EXHIBIT 10.17
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PURCHASE AND SALE AGREEMENT
Dated as of October 26, 1999
between
THE SELLERS NAMED HEREIN,
CADMUS RECEIVABLES CORP.
and
CADMUS COMMUNICATIONS CORPORATION
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TABLE OF CONTENTS
PAGE
ARTICLE I AGREEMENT TO SELL......................................................................................3
SECTION 1.2 TIMING OF PURCHASES...................................................................................5
SECTION 1.3 CONSIDERATION FOR PURCHASES...........................................................................5
SECTION 1.4 SALE TERMINATION DATE.................................................................................5
ARTICLE II CALCULATION OF PURCHASE PRICE.........................................................................5
SECTION 2.1 CALCULATION OF PURCHASE PRICE.........................................................................5
ARTICLE III PAYMENT OF PURCHASE PRICE............................................................................7
SECTION 3.1 INITIAL PURCHASE PRICE PAYMENT........................................................................7
SECTION 3.2 SUBSEQUENT PURCHASE PRICE PAYMENTS....................................................................8
SECTION 3.3 SETTLEMENT AS TO SPECIFIC RECEIVABLES.................................................................8
SECTION 3.4 SETTLEMENT AS TO DILUTION.............................................................................9
SECTION 3.5 RECONVEYANCE OF RECEIVABLES...........................................................................9
SECTION 3.6 REBILLED RECEIVABLES.................................................................................10
ARTICLE IV CONDITIONS OF PURCHASES..............................................................................10
SECTION 4.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE.............................................................10
SECTION 4.2 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES...................................................12
ARTICLE V REPRESENTATIONS AND WARRANTIES........................................................................12
SECTION 5.1 REPRESENTATIONS OF THE SELLERS.......................................................................12
ARTICLE VI COVENANTS OF THE SELLERS.............................................................................16
SECTION 6.1 AFFIRMATIVE COVENANTS................................................................................16
SECTION 6.2 REPORTING REQUIREMENTS...............................................................................18
SECTION 6.3 NEGATIVE COVENANTS...................................................................................19
ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES.....................................20
SECTION 7.1 RIGHTS OF THE COMPANY................................................................................20
SECTION 7.2 RESPONSIBILITIES OF THE SELLERS......................................................................20
SECTION 7.3 FURTHER ACTION EVIDENCING PURCHASES..................................................................21
ARTICLE VIII INDEMNIFICATION....................................................................................21
SECTION 8.1 INDEMNITIES BY THE SELLERS...........................................................................21
ARTICLE IX ADDITION AND TERMINATION OF SELLERS..................................................................23
SECTION 9.1 ADDITION OF SELLERS..................................................................................23
SECTION 9.2 CONDITIONS PRECEDENT TO THE ADDITION OF A SELLER.....................................................23
SECTION 9.3 TERMINATION OF A SELLER..............................................................................25
ARTICLE X MISCELLANEOUS.........................................................................................26
SECTION 10.1 AMENDMENTS, ETC.....................................................................................26
SECTION 10.2 NOTICES, ETC........................................................................................27
SECTION 10.3 NO WAIVER; CUMULATIVE REMEDIES......................................................................27
SECTION 10.4 BINDING EFFECT; ASSIGNABILITY.......................................................................27
SECTION 10.5 GOVERNING LAW.......................................................................................28
SECTION 10.6 COSTS, EXPENSES AND TAXES...........................................................................28
SECTION 10.7 SUBMISSION TO JURISDICTION..........................................................................28
SECTION 10.8 WAIVER OF JURY TRIAL................................................................................29
SECTION 10.9 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE...........................................29
SECTION 10.10 EXECUTION IN COUNTERPARTS..........................................................................29
SECTION 10.11 ACKNOWLEDGMENT AND AGREEMENT.......................................................................30
SECTION 10.12 NO PROCEEDINGS.....................................................................................30
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EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF PURCHASE REPORT
EXHIBIT B FORM OF THE SELLER NOTE
EXHIBIT C OFFICE LOCATIONS
EXHIBIT D FORM OF CERTIFICATE OF FINANCIAL OFFICER
EXHIBIT E FORM OF LOCK BOX AGREEMENT
SCHEDULE 5.1(n) TRADE NAMES
SCHEDULE 5.1(t) MATERIAL ADVERSE CHANGE
SCHEDULE 10.2 NOTICE ADDRESSES
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (as amended, supplemented or modified
from time to time, this "Agreement"), dated as of October 26, 1999, is between
the seller parties named herein (each such party being a "SELLER" and
collectively, the "SELLERS"), as sellers, CADMUS RECEIVABLES CORP., a Virginia
corporation (the "COMPANY"), as purchaser and Cadmus Communications Corporation
("CADMUS").
DEFINITIONS
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in Appendix A to the Receivables Purchase
Agreement of even-date herewith (as amended, supplemented or otherwise modified
from time to time, the "RECEIVABLES PURCHASE AGREEMENT"), among the Company,
Cadmus Communications Corporation, as initial master servicer, Blue Ridge Asset
Funding Corporation, as purchaser (the "PURCHASER") and Wachovia Bank, N.A., as
agent for the Purchaser (the "AGENT"). The following terms have the respective
meanings indicated hereinbelow:
Available Funds: As defined in Section 3.2 hereof.
Deemed Collections: Amounts payable by the Sellers pursuant to Section 3.3 or
3.4 hereof.
Ineligible Receivable: As defined in Section 3.3 hereof.
Initial Closing Date: As defined in Section 1.2 hereof.
Initial Cut-Off Date: The Business Day immediately preceding the Initial
Closing Date.
Mandatory Seller Termination Date: As defined in Section 9.3(a) hereof.
Payment Day: (i) the Initial Closing Date and (ii) each Business Day
thereafter that any Seller is open for business.
Permissive Seller Termination Date: As defined in Section 9.3(b) hereof.
Purchase Price: As defined in Section 2.1 hereof.
Purchase Report: As defined in Section 2.1 hereof.
Related Rights: As defined in Section 1.1(a) hereof.
Sale Indemnified Amounts: As defined in Section 8.1 hereof.
Sale Indemnified Party: As defined in Section 8.1 hereof.
Sale Termination Date: As defined in Section 1.4 hereof.
Seller Addition Date: As defined in Section 9.2 hereof.
Seller Material Adverse Effect: With respect to any event or circumstance, an
effect caused or resulting from such event or circumstance which has had or
would reasonably be expected to have a material adverse effect on:
(i) the assets, business, financial condition or
operations of Cadmus and its Subsidiaries, taken as a whole;
(ii) the ability of each Seller to perform in all material
respects its obligations under this Agreement or any other Transaction
Document to which such Seller is a party;
(iii) the validity or enforceability as against any Seller
of this Agreement or any other Transaction Document to which such
Seller is a party;
(iv) the status, existence, perfection, priority or
enforceability of the Company's interest in the Receivables Pool and
the Related Rights; or
(v) the validity, enforceability or collectibility of a
material portion of the Receivables Pool.
Seller Note: As defined in Section 3.1 hereof.
Solvent: As to any Person at any time, having a state of affairs such that all
of the following conditions are met: (i) the fair value of the property of such
Person is greater than the amount of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy
Code; (ii) the present fair salable value of the property of such Person in an
orderly liquidation of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (iii) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(iv) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (v) such Person is not engaged in business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute unreasonably small capital.
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Background
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1. The Company is a limited purpose corporation and a wholly-owned
direct subsidiary of Cadmus.
2. Each Seller is a wholly-owned indirect subsidiary of Cadmus.
3. The Sellers wish to sell Receivables and Related Rights to the
Company, and the Company is willing, on the terms and subject to the conditions
set forth herein, to purchase Receivables and Related Rights from the Sellers.
4. The Company intends to sell to the Purchaser from time to time
undivided interests in the Receivables and Related Rights pursuant to the
Receivables Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO SELL
SECTION 1.1 SALES AND CONTRIBUTIONS.
(a) Agreement to Sell. On the terms and subject to the conditions set
forth in this Agreement (including Article V), and in consideration of the
Purchase Price, from the Initial Closing Date until the Sale Termination Date,
each Seller agrees to sell, assign and transfer, and does hereby sell, assign
and transfer to the Company, and the Company agrees to purchase, and does hereby
purchase from each Seller, all of such Sellers' right, title and interest in and
to:
(i) each Receivable of such Seller that existed and was
owing to such Seller as of the close of such Seller's business on the
Initial Cut-Off Date;
(ii) each Receivable created or originated by such Seller from
the close of such Sellers' business on the Initial Cut-Off Date, to and
including the Sale Termination Date;
(iii) all rights to, but not the obligations under, all
Contracts and all Related Security with respect to the Receivables
originated by such Seller whether now existing or hereafter acquired;
(iv) all monies due or to become due with respect to the
foregoing;
(v) all books and records related to any of the foregoing
whether now existing or hereafter acquired;
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(vi) all Lock-Boxes, the Collection Account, all amounts on
deposit therein and all related agreements between such Seller and the
Lock-Box Banks, in each case to the extent constituting or representing
items described in paragraph (vii) below; and
(vii) all Collections in respect of, and other proceeds (as
defined in the UCC) of, Receivables sold, assigned and transferred to
the Company hereunder or any other of the foregoing received on or
after the Initial Cut-Off Date including, without limitation, all funds
which either are received by such Seller, the Company or the Master
Servicer from or on behalf of the Obligors in payment of any amounts
owed (including, without limitation, finance charges, interest and all
other charges) in respect of Receivables sold, assigned and transferred
to the Company hereunder, or are applied to such amounts owed by the
Obligors (including without limitation, insurance payments, if any,
that such Seller or the Servicer (if other than such Seller) applies in
the ordinary course of its business to amounts owed in respect of any
Receivable sold, assigned and transferred to the Company hereunder and
net proceeds of sale or other disposition of repossessed goods or other
collateral or property of the Obligors or any other party directly or
indirectly liable for payment of such Receivable and available to be
applied thereon).
All purchases hereunder shall be made without recourse, but shall be made
pursuant to and in reliance upon the representations, warranties and covenants
of the respective Seller, set forth in each Transaction Document. The proceeds
and rights described in subsections (iii) through (vii) of this Section 1.1(a)
are herein collectively called the "RELATED RIGHTS".
(b) [Reserved].
(c) Absolute Transfer. It is the intention of the parties hereto that
the conveyance of the Receivables and Related Rights by each Seller to the
Company as provided in this Section 1.1 be, and be construed as, an absolute
sale or assignment, without recourse, of such Receivables and Related Rights by
such Seller to the Company. Furthermore, it is not intended that such conveyance
be deemed a pledge of such Receivables and Related Rights by such Seller to the
Company to secure a debt or other obligation of such Seller. If, however,
notwithstanding the intention of the parties, the conveyance provided for in
this Section 1.1 is determined to be a transfer for security, then this
Agreement shall also be deemed to be a "security agreement" within the meaning
of Article 9 of the UCC and such Seller hereby grants to the Company a "security
interest" within the meaning of Article 9 of the UCC in all of such Seller's
right, title and interest in and to such Receivables and Related Rights, now
existing and hereafter created, to secure a loan in an amount equal to the
aggregate Purchase Prices therefor and each of such Seller's other payment
obligations under this Agreement.
