG Peat
Marwick, with respect to certain historical information provided by APP
relating to the Receivables;
(k) copies of any management or other agreements with regard to the
administration of Transferor's business, certified by an Authorized Officer
of Transferor;
(l) a pro forma balance sheet of Transferor as of the date hereof,
after giving effect to the transactions contemplated by the Supplement;
(m) a payout letter from the Holders of the Series 1995-1
Certificates, (i) specifying the aggregate amount required to be paid to
such Holders in order to pay all principal, accrued interest and other
currently existing claims of such Holders under such Certificates, the
related supplement to the Existing Pooling Agreement and the related
certificate purchase agreement, and (ii) subordinating any contingent
claims of such Holders under such documents to amounts owed under the
Supplement and the Series 1996-1 Certificates; and
(n) results of recent searches of the UCC filing records and tax and
ERISA and judgment lien records in each jurisdiction referred to below
against each Seller (including any predecessors in interest to any Seller
going back five years) and
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Transferor, showing no filings of record that cover any of the Receivables
or the Related Transferred Assets other than (i) filings in favor of
parties to an Intercreditor Agreement and (ii) the following filings (which
must be shown to be on file):
(i) UCC financing statements naming each Seller, as
seller/debtor, and Transferor, as secured party/purchaser, in each
office where the filing is necessary for the perfection of the sales
of Receivables by each Seller to Transferor;
(ii) assignments of such existing UCC financing statements to
Trustee, as assignee of the secured party, in each office where the
filing is necessary for the perfection of the sales of Receivables by
each Seller to Transferor; and
(iii) UCC financing statements naming Transferor, as
seller/debtor, and Trustee, as secured party, in each office where the
filing is necessary for the perfection of the transfers of Receivables
by Transferor to Trustee;
(o) any other information, certificates, opinions and documents as
the Purchaser may have reasonably requested.
If the conditions specified above have not been fulfilled on the date
hereof, any condition specified in this Agreement shall not have been fulfilled
when and as required in this Agreement or waived by the Purchaser, in each case
the Purchaser's obligations to purchase the Certificate pursuant to this
Agreement may be terminated by notice to Transferor. In addition, if, under the
circumstances, it shall not be feasible for the Purchaser to invest on the date
the funds that are held available by the Purchaser for the Purchase, Transferor
shall pay the Purchaser interest on the funds at the Alternate Base Rate from
the date of the notice until the next succeeding Business Day on which it is
feasible for the Purchaser to invest the funds. Nothing in this paragraph shall
operate to relieve Transferor from any of its obligations hereunder or otherwise
waive any of the Purchaser's rights against Transferor.
SECTION 5.2 Additional Conditions. The obligation of the Purchaser to
Purchase the Certificate shall also be subject to the conditions precedent that
on the date of the Purchase, before and after giving effect thereto and to the
application of any proceeds therefrom, the following statements shall be true:
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(a) the representations and warranties of Transferor and APP set out
in this Agreement are true and accurate as of that date with the same
effect as though made on that date (unless specifically stated to relate to
an earlier date); and
(b) no Early Amortization Event or Unmatured Early Amortization Event
has occurred and is continuing.
ARTICLE 6 COVENANTS
SECTION 6.1 Covenants. Transferor and APP each severally covenant and
agree that, until the Certificates have been paid in full, it will:
(a) with reasonable promptness deliver to the Purchaser such
information, documents, records or reports respecting the Program or the
Receivables as the Purchaser may from time to time reasonably request (to
the extent that such items are reasonably accessible to Transferor);
(b) at the same time any report (including any Daily Report, Monthly
Report or annual auditors' report), notice or other document is provided,
or caused to be provided, by Transferor or Servicer to Trustee or any Agent
under the Pooling Agreement, provide the Purchaser with a copy of the
report;
(c) during regular business hours and (so long as no Early
Amortization Event has occurred and is continuing) upon two Business Days
prior written notice, permit the Purchaser (or such other Person as Trustee
or the Purchaser may designate from time to time), or their respective
agents or representatives (including certified public accountants or other
auditors), as an expense of Servicer paid out of the Servicing Fee, (i) to
examine and make copies of and abstracts from, and to conduct accounting
reviews of, all Records in the possession or under the control of Servicer,
Transferor or any Seller, including the related Contracts and purchase
orders, invoices and other agreements related thereto, and (ii) to visit
the offices and properties of Servicer, Transferor or any Seller for the
purpose of examining such materials described in clause (i), and to discuss
matters relating to the Receivables or the Related Transferred Assets or
the performance by Servicer, Transferor or any Seller of their respective
obligations under any Transaction Document with any officer, employee or
representative of Servicer, Transferor or any Seller. The Purchaser may
(but shall not be obligated to) conduct, or cause their respective agents
or representatives to conduct, reviews of the types described in this
page 13
paragraph (each such review, a "Receivables Review") whenever the
Purchaser, in its reasonable judgment, deems any such review appropriate;
(d) not change (or permit the Sellers to change) collection policies
as contemplated by Section 6.3(b)(x) of the Purchase Agreement, if such
change would have a Material Adverse Effect, without the prior written
approval of holders of Class B Certificates whose Class Percentages exceed
50% (the "Majority Class B Holders");
(e) notwithstanding Section 7.2(g)(i) of the Pooling Agreement, not
enter into (or be a party to) any transaction contemplated by such Section
7.2(g)(i) unless the Majority Class B Holders shall have consented thereto
in writing; and
SECTION 6.2. Transfers. Purchaser agrees that it will not transfer its
Class B Certificate (or any portion thereof) to any Person unless such Person
shall have provided the Trustee and Transferor with a certificate to the effect
that such Person: (a) is an "accredited investor" as that term is defined in any
of paragraphs (1), (2), (3) or (7) of Rule 501(a) under the Securities Act and
is not purchasing its Certificate with a view to making a distribution thereof
(within the meaning of the Securities Act) and (b) is not a pension, profit
sharing or other employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended.