(d) Capital Contributions. Cadmus may from time to time, at its option,
make capital contributions to the Company in cash. Such capital contributions
may be used by the Company (i) prior to the Sale Termination Date, for any
purpose, including, without limitation, the payment of any obligation of the
Company hereunder or under the Receivables Purchase Agreement and (ii) on and
after the Sale Termination Date, solely for the payment of its obligations to
third parties under the Receivables Purchase Agreement until such obligations
have been paid in full.
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SECTION 1.2 TIMING OF PURCHASES.
(a) Initial Closing Date Purchases. On the date of the first Purchase
under the Receivables Purchase Agreement (the "INITIAL CLOSING DATE") each
Seller shall sell to the Company, and the Company shall purchase, pursuant to
Section 1.1, such Seller's entire right, title and interest in (i) each
Receivable that existed and was owing to such Seller as of the close of such
Seller's business on the Initial Cut-Off Date, and (ii) all Related Rights with
respect thereto.
(b) Subsequent Purchases. After the Initial Closing Date, and
continuing until the Sale Termination Date, each Receivable described in Section
1.1(a)(ii) hereof, and all the Related Rights with respect thereto, created or
originated by a Seller shall be sold by such Seller to the Company (without any
further action) upon the origination of such Receivable. All such Receivables,
shall be sold to the Company on such date.
SECTION 1.3 CONSIDERATION FOR PURCHASES.
On the terms and subject to the conditions set forth in this Agreement,
the Company agrees to make all Purchase Price payments to each Seller in
accordance with Article III.
SECTION 1.4 SALE TERMINATION DATE.
The "SALE TERMINATION DATE" shall be the earlier to occur of (i) with
respect to a particular Seller, the date (if any) that is such Seller's
Mandatory Seller Termination Date or Permissive Seller Termination Date and (ii)
the Termination Date under the Receivables Purchase Agreement.
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 CALCULATION OF PURCHASE PRICE.
On each Reporting Date (commencing with the first Reporting Date
following the Initial Closing Date), the Sellers shall deliver to the Company,
the Agent and the Master Servicer a report in substantially the form of Exhibit
A (each such report being herein called a "PURCHASE REPORT") with respect to the
Company's purchases of Receivables from the Sellers:
(a) that existed and were owing on the Initial Cut-Off Date (in the
case of the first Purchase Report to be delivered hereunder) and
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(b) that were originated during the Settlement Period immediately
preceding such Reporting Date (in the case of each successive Purchase Report).
Each Purchase Report shall designate the amount of such Receivables that were
Eligible Receivables on the date of origination (or, in the case of Receivables
transferred on the Initial Closing Date, on the Initial Closing Date).
The "PURCHASE PRICE" (to be paid to a Seller in accordance with the terms of
Article III) for the Receivables and the Related Rights sold and transferred by
such Seller to the Company hereunder shall be determined in accordance with the
following formula:
PP = AUB - (AUB X FMVD)
where:
PP = Purchase Price (to be paid to such Seller in
accordance with the terms of Article III) as
calculated on the relevant purchase date or Reporting
Date.
AUB = (i) for purposes of calculating the Purchase Price
for Receivables sold or transferred by such Seller on
the Initial Closing Date, the aggregate Unpaid
Balance of all such Receivables that existed and were
owing to such Seller as measured as at the Initial
Cut-Off Date, and
(ii) for purposes of calculating the Purchase Price
for Receivables on as of each Reporting Date
thereafter, the aggregate Unpaid Balance of the
Receivables described in Section 1.1(a)(ii) hereof
that were originated by such Seller during the
immediately preceding Settlement Period.
FMVD = Fair Market Value Discount Factor, which is the sum
of the Loss Discount and the Cost Discount, in each
case as calculated on the Initial Closing Date or the
most recent Reporting Date as set forth in the
definitions below.
"LOSS DISCOUNT" as measured on the Initial Closing Date or any
Reporting Date means the ratio, expressed as a percentage, of (i) the losses
(i.e. write-offs to the bad debt reserve or other write-offs consistent with the
Credit and Collection Policy of the related Seller, in each case, net of
recoveries) recognized for all Pool Receivables during the period equal to
twelve (12) successive months ending on the Cut-Off Date immediately preceding
the Initial Closing Date or such Reporting Date, as the case may be, divided by
(ii) the Collections on all Pool Receivables received during such period.
"COST DISCOUNT" as measured on the Initial Closing Date or any
Reporting Date means a percentage determined in accordance with the following
formula:
CD = (TD/360) x CR
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where:
CD = the Cost Discount as measured on the Initial Closing
Date or such Reporting Date, as the case may be;
TD = the Turnover Days, as set forth in the most recent
Purchase Report; and
CR = the Cost Rate as measured on the Initial Closing
Date or such Reporting Date, as the case may be.
"COST RATE" as measured on the Initial Closing Date or any Reporting
Date means a per annum percentage rate equal to the sum of (i) the LIBO Rate for
the Initial Closing Date or the related Settlement Period, as the case may be,
plus (ii) 5.0%.
"LIBO RATE" for the Initial Closing Date or any Settlement Period means
the offered rate per annum (rounded upwards, if necessary, to the nearest 1/16th
of one percent) appearing in The Wall Street Journal for three month LIBOR loans
on the Initial Closing Date or the first Business Day of such Settlement Period,
as the case may be.
"TURNOVER DAYS" at any time during a Settlement Period, means the
product of (a) a fraction the numerator of which is the aggregate Unpaid Balance
of all Receivables as of the first day of the next preceding Settlement Period
and the denominator of which is the aggregate amount of collections received on
all Receivables during such next preceding Settlement Period and (b) the number
of days in such next preceding Settlement Period.
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 INITIAL PURCHASE PRICE PAYMENT.
On the terms and subject to the conditions set forth in this Agreement,
the Company agrees to pay to the applicable Sellers on the Initial Closing Date
the Purchase Price for the purchase to be made by the Company with respect to
Receivables existing on the Initial Cut-Off Date (a) in cash in an amount equal
to the amount received by the Company in connection with the first Purchase made
pursuant to the Receivables Purchase Agreement (provided that if the aggregate
of the Purchase Prices exceeds the amount of cash so received by the Company,
the Company shall apply such amount of cash ratably among the Purchase Prices
payable to such Sellers) and (b) by the issuance of a promissory note in the
form of Exhibit B to each Seller (each such promissory note, as it may be
amended, supplemented, endorsed or otherwise modified from time to time in
substitution therefor or renewal thereof in accordance with the Transaction
Documents, being herein called a "SELLER NOTE") in the initial principal amount
equal to the remainder of the Purchase Price owing to such Seller on the Initial
Closing Date after subtracting the amount paid in cash.
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SECTION 3.2 SUBSEQUENT PURCHASE PRICE PAYMENTS.
On each Business Day after the Initial Closing Date on which a Seller
sells and transfers any Receivables to the Company hereunder until the
termination of this Agreement pursuant to Section 10.4 hereof, the Company shall
pay to each Seller a portion of the Purchase Price due pursuant to Section 2.1
by depositing into such account as such Seller shall specify immediately
available funds from monies then held by or on behalf of the Company solely to
the extent that such monies do not constitute Collections that are required to
be identified and held in trust by the Master Servicer pursuant to the
Receivables Purchase Agreement or required to be distributed to the Agent or the
Purchaser pursuant to the Receivables Purchase Agreement or required to be paid
to the Master Servicer as the Servicer's Fee on the next Settlement Date, or
otherwise necessary to pay current expenses of the Company (in its reasonable
discretion) (such available monies, the "AVAILABLE FUNDS") and provided that
such Seller has paid all amounts then due from it hereunder. To the extent that
the Available Funds are insufficient to pay the Purchase Price then due in full,
the remaining portion of such Purchase Price shall be paid by increasing the
principal amount owed to such Seller under the related Seller Note, effective as
of the last day of the related Settlement Period; provided, however, that the
aggregate of the principal amounts outstanding at any time under the Seller
Notes may not exceed the lesser of (a) $3,500,000 and (b) 10% of the Purchase
Limit. To the extent that (x) the amount due pursuant to Section 2.1 with
respect to all Receivables created or originated by a particular Seller that
arose during the corresponding Settlement Period is exceeded by (y) the amount
paid to such Seller during such Settlement Period pursuant to the foregoing
sentences for such Receivables, such excess shall be treated as a reduction in
the principal amount of the related Seller Note, effective as of the last day of
the related Settlement Period; provided, however, that if at any time the unpaid
principal amount of such Seller Note has been reduced to zero, such Seller shall
pay the Company the remainder of such excess payment in immediately available
funds.
Each Seller shall make all appropriate record keeping entries with
respect to its Seller Note to reflect payments by the Company thereon and such
Seller's books and records shall constitute rebuttable presumptive evidence of
the principal amount of and accrued interest on the related Seller Note. Each
Seller shall return its Seller Note to the Company upon the final payment
thereof after the termination of this Agreement pursuant to Section 10.4 hereof.
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SECTION 3.3 SETTLEMENT AS TO SPECIFIC RECEIVABLES.
If an officer of any Seller obtains knowledge or receives notice from
the Company or the Agent that (a) on the day that any Receivable conveyed to the
Company hereunder was created or originated by such Seller, (or, in the case of
Receivables transferred on the Initial Closing Date, on the Initial Closing
Date) any of the representations or warranties set forth in Section 5.1(l) was
not true with respect to such Receivable, or such Receivable was designated as
an Eligible Receivable on the related Purchase Report and was not an Eligible
Receivable or, (b) on any day any of the representations or warranties set forth
in Section 5.1(l) with respect to any Receivable is no longer true with respect
to a Receivable (each such Receivable, an "INELIGIBLE Receivable"), then the
Purchase Price with respect to Receivables of such Seller that arose during the
same Settlement Period in which such knowledge is obtained or notification is
received shall be decreased by an amount equal to the Unpaid Balance of such
Ineligible Receivable as of the related Settlement Date; provided, however, that
if there have been no purchases of Receivables (or insufficiently large
purchases of Receivables to create a Purchase Price large enough to so reduce by
the amount of such net reduction) from such Seller during such Settlement
Period, any amount owed by which the Purchase Price payable to such Seller would
have been reduced pursuant to the immediately preceding clause of this sentence
shall be paid by either (at the option of such Seller, unless the Company will,
absent such payment in cash, be unable to meet its obligations under the
Receivables Purchase Agreement on the next occurring Settlement Date, in which
case such Seller shall make a cash payment on or before such Settlement Date) a
reduction in the principal amount of the related Seller Note (but not below
zero) or by payment within two Business Days after the related Reporting Date in
cash by such Seller to the Company by payment of same day funds; provided,
further, that if the Company receives payment on account of Collections due with
respect to such Ineligible Receivable after such Settlement Date, the Company
promptly shall deliver such funds to such Seller. The enforcement of the
obligations of the Sellers set forth in this Section 3.3 shall be the sole
remedy of the Company with respect to Ineligible Receivables.
SECTION 3.4 SETTLEMENT AS TO DILUTION.
Each Purchase Report shall include, in respect of the Receivables
previously conveyed by the related Seller, a calculation of the aggregate net
reduction in the aggregate Unpaid Balance of such Receivables owed by particular
Obligors on account of any defective, rejected or returned merchandise or
services, any cash discount, any incorrect ▇▇▇▇▇▇▇▇ or other adjustments, or
setoffs in respect of any claims by the Obligor(s) thereof (whether such claims
arise out of the same or a related or unrelated transaction), or any rebate or
refund during the most recent Settlement Period. The Purchase Price to be paid
to such Seller for the Receivables generated by it during the Settlement Period
for which such Purchase Report is delivered shall be decreased by the amount of
such net reduction; provided, however, that if there have been no purchases of
Receivables (or insufficiently large purchases of Receivables to create a
Purchase Price large enough to so reduce by the amount of such net reduction)
from such Seller during such Settlement Period, any amount owed by which the
Purchase Price payable to such Seller would have been reduced pursuant to the
immediately preceding clause of this sentence shall be paid by either (at the
option of such Seller, unless the Company will absent such payment in cash, be
unable to meet its obligations under the Receivables Purchase Agreement on the
next occurring Settlement Date, in which case, such Seller shall make a cash
payment on or before such Settlement Date) a reduction in the principal amount
of its Seller Note (but not below zero) or by payment within two Business Days
after the related Reporting Date in cash by such Seller to the Company by
payment of same day funds.
SECTION 3.5 RECONVEYANCE OF RECEIVABLES.
In the event that any Seller has paid (by effecting a Purchase Price
reduction or otherwise) to the Company the full Unpaid Balance of any Receivable
pursuant to Section 3.3 or 3.4, the Company shall reconvey such Receivable and
all Related Rights with respect thereto, to such Seller, without recourse,
representation or warranty, but free and clear of all Liens created by the
Company; and such reconveyed Receivables and all Related Rights shall no longer
be subject to the terms of this Agreement (including any obligation to turn over
Collections to the Agent on behalf of the Purchaser with respect thereto).
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SECTION 3.6 REBILLED RECEIVABLES.
Pursuant to the provisions of Section 8.2(h) of the Receivables
Purchase Agreement, the Master Servicer or the relevant Seller, in its capacity
as Servicer, may, prior to the Rebill Termination Date, rebill one or more
Receivables which have been conveyed by such Seller to the Company hereunder due
to one or more errors in the original invoice or to reflect a discount given to
the Obligor thereof.
If any such Receivable is so rebilled prior to the occurrence of the
Rebill Termination Date, then:
(a) the Seller of such Receivable shall repurchase the
Original Receivable at a price equal to the Unpaid Balance thereof on
the date such Receivable is rebilled and, pursuant to the provisions of
Section 1.1 hereof, convey the Rebilled Receivable to the Company on
the date such Receivable is rebilled; and
(b) the Seller thereof shall be entitled to receive the
Purchase Price of each Rebilled Receivable, provided, however, that the
Sellers and the Company agree that if the Unpaid Balance of the
Rebilled Receivable exceeds the Unpaid Balance of the Original
Receivable, the amounts shall be netted and such excess shall be the
"Unpaid Balance" for purposes of calculating the Purchase Price of the
Rebilled Receivable; provided, further, however the Sellers and the
Company agree that if the Unpaid Balance of the Original Receivable
exceeds the Unpaid Balance of the Rebilled Receivable, the amounts
shall be netted and such excess shall be the paid or credited to the
Company in accordance with the provisions of Section 3.4 hereof.
No Receivable conveyed by any Seller to the Company hereunder may be
rebilled on or after the occurrence of the Rebill Termination Date.
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE.
The initial purchase hereunder is subject to the condition precedent
that the Company shall have received, on or before the Initial Closing Date, the
following, each (unless otherwise indicated) dated the Initial Closing Date, and
each in form, substance and date reasonably satisfactory to the Company and the
Agent:
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(a) A copy of the resolutions of the board of directors of each Seller
approving the Transaction Documents to be delivered by it and the transactions
contemplated hereby and thereby, certified by the secretary or assistant
secretary of such Seller;
(b) Good standing certificate for each Seller issued as of a recent
date by the Secretary of State of the jurisdiction of its incorporation and
principal place of business;
(c) A certificate of the secretary or assistant secretary of each
Seller certifying the names and true signatures of the officers authorized on
such Seller's behalf to sign the Transaction Documents to be delivered by it (on
which certificate the Company and Master Servicer may conclusively rely until
such time as the Company and the Master Servicer shall receive from such Seller
a revised certificate meeting the requirements of this subsection (c);
(d) The articles of incorporation of each Seller, duly certified by the
appropriate authority of the jurisdiction of its incorporation as of a recent
date, together with a copy of the by-laws of such Seller, duly certified by such
Seller's secretary or an assistant secretary;
(e) Copies of the proper financing statements (Form UCC-1) that have
been duly executed and name each Seller as the assignor and the Company as the
assignee (and Purchaser as assignee of the Company) of the Receivables and the
Related Rights or other, similar instruments or documents, as may be necessary
or, in the Company's, the Master Servicer's or the Agent's opinion, desirable
under the UCC of all appropriate jurisdictions or any comparable law of all
appropriate jurisdictions to perfect the Company's ownership interest in all
Receivables and Related Rights sold or transferred to the Company hereunder;
(f) A written search report from a Person satisfactory to the Master
Servicer and the Agent listing all effective financing statements that name each
Seller as debtor or assignor and that are filed in the jurisdictions in which
filings were made pursuant to the foregoing subsection (e), together with copies
of such financing statements (none of which, except for those described in the
foregoing subsection (e) shall cover any Receivable sold or transferred to the
Company hereunder or any Related Right related to any Receivable), and tax and
judgment lien search reports from a Person satisfactory to the Master Servicer
and the Agent showing no evidence of such liens filed against any Seller;
(g) Evidence (i) of the execution and delivery by each of the parties
thereto of each of the other Transaction Documents to be executed and delivered
in connection herewith and (ii) that each of the conditions precedent to the
execution, delivery and effectiveness of such other Transaction Documents has
been satisfied to the Company's satisfaction;
(h) Evidence that the Seller Notes in favor of each Seller, have been
duly executed and delivered by the Company; and
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(i) A certificate from an officer of each Seller to the effect that the
Master Servicer and such Seller have placed on the most recent, and have taken
all steps reasonably necessary to ensure that there shall be placed on
subsequent, summary master control data processing reports the following legend
(or the substantive equivalent thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE
BEEN SOLD TO CADMUS RECEIVABLES CORP. PURSUANT TO A PURCHASE AND SALE AGREEMENT,
DATED AS OF OCTOBER 26, 1999, AS AMENDED FROM TIME TO TIME, BETWEEN THE SELLERS
NAMED THEREIN, CADMUS RECEIVABLES CORP. AND CADMUS COMMUNICATIONS CORPORATION
AND AN OWNERSHIP AND SECURITY INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS
BEEN GRANTED AND ASSIGNED TO WACHOVIA BANK, N.A. AS AGENT ON BEHALF OF BLUE
RIDGE ASSET FUNDING CORPORATION, PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT,
DATED AS OF OCTOBER 26, 1999, AMONG BLUE RIDGE ASSET FUNDING CORPORATION, CADMUS
RECEIVABLES CORP., CADMUS COMMUNICATIONS CORPORATION AND WACHOVIA BANK, N.A.
SECTION 4.2 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES.
Each Seller, by accepting the Purchase Price related to each purchase
of Receivables (and Related Rights), shall be deemed to have certified that the
representations and warranties contained in Article V are true and correct on
and as of the day of such purchase, with the same effect as though made on and
as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 REPRESENTATIONS OF THE SELLERS.
In order to induce the Company to enter into this Agreement and to make
purchases hereunder, each Seller, in its capacity as a seller under this
Agreement, hereby makes the representations and warranties set forth in this
Section 5.1.
(a) Organization and Good Standing. It has been duly organized and is
validly existing as a corporation in good standing under the laws of the state
of its incorporation, with power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted.
(b) Due Qualification. It is duly licensed or qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
approvals, in all jurisdictions in which the ownership or lease of its property
or the conduct of its business requires such licensing, qualification or
approvals, except where the failure to be so qualified or have such licenses or
approvals would not have a Seller Material Adverse Effect.
(c) Power and Authority; Due Authorization. It has (a) all necessary
power, authority and legal right (i) to execute and deliver this Agreement and
each other Transaction Document to which it is a party; (ii) to perform its
obligations under each Transaction Document to which it is a party; (iii) to
generate, own, sell and assign Receivables on the terms and subject to the
conditions herein and therein provided; and (b) duly authorized such execution
and delivery and such sale and assignment and the performance of such
obligations by all necessary corporate action.
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(d) Valid Sale; Binding Obligations. Each sale of Receivables and
Related Rights made by it pursuant to this Agreement shall constitute a valid
sale, transfer, and assignment thereof to the Company, enforceable against its
creditors by it and this Agreement constitutes, and each other Transaction
Document to be signed by it, when duly executed and delivered, will constitute
its legal, valid, and binding obligation, enforceable against it in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or in law.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which it is a party and
the fulfillment of the terms hereof or thereof will not (a) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under (i) its articles of
incorporation or by-laws, or (ii) any material indenture, loan agreement,
mortgage, deed of trust, or other agreement or instrument to which it is a party
or by which it is bound, (b) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such material indenture,
loan agreement, mortgage, deed of trust, or other agreement or instrument, other
than the Transaction Documents, or (c) violate any law or any order, rule, or
regulation applicable to it of any court or of any federal, state or foreign
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over it or any of its properties; except where any such
conflict, breach, default, Lien or violation would not have a Seller Material
Adverse Effect.
(f) No Proceedings. There is no litigation, investigations or
proceeding pending, or to the best of its knowledge, threatened, before any
court, regulatory body, arbitrator, administrative agency, or other tribunal or
governmental instrumentality (a) asserting the invalidity of any Transaction
Document to which it is a party, (b) seeking to prevent the sale of Receivables
and the Related Rights to the Company or the consummation of any of the other
transactions contemplated by any Transaction Document to which it is a party, or
(c) that would have a Seller Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) Government Approvals. Except for the filing of the UCC financing
statements referred to in Article IV and any required continuation statements,
all of which, at the time required in Article IV, shall have been duly made and
shall be in full force and effect, no authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for its due execution, delivery and performance of this
Agreement and each other Transaction Document to which it is a party; except for
such authorizations, approval, notices and filings the failure of which to
obtain or make would not have a Seller Material Adverse Effect.
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(i) Financial Condition. On the date hereof it is, and on the date of
each transfer of a new Receivable hereunder (both before and after giving effect
to such transfer), it shall be Solvent. The consolidated balance sheet of Cadmus
and its Consolidated Subsidiaries (which includes each Seller) as at June 30,
1999, and the related statements of income, shareholders' equity and cash flows
for the Fiscal Year then ended, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent
certified public accountants, copies of which have been furnished to the Agent
and the Company, fairly present, in conformity with GAAP, the consolidated
financial condition of Cadmus and its Consolidated Subsidiaries as at such date
and the consolidated results of operations and cash flows for such period
stated, and there are no material liabilities or unusual forward obligations
that are not set forth therein. Since June 30, 1999 there has been no material
adverse change in any such financial condition, business or operations except as
described in Schedule 5.1(i).
(j) Material Adverse Effect: Since June 30, 1999 there has been no
event, act, condition, circumstance or occurrence having, or would have or
cause, a Seller Material Adverse Effect.
(k) Federal Regulations. No part of any funds obtained by it hereunder
has been used (x) to acquire any equity security of a class that is registered
pursuant to Section 12 of the Exchange Act or (y) for "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U of the Federal Reserve Board as now and from time to time
hereafter in effect or for any purpose which violates the provisions of any
Regulations of the Federal Reserve Board. If requested by the Agent at any time,
it will furnish to the Agent a statement in conformity with the requirements of
FR Form U-1 referred to in Regulation U.