ARTICLE 7 MISCELLANEOUS PROVISIONS
SECTION 7.1 Amendments. (a) Transferor and APP each severally covenant
and agree that, until the Certificates have been paid in full, it will not,
except as contemplated by Section 13.1 of the Pooling Agreement, amend or
otherwise modify any Transaction Document to which it is a party or grant any
waiver or consent thereunder, without the prior written consent of the Required
Series Holders; provided that no amendment, modification, waiver or consent
shall, without the prior written consent of the Purchaser, (a) decrease the
outstanding amount of the Certificate, (b) forgive or waive or otherwise excuse
any repayment of the Class B Invested Amount, (c) waive any Early Amortization
arising from a Bankruptcy Event with respect to Transferor or a Seller, (d)
waive any requirement under the Pooling Agreement that the interest of the
Trustee and the Receivables and other Transferred Assets be perfected by
appropriate UCC filings, or (e) reduce in any manner the amount of, or delay the
timing of, allocations, payments or distributions in respect of the Certificate;
and provided, further that neither the execution and delivery of a Supplement
relating to a refinancing of the Certificates as contemplated by Section 4.9 of
the Supplement relating to the Certificates, nor any other
page 14
amendment to the Transaction Documents in connection with such a refinancing,
shall require any consent from the Purchaser, so long as the prior or
contemporaneous repayment in full of the Certificates in accordance with Section
5.2 of the Supplement relating to the Certificates is a condition to the
issuance of the refinancing certificates, and of the effectiveness of such
related amendment.
SECTION 7.2 No Waiver; Remedies. Any waiver, consent or approval given by
any party hereto shall be effective only in the specific instance and for the
specific purpose for which given, and no waiver by a party of any breach or
default under this Agreement shall be deemed a waiver of any other breach or
default. No failure on the part of any party hereto 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, or any abandonment or
discontinuation of steps to enforce the right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other right. No notice
to or demand on any party hereto in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 7.3 Successors and Assigns; Assignments. (a) This Agreement shall
be binding upon, and inure to the benefit of, Transferor, Servicer, the
Purchaser and their respective successors and assigns; provided that neither
Transferor nor Servicer may assign its rights or obligations hereunder
(voluntarily, by operation of law or otherwise) without the prior written
consent of the Purchaser, except that the Servicer may be terminated in
accordance with Sections 10.1 and 10.2 of the Pooling Agreement; and provided
further, that no Purchaser may transfer, pledge, assign, sell participations in
or otherwise encumber its rights or obligations hereunder or any interest herein
except as permitted under the Pooling Agreement and this section.
(b) The Purchaser may at any time sell to one or more banks or other
entities ("Participants") participating interests in all or any portion of its
Certificate and its obligations hereunder (its "Credit Exposure"). In the event
of any sale by a Purchaser of participating interests to a Participant, the
Purchaser shall notify Transferor of the identity of the Participant upon a
request by Transferor, the Purchaser's obligations under this Agreement shall
remain unchanged, the Purchaser shall remain solely responsible for the
performance thereof, and the Purchaser shall remain the holder of its rights
under its Certificate and this Agreement for all purposes under this Agreement,
and the other parties to the Transaction Documents shall continue to deal solely
and directly with the Purchaser in connection with such rights
page 15
and obligations under this Agreement. Transferor agrees that each Participant
shall be entitled to the benefits of Sections 3.1, 3.2 and 3.4 and any
Prepayment Premium payable pursuant to the terms of the Supplement with respect
to its participation in the Certificate. The Purchasers agree that any agreement
between them and any Participant in respect of a participating interest shall
require the Participant to comply with the terms of Section 7.13 and shall not
restrict the Purchasers' right to agree to any amendment, supplement or
modification of the Transaction Documents except to (i) extend the final
maturity of any obligation, (ii) reduce the rate or extend the time of payment
of interest thereon or any fees owed to the Purchasers under the Transaction
Documents, (iii) reduce the principal amount of any obligation, (iv) release or
direct the release of all or substantially all of the Transferred Assets or
Trustee's claim to the Transferred Assets, (v) reduce substantially the amount
of any reserve included in the calculation of the Base Amount, (vi) increase the
amount of the participation from the amount thereof then in effect, or (vii)
permit assignment or transfer by Transferor or APP of its rights or obligations
under the Transaction Documents.