(l) Quality of Title.
(i) Each Receivable (together with the Related Rights with
respect to such Receivable) which is to be sold to the Company
hereunder is or shall be, at the time of such sale, owned by it, free
and clear of any Lien. Whenever the Company makes a purchase of a
Receivable hereunder, it shall acquire a valid and perfected ownership
interest (free and clear of any Lien, other than a Lien created by or
arising through the Company, the Purchaser or the Agent) in such
Receivable and all Collections related thereto, and in its entire
right, title and interest in and to the Related Rights with respect
thereto.
(ii) No currently effective financing statement or other
instrument similar in effect covering any Receivable or any Related
Right is on file in any recording office except such as may be filed
(1) in favor of it in accordance with the Contracts, (2) in favor of
the Company in accordance with this Agreement, (3) in favor of the
Purchaser or the Agent in accordance with the Receivables Purchase
Agreement or in connection with any Lien arising solely as the result
of any action taken by the Purchaser (or any assignee thereof) or by
the Agent or (4) in favor of the Collateral Agent.
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(m) Accuracy of Information. No information heretofore or
contemporaneously furnished in writing (and prepared) by it, as seller, to the
Company, the Purchaser or the Agent for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby or thereby is
inaccurate in any material respect as of the date it was furnished or (except as
otherwise disclosed to the Company at or prior to such time) as of the date as
of which such information is dated or certified, or contained any material
misstatement of fact or omitted or will omit to state any material fact
necessary to make such information not materially misleading.
(n) Offices. Its principal place of business and chief executive office
is located at the address set forth in Exhibit C, and the offices where it keeps
all its books, records and documents evidencing the Receivables, the related
Contracts and all other agreements related to such Receivables are located at
the address specified in Exhibit C (or at such other locations, notified to
Master Servicer, the Company and the Agent in accordance with Section 6.1(f), in
jurisdictions where all action required by Section 7.3 has been taken and
completed).
(o) Eligible Receivables. Subject to the last sentence of Section 3.3,
each Receivable included in the Net Pool Balance as an Eligible Receivable on
the date of any Purchase, Reinvestment or computation of Net Pool Balance shall
be an Eligible Receivable on such date.
(p) [Reserved].
(q) Year 2000 Compliance. Cadmus and its Subsidiaries have developed
and the Sellers have delivered, or caused to be delivered, to the Agent, on
behalf of the Purchaser a comprehensive plan (the "Y2K Plan") for insuring that
Cadmus' and its Subsidiaries' software and hardware systems material to the
business operations of Cadmus and its Subsidiaries will be Year 2000 Compliant
and Ready. Cadmus and its Subsidiaries have met the Y2K Plan milestones such
that all material hardware and software systems will be Year 2000 Compliant and
Ready in accordance with the Y2K Plan, except where a failure to meet any such
milestone would not have a Seller Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. With respect to each
Pool Receivable, it has complied in all material respects with the Credit and
Collection Policy.
(s) Compliance with Laws. It is in compliance with all applicable laws,
including, without limitation, all Environmental Laws, except where any failure
to comply with any such laws would not, alone or in the aggregate, have a Seller
Material Adverse Effect.
(t) Trade Names. Except as disclosed on Schedule 5.1(t), it does not
use any trade name other than its actual corporate name. From and after the date
that fell five (5) years before the date hereof, it has not been known by any
legal name other than its corporate name as of the date hereof, nor has it been
the subject of any merger or similar change in corporate structure, except as
disclosed on Schedule 5.1(t).
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(u) Taxes. It has filed all material tax returns and reports required
by law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except to the extent any failure to file such returns
or reports or pay such taxes or charges would not have a Seller Material Adverse
Effect.
(v) Reliance on Separate Legal Identity. It is aware that the
Purchaser, the Liquidity Banks and the Agent are entering into the Transaction
Documents to which they are parties in reliance upon the Company's identity as a
legal entity separate from it and any of its other Affiliates.
ARTICLE VI
COVENANTS OF THE SELLERS
SECTION 6.1 AFFIRMATIVE COVENANTS.
From the date hereof until the Final Payout Date, each Seller will,
unless the Company and the Agent shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders, including those with respect to
the Receivables generated by it and the Contracts and other agreements related
thereto, except where such noncompliance, individually or in the aggregate,
would not have a Seller Material Adverse Effect.
(b) Preservation of Corporate Existence. 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 the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification would
have a Seller Material Adverse Effect.
(c) Receivables Review. At any time and from time to time, upon not
less than five (5) Business Days' notice (unless a Liquidation Event has
occurred and is continuing (or the Agent believes in good faith that a
Liquidation Event has occurred and is continuing), in which case no such notice
shall be required) permit the Company and the Agent or their respective agents
or representatives, (i)(A) to examine, to audit and make copies of and abstracts
from all books, records and documents (including, without limitation, computer
tapes and disks) in the possession or under its control relating to the
Receivables generated by it, including, without limitation, the Contracts, and
purchase orders and other agreements related thereto, and (B) to visit its
offices and properties for the purpose of examining such materials described in
the foregoing clause (A) and discussing matters relating to the Receivables
generated by it or its performance hereunder with any of its officers or
employees having knowledge of such matters; (ii) to meet with the its
independent auditors, to review such auditor's work papers and otherwise to
review with such auditors its books and records with respect to the Receivables
generated by it and the Related Rights thereto; and (iii) without limiting the
provisions of clause (i) next above, from time to time, at its expense, permit
certified public accountants or other auditors acceptable to the Agent to
conduct a review of its books and records with respect to the Receivables and
the Related Rights conveyed to the Company hereunder; provided that, so long as
no Liquidation Event has occurred and is continuing, (x) such examinations,
visits, meetings and reviews shall not be done more than two (2) times in any
one calendar year and (y) it shall only be responsible for the costs and
expenses of one such review in any one calendar year.
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(d) Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the 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 daily identification of outstanding Unpaid Balances by Obligor and
related debit and credit details of the Receivables).
(e) Performance and Compliance with Receivables and Contracts. At its
expense timely and fully perform and comply in all material respects with all
provisions, covenants and other promises required to be observed by it under the
Contracts and all purchase orders and other agreements related to the
Receivables conveyed by it, except where a failure to do so would not have a
Seller Material Adverse Effect.
(f) Location of Records. Keep its principal place of business and chief
executive office, and the offices where it keeps its records concerning or
related to Receivables, at the address(es) referred to in Exhibit C or, upon 30
days' prior written notice to the Company and the Agent, at such other locations
in jurisdictions where all action required by Section 7.3 shall have been taken
and completed.
(g) Credit and Collection Policies. Comply in all material respects
with its Credit and Collection Policy in connection with the Receivables and all
Contracts related thereto.
(h) Separate Corporate Existence of the Company. Take such actions as
shall be required in order to maintain the separate identity of the Company
separate and apart from it and its Affiliates, including those actions
applicable to it set forth in Section 7.4 of the Receivables Purchase Agreement.
(i) Y2K Compliance. Meet the milestones contained in the Y2K Plan and
will have all material hardware and software systems Year 2000 Compliant and
Ready (including all internal and external testing) on or before November 1,
1999 except where a failure to meet any such milestone or a failure to be Year
2000 Compliant and Ready would not result in a Seller Material Adverse Effect.
(j) Accurate Reports. Furnish reports, information, financial
statements, documents, books, records or other material prepared by or on behalf
of it in writing that are true, complete and accurate in all material respects
as of the date so furnished and do not contain any material misstatement of fact
and do not omit to state a material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances made
or presented.
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(k) Servicing Programs. Use reasonable efforts to secure within 60 days
of the Closing Date, any license or approval which may be required for the
Agent's use of any program used by such Seller or the Master Servicer in the
servicing of Receivables.
SECTION 6.2 REPORTING REQUIREMENTS.
From the date hereof until the Final Payout Date, each Seller will,
unless the Company and the Agent shall otherwise consent in writing, furnish to
the Company and the Agent:
(a) Proceedings. As soon as possible and in any event within ten
Business Days after it has knowledge thereof, written notice of (i) all pending
proceedings and investigations of the type described in Section 5.1(f) not
previously disclosed to the Company and/or the Agent and (ii) any development in
previously disclosed litigation which development would have a Seller Material
Adverse Effect.
(b) Credit and Collection Policy. Prior to its effective date, notice
of any material change in the character of its business or in the Credit and
Collection Policy.
(c) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each of the first three fiscal quarters of
each of its Fiscal Years, copies of its balance sheets and related statements of
income, showing its financial condition as of the close of such fiscal quarter
and the results of its operations during such fiscal quarter and the then
elapsed portion of the fiscal year, together with a Certificate of Financial
Officer in the form attached hereto as Exhibit D executed by its chief financial
officer or treasurer provided, however, if in accordance with GAAP, any Seller
is required to consolidate its financial statements with Cadmus, such Seller
may, in lieu of providing its own financial statements, provide the
consolidated, and, to the extent otherwise available, consolidating balance
sheets and related statements of income and statements of cash flow of Cadmus,
showing the financial condition of Cadmus and its Consolidated Subsidiaries for
the related fiscal quarter.
(d) Annual Financial Statements. As soon as available and in any event
within 90 days after the end of each of its Fiscal Years, copies of its balance
sheets and related statements of income, showing its financial condition as of
the close of such fiscal year and the results of its operations during such
year; provided, however, if in accordance with GAAP, any Seller is required to
consolidate its financial statements with Cadmus, such Seller may, in lieu of
providing its own financial statements, provide the consolidated, and, to the
extent otherwise available, consolidating balance sheets and related statements
of income and statements of cash flow of Cadmus, showing the financial condition
of Cadmus and its consolidated Subsidiaries for the related Fiscal Year, all
such statements under this clause (d) certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other
independent public accountants of recognized national standing, with such
certification to be free of exceptions and qualifications not acceptable to the
Agent.
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(e) Reports to Holders and Exchanges. In addition to the reports
required by subsections (c) and (d) next above, promptly upon the Company's or
the Agent's request, copies of any reports specified in such request which such
Seller sends to any of its securityholders, and any reports or registration
statements that such Seller files with the SEC or any national securities
exchange other than registration statements relating to employee benefit plans
and to registrations of securities for selling securities.
(f) ERISA. If and when any Seller or any member of the Controlled Group
(i) gives or is required to give notice to the PBGC of any "reportable event"
(as defined in the Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give
such notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal under Title IV of ERISA, a copy of such
notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer any Plan, a copy of such
notice.
(g) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables generated by it and/or
its performance as Seller hereunder that the Company or the Agent may from time
to time reasonably request in order to protect the interests of the Company, the
Purchaser, the Agent, or any other Affected Party under or as contemplated by
the Transaction Documents.
SECTION 6.3 NEGATIVE COVENANTS.
From the date hereof until the Final Payout Date, each Seller agrees
that, unless the Agent shall otherwise consent in writing, it shall not:
(a) Sales, Liens, Etc. Except as otherwise provided herein or in any
other Transaction Document, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien upon or with respect
to, any Receivable conveyed to the Company hereunder or related Contract or
other Related Right, or any interest therein, or any Collections thereon, or
assign any right to receive income in respect thereof.