(c) The Purchaser may at any time assign to one or more banks or other
financial institutions ("Assignees") all or any part of its Credit Exposure;
provided that (i) unless assigned to an Affiliate of the Purchaser, it assigns
all of its Credit Exposure or a portion of its Credit Exposure in an amount not
less than $5,000,000, (ii) any Assignee, other than an Affiliate of the
Purchaser, must be reasonably acceptable to the Agent and Transferor, which
acceptance shall not be delayed or withheld unreasonably and (iii) if such
Assignee is organized under the laws of a jurisdiction outside the United States
of America, such Assignee shall satisfy the requirements of Section 3.4(c), or
amounts payable to it under Section 3.4 shall be limited to amounts that would
be payable if such Assignee had complied with Section 3.4(c). In the event of
any assignment, the Purchaser shall comply with Article VI of the Pooling
Agreement and also shall give notice to Transferor and the Agent and shall
deliver to the Agent, for acceptance and recording in its records, an assignment
agreement substantially in the form of Exhibit D together with a processing and
recordation fee of, in the case of assignments to an Affiliate of the Purchaser,
$1,500 and, in cases of any other assignment, $3,500. Within five Business Days
of receipt thereof, the Agent shall, if the assignment agreement has been fully
executed by the Assignee, the assignor Purchaser and Transferor, is completed
and is in substantially the form of Exhibit D, execute the assignment agreement
and record the information contained therein in its records. Upon the earlier of
the expiration of the five Business Day period or the date of the recording, the
assignment will become effective. Transferor, the Agent and the Purchaser agree
to extend the rights and benefits under this Agreement to the Assignee to the
extent the Assignee would have had if it were a Purchaser that was an original
signatory to this Agreement; provided,
page 16
that Transferor shall be entitled to continue to deal solely and directly with
the assignor Purchaser in connection with the interests so assigned to the
Assignee until the assignment agreement and any required fee, as described
above, shall have been delivered to Transferor and the Agent by the Purchaser
and the Assignee and the assignment shall have become effective. Upon the
effective assignment of its Credit Exposure, the Purchaser shall be relieved of
its obligations hereunder to the extent of the assignment.
(d) The sale or assignment of any Credit Exposure to any Assignee or
Participant (each, a "Transferee") shall not be effective until it has agreed to
be bound by the provisions of Section 7.13. Transferor and APP each authorize
the Purchaser to disclose to any Transferee and any prospective Transferee any
and all information in their possession concerning Transferor and APP that has
been delivered to them by Transferor, APP or Trustee in connection with their
credit evaluation of the Program prior to entering into this Agreement.
(e) Notwithstanding any other provisions set forth in this Agreement, the
Purchaser may at any time create a security interest in all or any portion of
its rights under this Agreement and the Certificate in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
(f) No transfer, assignment or other conveyance of a Class B Certificate
shall be made unless the aggregate outstanding principal amount transferred
pursuant to such transfer is equal to at least 2.1% of the aggregate principal
amount of all outstanding Class B Certificates. No Class B Certificate may be
subdivided into an aggregate principal amount of less than 2.1% of the aggregate
principal amount of all outstanding Class B Certificates. Any attempted
transfer, assignment or conveyance in contravention of the preceding
restrictions shall be void ab initio and the purported transferor of such Class
B Certificate shall continue to be treated as the Certificateholder of any such
Class B Certificate for all purposes of this Agreement.
SECTION 7.4 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the Certificates delivered
pursuant hereto shall survive the making and the repayment of the Purchases and
the execution and delivery of this Agreement and the Certificates and shall
continue in full force and effect until all obligations have been paid in full.
In addition, the obligations of Transferor under Sections 3.1, 3.2, 3.3, 3.4 and
7.5 shall survive the termination of this Agreement.
SECTION 7.5 Expenses; Indemnification. Transferor and APP jointly and
severally shall pay on demand (a) all reasonable out-of-pocket fees and
page 17
expenses (including reasonable attorneys fees and expenses) of the Purchaser
incurred in connection with the preparation, execution, delivery,
administration, amendment, modification and waiver of the Transaction Documents
and the making and repayment of the Purchases, including any Servicer or
collection agent fees paid to any third party for services rendered to the
Purchaser in collecting the Receivables and (b) all reasonable out-of-pocket
fees and expenses of the Purchaser (including reasonable attorneys fees and
expenses of their counsel) incurred in connection with the enforcement of the
Transaction Documents against Transferor, Servicer and the Seller and in
connection with any workout or restructuring of the Transaction Documents. In
addition, Transferor will pay any and all stamp and other taxes and fees payable
or determined to be payable in connection with the execution, delivery, filing,
recording or enforcement of this Agreement or any payment made under the
Transaction Documents, and hereby indemnifies and saves the Purchaser harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay the taxes and fees. Transferor and APP
jointly and severally agree to reimburse and indemnify the Purchaser and their
respective officers, directors, shareholders, controlling Persons, employees and
agents (collectively, the "Indemnitees") from and against any and all actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature that
may be imposed on, asserted against or incurred or suffered by the Purchaser
(including fees and expenses of legal counsel, accountants and experts) in any
way relating to or arising out of any event or circumstance described in the
first sentence of this Section.
If any action, suit, proceeding or investigation is commenced, as to which
an Indemnitee proposes to demand indemnification, it shall notify Transferor and
APP with reasonable promptness; provided, however, that any failure by such
Indemnitee to notify Transferor and APP shall not relieve Transferor and APP
from their obligations hereunder (except to the extent that Transferor and APP
are prejudiced by such failure to promptly notify). Transferor and APP shall be
entitled to assume the defense of any such action, suit, proceeding or
investigation, including the employment of counsel reasonably satisfactory to
the Indemnitee. The Indemnitee shall have the right to counsel of its own
choice to represent it; but the fees and expenses of such counsel shall be at
the expense of such Indemnitee unless the Indemnitee shall have been advised by
counsel that there exists an actual or potential conflict of interests among
Transferor and APP and such Indemnitee, including situations in which one or
more legal defenses may be available to such Indemnitee that are inconsistent
with those available to Transferor and APP; provided, however, that Transferor
and APP shall not, in connection with any one such action or proceeding or
separate but substantially similar actions or proceedings arising out of the
same general allegations, be liable for fees and expenses of more than one
separate firm of attorneys at any time for all
page 18
Indemnitees; and such counsel shall, to the extent consistent with its
professional responsibilities, cooperate with Transferor and APP and any counsel
designated by Transferor and APP.
Notwithstanding the foregoing (and with respect to clause (w) below,
without prejudice to the rights that an Indemnitee may have pursuant to the
other provisions of the Transaction Documents), in no event shall any Indemnitee
be indemnified against any amounts (w) resulting from gross negligence or
willful misconduct on the part of such Indemnitee (or any of its officers,
directors, employees, affiliates or agents) or the failure of such Indemnitee to
perform its obligations under the Transaction Documents), (x) to the extent they
include amounts in respect of Receivables and reimbursement therefore that would
constitute credit recourse to Servicer for the amount of any Receivable or
Related Transferred Asset not paid by the related Obligor, (y) except in the
case of the Prepayment Premium, to the extent they are or result from lost
profits or (z) to the extent they would constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to an Indemnitee or is insufficient to hold it harmless, then
Transferor and APP jointly and severally shall contribute to the amount paid by
the Indemnitee as a result of any loss, claim, damage or liability in a
proportion that is appropriate to reflect not only the relative benefits
received by the Indemnitee on the one hand and Transferor and APP on the other
hand, but also the relative fault of the Indemnitee (if any), Transferor and APP
and any other relevant equitable considerations; provided that Transferor's
obligations under this section shall be paid by Transferor only to the extent
that funds are available to make the payments pursuant to Article IV of the
Supplement, and there shall be no recourse to Transferor for all or any part of
any amounts payable pursuant to this section if the funds are at any time
insufficient to make all or part of any such payments. Any amount which
Transferor does not pay pursuant to the operation of the preceding sentence
shall not constitute a claim (as defined in (S)101 of the Bankruptcy Code)
against or corporate obligation of Transferor for any such insufficiency.
SECTION 7.6 Entire Agreement. This Agreement, together with the documents
delivered pursuant to Section 5.1 and the other Transaction Documents, including
the exhibits and schedules thereto, contains a 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 previous oral statements
and other writings with respect thereto.
page 19
SECTION 7.7 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered, sent by
overnight courier or mailed by registered mail, postage prepaid and return
receipt requested, or transmitted by facsimile transmission and confirmed by a
similar mailed writing to any party at the address for that party set forth (a)
on the signature page to this Agreement or (b) to another address as that party
may designate in writing to the Transferor.
SECTION 7.8 No Third Party Beneficiaries. Nothing expressed herein is
intended or shall be construed to give any Person (other than the Persons listed
in Section 7.3) any legal or equitable right, remedy or claim under or in
respect of this Agreement.
SECTION 7.9 Severability of Provisions. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the prohibition or unenforceability without invalidating the
remaining provisions of this Agreement.
SECTION 7.10 Counterparts. This Agreement may be executed in any number of
counterparts (which may include facsimile) and by the different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be
an original, and all of which together shall constitute one and the same
instrument.