(b) Change in Credit and Collection Policy. Make any material change in
the Credit and Collection Policy that would impair the collectibility of any
significant portion of the Receivables conveyed to the Company hereunder or
otherwise adversely affect the interests or remedies of the Company hereunder or
the Purchaser under any Transaction Document.
(c) Receivables Not to be Evidenced by Promissory Notes. Take any
action to cause or permit any Receivable conveyed to the Company hereunder
generated by it to become evidenced by any "instrument" (as defined in the
applicable UCC), except in connection with the collection of overdue
Receivables, provided that the original of such instrument is delivered to the
Agent, duly endorsed.
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ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
SECTION 7.1 RIGHTS OF THE COMPANY.
Each Seller hereby authorizes the Company and the Master Servicer or
their respective designees to take any and all steps in such Seller's name
necessary or desirable, in their respective determination, to collect all
amounts due under any and all Receivables conveyed to the Company hereunder,
including, without limitation, endorsing such Seller's name on checks and other
instruments representing Collections and enforcing such Receivables and the
provisions of the related Contracts that concern payment and/or enforcement of
rights to payment.
SECTION 7.2 RESPONSIBILITIES OF THE SELLERS.
Anything herein to the contrary notwithstanding:
(a) Collection Procedures. Each Seller agrees to direct the Obligors to
make payments of Receivables generated by it directly to a Lock-Box that is the
subject of a Lock Box Agreement at a Lock-Box Bank. Each Seller further agrees
to transfer any Collections (including any security deposits applied to the
Unpaid Balance of any Receivable) that it receives directly to the Master
Servicer within two Business Days of receipt thereof, and agrees that all such
Collections shall be deemed to be received in trust for the Company; provided
that, to the extent permitted pursuant to Section 3.2, such Seller may retain
such Collections as a portion of the Purchase Price then payable or apply such
Collections to the reduction of the outstanding balance of the related Seller
Note.
(b) Performance Under Contract. Each Seller shall remain responsible
for performing its obligations hereunder and under its applicable Contracts, and
the exercise by the Company or its designee of its rights hereunder shall not
relieve such Seller from such obligations.
(c) Power of Attorney. Each Seller hereby grants to the Master Servicer
an irrevocable power of attorney, with full power of substitution, coupled with
an interest, to take in the name of such Seller all steps necessary or advisable
to indorse, negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by such Seller or transmitted or received by the
Company (whether or not from such Seller) in connection with any Receivable.
(d) Sellers as Servicers. Each Seller hereby agrees to act as servicer
with respect to all Receivables conveyed by such Seller to the Company hereunder
and, with respect thereto shall be a "Servicer" under the Receivables Purchase
Agreement. Accordingly, in connection with such Receivables conveyed by such
Seller to the Company hereunder, each Seller hereby assumes all of the
responsibilities and obligations under the Receivables Purchase Agreement of the
Master Servicer with respect to the servicing of all Receivables conveyed by it
to the Company hereunder.
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SECTION 7.3 FURTHER ACTION EVIDENCING PURCHASES.
Each Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action that the Company may reasonably request in order to perfect,
protect or more fully evidence the Company's ownership of the Receivables
conveyed by such Seller to the Company hereunder (and the Related Rights) or to
enable the Company to exercise or enforce any of its rights hereunder or under
any other Transaction Document. Without limiting the generality of the
foregoing, upon the request of the Company, each Seller will:
(a) 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; and
(b) ▇▇▇▇ the summary master control data processing records with the
legend set forth in Section 4.1(i).
Each Seller hereby authorizes the Company or its designee to file one or more
financing or continuation statements, and amendments thereto and assignment
thereof, related to all or any of the Receivables conveyed by such Seller to the
Company hereunder (and the Related Rights) now existing or hereafter sold by
such Seller. If any Seller fails to perform any of its agreements or obligations
under this Agreement, the Company or its designee may (but shall not be required
to) itself, on behalf of such Seller, perform, or cause performance of, such
agreement or obligation, and the expenses of the Company or its designee
incurred in connection therewith shall be payable by such Seller as provided in
Section 10.6.
SECTION 7.4 APPLICATION OF COLLECTIONS.
Any payment by an Obligor in respect of any indebtedness owed by it to
a Seller in respect of any Contract shall, except as otherwise specified by such
Obligor or otherwise required by contract or law, be applied first, as a
Collection of the Receivables of such Obligor, in the order of the age of such
Receivables, starting with the oldest of such Receivables, and second, to any
other indebtedness of such Obligor.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 INDEMNITIES BY THE SELLERS.
Without limiting any other rights which the Company may have hereunder
or under applicable law, each Seller hereby agrees to indemnify the Company and
each of its permitted assigns, officers, directors, employees and agents (each
of the foregoing Persons being individually called a "SALE INDEMNIFIED PARTY"),
on demand, from and against any and all damages, losses, claims, judgments,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively called "SALE
INDEMNIFIED AMOUNTS") awarded against or incurred by any of them arising out of
or as a result of the following:
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(a) the transfer by such Seller of an interest in any Receivable
conveyed by such Seller to the Company hereunder or Related Right to any Person
other than the Company;
(b) subject to the last sentence of Section 3.3 hereof, the breach of
any representation or warranty made by such Seller under or in connection with
this Agreement or any other Transaction Document, or any information or report
delivered by such Seller pursuant hereto or thereto which shall have been false
or incorrect in any material respect when made or deemed made;
(c) the failure by such Seller to comply with any applicable law, rule
or regulation with respect to any Receivable conveyed by such Seller to the
Company hereunder or the related Contract, or the nonconformity of any
Receivable conveyed by such Seller to the Company hereunder or the related
Contract with any such applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an ownership
interest in the Receivables conveyed by such Seller to the Company hereunder and
the Related Rights free and clear of any Lien, other than a Lien arising solely
as a result of an act of the Company, the Purchaser or the Agent, whether
existing at the time of the purchase of such Receivables or at any time
thereafter;
(e) the failure of such Seller to file with respect to itself, 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 Receivables conveyed by such Seller to the Company hereunder or
purported Receivables originated by such Seller, whether at the time of any
purchase or at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy or nonpayment due to a credit problem with the Obligor) of the
Obligor to the payment of any Receivable or purported Receivable conveyed by
such Seller to the Company hereunder (including, without limitation, a defense
based on such Receivables or the related Contracts 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 services or merchandise related to
any such Receivable or the furnishing of or failure to furnish such services or
merchandise;
(g) any product liability claim arising out of or in connection with
services or merchandise that are the subject of any Receivable conveyed by such
Seller to the Company hereunder; and
22
(h) any tax or governmental fee or charge (but not including taxes upon
or measured by net income or representing a franchise or unincorporated business
tax on such Sale Indemnified Party), all interest and penalties thereon or with
respect thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against the same, which may
arise by reason of the purchase or ownership of the Receivables generated by
such Seller or any Related Right connected with any such Receivables;
excluding, however, (i) Sale Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Sale Indemnified
Party, and (ii) any indemnification which has the effect of recourse to such
Seller for non-payment of related Receivables due to credit problems of the
Obligors.
If for any reason the indemnification provided above in this Section
8.1 is unavailable to a Sale Indemnified Party or is insufficient to hold such
Sale Indemnified Party harmless, then the related Seller shall contribute to the
amount paid or payable by such Sale Indemnified Party to the maximum extent
permitted under applicable law.
ARTICLE IX
ADDITION AND TERMINATION OF SELLERS
SECTION 9.1 ADDITION OF SELLERS.
Subject to Section 9.2, from time to time one or more Subsidiaries who
are 100% owned, directly or indirectly, by Cadmus may become Sellers hereunder
and parties hereto. If any such Subsidiary wishes to become an additional Seller
or if Cadmus or any Seller desires to acquire any Person as a new wholly-owned
Subsidiary and cause such Subsidiary to be an additional Seller at the time such
acquisition is consummated, it shall submit a request to such effect in writing
to the Company and the Agent. If the Company (which, for purposes of this
provision shall not include any assignee under Section 10.11) shall have agreed
to any such request, such Subsidiary shall become an additional Seller hereunder
and a party hereto on the related Seller Addition Date upon the satisfaction of
the conditions set forth in Section 9.2.
SECTION 9.2 CONDITIONS PRECEDENT TO THE ADDITION OF A SELLER.
No Subsidiary of Cadmus approved by the Company as an additional Seller
pursuant to Section 9.1 shall be added as a Seller hereunder unless the
conditions set forth below shall have been satisfied on or before the date
designated for the addition of such Seller (the "SELLER ADDITION DATE"):
(a) the Company and the Agent shall have received copies of
duly adopted resolutions of the board of directors of such Seller, as
in effect on the related Seller Addition Date, authorizing this
Agreement, the execution of a supplement to this Agreement and the
related Seller Note, substantially in the form of Exhibit B, making
such Seller a "Seller" herein and thereunder, the documents to be
delivered by such Seller hereunder and under any other Transaction
Document and the transactions contemplated hereby, certified by the
secretary or assistant secretary of such Seller;
23
(b) the Company and the Agent shall have received duly
executed certificates of the secretary or an assistant secretary of
such Seller, dated the related Seller Addition Date, certifying the
names and true signatures of the officers authorized on behalf of such
Seller to sign any instruments or documents in connection with the
addition of such Seller as a "Seller" under this Agreement or any other
Transaction Document;
(c) a Lock-Box with respect to the Receivables and Related
Rights to be sold by such Seller shall have been established and
approval of the Agent has been obtained pursuant to Section 7.3(d) of
the Receivables Purchase Agreement;
(d) the Company and the Agent shall have received
acknowledgment copies (or other evidence of filing reasonably
acceptable to the Agent, on the Purchaser's behalf,) of (i) proper
financing statements (Form UCC-1), in such form as the Agent, on the
Purchaser's behalf, may reasonably request, naming such Seller as the
debtor and seller of the Receivables and the Related Rights to be sold
by such Seller, the Company as the secured party and the purchaser
thereof and the Agent on behalf of the Purchaser as assignee, and (ii)
financing statements (Form UCC-1), in such form as the Agent, on the
Purchaser's behalf, may reasonably request, naming the Company as the
debtor and seller of an undivided percentage interest in the
Receivables and Related Rights to be sold by such Seller and the
Purchaser as the secured party and purchaser thereof, or other, similar
instruments or documents, as may be necessary or, in the opinion of the
Agent, on the Purchaser's behalf, desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect the sale by
such Seller to the Company of, and the Purchaser's undivided percentage
interest in, the Receivables and the Related Rights to be sold by such
Seller;
(e) the Company and the Agent, on the Purchaser's behalf,
shall have received search reports (i) listing all financing statements
that name such Seller as debtor and that are filed in the jurisdictions
in which filings were made pursuant to subsection (d) above and in such
other jurisdictions that the Agent shall reasonably request, together
with copies of such financing statements (none of which (other than any
of the financing statements described in subsection (d) above) shall
cover any Receivables or Related Rights unless appropriate releases
and/or termination statements with respect thereto are executed and
delivered to the Company and the Agent), and (ii) listing all tax liens
and judgment liens (if any) filed against any debtor referred to in
clause (i) above in the jurisdictions described therein and showing no
such Liens;
(f) such Seller shall have delivered or transmitted to the
Company, with respect to the Receivables originated by it, a computer
tape, diskette or data transmission reasonably acceptable to the
Company showing, as of a date no later than five Business Days
preceding the related Seller Addition Date, the information required to
be contained in a Purchase Report as to all Receivables to be
transferred by such Seller to the Company on the related Seller
Addition Date;
24
(g) such Seller shall have delivered to the Company, the Agent
and the Purchaser, opinions of counsel (each such opinion to be in form
and substance, and reviewed by a law firm, satisfactory to the Agent)
(i) concerning the existence of a "true sale" of the Receivables and
the proceeds thereof from such Seller to the Company hereunder, (ii)
concerning the inapplicability of the doctrine of substantive
consolidation to the Company and in connection with any bankruptcy
proceeding involving such Seller, (iii) to the effect that the Company
has obtained a valid and perfected ownership or security interest in
the Receivables and the proceeds thereof of such Seller and (iv) the
enforceability of the Transaction Documents against such Seller, due
incorporation of the Seller, certain corporate matters and such other
matters as the Agent may reasonably request; and
(h) the Agent shall be satisfied that such Receivables and the
proceeds thereof are subject to no other Liens of record, except as
otherwise permitted under the Transaction Documents; and
(i) the Company and the Agent shall have received such other
approvals, opinions or documents as the Company or the Agent, as the
case may be, shall reasonably request.