SECTION 7.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
SECTION 7.12 Tax Characterization. Each party to this Agreement (a)
acknowledges that it is the intent of the parties to this Agreement that, for
Federal, state and local income and franchise tax purposes, the Certificate will
be treated as evidence of indebtedness secured by the Transferred Assets and the
Trust will not be characterized as an association (or publicly traded
partnership) taxable as a corporation, (b) agrees to treat the Certificate for
Federal, state and local income and franchise tax purposes as indebtedness and
(c) agrees that the provisions of the Transaction Documents shall be construed
to further these intentions.
SECTION 7.13 No Proceedings. Each of Servicer and the Purchaser (solely in
its capacity as such) hereby agrees that it will not institute against
Transferor, or join any other Person in instituting against Transferor, any
insolvency proceeding (namely, any proceeding of the type referred to in the
page 20
definition of "Bankruptcy Event") so long as any Series 1996-1 Certificates
shall be outstanding or there shall not have elapsed one year plus one day since
the last day on which any Series 1996-1 Certificates shall have been
outstanding. The foregoing shall not limit the right of Servicer or the
Purchaser to file any claim in or otherwise take any action with respect to any
insolvency proceeding that was instituted against Transferor by any other
Person.
SECTION 7.14 No Recourse. None of the directors, officers or employees of
Transferor shall have any liability to any Person, including, without
limitation, the Trustee or the Purchaser, for any action undertaken or any
certificate delivered or information delivered by such director, officer or
employee hereunder, except to the extent of the gross negligence or willful
misconduct of such director, officer or employee in connection therewith.
page 21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
NOTEPAD FUNDING
CORPORATION
By:/s/ Gregory M. Benson
---------------------------------------
Name: Gregory M. Benson
------------------------------------
Title: President
-----------------------------------
Address:
c/o 17304 Preston Road
Suite 700
Dallas, Texas 75252-5613
Attention: Chief Financial Officer
Telephone: (214) 733-6200
Facsimile: (214) 733-6260
AMERICAN PAD & PAPER
COMPANY OF DELAWARE, INC.
By: /s/ Gregory M. Benson
--------------------------------------
Name: Gregory M. Benson
------------------------------------
Title: Executive Vice President
------------------------------------
Address:
17304 Preston Road
Suite 700
Dallas, Texas 75252-5613
Attention: Chief Financial Officer
Telephone: (214) 733-6200
Facsimile: (214) 733-6260
CAISSE NATIONALE DE CREDIT
AGRICOLE, as Purchaser
By: /s/ Katherine L. Abbott
-------------------------------------
Name: Katherine L. Abbott
------------------------------------
Title: First Vice President
-----------------------------------
Address: Caisse Nationale de Credit
Agricole
55 East Monroe Street
Suite 4700
Chicago, Illinois 60603-5702
Attention: Laurence Grant
Telephone: 312-917-7456
Facsimile: 312-372-3455
SCHEDULE I
To Certificate Purchase Agreement
(Series 1996-1, Class B)
AMOUNT OF INITIAL PURCHASER'S CERTIFICATE
-----------------------------------------
Stated Amount of Certificate
- ----------------------------
Caisse Nationale de Credit Agricole $10,000,000.00
Class Percentage
- ----------------
Caisse Nationale de Credit Agricole 100.0000000000%
Series Percentage
- -----------------
Caisse Nationale de Credit Agricole 16.6666666667%
EXHIBIT A
to Certificate Purchase Agreement
(Series 1996-1, Class B)
FORM OF POOLING AND SERVICING AGREEMENT
---------------------------------------
EXHIBIT B
to Certificate Purchase Agreement
(Series 1996-1, Class B)
FORM OF RECEIVABLES PURCHASE AGREEMENT
--------------------------------------
EXHIBIT C
to Certificate Purchase Agreement
(Series 1996-1, Class B)
FORM OF SERIES 1996-1 SUPPLEMENT
--------------------------------
EXHIBIT D
to Certificate Purchase Agreement
(Series 1996-1, Class B)
FORM OF ASSIGNMENT AGREEMENT
----------------------------
This ASSIGNMENT AGREEMENT, dated as of ____________ (this "Agreement"), is
made between ____________________ ("Assignor"), and _____________________
("Assignee"). Except as otherwise defined herein, capitalized terms have the
meanings assigned to them in the Certificate Purchase Agreement (as defined
below).
BACKGROUND
1. Assignor is a party to the Certificate Purchase Agreement (Series
1996-1, Class B), dated as of May 29, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Certificate Purchase Agreement"),
among Notepad Funding Corporation, a Delaware corporation ("Transferor"),
American Pad & Paper Company of Delaware, Inc., a Delaware corporation, and
Caisse Nationale de Credit Agricole.
2. Assignor wishes to assign, and Assignee wishes to be so assigned,
Assignor's rights and obligations arising on and after the Effective Date (as
defined below) under the Certificate Purchase Agreement and its Certificate
including (a) its obligations to make Purchases (its "Credit Exposure") and (b)
its outstanding Purchase (the "Purchase").
3. Assignor and Assignee also wish (a) Assignee to assume the obligations
of Assignor under the Certificate Purchase Agreement with respect to Assignee's
Share (as defined below) to the extent of the rights assigned and (b) Assignor
to be released from the obligations assumed by Assignee.
4. Transferor and Agent, by their execution hereof, are providing their
written consent to the assignment accomplished by this Agreement.
SECTION 1. Assignment. Effective on the Effective Date (as defined below)
and upon payment of the amount specified in Section 3(a), Assignor hereby
assigns and transfers to Assignee, without recourse, representation or warranty
of any kind, express or implied (except as provided in Sections 6(a)
and (b)), and subject to Section 4(b), Assignee's Share (as specified in Annex I
hereto) (the "Assignee's Share") of all of Assignor's rights, title and interest
arising under (a) the Certificate Purchase Agreement relating to Assignor's
Credit Exposure including all rights and obligations with respect to the
Purchase attributable to Assignee's Share and (b) Assignor's Certificate with
respect to Assignee's Share as will result in Assignee having from and after the
Effective Date the Class Percentage ("Assignee's Percentage") specified in Annex
I.
SECTION 2. Assumption. Effective on the Effective Date, Assignee hereby
irrevocably purchases, assumes and takes from Assignor, and Assignor is hereby
expressly and absolutely released from, all of Assignor's obligations arising
under the Certificate Purchase Agreement relating to Assignee's Share and of any
outstanding Purchases attributable to Assignee's Share.
SECTION 3. Payment. In consideration of the assignment by Assignor to
Assignee as set forth above, Assignee agrees to pay to Assignor, in Dollars and
in immediately available funds, (a) on or prior to the Effective Date, an amount
specified by Assignor in writing on or prior to the Effective Date that
represents Assignee's Share attributable to the principal amount of the Purchase
made pursuant to the Certificate Purchase Agreement and outstanding on the
Effective Date, and (b) from time to time thereafter, other amounts (if any)
that Assignee has agreed in writing to pay to Assignor after the Effective Date.
In consideration of the assumption by Assignee, Assignor agrees to pay to
Assignee within two Business Days of the Effective Date, an assignment fee (if
any) that previously has been agreed to in writing by both parties.
Notwithstanding anything to the contrary in this Agreement, if and when
Assignee receives or collects (x) any payment of principal or interest relating
to the Purchase or (y) any payment of fees that are required to be paid to
Assignor pursuant to this Agreement, then Assignee shall forward the payment to
Assignor.
To the extent payment of funds to Assignee or Assignor are not made within
two Business Days, each, as the case may be, shall be entitled to recover the
due amount, together with interest thereon at the Federal Funds Rate per annum
accruing from the date of payment or the date of receipt of the funds by the
other party.
SECTION 4. Effectiveness. (a)(i) This Agreement shall become effective on
the date (the "Effective Date") on which it shall have been duly executed by all
parties and the Agent shall have recorded the information contained herein in
its records (or automatically if not so recorded within five Business Days from
the Agent's receipt of this Agreement signed by Assignor,
Page 2
Assignee and Transferor). Assignor hereby notifies the Agent, Transferor and
Servicer of the assignment, effective as of the Effective Date, of Assignee's
Share and any Purchases attributable to the Assignee's Share, and directs
Servicer to pay Assignee any payment of principal of, or interest on, any
Purchase attributable to the Assignee's Share of any Purchases. No (x) failure
of either Assignee or Assignor to settle any amount owed to the other (except
with respect to the payment of the processing and recordation fee to the Agent
and the payment due under Section 3(a)), (y) dispute respecting any other
settlement, including in respect of Transferor, or (z) bankruptcy, insolvency or
other condition whatsoever respecting any Person, shall in any way impair,
reduce or otherwise affect the effectiveness of this Agreement.
(ii) Assignor, Assignee and Servicer each acknowledges and agrees that from
and after the Effective Date, Servicer shall make all payments under the
Certificate Purchase Agreement in respect of Assignee's Share (including all
payments of principal and interest with respect thereto, whether or not the
payments shall have accrued prior to or after the Effective Date) to Assignee
only. Assignor and Assignee hereby agree further to make all appropriate
adjustments in payments to either of them under the Certificate Purchase
Agreement for periods prior to the Effective Date directly between themselves.
(b) With respect to the portion of the Purchase attributable to Assignee's
Share, if and when Assignor receives or collects any payment of principal,
interest or Additional Amounts with respect to Assignee's Share for any period
commencing on or after the Effective Date, Assignor shall distribute to Assignee
the portion attributable to Assignee's Share, but only to the extent it accrued
on or after the Effective Date and was not theretofore paid to Assignee by
Transferor or otherwise. Any principal, interest and Additional Amounts paid
prior to the Effective Date shall be retained by Assignor. Any principal,
interest and Additional Amounts received by Assignee that accrued prior to the
Effective Date shall be forwarded promptly, in the form received, to Assignor.