SECTION 9.3 TERMINATION OF A SELLER.
(a) Any Seller shall be terminated as a Seller hereunder by the Company
and with prior written notice to the Agent, on behalf of the Purchaser, on the
date such Seller ceases to be a wholly-owned direct or indirect Subsidiary of
Cadmus (a "MANDATORY SELLER TERMINATION DATE"); provided that (i) the aggregate
Outstanding Balance of the Receivables of any such Sellers which so cease to be
wholly-owned Subsidiaries at such time (together with the aggregate Outstanding
Balance of Receivables of all Sellers which have been terminated pursuant to
this Section 9.3 within the preceding 90 days) shall not exceed 10% of the
aggregate Outstanding Balance of all Receivables at such time and (ii) the
Termination Date has not occurred and no Termination Date would occur as a
result thereof. From and after any Mandatory Seller Termination Date, the
Company shall cease buying Receivables and other Related Rights from the related
Seller. Each such Seller shall be released as a Seller party hereto for all
purposes and shall cease to be a party hereto on the date that is the later of
(A) 90 days after the Mandatory Seller Termination Date and (B) the date on
which all amounts outstanding with respect to Receivables previously sold by
such Seller to the Company have been collected or written off in accordance with
the Credit and Collection Policy of such Seller. Prior to such day, such Seller
shall continue to be obligated to perform its servicing and other obligations
hereunder and under the Transaction Documents to which it is a party with
respect to Receivables previously sold by such Seller to the Company, including,
without limitation, its obligation to direct the deposit of Collections into the
appropriate Lock-Box.
25
(b) From time to time, the Sellers, or the Master Servicer on behalf of
the Sellers, may request in writing (with a copy to the Agent) that the Company
designate one or more Sellers as Sellers that shall cease to be parties to this
Agreement (a "PERMISSIVE SELLER TERMINATION"); provided that no Termination Date
has occurred or will occur as a result thereof. Promptly after receipt of any
such designation by the Company, the Agent and each other Seller, such Seller
shall select a date, which date shall not be earlier than 30 days after the date
of receipt by the Agent of written notice of such designation, as such Seller's
"PERMISSIVE SELLER TERMINATION DATE"; provided that such Permissive Seller
Termination may not occur with respect to a Seller without the written consent
of the Agent, on behalf of the Purchaser, if the aggregate Outstanding Balance
of the Receivables of such Seller exceeds 10% of the aggregate Outstanding
Balance of all Receivables on the Reporting Date immediately preceding the date
of such notice to the Agent. From and after any Permissive Seller Termination
Date, the Company shall cease buying Receivables and other Related Rights from
the related Seller. Each such Seller shall be released as a Seller party hereto
for all purposes and shall cease to be a party hereto on the date that is the
later of (i) 90 days after the Permissive Seller Termination Date and (ii) the
date on which all amounts outstanding with respect to Receivables previously
sold by such Seller to the Company have been collected or written off in
accordance with the Credit and Collection Policy of such Seller. Prior to such
day, such Seller shall continue to be obligated to perform its servicing and
other obligations hereunder and under the Transaction Documents to which it is a
party with respect to Receivables previously sold by such Seller to the Company,
including, without limitation, its obligation to direct the deposit of
Collections into the appropriate Lock-Box.
(c) A terminated Seller's Obligations relating to breaches of its
representations and warranties made in Article V, its indemnification
obligations and payment provisions set forth in Article VIII and Section 10.6
and its agreement in Section 10.12 shall be continuing and shall survive any
termination of a Seller hereunder. Such terminated Seller will have continuing
obligations with respect to any Receivables previously sold by it to the Company
(including, without limitation, the payment of any Sale Indemnified Amounts) to
the extent such obligations arise hereunder or under any Transaction Document to
which such Seller is a party, but otherwise shall have no obligation to
repurchase any Receivables previously sold by it to the Company. A terminated
Seller shall be entitled to receive any Collections on reconveyed Receivables or
other amounts pursuant to Section 3.5.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 AMENDMENTS, ETC.
(a) The provisions of this Agreement may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by each Seller, the Company, the Agent and the Master Servicer.
26
(b) No failure or delay on the part of the Company, the Master
Servicer, any Seller or any third party beneficiary in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Company, the Master Servicer, or any Seller in any case shall
entitle it to any notice or demand in similar or other circumstances. No waiver
or approval by the Company or the Master Servicer under this Agreement shall,
except as may otherwise be stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval under this Agreement shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 10.2 NOTICES, ETC.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by express mail or
courier or by certified mail, postage-prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth below, or to
such other address as may be hereafter notified by the respective parties
hereto.
(a) The Company:
CADMUS RECEIVABLES CORP.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The Sellers:
to the addresses set forth in Schedule 10.2.
All such notices and communications shall be effective, (i) if personally
delivered or sent by express mail or courier or if sent by certified mail, when
received, and (ii) if transmitted by facsimile, when sent, receipt confirmed by
telephone or electronic means.
SECTION 10.3 NO WAIVER; CUMULATIVE REMEDIES.
The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
27
SECTION 10.4 BINDING EFFECT; ASSIGNABILITY.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Sellers and their respective successors and permitted assigns. No
Seller may assign its rights hereunder or any interest herein except to another
wholly-owned direct or indirect Subsidiary of Cadmus that has been admitted as a
Seller hereunder without the prior written consent of the Company and the Agent.
Subject to Section 10.11, the Company may not assign its rights hereunder or any
interest herein without the prior written consent of the Sellers and the Agent.
The 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 the date after the Sale Termination Date on which each Seller has
received payment in full for all Receivables originated by it and Related Rights
conveyed pursuant to Section 1.1 hereof and has paid and performed all of its
obligations hereunder in full. The rights and remedies with respect to any
breach of any representation and warranty made by the Sellers pursuant to
Article V and the indemnification and payment provisions of Article VIII and
Section 10.6 and each Person's agreement set forth in Section 10.12 shall be
continuing and shall survive any termination of this Agreement.
SECTION 10.5 GOVERNING LAW.
THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
COMMONWEALTH OF VIRGINIA, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE
INTERESTS OF THE COMPANY IN THE RECEIVABLES OR RELATED RIGHTS IS GOVERNED BY THE
LAWS OF JURISDICTIONS OTHER THAN THE COMMONWEALTH OF VIRGINIA.
SECTION 10.6 COSTS, EXPENSES AND TAXES.
In addition to the obligations of the Sellers under Article VIII, each
Seller agrees to pay on demand:
(a) all reasonable costs and expenses, including attorneys' fees, in
connection with any enforcement against such Seller relating to any breach of
such Seller's obligations hereunder or under any other Transaction Document; and
(b) all stamp and other similar taxes and fees payable or determined to
be payable in connection with the execution, delivery, filing and recording of
this Agreement or the other Transaction Documents, and agrees to indemnify each
Sale Indemnified Party against any liabilities with respect to or resulting from
any delay in paying or omission to pay such taxes and fees.
SECTION 10.7 SUBMISSION TO JURISDICTION.
EACH PARTY HERETO HEREBY IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN THE
STATE OF NEW YORK, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY TRANSACTION DOCUMENT; (B) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL
COURT; (C) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING; (D) CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH
PERSON AT ITS ADDRESS SPECIFIED IN SECTION 10.2; AND (E) TO THE EXTENT ALLOWED
BY LAW, AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT
ANY PARTY'S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTIONS.
28
SECTION 10.8 WAIVER OF JURY TRIAL.
EACH PARTY HERETO EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY
OTHER TRANSACTION DOCUMENT, OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 10.9 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY
REFERENCE.
The various captions (including, without limitation, the table of
contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any Section or Exhibit are to such Section or
Exhibit of this Agreement, as the case may be. The Exhibits hereto are hereby
incorporated by reference into and made a part of this Agreement.
SECTION 10.10 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement.
29
SECTION 10.11 ACKNOWLEDGMENT AND AGREEMENT.
By execution below, each Seller expressly acknowledges and agrees that
all of the Company's rights, title, and interests in, to, and under this
Agreement shall be assigned by the Company to the Purchaser pursuant to the
Receivables Purchase Agreement (and the Purchaser may further assign such rights
in accordance with the Receivables Purchase Agreement), and each Seller consents
to such assignment. Each of the parties hereto acknowledges and agrees that the
Agent and the Purchaser are third party beneficiaries of the rights of the
Company arising hereunder and under the other Transaction Documents to which
such Seller is a party as seller.
SECTION 10.12 NO PROCEEDINGS.
Each Seller agrees that it shall not institute against the Company, or
join any other Person in instituting against the Company, or join any other
Person in instituting against the Company, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Event of Bankruptcy)
as long as there shall not have elapsed one year plus one day since the Final
Payout Date. The foregoing shall not limit any Seller's right to file any claim
in or otherwise take any action with respect to any insolvency proceeding that
was instituted by any Person other than such Seller.
[Remainder of page intentionally left blank]
30
PURCHASE AND SALE AGREEMENT540390
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duty authorized, as of the date
first above written.
CADMUS JOURNAL SERVICES, INC.
By:---------------------------------------
Name:---------------------------------
Title:--------------------------------
EXPERT GRAPHICS, INC.
By:---------------------------------------
Name:---------------------------------
Title:--------------------------------
▇▇▇▇▇▇▇▇ GRAPHICS, INC.
By:---------------------------------------
Name:---------------------------------
Title:--------------------------------
CADMUS RECEIVABLES CORP.
By:---------------------------------------
Name:---------------------------------
Title:--------------------------------
CADMUS COMMUNICATIONS CORPORATION
By:---------------------------------------
Name:---------------------------------
Title:--------------------------------
Sale Agreement
EXHIBIT A
PURCHASE REPORT
[NAME OF ORIGINATOR]
CADMUS RECEIVABLES CORP.
As of (DATE)
Cut-Off Date
Total Receivables $ Input
Aggregate Unpaid Balance of Receivables AUB $ Calculated
LIBOR Input
Turnover Days Input
12 Month Losses $ Input
12 Month Collections $ Input
Purchaser's Total Investment PTI Fixed
Cost Rate (LIBOR + 5.0%) CR Calculated
Cost Discount (TD/360)*CR CD Calculated
Loss Discount (12 Month Losses/12 Month Collections) LD Calculated
Fair Market Value Discount (CD + LD) FMVD Calculated
Purchase Price (AUB - (AUB*FMVD)) PP Calculated
Eligible Receivables $ Input
Ineligible Receivables $ Input
A-1
EXHIBIT B
PROMISSORY NOTE
(NON-NEGOTIABLE
SELLER NOTE)
[EFFECTIVE DATE]
FOR VALUE RECEIVED, the undersigned, CADMUS RECEIVABLES CORP., a
Virginia corporation (the "COMPANY"), promises to pay to [NAME OF SELLER], a
[________] corporation ("[NAME OF SELLER"), on the terms and subject to the
conditions set forth herein and in the Purchase Agreement referred to below, the
principal sum of the aggregate unpaid Purchase Price of all Receivables
purchased from time to time by the Company from [Name of Seller] pursuant to
such Purchase Agreement, as such unpaid Purchase Price is shown in the records
of [Name of Seller].
1. Purchase Agreement. This promissory note (this "SELLER NOTE") is one
of the Seller Notes described in, and is subject to the terms and conditions set
forth in, that certain Purchase and Sale Agreement of even date herewith (as the
same may be amended or otherwise modified from time to time, the "PURCHASE
Agreement"), between the sellers named therein, the Company and Cadmus
Communications Corporation. Reference is hereby made to the Purchase Agreement
for a statement of certain other rights and obligations of [Name of Seller] and
the Company.
2. Definitions. Capitalized terms used (but not defined) herein have
the meanings assigned thereto in the Purchase Agreement and in Appendix A to the
Receivables Purchase Agreement dated as of even date herewith among Cadmus
Communications Corporation, as initial master servicer, the Company, Blue Ridge
Asset Funding Corporation, as purchaser and Wachovia Bank, N.A., as agent (as it
may be amended or otherwise modified from time to time, the "RECEIVABLES
PURCHASE AGREEMENT"). In addition, as used herein, the following terms have the
following meanings:
Bankruptcy Proceedings: As defined in clause (b) of paragraph 9 hereof.
Final Maturity Date: The date that is one year and one day following the Final
Payout Date.
Interest Period: The period from and including a Reporting Date (or, in the case
of the first Interest Period, the date hereof) to but excluding the next
Reporting Date.
Senior Interest: Collectively, (i) the obligation of the Company and the Master
Servicer to identify, and to turn over, Collections and other proceeds of the
Asset Interest acquired by the Purchaser pursuant to the Receivables Purchase
Agreement, (ii) any Indemnified Amounts and (iii) all other obligations of the
Company that are due and payable to any Affected Party, together with all
interest accruing on any such amounts after the commencement of any Bankruptcy
Proceedings, notwithstanding any provision or rule of law that might restrict
the rights of any Senior Interest Holder, as against the Company of anyone else,
to collect such interest.
B-1
Senior Interest Holders: Collectively, the Purchaser, the Agent, the other
Affected Parties and the Indemnified Parties.
3. Interest. Subject to the provisions set forth below, the Company
promises to pay interest on this Seller Note as follows:
(a) Prior to the Final Payout Date, the aggregate unpaid Purchase Price
from time to time outstanding during any Interest Period shall bear interest at
a rate per annum equal to the LIBO Rate as in effect from time to time on the
first Business Day of each Settlement Period, as determined by [Name of Seller],
plus 1.5%; and
(b) From (and including) the Final Payout Date to (but excluding) the
date on which the entire aggregate unpaid Purchase Price is fully paid, the
aggregate unpaid Purchase Price from time to time outstanding shall bear
interest at a rate per annum equal to the LIBO Rate as in effect from time to
time on the first Business Day of each Settlement Period, as determined by [Name
of Seller], plus 1.5%,
but in no event in excess of the maximum rate permitted by law. In this event
that, contrary to the intent of [Name of Seller] and the Company, the Company
pays interest hereunder and it is determined that such interest rate was in
excess of the then legal maximum rate, then that portion of the interest payment
representing an amount in excess of the then legal maximum rate shall be deemed
a payment of principal and applied against the principal then due hereunder.
4. Interest Payment Dates. Subject to the provisions set forth below,
the Company shall pay accrued interest on this Seller Note on each Settlement
Date, and shall pay accrued interest on the amount of each principal payment
made in cash on a date other than a Settlement Date at the time of such
principal payment.
5. Basis of Computation. Interest accrued hereunder shall be computed
for the actual number of days elapsed on the basis of a 365- or 366-day year.
6. Principal Payment Dates. Subject to the provisions set forth below,
payments of the principal amount of this Seller Note shall be made as follows:
(a) The principal amount of this Seller Note shall be reduced from time
to time pursuant to Sections 3.2, 3.3, 3.4 and 7.2 of the Purchase Agreement;
(b) The entire remaining unpaid balance of this Seller Note shall be
paid on the final Maturity Date.
B-2
Subject to the provisions set forth below, the principal amount of and accrued
interest on this Seller Note may be prepaid on any Business Day without premium
or penalty.
7. Payments. All payments of principal and interest hereunder are to be
made in lawful money of the United States of America.
8. Enforcement Expenses. In addition to and not in limitation of the
foregoing, but subject to the provisions set forth below and to any limitation
imposed by applicable law, the Company agrees to pay all expenses, including
reasonable attorneys' fees and legal expenses, incurred by [Name of Seller] in
seeking to collect any amounts payable hereunder which are not paid when due.
9. Provisions Regarding Restrictions on Payment. The Company covenants
and agrees, and [Name of Seller], by its acceptance of this Seller Note,
likewise covenants and agrees on behalf of itself and any holder of this Seller
Note, that the payment of the principal amount of, and interest on, this Seller
Note is hereby expressly subject to certain restrictions set forth in the
following clauses of this paragraph 9:
(a) No payment or other distribution of the Company's assets of any
kind or character, whether in cash, securities, or other rights or property,
shall be made on account of this Seller Note except to the extent such payment
or other distribution is permitted under the Purchase Agreement and the
Receivables Purchase Agreement;
(b) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Company,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency or receivership proceedings, or upon an assignment for
the benefit of creditors, or any other marshalling of the assets and liabilities
of the Company or any sale of all or substantially all of the assets of the
Company (such proceedings being herein collectively called "BANKRUPTCY
PROCEEDINGS"), the Senior Interest shall first be paid and performed in full and
in cash before Cadmus shall be entitled to receive and to retain any payment or
distribution in respect to this Seller Note. In order to implement the
foregoing, [Name of Seller] hereby irrevocably agrees that the Agent, in the
name of [Name of Seller] or otherwise, may demand, ▇▇▇ for, collect, receive and
receipt for any and all such payments or distributions, and the file, prove and
vote or consent in any such Bankruptcy Proceedings with respect to any and all
claims of [Name of Seller] relating to this Seller Note, in each case until the
Senior Interests shall have been paid and performed in full and in cash;
(c) In the event that [Name of Seller] receives any payment or other
distribution of any kind or character from the Company or from other source
whatsoever, in respect of this Seller Note, other than as expressly permitted by
the terms of this Seller Note, such payment or other distribution shall be
received for the sole benefit of the Senior Interest Holders to the extent of
the Senior Interest and shall be turned over by [Name of Seller] to the Agent
(for the benefit of the Senior Interest Holders) forthwith;
B-3
(d) Notwithstanding any payments or distributions received by the
Senior Interest Holders in respect of this Seller Note, [Name of Seller] shall
not be subrogated to the rights of the Senior Interest Holders in respect of the
Senior Interests;
(e) The provisions set forth in this Paragraph 9 are intended solely
for the purpose of defining the relative rights of [Name of Seller], on the one
hand, and the Senior Interest Holders on the other hand;
(f) [Name of Seller] shall not, until Final Payout Date, transfer,
pledge or assign, or commence legal proceedings to enforce or collect this
Seller Note or any rights in respect hereof;
(g) [Name of Seller] shall not, without the advance written consent of
the Agent, commence, take any action to cause any other Person to commence, or
join with any other Person in commencing, any Bankruptcy Proceedings with
respect to the Company until the Final Payout Date shall have occurred;
(h) If, at any time, any payment (in whole or in part) of any Senior
Interest is rescinded or must be restored or returned by a Senior Interest
Holder (whether in connection with Bankruptcy Proceedings or otherwise), these
provisions shall continue to be effective or shall be reinstated, as the case
may be, as though such payment had not been made;
(i) [Name of Seller] hereby waives; (i) notice of acceptance of these
provisions by any of the Senior Interest Holders; (ii) notice of the existence,
creation, non-payment or non-performance of all or any of the Senior Interests;
and (iii) all diligence in enforcement, collection or protection of, or
realization upon, the Senior Interests, or any thereof, or any security
therefor;
(j) These provisions constitute a continuing offer from the holder of
this Seller Note to all Persons who become the holders of, or who continue to
hold, Senior Interests; and these provisions are made for the benefit of the
Senior Interest Holders, and the Agent or the Purchaser may proceed to enforce
such provisions on behalf of each of such Persons.
10. General. No failure or delay on the part of [Name of Seller] in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power of right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Seller Note shall in any event be effective unless (i) the
same shall be in writing and signed and delivered by the Company and [Name of
Seller] and (ii) all consent required for such actions under the Transaction
Documents shall have been received by the appropriate Persons.
11. No Negotiation. This Seller Note is not negotiable.
12. Governing Law. THIS PROMISSORY NOTE SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
B-4
13. Captions. Paragraph captions used in this Seller Note are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Seller Note.
CADMUS RECEIVABLES CORP.
By:------------------------
Name:----------------------
Title:---------------------
B-5
Exhibit C
Office Location Where Records are Kept
Cadmus Journal Services, Inc.
-----------------------------
o ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Henrico County)
o ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇▇ Arundel County)
o ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Lancaster County)
Expert Graphics, Inc.
---------------------
o ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Henrico County)
▇▇▇▇▇▇▇▇ Graphics, Inc.
-----------------------
o ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Mecklenburg County)
Schedule 5.1(i)
Material Adverse Changes
On October 14, 1999, Cadmus announced that it will close its
Atlanta-based Cadmus Point of Purchase business unit and, as a result, will
record certain accounting charges relating thereto. Although a portion of the
charges will be included in results for the first fiscal quarter ended September
30, 1999, the majority of the charges will appear in the results for the fiscal
quarter ending December 31, 1999.
Schedule 5.1 (t)
Trade Names
Cadmus Journal Services, Inc.
-----------------------------
CURRENT TRADE NAMES:
Cadmus
Cadmus Communications
Cadmus Journal Services
Cadmus Journals
Cadmus Lancaster
Cadmus Magazines
CJS
CJS Backcopy
CJS Reprints
Dynamic Diagrams
E-Doc
Tapsco
OTHER CORPORATE NAMES; RECENT MERGERS:
Cadmus Journal Services, Inc. is the result of a June 30, 1998,
merger of Lancaster Press, Inc. and Cadmus Journal Services, Inc.
with and into The ▇▇▇▇▇▇▇ ▇▇▇▇ Press, Incorporated, which
simultaneously changed its name to "Cadmus Journal Services, Inc."
Expert Graphics, Inc.
---------------------
CURRENT TRADE NAMES:
Cadmus
Cadmus Airport
Cadmus Communications
Cadmus Graphic Solutions
Cadmus Promotional
Cadmus Promotional Printing
Expert Graphics
OTHER CORPORATE NAMES; RECENT MERGERS:
On December 22, 1995, Cadmus Color Center, Inc. was merged with and
into Expert Graphics, Inc., which was the surviving corporation of
such merger.