Assignee recognizes and agrees that notwithstanding anything to the contrary in
this Agreement, Assignor shall retain all of its rights to indemnification under
the Certificate Purchase Agreement for any events, acts or omissions occurring
prior to the Effective Date.
(c) Servicer, by its execution hereof, acknowledges the assignment and
agrees to make payments in respect of principal, interest, fees and Additional
Amounts as described above.
SECTION 5. Rights as Purchaser under Certificate Purchase Agreement. In
accordance with Section 7.3 of the Certificate Purchase Agreement, (a) as of the
Effective Date, Assignee will be a Purchaser under,
Page 3
and party to, the Certificate Purchase Agreement and shall have (i) all of the
rights and obligations of a Purchaser (to the extent of the assignment and
assumption of Assignee's Share effected by this Agreement) and (ii) the
addresses for (A) notice purposes and (B) LIBOR Office as set forth in items 2
and 3, respectively, of Annex I hereto and (b) promptly on or after the
Effective Date, Transferor will execute and deliver any documents and
instruments that Assignor or Assignee reasonably may require.
SECTION 6. Representations and Warranties. (a) Each of Assignor and
Assignee represents and warrants to the other as follows:
(i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement, to fulfill the
obligations hereunder and to consummate the transactions contemplated
hereby,
(ii) the making and performance of this Agreement and all documents
required to be executed and delivered hereunder do not and will not violate
any law or regulation of the jurisdiction of its incorporation or any other
applicable law or regulation,
(iii) this Agreement has been duly executed and delivered and
constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms, and
(iv) all approvals, authorizations or other actions by, or filing
with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been obtained.
(b) Assignor represents and warrants to Assignee that Assignee's Share and
the Purchases attributable to Assignee's Share are not subject to any liens or
security interests created by Assignor.
(c) Except as set forth in subsections (a) and (b), Assignor makes no
representations or warranties, express or implied, to Assignee and shall not be
responsible to Assignee for (i) the execution, effectiveness, genuineness,
legality, validity, enforceability, collectibility, regulatory status or
sufficiency of the Certificate Purchase Agreement or any of the other
Transaction Documents, (ii) the perfection, priority, value or adequacy of any
collateral security or guaranty, (iii) the taking of any action, or the failure
to take any action, with respect to any of the Transaction Documents, (iv) any
representations, warranties, recitals or statements made in any of the
Transaction Documents or in any written or oral financial or other statements,
Page 4
instruments, reports, certificates or documents made or furnished by Assignor to
Assignee or by or on behalf of Transferor or any of its Affiliates to Assignor
or Assignee in connection with the Transaction Documents and the transactions
contemplated thereby, (v) the financial or other condition of Transferor or any
other Person or (vi) any other matter having any relation to any of the
foregoing. Assignor shall not be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Transaction Documents or the existence or
possible existence of any Unmatured Early Amortization Event, Early Amortization
Event or Servicer Default. Additionally, Assignor shall not have any duty or
responsibility either initially or on a continuing basis to make any
investigation or any appraisal on Assignee's behalf or to provide Assignee with
any credit or other information with respect thereto, whether coming into
Assignor's possession before the execution of the Certificate Purchase Agreement
or at any time thereafter. Assignor shall have no responsibility with respect to
the accuracy of, or the completeness of, any information provided to Assignee,
whether by Assignor or by or on behalf of Transferor or any other Person
obligated under the Certificate Purchase Agreement or any related instrument or
document.
(d) Assignee represents and warrants that it has made its own independent
investigation of each of the foregoing matters, including the financial
condition and affairs of Transferor and its Affiliates, in connection with the
making of the Purchases and the execution of this Agreement (including the
solvency of Transferor and its Affiliates, their ability to pay their respective
debts as they mature and the capital of Transferor and its Affiliates remaining
after the closing under the Transaction Documents and the consummation of the
transactions contemplated thereby) and has made and shall continue to make its
own appraisal of the creditworthiness of Transferor and its Affiliates. Assignee
(i) confirms that it has received copies of the Transaction Documents together
with copies of certain other closing documents delivered in connection with the
Certificate Purchase Agreement, financial statements and any other documents and
information that it has requested or deemed appropriate to make its own credit
analysis and decision to enter into this Agreement and (ii) agrees that it will,
independently and without reliance upon the Agent, Assignor or any other
Purchaser 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.
SECTION 7. No Proceedings. Assignee hereby agrees to be bound by the
provisions of Section 7.13 of the Certificate Purchase Agreement.
Page 5
SECTION 8. [Withholding Taxes. In accordance with Section 3.4 of the
Certificate Purchase Agreement, Assignee agrees to execute and deliver to the
Agent, for delivery to Transferor, on or before the Effective Date, (a) an
Internal Revenue Service Form 1001 or 4224 or successor applicable form,
properly completed and duly executed by the Purchaser certifying that it is
entitled to receive payments under the Certificate Purchase Agreement without
deduction or withholding of any United States Federal income taxes, and (b) an
original copy of Internal Revenue Service Form W-8 or W-9 or applicable
successor form, properly completed and duly executed. Assignee represents and
warrants to Transferor and Assignor that, as of the Effective Date, it shall be
entitled to receive payments of principal and interest under its Certificate and
hereunder without deduction for or on account of any taxes imposed by the United
States of America or any political subdivision thereof. In the event that, after
delivering the applicable form, Assignee shall cease to be exempt from
withholding and/or deduction of taxes, then the Agent may withhold and/or deduct
the applicable amount from any payments of principal, interest and any fees to
which Assignee otherwise would be entitled, and the Agent shall have no
liability whatsoever to Assignee for any such withholding or deduction. Assignee
shall indemnify Transferor and the Agent from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs or
expenses that result from Assignee's breach of such representation and
warranty./*/
SECTION 9. ]Miscellaneous. (a) Each of the parties hereto agrees to take
any action and execute and deliver any documents that any party hereto
reasonably may request from time to time in order to implement more fully the
purposes of this Agreement. Without limiting the generality of the foregoing,
Assignor and Assignee will cooperate in obtaining for Assignee a Certificate (as
well as a replacement Certificate for Assignor representing any retained
interest of Assignor).
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
(c) Except as otherwise set forth herein, this Agreement sets forth the
entire agreement between the parties relating to the subject matter hereof, and
no term or provision of this Agreement may be amended, changed, waived,
discharged or terminated orally or otherwise, except in a writing signed by
Assignor and Assignee.
- -----------------------------
/*/ If the Assignee is a foreign entity.
Page 6
(d) This Agreement may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
(e) Each of the parties hereto agrees that each party shall bear its own
expenses in connection with the preparation and execution of this Agreement and
the consummation of the Assignment described herein. Assignee further agrees
that it shall send a check in the amount of $[1,500] [3,500] to the Agent on or
prior to the Effective Date, as payment of the processing and recordation fee
described in Section 7.3(c) of the Certificate Purchase Agreement.
(f) All representations and warranties made, and indemnities provided for,
herein shall survive the consummation of the transactions contemplated hereby.
(g) Assignor may at any time or from time to time grant assignments and
participations in its rights and obligations under the Certificate Purchase
Agreement and its Certificate to other Persons, but not in the portions thereof
assigned to Assignee.
(h) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Neither Assignor nor
Assignee may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party. The preceding
sentence shall not limit the right of Assignee to assign all or part of
Assignee's Share in the manner contemplated by the Certificate Purchase
Agreement.
Page 7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
________________________,
as Assignor
By:_______________________
Title:__________________
________________________,
as Assignee
By:______________________
Title:_________________
The undersigned hereby acknowledges the terms and provisions of this
Agreement, and agrees to make payments in respect of principal, interest and
fees as described in Section 4(a).
ABN AMRO BANK N.V., as Agent
By:_________________________
Title:____________________
AMERICAN PAD & PAPER COMPANY OF
DELAWARE, INC., as Servicer
By:_________________________
Title:____________________
NOTEPAD FUNDING CORPORATION
By:_________________________
Title:____________________
Page 8
ANNEX I
to Assignment Agreement
ITEM 1. ASSIGNEE'S SHARE:
(a) Assignee's Stated Amount $______________
(b) Assignee's Class Percentage _____________%
ITEM 2. ADDRESS OF ASSIGNEE FOR NOTICE PURPOSES:
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Attention:
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Telephone:
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Facsimile:
- ----------------------------
ITEM 3. LIBOR OFFICE OF ASSIGNEE:
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APPENDIX X
to Certificate Purchase Agreement
(Series 1996-1, Class B)
INDEX OF ADDITIONAL DEFINED TERMS
---------------------------------
Agreement............................................................... 1
APP..................................................................... 1
Assignees............................................................... 16
Certificate............................................................. 1
Class B Certificate..................................................... 1
Class Percentage........................................................ 2
Closing................................................................. 2
Credit Exposure......................................................... 16
Financial Advisor....................................................... 7
Indemnitees............................................................. 18
LIBOR Office............................................................ 3
Participants............................................................ 16
Pooling Agreement....................................................... 1
Purchase................................................................ 2
Purchaser............................................................... 1
Receivables Review...................................................... 14
Series Percentage....................................................... 2
Servicer................................................................ 1
Supplement.............................................................. 1
Taxes................................................................... 6
Transferee.............................................................. 17
Transferor.............................................................. 1
Trust................................................................... 1
Trust Interest.......................................................... 1
Trustee................................................................. 1