Schedule 5.1(t)
Trade Names
(continued)
▇▇▇▇▇▇▇▇ Graphics, Inc.
-----------------------
CURRENT TRADE NAMES:
Cadmus
Cadmus ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Communications
Cadmus Specialty Packaging
Cadmus Promotional Printing
Cadmus Whitehall
Cadmus-Whitehall Group
OTHER CORPORATE NAMES; RECENT MERGERS:
None
Except as described above, from and after the date that fell five (5) years
before the date hereof, none of the corporations has been known by any legal
name other than its corporate name as of the date hereof, nor has any of the
corporations been the subject of any merger or similar change in corporate
structure.
Schedule 10.2
Notice Addresses
Cadmus Journal Services, Inc.
-----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Expert Graphics, Inc.
---------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Graphics, Inc.
-----------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT D
FORM OF CERTIFICATE OF FINANCIAL OFFICER
FORM OF CERTIFICATE OF FINANCIAL OFFICER
In accordance with Section 6.2(c) of that certain Purchase and Sale
Agreement, dated as of October 26, 1999 (the "SALE AGREEMENT") (terms defined in
the Receivables Purchase Agreement being used herein as therein defined),
between the sellers named therein and Cadmus Receivables Corp., I, _________, in
my capacity as __________ of [Name of Seller] (the "COMPANY") DO HEREBY CERTIFY
that:
1. Each of the representations and warranties of the Company contained
in Article V of the Sale Agreement is true and correct in all material respects
on and as of the date hereof as if made on and as of such date.
2. Attached hereto as Exhibit A are the consolidated balance sheet,
income statement and statement of shareholders' equity as of June 30, 1999 of
Cadmus Communications Corporation. Such financial statements fairly present, in
conformity with GAAP, the consolidated financial position of Cadmus
Communications Corporation and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and cash flows for such periods stated
and there are no material liabilities or unusual forward obligations that are
not set forth therein.
3. No Liquidation Event or Unmatured Liquidation Event has occurred and
is continuing on the date hereof.
4. Since June 30, 1999 there has been no material adverse change in the
Company's financial condition, business or operations.
IN WITNESS WHEREOF, I have signed this certificate as of this [26th]
day of October 1999.
-------------------------------------
[Name]
[Title]
EXHIBIT A-1
[FORM OF LOCK-BOX AGREEMENT]
_____________________, 199_
[Lock-Box Bank]
Ladies and Gentlemen:
Reference is made to our collection account no._____________ maintained
with you (the "ACCOUNT") pursuant to a lockbox agreement between each of the
undersigned and you, the terms and conditions of which are incorporated herein
by reference (the "LOCKBOX AGREEMENT"). Pursuant to a Purchase and Sale
Agreement, dated as of October 26, 1999 as amended, supplemented or otherwise
modified from time to time, among Cadmus Journal Services, Inc. ("CADMUS
JOURNAL"), Expert Graphics, Inc. ("EXPERT GRAPHICS") and ▇▇▇▇▇▇▇▇ Graphics, Inc.
("▇▇▇▇▇▇▇▇ GRAPHICS"), as sellers, Cadmus Communications Corporation (together,
with Cadmus Journal, Expert Graphics and ▇▇▇▇▇▇▇▇ Graphics, the "LOCK-BOX
PARTIES") and Cadmus Receivables Corp. ("CADMUS RECEIVABLES"), as purchaser, we
have sold and/or may hereafter sell to Cadmus Receivables certain of the
accounts, chattel paper, instruments or general intangibles (collectively,
"RECEIVABLES") with respect to which payments are or may hereafter be made to
the Account. Pursuant to a Receivables Purchase Agreement, dated as of October
26, 1999 (as amended, supplemented or otherwise modified from time to time, the
"PURCHASE AGREEMENT"), among Cadmus Receivables, as seller, Cadmus
Communications Corporation, as master servicer, Blue Ridge Asset Funding
Corporation, as purchaser ("BLUE RIDGE"), as purchaser and Wachovia Bank, N.A.
as Agent (the "AGENT") for Blue Ridge, Cadmus Receivables has assigned and/or
may hereafter assign to the Agent on behalf of Blue Ridge an undivided
percentage interest in the Receivables.
For purposes of this letter agreement, Wachovia Bank, N.A. is acting as
Agent for Blue Ridge. We hereby transfer exclusive ownership and control of the
Account to the Agent, for the benefit of Blue Ridge, subject only to the
condition subsequent that the Agent shall have given you notice of its election
to assume such ownership and control, which notice shall be substantially in the
form attached hereto as Annex A.
We hereby irrevocably instruct you, at all times from and after the
date of your receipt of notice from the Agent of its assumption of control of
the Account as described above, (i) to make all payments to be made by you out
of or in connection with the Account directly to the Agent in accordance with
the instructions of the Agent, (ii) to hold all moneys and instruments delivered
to the Account or any lockbox administered by you for the order of the Agent
(for the benefit of Blue Ridge), (iii) to refrain from initiating any transfer
from the Account to any Lock-Box Party and (iv) to change the name of the
Account to "Wachovia Bank, N.A. as Agent for Blue Ridge". The Agent agrees to
execute standard wire transfer documentation in effect from time to time, or
other customary documentation related to wire transfers, prior to the initiation
of any wire transfers.
We also hereby notify you that, at all times from and after the date of
your receipt of notice from the Agent as described above, the Agent shall be
irrevocably entitled to exercise in our place and stead any and all rights in
respect of or in connection with the Account, including, without limitation, (a)
the right to specify when payments are to be made out of or in connection with
the Account and (b) the right to require preparation of duplicate monthly bank
statements on the Account for the Agent's audit purposes and mailing of such
statements directly to the Agent at an address specified by the Agent.
Notices from the Agent and other notices or communications under this
letter agreement may be personally served or sent by facsimile or by certified
mail, return receipt requested, or by express mail or courier, to the address or
facsimile number set forth under the signature of the relevant party to this
letter agreement (or to such other address or facsimile number as the relevant
party shall have designated by written notice to the party giving the aforesaid
notice or other communication). Notwithstanding the foregoing, any notice
delivered by you may be delivered by regular mail. If notice is given by
facsimile, it will be deemed to have been received when the notice is sent and
receipt is confirmed by telephone or other electronic means. All other notices
will be deemed to have been received when actually received or, in the case of
personal delivery, delivered.
By executing this letter agreement, you acknowledge the existence of
the Agent's right to ownership and control of the Account and its ownership (on
behalf of Blue Ridge and Cadmus Receivables as the parties having interests in
such amounts) of the amounts from time to time on deposit therein, and agree
that from the date hereof the Account shall be maintained by you for the benefit
of, and amounts from time to time therein held by you for, the Agent (on behalf
of Blue Ridge and Cadmus Receivables) on the terms provided herein. Except as
otherwise provided in this letter agreement, payments to the Account are to be
processed in accordance with the standard procedures currently in effect. All
service charges and fees with respect to the Account shall continue to be
payable by us under the arrangements currently in effect.
By executing this letter agreement, you irrevocably waive and agree not
to assert, claim or endeavor to exercise, irrevocably bar and stop yourself from
asserting, claiming or exercising, and acknowledge that you have not heretofore
received a notice, writ, order or any form of legal process from any other party
asserting, claiming or exercising, any rights of set-off, banker's lien or other
purported form of claim with respect to the Account or any funds from time to
time therein. Except for your right to payment of your service charges and fees
and your right to make deductions for returned items, you shall have no rights
in the Account or funds therein. To the extent you may ever have such rights,
you hereby expressly subordinate all such rights to all rights of the Agent.
You may terminate this letter agreement by canceling the Account
maintained with you, which cancellation and termination shall become effective
only upon 90 days' prior written notice thereof from you to the Agent. Incoming
mail addressed to the Account received after such cancellation shall be
forwarded in accordance with the Agent's instructions. This letter agreement may
also be terminated upon written notice to you by the Agent stating that the
Purchase Agreement is no longer in effect. Except as otherwise provided in this
paragraph, this letter agreement may not be terminated or amended without the
prior written consent of the Agent.
Notwithstanding any other provision of this letter agreement, it is
agreed by the parties hereto that you shall not be liable to Blue Ridge or the
Agent for any action taken by you or any of your directors, officer, agents or
employees in accordance with this letter agreement at the request of the Agent,
except for your or such person's own gross negligence or willful misconduct.
This letter agreement may be executed by the signatories hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall together constitute but one and the same letter agreement. This
letter agreement shall be governed by and interpreted under the laws of the
State of North Carolina.
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing the six copies of this letter agreement enclosed herewith
in the space provided below and returning each of such signed copies to the
Agent.
Very truly yours,
CADMUS COMMUNICATIONS CORPORATION
By:------------------------------
Title:---------------------------
Address for notice:
Attention:
Facsimile No.:
CADMUS JOURNAL SERVICES, INC.
By:------------------------------
Title:---------------------------
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address:
EXPERT GRAPHICS, INC.
By:------------------------------
Title:---------------------------
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address:
▇▇▇▇▇▇▇▇ GRAPHICS, INC.
By:
Title:
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address
Accepted and confirmed as of
the date first written above:
BLUE RIDGE ASSET FUNDING CORPORATION
as Purchaser
By:------------------------------
Title:---------------------------
Address for notice:
Attention:
Facsimile No.:
WACHOVIA BANK, N.A.,
as Agent
By:------------------------------
Title:---------------------------
Address for notice:
Attention:
Facsimile No.:
Acknowledged and agreed to as of
the date first written above:
CADMUS RECEIVABLES CORP.
By:------------------------------
Title:---------------------------
Address for notice:
Attention:
Facsimile No.:
[LOCKBOX BANK]
By:------------------------------
Title:---------------------------
Address for notice:
----------------------------
----------------------------
----------------------------
Attention:------------------
Facsimile No.:--------------
ANNEX A to
Lock-Box Agreement
[FORM OF NOTICE OF ASSUMPTION OF CONTROL OF ACCOUNT]
[Letterhead of Wachovia]
______________________ , 199
--------------------------
--------------------------
--------------------------
--------------------------
RE: Cadmus Communications Corporation
Cadmus Journal Services, Inc.
Expert Graphics, Inc.
▇▇▇▇▇▇▇▇ Graphics, Inc.
Lock-Box Account No.
--------------------
Ladies and Gentlemen:
Reference is made to the letter agreement dated October 26, 1999 (as
amended, supplemented or otherwise modified from time to time, the "LETTER
AGREEMENT") among Cadmus Journal Services, Inc., Expert Graphics, Inc., ▇▇▇▇▇▇▇▇
Graphics, Inc., Cadmus Communications Corporation, Cadmus Receivables Corp.,
Blue Ridge Asset Funding Corporation (the "PURCHASER"), Wachovia Bank, N.A., as
Agent for the Purchaser, and you, concerning the above described lock-box
account (the "ACCOUNT").
We hereby give you notice of our assumption of ownership and control of
the Account as provided in the Letter Agreement.
We hereby instruct you to make all payments to be made by you out of or
in connection with the Account [directly to the undersigned, at [our address set
forth above], for the account of [Blue Ridge Asset Funding Corporation (account
no.__________________)].
[other instructions]
Very truly yours,
Wachovia Bank, N.A., as Agent
By:______________________________
Name:
Title: