EXHIBIT 10.18
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RECEIVABLES PURCHASE AGREEMENT
Dated as of October 26, 1999
Among
CADMUS RECEIVABLES CORP.
as Seller
and
CADMUS COMMUNICATIONS CORPORATION
as Master Servicer
and
BLUE RIDGE ASSET FUNDING CORPORATION
as Purchaser
and
WACHOVIA BANK, N.A.
as the Agent
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TABLE OF CONTENTS
Page
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ARTICLE I PURCHASES AND REINVESTMENTS 2
Section 1.1 Commitments to Purchase; Limits on Purchaser's Obligations.........................................2
Section 1.2 Purchase Procedures; Assignment of the Purchaser's Interests.......................................2
Section 1.3 Reinvestments of Certain Collections; Payment of Remaining Collections.............................3
Section 1.4 Asset Interest.....................................................................................5
ARTICLE II COMPUTATIONAL RULES 6
Section 2.1 Selection of Asset Tranches........................................................................6
Section 2.2 Computation of Invested Amount and Purchaser's Tranche Investment..................................7
Section 2.3 Computation of Concentration Limits and Unpaid Balance.............................................7
Section 2.4 Computation of Earned Discount.....................................................................7
Section 2.5 Estimates of Earned Discount Rate, Fees, etc.......................................................8
ARTICLE III SETTLEMENTS 8
Section 3.1 Settlement Procedures..............................................................................8
Section 3.2 Deemed Collections; Reduction of Invested Amount, Etc.............................................10
Section 3.3 Payments and Computations, Etc....................................................................12
Section 3.4 Treatment of Collections and Deemed Collections...................................................13
ARTICLE IV FEES AND YIELD PROTECTION 13
Section 4.1 Fees..............................................................................................13
Section 4.2 Yield Protection..................................................................................13
Section 4.3 Funding Losses....................................................................................15
ARTICLE V CONDITIONS OF PURCHASES 16
Section 5.1 Conditions Precedent to Initial Purchase..........................................................16
Section 5.2 Conditions Precedent to All Purchases and Reinvestments...........................................18
ARTICLE VI REPRESENTATIONS AND WARRANTIES 19
Section 6.1 Representations and Warranties of the Seller Parties..............................................19
ARTICLE VII GENERAL COVENANTS OF THE SELLER PARTIES 23
Section 7.1 Affirmative Covenants of the Seller Parties.......................................................23
Section 7.2 Reporting Requirements of the Seller Parties......................................................25
Section 7.3 Negative Covenants of the Seller Parties..........................................................28
Section 7.4 Separate Corporate Existence of the Seller........................................................30
ARTICLE VIII ADMINISTRATION AND COLLECTION 33
Section 8.1 Designation of Master Servicer....................................................................33
Section 8.2 Duties of Master Servicer.........................................................................34
Section 8.3 Servicer Advances.................................................................................36
Section 8.4 Servicer Defaults.................................................................................36
Section 8.5 Rights of the Agent...............................................................................37
Section 8.6 Responsibilities of the Seller Parties............................................................38
Section 8.7 Further Action Evidencing Purchases and Reinvestments.............................................39
Section 8.8 Application of Collections........................................................................40
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ARTICLE IX SECURITY INTEREST 40
Section 9.1 Grant of Security Interest........................................................................40
Section 9.2 Further Assurances................................................................................40
Section 9.3 Remedies..........................................................................................41
ARTICLE X LIQUIDATION EVENTS 41
Section 10.1 Liquidation Events...............................................................................41
Section 10.2 Remedies.........................................................................................42
ARTICLE XI THE AGENT 43
Section 11.1 Authorization and Action.........................................................................43
Section 11.2 Agent's Reliance, Etc............................................................................43
Section 11.3 Wachovia and Affiliates..........................................................................44
ARTICLE XII ASSIGNMENT OF THE PURCHASER'S INTEREST 44
Section 12.1 Restrictions on Assignments......................................................................44
Section 12.2 Rights of Assignee...............................................................................45
Section 12.3 Terms and Evidence of Assignment.................................................................45
Section 12.4 Rights of Collateral Agent.......................................................................45
ARTICLE XIII INDEMNIFICATION 46
Section 13.1 Indemnities by the Seller........................................................................46
Section 13.2 Indemnities by Master Servicer...................................................................48
ARTICLE XIV MISCELLANEOUS 49
Section 14.1 Amendments, Etc..................................................................................49
Section 14.2 Notices, Etc.....................................................................................49
Section 14.3 No Waiver; Remedies..............................................................................49
Section 14.4 Binding Effect; Survival.........................................................................50
Section 14.5 Costs, Expenses and Taxes........................................................................50
Section 14.6 No Proceedings...................................................................................51
Section 14.7 Confidentiality of the Seller Information........................................................51
Section 14.8 Captions and Cross References....................................................................54
Section 14.9 Integration......................................................................................55
Section 14.10 Governing Law...................................................................................55
Section 14.11 Waiver Of Jury Trial............................................................................55
Section 14.12 Consent To Jurisdiction; Waiver Of Immunities...................................................55
Section 14.13 Execution in Counterparts.......................................................................56
Section 14.14 No Recourse Against Other Parties...............................................................56
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APPENDIX
Appendix A Definitions
SCHEDULES
SCHEDULE 6.1(i) Description of Material Adverse Changes
SCHEDULE 6.1(n) List Of Offices Of the Master Servicer And the Seller
Where Records Are Kept
schedule 6.1(o) List of Lock-Box Banks
schedule 14.2 Notice Addresses
SCHEDULE A Initial Originators and Servicers
SCHEDULE B Fiscal Periods
exhibits
exhibit 1.2(a) Form of Purchase Request
exhibit 3.1(a) Form of Settlement Report
exhibit 5.1(h) Form of Opinion of Special Counsel for the Seller Parties
exhibit a-1 Form of Lock-Box Agreement
exhibit b Form of Certificate of Financial Officer
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RECEIVABLES PURCHASE AGREEMENT
Dated as of October 26, 1999
THIS IS A RECEIVABLES PURCHASE AGREEMENT, among:
(1) CADMUS RECEIVABLES CORP., a Virginia corporation (together
with its successors and permitted assigns, the "SELLER"),
(2) CADMUS COMMUNICATIONS CORPORATION, a Virginia corporation
(together with its successors, "Cadmus"), as Master Servicer hereunder (in such
capacity, together with any successor Master Servicer appointed pursuant to
Section 8.1, the "MASTER SERVICER"; Cadmus, in its capacity as the Master
Servicer, together with the Seller, each a "SELLER PARTY" and collectively the
"SELLER PARTIES"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation
(together with its successors and assigns, the "PURCHASER"), and
(4) WACHOVIA BANK, N.A., a national banking association
("WACHOVIA"), as agent for the Secured Parties (as defined below) (in such
capacity, together with any successors thereto in such capacity, the "AGENT").
Unless otherwise indicated, capitalized terms used in this Agreement
are defined in Appendix A.
Background
1. The Seller is a wholly-owned direct subsidiary of Cadmus.
2. Cadmus, through the Originators and its other Subsidiaries, is
engaged in the business of providing high-end, integrated graphic communications
services to its customers.
3. Each of the Originators, Cadmus and the Seller have entered
into the Sale Agreement pursuant to which each Originator has transferred, and
hereafter will transfer, to the Seller all of its right, title and interest in
and to the Pool Receivables and certain related property.
4. The Seller has requested the Purchaser, and the Purchaser has
agreed, subject to the terms and conditions contained in this Agreement, to
purchase from the Seller from time to time an undivided percentage interest,
referred to herein as the Asset Interest, in Pool Receivables and related
property.
5. The Seller and the Purchaser also desire that, subject to the
terms and conditions of this Agreement, certain of the daily Collections in
respect of the Asset Interest be reinvested in Pool Receivables, which
reinvestment shall constitute part of the Asset Interest.
6. Wachovia has been requested, and is willing, to act as the
Agent under this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.1 COMMITMENTS TO PURCHASE; LIMITS ON PURCHASER'S OBLIGATIONS.
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Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article V), from time to time during the
Revolving Period, the Seller may request that the Purchaser purchase from the
Seller ownership interests in Pool Receivables and Related Assets, and the
Purchaser shall make such purchase (each being a "PURCHASE"); provided that no
Purchase shall be made by the Purchaser if, after giving effect thereto, either
(a) the sum of (i) the Invested Amount and (ii) the Aggregate Accruals would
exceed $35,000,000 (as adjusted pursuant to Section 3.2(b)) (the "PURCHASE
LIMIT"), or (b) the Asset Interest, expressed as a percentage of Net Pool
Balance, would exceed 100% (the "ALLOCATION LIMIT"); and provided, further that
each Purchase made pursuant to this Section 1.1 shall have a purchase price
equal to at least $1,000,000 and shall be an integral multiple of $100,000 .
SECTION 1.2 PURCHASE PROCEDURES; ASSIGNMENT OF THE PURCHASER'S
INTERESTS.
(a) Purchase Request. Each Purchase from the Seller by the
Purchaser shall be made on notice from the Seller to the Agent (on behalf of the
Purchaser) received by the Agent not later than 12:00 noon (New York City time)
two Business Days prior to the date of such proposed Purchase. Each such notice
of a proposed Purchase shall be substantially in the form of Exhibit 1.2(a) and
shall specify, among other items, the desired amount and date of such Purchase.
The Agent shall promptly upon receipt notify the Purchaser of any such notice.
(b) Funding of Purchase. On the date of each Purchase, the
Purchaser shall, upon satisfaction of the applicable conditions set forth in
Article V, make available to the Seller the amount of its Purchase in same day
funds by wire transfer to an account designated in writing by the Seller.
(c) Assignment of Asset Interest. The Seller hereby sells, assigns
and transfers to the Purchaser, effective on and as of the date of each Purchase
and each Reinvestment by the Purchaser hereunder, the Asset Interest in the Pool
Receivables and Related Assets.
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SECTION 1.3 REINVESTMENTS OF CERTAIN COLLECTIONS; PAYMENT OF
REMAINING COLLECTIONS.
(a) On the close of business on each day during the period from
the date of the first Purchase to the Termination Date, the Master Servicer
will, out of all Collections received on such day from Pool Receivables and
Related Assets:
(i) determine the portion of the Collections attributable to
the Asset Interest by multiplying (A) the amount of such Collections
times (B) the Purchaser's Share;
(ii) out of the portion of such Collections allocated to the
Asset Interest pursuant to clause (i), identify and hold in trust for
the Purchaser an amount equal to the sum of the estimated amount (based
on the rate information provided by the Agent pursuant to Section 2.5)
of Earned Discount accrued in respect of each Asset Tranche, all other
amounts due to the Purchaser or the Agent hereunder and the Purchaser's
Share of the Servicer's Fee (in each case, accrued through such day)
and not so previously accounted for; and
(iii) apply the Collections allocated to the Asset Interest
pursuant to clause (i) and not required to be identified and held in
trust pursuant to clause (ii) to the purchase from the Seller of
ownership interests in Pool Receivables and Related Assets (each such
purchase being a "REINVESTMENT"); provided that:
(A) if (I) the then Asset Interest would exceed the
Allocation Limit or (II) the sum of (a) the Invested Amount
and (b) the Aggregate Accruals would exceed the Purchase
Limit, then the Master Servicer shall not reinvest to the
extent of such excess, but shall identify and hold in trust
for the benefit of the Purchaser, a portion of such
Collections which, together with other Collections previously
so identified and then so held, shall equal the amount
necessary to reduce the sum of (a) the Invested Amount and (b)
the Aggregate Accruals to the Purchase Limit and the Asset
Interest to the Allocation Limit; and
(B) if any of the conditions precedent to
Reinvestment in clause (a), (b) and (d) of Section 5.2,
subject to the proviso set forth in Section 5.2, are not
satisfied, then the Master Servicer shall not reinvest any of
such remaining Collections, but shall identify them and hold
them in trust for the benefit of the Purchaser;
(iv) out of the portion of Collections not allocated to the
Asset Interest pursuant to clause (i), pay to the Master Servicer the
Seller's Share of the Servicer's Fee accrued through such day and not
previously paid; and
(v) pay to the Seller (A) the remaining portion of Collections
not allocated to the Asset Interest pursuant to clause (i) net of the
amount paid to the Master Servicer pursuant to clause (iv) and (B) the
Collections applied to Reinvestment pursuant to clause (iii).
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(b) Unreinvested Collections. The Master Servicer shall identify
and hold in trust for the benefit of the Purchaser all Collections allocated to
the Asset Interest pursuant to clause (i) of Section 1.3(a) which, pursuant to
clause (iii) of Section 1.3(a), may not be reinvested in the Pool Receivables
and Related Assets, provided that unless otherwise requested by the Agent after
a Liquidation Event, such Collections need not be held in a segregated account.
If, prior to the date when such Collections are required to be paid to the Agent
for the benefit of the Purchaser pursuant to Section 1.3(c)(iv), (1) the amount
of Collections so identified exceeds the greater of (x) the amount, if any,
necessary to reduce the sum of (i) the Invested Amount and (ii) the Aggregate
Accruals to the Purchase Limit and (y) the Asset Interest to the Allocation
Limit, and (2) the conditions precedent to Reinvestment set forth in clauses
(a), (b) and (d) of Section 5.2, subject to the proviso set forth in Section
5.2, are satisfied, then the Master Servicer shall apply such Collections (or,
if less, a portion of such Collections equal to the amount of such excess) to
the making of a Reinvestment.
(c) Payment of Amounts. Unless a Lock-Box Notice has been given
and alternate instructions have been given by the Agent pursuant thereto:
(i) The Master Servicer shall pay all amounts identified
pursuant to Section 1.3(a)(ii) in respect of Earned Discount on an
Asset Tranche funded by a Liquidity Funding to the Agent, on the
Purchaser's behalf, on the last day of the then current Yield Period
for an Asset Tranche, as provided in Section 3.1.
(ii) The Master Servicer shall pay all amounts of Collections
identified pursuant to Section 1.3(a)(ii) in respect of Earned Discount
on any Asset Tranche funded by Commercial Paper Notes to the Agent, on
the Purchaser's behalf, on the last day of the then current CP Tranche
Period for such Asset Tranche, as provided in Section 3.1.
(iii) The Master Servicer shall pay all amounts of Collections
identified pursuant to Section 1.3(a)(ii) and not applied pursuant to
clauses (i) or (ii) above to the Agent, on the Purchaser's behalf, on
each Settlement Date for each Settlement Period, as provided in Section
3.1.
(iv) The Master Servicer shall pay all other amounts
identified and held in trust for the benefit of the Purchaser pursuant
to Section 1.3(a) to the Agent for the account of the Purchaser (A) on
the last day of the then current Yield Period for any Asset Tranche
funded by a Liquidity Funding, as notified pursuant to Section 3.1(b),
in an amount not exceeding the Purchaser's Tranche Investment of such
Asset Tranche, and (B) on the last day of the then current CP Tranche
Period for any Asset Tranche funded by Commercial Paper Notes, as
notified pursuant to Section 3.1(b), in an amount not exceeding the
Purchaser's Tranche Investment of such Asset Tranche; provided,
however, no payment shall be made under clause (B) above unless the
Purchaser's Tranche Investments of all Asset Tranches, if any, funded
by Liquidity Fundings shall have been reduced to zero.
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(d) Funds Under Sale Agreement. Upon the written request of the
Agent, on the Purchaser's behalf, given at any time when (i) based on the most
recent Settlement Report, the Asset Interest would exceed the Allocation Limit
or the sum of (A) the Invested Amount and (B) the Aggregate Accruals would
exceed the Purchase Limit, or (ii) a Liquidation Event or Unmatured Liquidation
Event shall have occurred and be continuing, the Seller shall hold all funds
that under the Sale Agreement would be applied to repay principal of the Seller
Notes owing to the Originators. The Seller may make withdrawals of such funds
only for the purposes of (i) at any time, purchasing Receivables from any
Originator in accordance with the Sale Agreement; (ii) on the Settlement Date
for any Settlement Period, making payments in accordance with the last sentence
of Section 3.1(c)(ii), and (iii) on the Settlement Date for any Settlement
Period, if, on the basis of the most recent Settlement Report, and after giving
effect to any payment made to the Master Servicer on such date pursuant to the
last sentence of Section 3.1(c)(ii), the sum of (A) the Invested Amount and (B)
the Aggregate Accruals does not exceed the Purchase Limit and the Asset Interest
does not exceed the Allocation Limit, and provided that no Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, repaying
principal of the Seller Notes in accordance with this Agreement and the Sale
Agreement.
(e) If, on any day any payment is required to be made pursuant to
any of the provisions of Section 1.3(c), the Seller does not have sufficient
funds available to make any such payment, the Master Servicer may make a
Servicer Advance in an amount necessary for the payment, subject to the
restrictions set forth in Section 8.3.
(f) Notwithstanding anything herein to the contrary, the Master
Servicer may recover any Servicer Advance that it has made in respect of any
Receivable or related Contract from amounts received in respect of such
Receivable or related Contract. If the Master Servicer has previously made a
Servicer Advance which it later determines to be nonrecoverable, the Master
Servicer may, following delivery of an officer's certificate to the Agent
detailing the Master Servicer's determination that such Servicer Advance is
nonrecoverable, recover the amount of such Servicer Advance from Collections.
Any amount so recovered by the Master Servicer shall not be a Collection for
purposes of this Section 1.3.
SECTION 1.4 ASSET INTEREST.
(a) Components of Asset Interest. On any date the Asset Interest
will represent the Purchaser's undivided percentage ownership interest in all
then outstanding Pool Receivables and all Related Assets with respect to such
Pool Receivables as at such date.
(b) Computation of Asset Interest. On any date, the Asset
Interest will be equal to a percentage equivalent of the following fraction:
IA+RR
-----
NPB
5
where:
IA = Invested Amount as of the time of such computation;
RR = the then Required Reserve; and
NPB = the then Net Pool Balance
provided, however, that the Asset Interest during the Liquidation Period shall
equal 100% and shall at no time exceed 100%.
(c) Frequency of Computation. The Asset Interest shall be computed
(i) as provided in Section 3.1, as of the Cut-Off Date for each Settlement
Period, and (ii) on the Settlement Date following each Reporting Date, after
giving effect to the payments made pursuant to Section 3.1. In addition, at any
time, the Agent, on the Purchaser's behalf, may require the Master Servicer to
provide a Settlement Report, based on the information then available to the
Master Servicer, for purposes of computing the Asset Interest or the Purchase
Limit as of any other date, and the Master Servicer agrees to do so within five
(5) (or three (3), if a Liquidation Event has occurred and is continuing)
Business Days of its receipt of the Agent's request.
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.1 SELECTION OF ASSET TRANCHES.
The Agent shall, from time to time for purposes of computing Earned
Discount, divide the Asset Interest into Asset Tranches; in doing so, the Agent
shall, prior to the occurrence of a Liquidation Event, consult with the Seller.
The applicable Earned Discount Rate may be different for each Asset Tranche. The
total Invested Amount shall be allocated to the Asset Tranches by the Agent, on
the Purchaser's behalf to reflect the funding sources for the Asset Interest
such that the total amount of the Purchaser's Tranche Investments of such Asset
Tranches shall equal the Invested Amount, so that:
(a) there will be an Asset Tranche with a Purchaser's Tranche
Investment equal to the excess of the Invested Amount over the aggregate amount
allocated at such time pursuant to clause (b) below, which Asset Tranche shall
reflect the portion of the Asset Interest funded by Commercial Paper Notes; and
(b) there will be one or more Asset Tranches, selected by the
Agent, on the Purchaser's behalf, reflecting the portion or portions of the
Asset Interest funded by outstanding Liquidity Fundings.
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SECTION 2.2 COMPUTATION OF INVESTED AMOUNT AND PURCHASER'S
TRANCHE INVESTMENT.
In making any determination of the Invested Amount and any Purchaser's
Tranche Investment, the following rules shall apply:
(a) the Invested Amount shall not be considered reduced by any
allocation, setting aside or distribution of any portion of Collections unless
such Collections shall have been actually delivered hereunder to the Agent, on
the Purchaser's behalf;
(b) the Invested Amount shall not be considered reduced by any
distribution of any portion of Collections if at any time such distribution is
rescinded or must otherwise be returned for any reason; and
(c) if there is any reduction in the Invested Amount, there shall
be a corresponding reduction in the Purchaser's Tranche Investment with respect
to one or more Asset Tranches selected by the Agent, on the Purchaser's behalf,
in its discretion.
SECTION 2.3 COMPUTATION OF CONCENTRATION LIMITS AND UNPAID BALANCE.
The Obligor Concentration Limits and the aggregate Unpaid Balance of
Pool Receivables of any Obligor and its Affiliated Obligors (if any) shall be
calculated as if such Obligor and its Affiliated Obligors were one Obligor.
SECTION 2.4 COMPUTATION OF EARNED DISCOUNT.
In making any determination of Earned Discount, the following rules
shall apply:
(a) the Agent, on the Purchaser's behalf, shall determine the
Earned Discount accruing with respect to each Asset Tranche, and each CP Tranche
Period therefor (or, in the case of the Asset Tranche funded by Liquidity
Fundings, each Yield Period), in accordance with the definition of Earned
Discount;
(b) no provision of this Agreement shall require the payment
or permit the collection of Earned Discount in excess of the maximum permitted
by applicable law; and
(c) the Earned Discount for any Asset Tranche shall not be
considered paid by any distribution if at any time such distribution is
rescinded or must otherwise be returned for any reason.
It is the intent of the Purchaser to fund the Asset Interest by the issuance of
Commercial Paper Notes. If the Purchaser is unable, or determines that it is
undesirable, to issue Commercial Paper Notes to fund the Asset Interest, or is
unable to repay such Commercial Paper Notes upon the maturity thereof, the
Purchaser will draw on Liquidity Fundings to fund the Asset Interest to the
extent Liquidity Fundings are available.
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SECTION 2.5 ESTIMATES OF EARNED DISCOUNT RATE, FEES, ETC.
For purposes of determining the amounts required to be identified and
held in trust by Master Servicer pursuant to Section 1.3, the Agent, on the
Purchaser's behalf, shall notify the Master Servicer (and, if Cadmus is not the
Master Servicer, the Seller) from time to time of the Purchaser's Tranche
Investment of each Asset Tranche, the Earned Discount Rate applicable to each
Asset Tranche and the rates at which fees and other amounts are accruing
hereunder. It is understood and agreed that (i) the Earned Discount Rate for any
Asset Tranche may change from one applicable Yield Period or CP Tranche Period
to the next, and the Bank Rate used to calculate the Earned Discount Rate may
change from time to time during an applicable Yield Period, (ii) certain rate
information provided by the Agent to the Master Servicer shall be based upon the
Agent's good faith estimate, (iii) the amount of Earned Discount actually
accrued with respect to an Asset Tranche during any CP Tranche Period (or, in
the case of the Asset Tranche funded by Liquidity Fundings any Yield Period) may
exceed, or be less than, the amount identified with respect thereto by Master
Servicer, and (iv) the amount of fees or other amounts payable by the Seller
hereunder which have accrued hereunder with respect to any Settlement Period may
exceed, or be less than, the amount identified with respect thereto by the
Master Servicer. Failure to identify and hold in trust any amount so accrued
shall not relieve the Master Servicer of its obligation to remit Collections to
the Agent, for the benefit of the Purchaser, with respect to such accrued
amount, as and to the extent provided in Section 3.1.
ARTICLE III
SETTLEMENTS
SECTION 3.1 SETTLEMENT PROCEDURES.
The parties hereto will take the following actions with respect to each
Settlement Period:
(a) Settlement Report. On the Reporting Date, the Master Servicer
shall deliver to the Agent, on the Purchaser's behalf, a report in the form of
Exhibit 3.1(a) (each, a "SETTLEMENT REPORT").
(b) Earned Discount; Other Amounts Due. On or before 12:00 noon,
Atlanta, Georgia, time two (2) Business Days before the last day of each CP
Tranche Period or Yield Period, as the case may be, the Agent shall notify the
Master Servicer of the amount of Earned Discount accrued with respect to any
Asset Tranche corresponding to such CP Tranche Period or Yield Period, as the
case may be. The Master Servicer shall pay to the Agent for the benefit of the
Purchaser the amount of such Earned Discount before 12:00 noon, Atlanta, Georgia
time on the last day of such CP Tranche Period or Yield Period. On or before
12:00 noon, Atlanta, Georgia time, on the Business Day before each Reporting
Date, the Agent, on the Purchaser's behalf, shall notify the Master Servicer of
all fees and other amounts accrued and payable by the Seller under this
Agreement during the prior calendar month (other than amounts described in
clause (c) below). The Master Servicer shall pay to the Agent, for the benefit
of the Purchaser, the amount of fees and other amounts on the Settlement Date
for such month. Such payments shall be made out of amounts identified pursuant
to Section 1.3 for such payment; provided, however, that to the extent that
Collections attributable to the Asset Interest during such Settlement Period are
not sufficient to make such payment, the shortfall shall be paid from amounts
paid to the Seller pursuant to Section 1.3(a)(v) and, if such amounts are not
sufficient to fully cover such shortfall, the Master Servicer may make a
Servicer Advance in the amount of such remaining shortfall in accordance with,
and subject to the provisions of Section 8.3.
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(c) Asset Interest Computations.
(i) On the Reporting Date for each Settlement Period, the
Master Servicer shall compute, as of the related Cut-Off Date and based
upon the assumptions in the next sentence, (A) the Asset Interest, (B)
the amount of the reduction or increase (if any) in the Invested Amount
and the percentage interest represented by the Asset Interest since the
immediately preceding Cut-Off Date, (C) the excess (if any) of the
Asset Interest over the Allocation Limit, and (D) the excess (if any)
of the sum of (1) the Invested Amount and (2) the Aggregate Accruals
over the Purchase Limit. Such calculations shall be based upon the
assumptions that (x) the information in the Settlement Report is
correct, and (y) Collections identified pursuant to Section 1.3(b) will
be paid to the Agent, for the benefit of the Purchaser, on the
Settlement Date for such Settlement Period.
(ii) If, according to the computations made pursuant to clause
(i) above, either (x) the Asset Interest exceeds the Allocation Limit
or (y) the sum of (A) the Invested Amount and (B) the Aggregate
Accruals exceeds the Purchase Limit, then on the Settlement Date for
such Settlement Period, the Master Servicer shall pay to the Agent, for
the benefit of the Purchaser, (to the extent of Collections during the
related Settlement Period attributable to all Asset Tranches and not
previously paid to the Agent and from other funds of the Seller) the
amount necessary to reduce the sum of (A) the Invested Amount and (B)
the Aggregate Accruals to the Purchase Limit and the Asset Interest to
the Allocation Limit, subject, however, to the proviso to Section
1.3(c)(iv). Such payment shall be made out of amounts identified
pursuant to Section 1.3 for such purpose and, to the extent such
amounts were not so identified, the Seller hereby agrees to pay such
amounts to the Master Servicer to the extent of Collections applied to
Reinvestment under Section 1.3 during the relevant Settlement Period.
(iii) In addition to the payments described in clause (ii)
above, during the Liquidation Period, the Master Servicer shall pay to
the Agent, for the benefit of the Purchaser, all amounts identified
pursuant to Section 1.3 (A) on the last day of the current Yield Period
for any Asset Tranche funded by a Liquidity Funding, in an amount not
exceeding the Purchaser's Tranche Investment of such Asset Tranche, and
(B) after reduction to zero of the Purchaser's Tranche Investments of
the Asset Tranches, if any, funded by Liquidity Fundings, on the last
day of the each CP Tranche Period, in an amount not exceeding the
Purchaser's Tranche Investment of the Asset Tranche funded by
Commercial Paper Notes.
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(d) Order of Application. Upon receipt by the Agent, on
the Purchaser's behalf, of funds distributed pursuant to this Section 3.1,
the Agent shall apply them to the items specified in the subclauses below, in
the order of priority of such subclauses:
(i) to accrued Earned Discount, plus any previously
accrued Earned Discount not paid;
(ii) to the Purchaser's Share of the accrued and unpaid
Servicer's Fee (if the Master Servicer is not Cadmus or its Affiliate);
(iii) to the Usage Fee and the Unused Fee accrued during such
Settlement Period, plus any previously accrued Usage Fee and Unused Fee
not paid on a prior Settlement Date;
(iv) to the reduction of Invested Amount, to the extent such
reduction is required under Section 3.1(c);
(v) to other accrued and unpaid amounts owing to the Purchaser
or the Agent hereunder (except Earned Discount on any Asset Tranche
funded by a Liquidity Funding which has accrued but is not yet overdue
under Section 1.3(c)); and
(vi) to the Purchaser's Share of the accrued and unpaid
Servicer's Fee (if the Master Servicer is Cadmus or its Affiliate);
(e) Non-Distribution of Servicer's Fee. The Agent hereby consents
(which consent may be revoked at any time after the occurrence and during the
continuance of a Liquidation Event), to the retention by the Master Servicer of
the amounts (if any) identified pursuant to Section 1.3 in respect of the
Servicer's Fee, in which case no distribution shall be made in respect of the
Purchaser's Share of the Servicer's Fee pursuant to clause (d) above.
(f) Delayed Payment. If on any day described in this Section 3.1
(or in Section 1.3(c) in respect of accrued Earned Discount on Asset Tranches
funded by Liquidity Fundings or by the issuance of Commercial Paper Notes),
because Collections during the relevant CP Tranche Period or Yield Period were
less than the aggregate amounts payable, the Master Servicer shall not make any
payment otherwise required, the next available Collections in respect of the
Asset Interest shall be applied to such payment, and no Reinvestment shall be
permitted hereunder until such amount payable has been paid in full.
SECTION 3.2 DEEMED COLLECTIONS; REDUCTION OF INVESTED AMOUNT, ETC
(a) Deemed Collections. If on any day
(i) the Unpaid Balance of any Pool Receivable is
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(A) reduced as a result of any defective, rejected or
returned merchandise or services, any cash discount, or any
other adjustment by any Seller Party or any Affiliate thereof,
or as a result of any tariff or other governmental or
regulatory action, or
(B) reduced or canceled as a result of a setoff in
respect of any claim by the Obligor thereof (whether such
claim arises out of the same or a related or an unrelated
transaction), or
(C) reduced on account of the obligation of any
Seller Party or any Affiliate thereof to pay to the related
Obligor any rebate or refund, or
(D) less than the amount included in calculating the
Net Pool Balance for purposes of any Settlement Report (for
any reason other than such Receivable becoming a Defaulted
Receivable), or
(ii) any of the representations or warranties of the Seller
set forth in Section 6.1(l) or (p) were not true when made with respect
to any Pool Receivable, or any of the representations or warranties of
the Seller set forth in Section 6.1(l) are no longer true with respect
to any Pool Receivable, or any Pool Receivable is repurchased by the
applicable Originator pursuant to the Sale Agreement,
then, on such day, the Seller shall be deemed to have received a Collection of
such Pool Receivable
(I) in the case of clause (i) above, in the amount of
such reduction or cancellation or the difference between the
actual Unpaid Balance and the amount included in calculating
such Net Pool Balance, as applicable; and
(II) in the case of clause (ii) above, in the amount
of the Unpaid Balance of such Pool Receivable.
Collections deemed received by the Seller under this Section 3.2(a) are herein
referred to as "DEEMED Collections." The Purchaser shall, with respect to any
Pool Receivable as to which the full Deemed Collection due under clause II above
has been received by the Purchaser, upon receipt of such Deemed Collection by
the Purchaser, reconvey to the Seller, without recourse, representation or
warranty by the Purchaser, all of the Purchaser's right, title and interest in
such Pool Receivable. Such Pool Receivable shall be released from any Lien
thereon created hereby and the Seller shall be deemed to reconvey to the related
Originator, without recourse, representation or warranty by the Seller, all of
the Seller's right, title and interest in such Pool Receivable.
(b) Seller's Optional Reduction of Invested Amount. The Seller
may at any time elect to reduce the Invested Amount as follows:
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(i) the Seller shall give the Agent, on the Purchaser's
behalf, at least five (5) Business Days' prior written notice of such
reduction (including the amount of such proposed reduction and the
proposed date on which such reduction will commence),
(ii) on the proposed date of commencement of such reduction
and on each day thereafter, the Master Servicer shall refrain from
reinvesting Collections pursuant to Section 1.3 until the amount
thereof not so reinvested shall equal the desired amount of reduction,
and
(iii) the Master Servicer shall hold such Collections in trust
for the Purchaser, pending payment to the Agent, as provided in Section
1.3;
provided that:
(A) the amount of any such reduction shall be in (1)
an amount of $1,000,000 and any integral multiple of $100,000
in excess thereof or (2) an amount equal to the remaining
Invested Amount,
(B) the Seller shall use reasonable efforts to
attempt to choose a reduction amount, and the date of
commencement thereof, so that such reduction shall commence
and conclude in the same Settlement Period, and
(C) unless the Invested Amount will be reduced to
zero, after giving effect to such reduction, the Invested
Amount will be at least $25,000,000.
SECTION 3.3 PAYMENTS AND COMPUTATIONS, ETC.
(a) Payments. All amounts to be paid to the Agent or any other
Person or deposited by the Seller or the Master Servicer hereunder (other than
amounts payable under Section 4.2) shall be paid or deposited in accordance with
the terms hereof no later than 12:00 noon (Atlanta, Georgia time) on the day
when due in lawful money of the United States of America in same day funds to
the Purchaser in care of Wachovia Bank, N.A., ABA #▇▇▇▇▇▇▇▇▇, Account
#8735-098787, for credit: Blue Ridge Asset Funding Corporation, Reference:
Cadmus Receivables Corp., Attention: Administrative Associate, (▇▇▇) ▇▇▇-▇▇▇▇,
or to such other account at the bank named therein or at such other bank as the
Agent on behalf of the Purchaser may designate by written notice to the Person
making such payment.
(b) Late Payments. The Seller or the Master Servicer, as
applicable, shall, to the extent permitted by law, pay to the Person to whom
payment is due interest on all amounts not paid or deposited when due hereunder
at 2% per annum above the Base Rate, payable on demand, provided, however, that
such interest rate shall not at any time exceed the maximum rate permitted by
applicable law.
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(c) Method of Computation. All computations of interest, Earned
Discount, Liquidation Fee, any fees payable under Section 4.1 and any other fees
payable by the Seller to the Purchaser or the Agent hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) elapsed.
SECTION 3.4 TREATMENT OF COLLECTIONS AND DEEMED COLLECTIONS.
The Seller shall forthwith deliver to the Master Servicer all Deemed
Collections, and the Master Servicer shall hold or distribute such Deemed
Collections as Earned Discount, accrued Servicer's Fee, repayment of Invested
Amount, and to other accrued amounts owing hereunder to the same extent as if
such Deemed Collections had actually been received on the date of such delivery
to the Master Servicer. If Collections are then being paid to the Agent, on the
Purchaser's behalf, or its designee, or lock boxes or accounts directly or
indirectly owned or controlled by the Agent, the Master Servicer shall forthwith
cause such Deemed Collections to be paid to the Agent, on the Purchaser's
behalf, or its designee or to such lock boxes or accounts, as applicable, or as
the Agent shall request. So long as the Seller shall hold any Collections
(including Deemed Collections) required to be paid to the Master Servicer, the
Agent or the Collateral Agent, it shall hold such Collections in trust for the
benefit of the Agent, on behalf of the Purchaser, and shall clearly ▇▇▇▇ its
records to reflect such trust; provided that unless the Agent shall have
requested it in writing to do so, the Seller shall not be required to hold such
Collections in a separate deposit account containing only such Collections.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.1 FEES.
The Seller shall pay to the Purchaser certain fees from time to time in
amounts and payable on such dates as are set forth in the letter dated on or
about the date hereof (as amended from time to time, the "FEE LETTER") among the
Seller, the Purchaser and the Agent. Cadmus shall have paid to the Agent the
structuring fee set forth in the letter dated February 8, 1999 among Cadmus and
Wachovia (the "MANDATE LETTER") on or before the date this Agreement is
executed.
SECTION 4.2 YIELD PROTECTION.
(a) If (i) any change in the interpretation of Regulation
D or (ii) any Regulatory Change occurring after the date hereof
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(A) shall subject an Affected Party to any tax, duty or other
charge with respect to the Asset Interest or any Asset Tranche owned by
or funded by it, or any obligations or right to make Purchases or
Reinvestments or to provide funding therefor, or shall change the basis
of taxation of payments to the Affected Party of any Invested Amount,
Purchaser's Tranche Investment or Earned Discount owned by, owed to or
funded in whole or in part by it or any other amounts due under this
Agreement in respect of the Asset Interest or any Asset Tranche owned
by or funded by it or its obligations or rights, if any, to make
Purchases or Reinvestments or to provide funding therefor (except for
(1) taxes based on, or measured by, net income, or changes in the rate
of tax on or determined by reference to the overall net income, of such
Affected Party imposed by the United States of America, or by the
jurisdiction in which such Affected Party's principal executive office
is located and, if such Affected Party's principal executive office is
not in the United States of America, by the jurisdiction where such
Affected Party's principal office in the United States is located or,
(2) franchise taxes, taxes on, or in the nature of, doing business
taxes or capital taxes); or
(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal
Reserve Board, but excluding any reserve included in the determination
of Earned Discount), special deposit or similar requirement against
assets of any Affected Party, deposits or obligations with or for the
account of any Affected Party or with or for the account of any
affiliate (or entity deemed by the Federal Reserve Board to be an
affiliate) of any Affected Party, or credit extended by any Affected
Party; or
(C) shall change the amount of capital maintained or required
or requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting any Asset
Interest owned or funded in whole or in part by any Affected Party, or
its obligations or rights, if any, to make Purchases or Reinvestments
or to provide funding therefor; or
(E) shall change the rate for, or the manner in which the
Federal Deposit Insurance Corporation (or a successor thereto)
assesses, deposit insurance premiums or similar charges;
and the result of any of the foregoing is or would be
(x) to increase the cost to or to impose a cost on (I) an
Affected Party funding or making or maintaining any Purchases or
Reinvestments, any purchases, reinvestments, or loans or other
extensions of credit under the Liquidity Agreement, or any commitment
of such Affected Party with respect to any of the foregoing, or (II)
the Agent for continuing its or the Seller's relationship with the
Purchaser, in each case, in an amount deemed to be material by such
Affected Party,
(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement or under the
Liquidity Agreement, or
(z) in the reasonable determination of such Affected Party, to
reduce the rate of return on the capital of an Affected Party as a
consequence of its obligations hereunder or arising in connection
herewith to a level below that which such Affected Party could
otherwise have achieved,
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then, within thirty days after demand by such Affected Party (which demand shall
be accompanied by a certificate setting forth, in reasonable detail, the basis
of such demand and the methodology for calculating, and the calculation of, the
amounts claimed by the Affected Party), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such additional or increased cost or such reduction.
(b) Each Affected Party will promptly notify the Seller and the
Agent of any event of which it has knowledge (including any future event that,
in the judgment of such Affected Party, is reasonably certain to occur) which
will entitle such Affected Party to compensation pursuant to this Section 4.2;
provided, however, no failure to give or delay in giving such notification shall
adversely affect the rights of any Affected Party to such compensation.
(c) In determining any amount provided for or referred to in this
Section 4.2, an Affected Party may use any reasonable averaging and attribution
methods (consistent with its ordinary business practices) that it (in its
discretion) shall deem applicable. Any Affected Party when making a claim under
this Section 4.2 shall submit to the Seller the certificate (referred to in
subsection (a) above) as to such increased cost or reduced return (including
calculation thereof in reasonable detail), which statement shall, in the absence
of demonstrable error, be conclusive and binding upon the Seller.
(d) The Purchaser shall use reasonable efforts to cause any
Affected Party that makes a claim for payment under this Section 4.2 to take
reasonable measures to minimize the amounts payable by the Seller pursuant to
this Section 4.2.
SECTION 4.3 FUNDING LOSSES.
In the event that any Liquidity Bank shall actually incur any loss or
expense (including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Liquidity Bank to make
any Liquidity Funding or maintain any Liquidity Funding) as a result of (i) any
settlement with respect to the Purchaser's Tranche Investment of any Asset
Tranche funded by a Liquidity Funding being made on any day other than the
scheduled last day of an applicable Yield Period with respect thereto (it being
understood that the foregoing shall not apply to any portion of the Purchasers'
Tranche Investment that is accruing Earned Discount calculated by reference to
the Base Rate), or (ii) any Purchase not being made in accordance with a request
therefor under Section 1.2, then, upon written notice from the Agent to the
Seller and the Master Servicer, the Seller shall pay to the Master Servicer, and
the Master Servicer shall pay to the Agent for the account of such Liquidity
Bank, the amount of such loss or expense. Such written notice (which shall
include the methodology for calculating, and the calculation of, the amount of
such loss or expense, in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding upon the Seller and the Master
Servicer.
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ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE.
The initial Purchase pursuant to this Agreement is subject to the
following conditions precedent:
(a) the Agent, on the Purchaser's behalf, shall have received, on
or before the date of such initial Purchase, the following each (unless
otherwise indicated) dated such date and in form and substance reasonably
satisfactory to the Agent:
(i) The Sale Agreement, duly executed by the parties thereto;
(ii) A certificate of the Secretary or Assistant Secretary of
each Seller Party certifying the names and true signatures of the
officers authorized on its behalf to sign this Agreement and the other
Transaction Documents to be delivered by it hereunder (on which
certificate the Agent and the Purchaser may conclusively rely until
such time as the Agent, on the Purchaser's behalf, shall receive from
such Seller Party a revised certificate meeting the requirements of
this subsection (ii));
(iii) The Articles or Certificate of Incorporation of each
Seller Party, duly certified by the State Corporation Commission of the
Commonwealth of Virginia, as of a recent date acceptable to Agent, on
the Purchaser's behalf, in each case together with a copy of the
by-laws of such Seller Party, duly certified by the Secretary or an
Assistant Secretary of such Seller Party;
(iv) Copies of good standing certificates for each Seller
Party, issued by the State Corporation Commission of the Commonwealth
of Virginia and the state where such Seller Party's principal place of
business is located;
(v) Acknowledgment copies (or other evidence of filing
reasonably acceptable to the Agent, on behalf of the Secured Parties,)
of (i) proper financing statements (Form UCC-1), in such form as the
Agent, on behalf of the Secured Parties, may reasonably request, naming
each of the Originators as the debtor and the seller of the Receivables
and Related Assets, the Seller as the secured party and purchaser
thereof and Wachovia, solely in its capacity as Agent for the Secured
Parties hereunder, as assignee, and (ii) financing statements (Form
UCC-1), in such form as the Agent, on behalf of the Secured Parties,
may reasonably request, naming the Seller as the debtor and the seller
of an undivided percentage interest in the Pool Receivables and Related
Assets 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 behalf of the Secured Parties, desirable
under the UCC or any comparable law of all appropriate jurisdictions to
perfect the sale by each Originator to the Seller of, and the
Purchaser's, undivided percentage interest in, the Pool Receivables and
Related Assets;
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(vi) Search reports provided in writing to the Agent, on the
Purchaser's behalf, (i) listing all effective financing statements that
name any Seller Party as debtor and that are filed in the jurisdictions
in which filings were made pursuant to subsection (v) 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 (v) above) shall
cover any Receivables or Related Assets, 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;
(vii) Evidence that the Seller Notes have been duly executed
and delivered by the Seller;
(viii) Favorable opinions of ▇▇▇▇ & Valentine, L.L.P., counsel
to the Seller Parties, in substantially the form of Exhibit
5.1(a)(viii);
(ix) A favorable opinion of ▇▇▇▇ & Valentine, L.L.P., counsel
to the Seller Parties, as to
(x) the existence of a "true sale" of the
Receivables from the Originators to the Seller under the Sale
Agreement; and
(y) the inapplicability of the doctrine of
substantive consolidation to the Seller in connection with
any bankruptcy proceeding involving any of the Originators or
Cadmus;
(x) A pro forma Settlement Report, prepared as of the Cut-Off
Date of September 30, 1999;
(xi) A report in form and substance satisfactory to the Agent,
on the Purchaser's behalf, from the Initial Due Diligence Auditor as to
a pre-closing due diligence audit by the Initial Due Diligence Auditor;
(xii) The Liquidity Agreement, in form and substance
satisfactory to the Agent, on the Purchaser's behalf, duly executed by
the Purchaser, the Liquidity Agent and each Liquidity Bank;
(xiii) Evidence that Cadmus has implemented all operational
changes as set forth in the Letter Agreement;
(xiv) Lock-Box Agreements with respect to each Lock-Box and
the Collection Account;
17
(xv) [Reserved];
(xvi) With respect to Cadmus and its Consolidated
Subsidiaries, a consolidated balance sheet, income statement and
statement of shareholders' equity as at June 30, 1999 and with respect
to the Seller, a balance sheet as at October 26, 1999, each of the
foregoing together with a certification of the chief financial officer
or treasurer in the form attached hereto as Exhibit B; and
(xvii) such other agreements, instruments, certificates,
approvals, opinions and other documents as the Agent may reasonably
request; and
(b) Cadmus shall have paid (i) the Structuring Fee and (ii) all
Transaction Fees.
SECTION 5.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.
Each Purchase (including the initial Purchase) and each Reinvestment
shall be subject to the further conditions precedent that on the date of such
Purchase or Reinvestment the following statements shall be true (and the Seller,
by accepting the amount of such Purchase or by receiving the proceeds of such
Reinvestment, and each other Seller Party, upon such acceptance or receipt by
the Seller, shall be deemed to have certified that):
(a) the representations and warranties contained in Section 6.1
are correct in all material respects on and as of such day as though made on and
as of such day and shall be deemed to have been made on such day;
(b) no event has occurred and is continuing, or would result from
such Purchase or Reinvestment, that constitutes a Liquidation Event or
Unmatured Liquidation Event;
(c) after giving effect to each proposed Purchase or Reinvestment,
the sum of (i) the Invested Amount and (ii) the Aggregate Accruals will not
exceed the Purchase Limit and the Asset Interest will not exceed the Allocation
Limit;
(d) the Termination Date shall not have occurred;
(e) in the case of a Purchase, the Agent shall have timely
received an appropriate notice of the proposed Purchase in accordance with
Section 1.2(a); and
(f) the Agent shall have received such other agreements,
instruments, certificates, approvals, opinions and other documents as the Agent
may reasonably request.
provided, however, the absence of the occurrence and continuance of an Unmatured
Liquidation Event shall not be a condition precedent to any Reinvestment or any
Purchase on any day which does not cause the Invested Amount, after giving
effect to such Reinvestment or Purchase, to exceed the Invested Amount as of the
opening of business on such day.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES.
Each Seller Party represents and warrants as to itself, except when
specifically provided, in which case, the specified Seller Party represents and
warrants as follows:
(a) Organization and Good Standing; Ownership. It has been duly
organized and is validly existing as a corporation in good standing under the
laws of the Commonwealth of Virginia, 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. The Seller had at all relevant times,
and now has, all necessary corporate power and authority to acquire and own the
Pool Receivables and Related Assets.
(b) Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals, except where the failure to be so qualified or have such licenses or
approvals would not have a Material Adverse Effect.
(c) Power and Authority; Due Authorization. It (i) has all
necessary corporate power and authority (A) to execute and deliver this
Agreement and the other Transaction Documents to which it is a party, (B) to
carry out the terms of the Transaction Documents to which it is a party, (C) in
the case of the Master Servicer, to service the Receivables and the Related
Assets in accordance with this Agreement and the Sale Agreement, and (D) in the
case of the Seller, to sell and assign the Asset Interest on the terms and
conditions herein provided, and (ii) has duly authorized by all necessary
corporate action the execution, delivery and performance of this Agreement and
the other Transaction Documents and, in the case of the Seller, the sales and
assignments described in clause (i)(D) above.
(d) Valid Sale; Binding Obligations. (i) This Agreement
constitutes a valid sale, transfer, and assignment of the Asset Interest to the
Purchaser, enforceable against creditors of, and purchasers from, the Seller,
and (ii) this Agreement and each other Transaction Document signed by such
Seller Party constitutes, a legal, valid and binding obligation of such Seller
Party, enforceable against such Seller Party in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws from time to time in effect 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 at law.
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(e) No Violation. The execution, delivery and performance by it of
this Agreement and the other Transaction Documents to which it is a party and
the consummation by it of the transactions contemplated hereby and thereby do
not (i) 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, its articles or certificate of incorporation or by-laws, or any material
indenture, loan agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument to which it is a party or by which it or
any of its properties is bound, (ii) 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, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument, other than this Agreement and the other
Transaction Documents, or (iii) violate any law or any order, rule, or
regulation applicable to it of any court or of any federal or state 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 Material Adverse Effect.
(f) No Proceedings. There are no proceedings or investigations
against or affecting it which are pending, or, to its knowledge, threatened,
before any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
any other Transaction Document, (ii) seeking to prevent the sale and assignment
of the Receivables under the Sale Agreement or of the Asset Interest under this
Agreement or the consummation of any of the other transactions contemplated by
this Agreement or any other Transaction Document, or (iii) that would have a
Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) Government Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
it of this Agreement and each other Transaction Document to which it is a party,
except, (i) in the case of the Seller, for (A) the filing of the UCC financing
statements referred to in Article V, and (B) the filing of any UCC continuation
statements and amendments from time to time required in relation to any UCC
financing statements filed in connection with this Agreement, as provided in
Section 8.7, all of which, at the time required in Article V or Section 8.7, as
applicable, shall have been duly made and shall be in full force and effect; and
(ii) such authorizations, approvals, actions, notices and filings the failure of
which to obtain or make would not have a Material Adverse Effect.
(i) Financial Condition. (w) The consolidated balance sheet of the
Master Servicer and its Consolidated Subsidiaries 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, fairly
present, in conformity with GAAP, the consolidated financial condition of the
Master Servicer and its Consolidated Subsidiaries as of such date and their
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, (x) since June 30, 1999 there has been no material adverse
change in any such financial condition, business or operations except as
described in Schedule 6.1(i), (y) the balance sheet of the Seller as at October
26, 1999, certified by the chief financial officer or treasurer of the Seller by
means of a Certificate of Financial Officer in the form attached hereto as
Exhibit B, copies of which have been furnished to the Agent, fairly presents in
all material respects the financial condition, assets and liabilities of the
Seller as at such date, all in accordance with GAAP consistently applied, and
(z) since October 26, 1999, there has been no material adverse change in the
Seller's financial condition, business or operations.
20
(j) Material Adverse Effect: Since June 30, 1999 there has
been no event, act, condition, circumstance or occurrence which would have a
Material Adverse Effect.
(k) Federal Regulations. No part of any funds obtained by the
Seller 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, the Seller 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 Pool Receivable, together with the
Related Assets, is owned by the Seller free and clear of any Lien (other than
any Lien arising hereunder or solely as the result of any action taken by the
Purchaser (or any assignee thereof) or by the Agent); (ii) when the Purchaser
makes a Purchase or Reinvestment, it shall acquire and shall at all times
thereafter continuously maintain a valid and perfected first priority undivided
percentage ownership interest to the extent of the Asset Interest in each Pool
Receivable and each Related Asset, free and clear of any Lien (other than any
Lien arising as the result of any action taken by the Purchaser (or any assignee
thereof or by the Agent)); and (iii) no currently effective financing statement
or other instrument similar in effect covering any Pool Receivable, any interest
therein, the Related Assets or Collections with respect thereto is on file in
any recording office except such as may be filed (1) in favor of the Seller in
connection with the Sale Agreement, (2) in favor of the Purchaser or the Agent
in accordance with this 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 (3) in favor of the Collateral Agent.
(m) Accurate Reports. No Settlement Report (if prepared by such
Seller Party, or to the extent information therein was supplied by such Seller
Party) or other information, exhibit, financial statement, document, book,
record or report furnished, in each case in writing, by or on behalf of such
Seller Party to the Agent or the Purchaser pursuant to this Agreement was
inaccurate in any material respect as of the date it was dated or (except as
otherwise disclosed to the Agent or Purchaser at such time) as of the date so
furnished, or contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
materially misleading in light of the circumstances made or presented.
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(n) Offices. The principal places of business and chief executive
offices of the Master Servicer and the Seller are located at the respective
addresses set forth on Schedule 14.2, and the offices where the Master Servicer
and the Seller keep all their books, records and documents evidencing Pool
Receivables, the related Contracts and all purchase orders and other agreements
related to such Pool Receivables are located at the addresses specified in
Schedule 6.1(n) (or at such other locations, notified to the Agent, on the
Purchaser's behalf, in accordance with Section 7.1(f), in jurisdictions where
all action required by Section 8.7 has been taken and completed).
(o) Lock-Boxes and Collection Account. The names and addresses of
all the Lock-Box Banks, together with the related account numbers of the
accounts of the Originators, the Master Servicer or the Seller at such Lock-Box
Banks, are specified in Schedule 6.1(o) (or have been notified to and approved
by the Agent, on the Purchaser's behalf, in accordance with Section 7.3(d)). All
funds in the Lock-Boxes and the Collection Account result from Collections on
the Receivables and other amounts received with respect thereto.
(p) Eligible Receivables. 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.
(q) [Reserved].
(r) Year 2000 Compliance. Cadmus has developed and has 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 Material Adverse Effect.
(s) 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.
(t) Payments to Originators. With respect to each Receivable
transferred to the Seller by the Originators pursuant to the Sale Agreement, the
Seller has given reasonably equivalent value to each Originator in consideration
for the Receivables originated by it and the Related Assets with respect thereto
and such transfer was not made for or on account of antecedent debt.
(u) Names. In the past five years, the Seller has not used any
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement.
(v) Ownership of the Seller. Cadmus owns, directly or indirectly,
100% of the issued and outstanding capital stock of the Seller, free and clear
of any Lien. Such capital stock is validly issued, fully paid and nonassessable,
and there are no options, warrants or other rights to acquire securities of the
Seller.
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(w) Investment Company. The Seller is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended from time
to time, or any successor statute.
(x) 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 result in a Material
Adverse Effect.
(y) 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 Material Adverse Effect.
ARTICLE VII
GENERAL COVENANTS OF THE SELLER PARTIES
SECTION 7.1 AFFIRMATIVE COVENANTS OF THE SELLER PARTIES.
From the date hereof until the Final Payout Date, unless the Agent
shall otherwise consent in writing:
(a) Compliance With Laws, Etc. Each Seller Party will comply in
all material respects with all applicable laws, rules, regulations and orders,
including those with respect to the Pool Receivables and related Contracts,
except where the failure to so comply would not individually or in the aggregate
have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Each Seller Party will
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification would have a Material Adverse Effect.
(c) Audits. Each Seller Party will (i) 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, on the Purchaser's behalf,
believes in good faith that a Liquidation Event has occurred and is continuing),
in which case no such notice shall be required) during regular business hours,
permit the Agent, on the Purchaser's behalf, or any of its agents or
representatives, (A) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in the possession or under the control of such Seller Party relating to Pool
Receivables, including, without limitation, the related Contracts and purchase
orders and other agreements, and (B) to visit the offices and properties of such
Seller Party for the purpose of examining such materials described in clause
(i)(A) next above, and to discuss matters relating to Pool Receivables or such
Seller Party's performance hereunder with any of the officers or employees of
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such Seller Party having knowledge of such matters; (ii) permit the Agent or any
of its agents or representatives, upon not less than five (5) Business Days'
notice from the Agent (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), to meet with the
independent auditors of such Seller Party, to review such auditors' work papers
and otherwise to review with such auditors the books and records of such Seller
Party with respect to the Pool Receivables and Related Assets; and (iii) without
limiting the provisions of clause (i) or (ii) next above, from time to time, at
the expense of such Seller Party, permit certified public accountants or other
auditors acceptable to the Agent to conduct a review of such Seller Party's
books and records with respect to the Pool Receivables and Related Assets;
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) the Seller Parties shall only be
responsible for the costs and expenses of one such review in any one calendar
year.
(d) Keeping of Records and Books of Account. The Master Servicer
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Pool 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 Pool 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 Pool Receivables).
(e) Performance and Compliance with Receivables and Contracts.
Each Seller Party will, at its expense, timely and fully perform and comply with
all material provisions, covenants and other promises, if any, required to be
observed by it under the Contracts related to the Pool Receivables and all
agreements related to such Pool Receivables, except where a failure to do so
would not have a Material Adverse Effect.
(f) Location of Records. Each Seller Party will keep its chief
place of business and chief executive office, and the offices where it keeps its
records concerning the Pool Receivables, all related Contracts and all
agreements related to such Pool Receivables (and all original documents relating
thereto), at the address(es) of the applicable Servicer and the Seller referred
to in Section 6.1(n) or, upon 30 days' prior written notice to the Agent, at
such other locations in jurisdictions where all action required by Section 8.7
shall have been taken and completed.
(g) Credit and Collection Policies. Each Seller Party will comply
in all material respects with the Credit and Collection Policy in regard to each
Pool Receivable and the related Contract.
(h) Sale Agreement. The Seller will perform and comply in all
material respects with all of its covenants and agreements set forth in the Sale
Agreement, and will enforce the performance by each Originator of its
obligations under the Sale Agreement.
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(i) Collection Bank Agreement. The Seller and the Master Servicer
shall instruct all Obligors to remit all Collections to the Lock-Boxes and each
Lock-Box Bank to deposit all Collections to the Collection Account. The Seller
will not give any contrary or conflicting instructions, and will, upon the
request of the Master Servicer or the Agent, confirm such instructions by the
Master Servicer or take such other action as may be reasonably required to give
effect to such instructions.
(j) Y2K Compliance. Cadmus and its Subsidiaries will meet the
milestones contained in the Y2K Plan and will have all material hardware and
software systems Year 2000 Complaint 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 Material Adverse Effect.
(k) Accurate Reports. All reports, information, financial
statements, documents, books, records or other material furnished by or on
behalf of a Seller Party to the Agent or the Purchaser, in each case in writing,
shall be true, complete and accurate in all material respects as of the date so
furnished and shall not contain any material misstatement of fact and shall 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.
(l) Letter Agreement. Each Seller Party has implemented all
required operational changes as set forth in the Letter Agreement.
(m) Servicing Agreements. Each Seller Party will 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 the Master
Servicer in the servicing of the Receivables.
SECTION 7.2 REPORTING REQUIREMENTS OF THE SELLER PARTIES.
From the date hereof until the Final Payout Date, unless the Agent, on
the Purchaser's behalf, shall otherwise consent in writing:
(a) Quarterly Financial Statements - The Master Servicer. The
Master Servicer will furnish to the Agent, on the Purchaser's behalf, as soon as
available and in any event within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year, copies of the consolidated and
consolidating balance sheet of the Master Servicer and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter, the related consolidated and
consolidating statement of income and the related consolidated statement of cash
flows for such Fiscal Quarter and for the portion of the Fiscal Year ended at
the end of such Fiscal Quarter, setting forth in each case in comparative form
the figures for the corresponding Fiscal Quarter and the corresponding portion
of the previous Fiscal Year, together with a Certificate of Financial Officer in
the form attached hereto as Exhibit B executed by its chief financial officer or
treasurer.
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(b) Annual Financial Statements - The Master Servicer. The Master
Servicer will furnish to the Agent, as soon as available and in any event within
90 days after the end of each Fiscal Year, a consolidated and consolidating
balance sheet of the Master Servicer and its Consolidated Subsidiaries as of the
end of such Fiscal Year, the related consolidated and consolidating statements
of income and shareholders' equity and the related consolidated statement of
cash flows for such Fiscal Year, setting forth in each case in comparative form
the figures for the previous Fiscal Year, all 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;
(c) Quarterly Financial Statements-Seller. The Seller will furnish
to the Agent, as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Seller, copies of
the financial statements of the Seller, consisting of at least a balance sheet
as at the close of such quarter and a statement of earnings for such quarter and
for the period from the beginning of the fiscal year to the close of such
quarter, together with a Certificate of Financial Officer in the form attached
hereto as Exhibit B executed by the chief financial officer or treasurer of the
Seller;
(d) Annual Financial Statements-Seller. The Seller will furnish to
the Agent, as soon as available and in any event within 90 days after the end of
each fiscal year of the Seller, copies of the financial statements of the
Seller, consisting of at least a balance sheet of the Seller for such year and a
statement of earnings, setting forth in each case in comparative form
corresponding figures from the preceding fiscal year, together with a
Certificate of Financial Officer in the form attached hereto as Exhibit B
executed by the chief financial officer or treasurer of the Seller;
(e) Reports to Holders and Exchanges. In addition to the reports
required by subsections (a), (b), (c) and (d) next above, promptly upon the
Agent's request, the Master Servicer will furnish to the Agent, on the
Purchaser's behalf, copies of any reports specified in such request which the
Master Servicer sends to any of its securityholders, and any reports or
registration statements that the Master Servicer files with the Securities and
Exchange Commission 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 Party 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 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, such Seller Party
will promptly deliver to the Agent 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 liability under Title IV of ERISA, such Seller Party shall
promptly deliver to the Agent 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, such Seller Party shall promptly deliver to the
Agent a copy of such notice;
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(g) Liquidation Events, Etc. As soon as possible and in any event
within five (5) Business Days after obtaining knowledge of the occurrence of any
Liquidation Event or any Unmatured Liquidation Event, each Seller Party will
furnish to the Agent, on the Purchaser's behalf, a written statement of the
chief financial officer, treasurer or chief accounting officer of such Seller
Party setting forth details of such event and the action that such Seller Party
will take with respect thereto;
(h) Litigation. As soon as possible and in any event within ten
Business Days of any Seller Party's knowledge thereof, such Seller Party will
furnish to the Agent, on the Purchaser's behalf, notice of (i) any litigation,
investigation or proceeding which may exist at any time which would have a
Material Adverse Effect and (ii) any development in previously disclosed
litigation which development would have a Material Adverse Effect;
(i) Audit of Pool Receivables. As soon as available and in any
event by the end of each fiscal year of the Seller, the Seller will furnish to
the Agent, on the Purchaser's behalf, an audit report, prepared by a Person
reasonably acceptable to the Agent (unless a Liquidation Event has occurred, in
which case such audit report shall be prepared by a nationally recognized
accounting firm or other Person acceptable to the Agent), as of the end of such
fiscal year, substantially in the form of the report delivered pursuant to
Section 5.1(a)(xi) and covering such other matters as the Agent may reasonably
request in order to protect the interests of the Agent or Purchaser under or as
contemplated by this Agreement;
(j) Change in Credit and Collection Policy. Prior to its effective
date, each Seller Party will furnish to the Agent, on the Purchaser's behalf,
notice of (i) any material change in the character of such Seller Party's
business, and (ii) any material change in the Credit and Collection Policy;
(k) [Reserved].
(l) Deliveries to Investors. The Seller will deliver to the Agent
for distribution to each of the Investors:
(i) Simultaneously with the delivery of each set of annual and
quarterly financial statements referred to in paragraphs (a), (b), (c)
and (d) above, each Seller Party will deliver to the Agent on behalf of
the Purchaser a statement of the chief executive officer, treasurer,
chief financial officer or chief technology officer of such Seller
Party stating that no Unmatured Liquidation Event or Liquidation Event
has occurred and is continuing or, if an Unmatured Liquidation Event or
Liquidation Event has occurred and is continuing, a statement setting
forth the details thereof and the action which such Seller Party is
taking or proposes to take with respect thereto;
(ii) Within 10 Business Days after any Seller Party becomes
aware that any Y2K Plan milestone has not been met or that compliance
with the Y2K Plan will be delayed or not achieved and that such failure
to meet a Y2K Plan milestone or failure to comply with the Y2K Plan
would have a Material Adverse Effect, such Seller Party shall deliver a
statement of the chief executive officer, treasurer, chief financial
officer or chief technology officer setting forth the details thereof
and the action which such Seller Party is taking or proposes to take
with respect thereto; and
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(iii) Promptly upon the receipt thereof, any Seller Party shall
deliver a copy of any third party assessments of such Seller Party's
Y2K Plan together with any recommendations made by such third party
with respect to Year 2000 compliance.
(m) Other. Promptly, from time to time, each Seller Party will
furnish to the Agent, on the Purchaser's behalf, such other information,
documents, records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of such Seller Party as the Agent may from
time to time reasonably request in order to protect the interests of the Agent
or Purchaser under or as contemplated by this Agreement.
SECTION 7.3 NEGATIVE COVENANTS OF THE SELLER PARTIES.
From the date hereof until the Final Payout Date, without the prior
written consent of the Agent:
(a) Sales, Liens, Etc. (i) The Seller will not, except as
otherwise provided herein and in the other Transaction Documents, 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 Pool Receivable or any Related
Asset, or any interest therein, or any account to which any Collections of any
Pool Receivable are sent, or any right to receive income or proceeds from or in
respect of any of the foregoing, and (ii) the Master Servicer will not assert
any interest in the Receivables, except as Master Servicer.
(b) Extension or Amendment of Receivables. No Seller Party will,
except as otherwise permitted in Section 8.2(c), extend, amend or otherwise
modify the terms of any Pool Receivable, or amend, modify or waive any material
term or condition of any Contract related thereto in any way that adversely
affects the collectibility of any Pool Receivable or the Purchaser's rights
therein.
(c) Change in Business or Credit and Collection Policy. No Seller
Party will make or permit to be made any change in the character of its business
or in the Credit and Collection Policy, which change would, in either case,
impair the collectibility of any significant portion of the Pool Receivables or
otherwise adversely affect the interests or remedies of the Purchaser under this
Agreement or any other Transaction Document.
(d) Change in Payment Instructions to Obligors. No Seller Party
will add or terminate any bank as a Lock-Box Bank from those listed in Schedule
6.1(o), or make any change in its instructions to Obligors regarding payments to
be made to the Seller or Master Servicer or payments to be made to any Lock-Box
Bank (except for a change in instructions solely for the purpose of directing
Obligors to make such payments to another existing Lock-Box Bank), unless (i)
the Agent shall have received prior written notice of such addition, termination
or change and (ii) if a Liquidation Event has occurred, the Agent shall have
received duly executed copies of Lock-Box Agreements with each new Lock-Box
Bank.
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(e) Deposits to the Collection Account. No Seller Party will
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to the Collection Account, any cash or cash proceeds other than Collections of
Pool Receivables and other amounts received with respect thereto.
(f) Changes to Other Documents. The Seller will not enter into any
amendment or modification of, or supplement to, the Sale Agreement or the
Seller's certificate of incorporation.
(g) Restricted Payments by the Seller. The Seller will not (i)
purchase or redeem any shares of the capital stock of the Seller, (ii) declare
or pay any dividends thereon (other than stock dividends), (iii) make any
distribution to stockholders or set aside any funds for any such purpose, or
(iv) pay any principal amount of the Seller Notes, except that the Seller may
declare or pay any dividends and pay all or a portion of such principal amounts
on the Settlement Date for any Settlement Period, after making any payment
required to be made by the Seller on such Settlement Date in accordance with the
last sentence of Section 3.1(c)(ii) and Section 3.1(c)(iii) if after giving
effect to such payment the sum of (A) the Invested Amount and (B) the Aggregate
Accruals does not exceed the Purchase Limit and the Asset Interest does not
exceed the Allocation Limit and the Seller's net worth (determined in accordance
with GAAP) is not less than 3% of the Purchase Limit.
(h) Seller Indebtedness. The Seller will not incur or permit to
exist any Indebtedness or liability on account of deposits or advances or for
borrowed money or for the deferred purchase price of any property or services,
except (A) indebtedness of the Seller to the Originators incurred in accordance
with the Sale Agreement, (B) current accounts payable arising under or permitted
by the Transaction Documents and not overdue and tax liabilities not overdue,
and (C) other current accounts payable arising in the ordinary course of
business and not overdue, in an aggregate amount at any time outstanding not to
exceed $10,700.
(i) Negative Pledges. No Seller Party will enter into or assume
any agreement (other than this Agreement and the other Transaction Documents)
prohibiting the creation or assumption of any Lien upon any Pool Receivables or
Related Assets, whether now owned or hereafter acquired, except as contemplated
by the Transaction Documents, or otherwise prohibiting or restricting any
transaction contemplated hereby or by the other Transaction Documents.
(j) Change of Name. The Seller will not change its name, any trade
name or corporate structure, or commence the use of any new trade name unless it
has given the Agent at least 30 days prior written notice thereof and has taken
all steps necessary to continue the perfection of the Purchaser's interest,
including the filing of amendments to the UCC financing statements filed
pursuant to Section 5.1(a)(v).
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(k) Liens. The Seller will not create, incur, assume or permit to
exist any Lien on any property or assets (including stock or other securities of
any person, including any Subsidiary) now owned or hereafter acquired by it or
on any income or revenues or rights in respect of any thereof, except as
provided in the Transaction Documents. The Master Servicer will not create,
incur or permit to exist any Lien (other than as contemplated by the Transaction
Documents) on any of the Receivables or Related Assets.
(l) Consolidations, Mergers and Sales of Assets. The Master
Servicer will not, nor will it permit any Significant Subsidiary to, consolidate
or merge with or into, or sell, lease or otherwise transfer all or any
substantial part of its assets (including, without limitation, any of its
Subsidiaries) to, any other Person, or discontinue or eliminate any business
line or segment, provided that (a) the Master Servicer or a Subsidiary may merge
with another Person if (i) such Person was organized under the laws of the
United States of America or one of its states, (ii) the Master Servicer or such
Subsidiary, as the case may be, is the corporation surviving such merger and
(iii) immediately after giving effect to such merger, no Unmatured Liquidation
Event or Liquidation Event shall have occurred and be continuing, (b)
Subsidiaries of the Master Servicer may merge with the Master Servicer or one
another, provided the conditions set forth in clauses (i) and (iii) above are
satisfied, and in the case of a merger with the Master Servicer, the Master
Servicer is the corporation surviving such merger, (c) the foregoing limitation
on the sale, lease or other transfer of assets (including, without limitation,
the sale or transfer of a Subsidiary) and on the discontinuance or elimination
of a business line or segment shall not prohibit, during any Fiscal Quarter, a
sale or transfer of assets (including, without limitation, the sale or transfer
of a Subsidiary) or the discontinuance or elimination of a business line or
segment (in a single transaction or in a series of related transactions) unless
the aggregate assets to be sold or transferred or utilized in a business line or
segment to be so discontinued, when combined with all other assets sold or
transferred, and all other assets utilized in all other business lines or
segments discontinued, during such Fiscal Quarter and the immediately preceding
three Fiscal Quarters (excluding however, for purposes of this clause (c) sales,
contributions, or other transfers of Receivables pursuant to the Sale Agreement,
the POP Disposition, the Agency Disposition and the CFC Sale (the POP
Disposition, the Agency Disposition and the CFC Sale each as defined in the
Credit Agreement)) either (x) contributed more than 5% of Consolidated EBITDA
during the 4 consecutive Fiscal Quarters immediately preceding such Fiscal
Quarter, or (y) constituted more than 5% of Consolidated Total Assets at the end
of such Fiscal Quarter, and (d) the Master Servicer and its Subsidiaries may
sell, contribute and make other transfers as contemplated by the Transaction
Documents.
SECTION 7.4 SEPARATE CORPORATE EXISTENCE OF THE SELLER.
Each Seller Party hereby acknowledges that Purchaser and the Agent are
entering into the transactions contemplated hereby in reliance upon Seller's
identity as a legal entity separate from the Master Servicer and its other
Affiliates. Therefore, each Seller Party shall take all steps specifically
required by this Agreement or reasonably required by the Agent to continue
Seller's identity as a separate legal entity and to make it apparent to third
Persons that the Seller is an entity with assets and liabilities distinct from
those of its Affiliates, and is not a division of Cadmus or any other Person.
Without limiting the foregoing, each Seller Party will take such actions as
shall be required in order that:
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(i) The Seller will be a limited purpose corporation whose
primary activities are restricted in its Articles of Incorporation to
purchasing or otherwise acquiring from the Originators, owning,
holding, granting security interests, or selling interests, in
Receivables in the Receivables Pool and Related Assets, entering into
agreements for the selling and servicing of the Receivables Pool, and
conducting such other activities as it deems necessary or appropriate
to carry out its primary activities;
(ii) Not less than one member of the Seller's Board of
Directors (the "Independent Director") shall be an individual who is
not, and never has been, a direct, indirect or beneficial stockholder,
officer, director, employee, affiliate, associate, material supplier or
material customer of Cadmus or any of its Affiliates. The certificate
of incorporation of the Seller shall provide that (a) at least one
member of the Seller's Board of Directors shall be an Independent
Director, (b) the Seller's Board of Directors shall not approve, or
take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Seller unless the Independent Director
shall approve the taking of such action in writing prior to the taking
of such action and (c) the provisions requiring an independent director
and the provision described in clauses (a) and (b) of this paragraph
(ii) cannot be amended without the prior written consent of the
Independent Director;
(iii) The Independent Director shall not at any time serve as
a trustee in bankruptcy for the Seller or any Affiliate thereof;
(iv) Any employee, consultant or agent of the Seller will be
compensated from the Seller's funds for services provided to the
Seller. The Seller will not engage any agents other than its attorneys,
auditors and other professionals, and a Master Servicer and any other
agent contemplated by the Transaction Documents for the Receivables
Pool, which the Master Servicer will be fully compensated for its
services by payment of the Servicer's Fee, and certain organizational
expenses in connection with the formation of the Seller;
(v) The Seller will contract with the Master Servicer to
perform for the Seller all operations required on a daily basis to
service the Receivables Pool. The Seller will pay the Master Servicer
the Servicer's Fee pursuant hereto. The Seller will not incur any
material indirect or overhead expenses for items shared with Cadmus (or
any other Affiliate thereof) which are not reflected in the Servicer's
Fee. To the extent, if any, that the Seller (or any other Affiliate
thereof) share items of expenses not reflected in the Servicer's Fee,
for legal, auditing and other professional services and directors'
fees, such expenses will be allocated to the extent practical on the
basis of actual use or the value of services rendered, and otherwise on
a basis reasonably related to the actual use or the value of services
rendered, it being understood that Cadmus shall pay all expenses
relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including, without limitation, legal, rating
agency and other fees;
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(vi) The Seller's operating expenses will not be paid by any
other Seller Party or other Affiliate of the Seller;
(vii) The Seller will have its own stationery;
(viii) The books of account, financial reports and corporate
records of the Seller will be maintained separately from those of
Cadmus and each other Affiliate of the Seller;
(ix) Any financial statements of any Seller Party or Affiliate
thereof which are consolidated to include the Seller will contain
detailed notes clearly stating that (A) all of the Seller's assets are
owned by the Seller, and (B) the Seller is a separate corporate entity
with its own separate creditors that will be entitled to be satisfied
out of the Seller's assets prior to any value in the Seller becoming
available to the Seller's equity holders; and the accounting records
and the published financial statements of each Originator will clearly
show that, for accounting purposes, the Pool Receivables and Related
Assets have been sold by such Originator to the Seller;
(x) The Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of the
Master Servicer and the other Affiliates;
(xi) Each Affiliate of the Seller will strictly observe
corporate formalities in its dealings with the Seller, and, except as
permitted pursuant to this Agreement with respect to Collections, funds
or other assets of the Seller will not be commingled with those of any
of its Affiliates;
(xii) No Affiliate of the Seller will maintain joint bank
accounts with the Seller or other depository accounts with the Seller
to which any such Affiliate (other than in its capacity as the Master
Servicer hereunder or under the Sale Agreement) has independent access,
provided that prior to the occurrence of a Liquidation Event, Cadmus,
in its capacity as Master Servicer and subject to the obligations of
the Master Servicer hereunder, may manage Collections deposited into
the Collection Account pursuant to centralized cash management
procedures, including depositing Collections into general accounts of
Cadmus;
(xiii) No Affiliate of the Seller shall, directly or
indirectly, name the Seller or enter into any agreement to name the
Seller as a direct or contingent beneficiary or loss payee on any
insurance policy covering the property of any Affiliate of the Seller;
(xiv) Each Affiliate of the Seller will maintain arm's length
relationships with the Seller, and each Affiliate of the Seller that
renders or otherwise furnishes services or merchandise to the Seller
will be compensated by the Seller at market rates for such services or
merchandise;
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(xv) No Affiliate of the Seller will be, nor will it hold
itself out to be, responsible for the debts of the Seller or the
decisions or actions in respect of the daily business and affairs of
the Seller. Cadmus and the Seller will immediately correct any known
misrepresentation with respect to the foregoing and they will not
operate or purport to operate as an integrated single economic unit
with respect to each other or in their dealing with any other entity;
(xvi) The Seller will keep correct and complete books and
records of account and minutes of the meetings and other proceedings of
its stockholder and board of directors, as applicable, and the
resolutions, agreements and other instruments of the Seller will be
continuously maintained as official records by the Seller; and
(xvii) The Seller, on the one hand, and each of the
Originators, on the other hand, will conduct its business solely in its
own corporate name and in such a separate manner so as not to mislead
others with whom they are dealing.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.1 DESIGNATION OF MASTER SERVICER.
(a) Cadmus as Initial Master Servicer. The servicing,
administering and collection of the Pool Receivables shall be conducted by the
Person designated as Master Servicer hereunder from time to time in accordance
with this Section 8.1. Until the Agent, on the Purchaser's behalf, gives to
Cadmus a Successor Notice (as defined in Section 8.1(b)), Cadmus is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Master Servicer pursuant to the terms hereof. Each of the Originators named in
the Sale Agreement, agrees to act as subservicer for the purpose of performing
certain duties and obligations with respect to all Receivables purchased by the
Seller from such Originator pursuant to the terms of the Sale Agreement. In so
acting as subservicer, each of such Originators shall comply with, and agrees to
be bound by, all of the terms and provisions of this Agreement applicable to
such Originator in the performance of its duties as subservicer; provided,
however, that each such Originator (i) shall cease to act as subservicer upon
the Agent's delivery of a Successor Notice to Cadmus (with a copy to each such
Originator), (ii) shall not be entitled to receive any Servicer's Fee provided
for herein, and (iii) shall not be bound by, or be deemed to have made, any of
the representations, warranties or covenants in Articles V and VI applicable to
the "Seller Parties," except as expressly provided in the Sale Agreement.
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(b) Successor Notice; Servicer Transfer Events. Upon Cadmus'
receipt of a notice from the Agent of the Agent's designation, on the
Purchaser's behalf, of a new Master Servicer (a "SUCCESSOR NOTICE"), Cadmus
agrees that it will terminate its activities as Master Servicer hereunder in a
manner that the Agent believes will facilitate the transition of the performance
of such activities to the new Master Servicer, and the Agent (or its designee)
shall assume each and all of Cadmus' obligations to service and administer such
Receivables, on the terms and subject to the conditions herein set forth, and
Cadmus shall use its best efforts to assist the Agent (or its designee) in
assuming such obligations. Without limiting the foregoing, Cadmus agrees, at its
expense, to take all actions necessary to provide the new Master Servicer with
access to all computer software necessary or useful in collecting or billing
Receivables, solely for use in collecting and billing Receivables. The Agent
agrees not to give Cadmus a Successor Notice until after the occurrence and
during the continuance of any Liquidation Event (any such event being herein
called a "SERVICER TRANSFER EVENT"), in which case such Successor Notice may be
given at any time in the Agent's discretion. If Cadmus disputes the occurrence
of a Servicer Transfer Event, Cadmus may take appropriate action to resolve such
dispute; provided that Cadmus must terminate its activities hereunder as Master
Servicer and allow the newly designated Master Servicer to perform such
activities on the date provided by the Agent as described above, notwithstanding
the commencement or continuation of any proceeding to resolve the aforementioned
dispute, if the Agent, on the Purchaser's behalf, reasonably determines, in good
faith, that such termination is necessary or advisable to protect the
Purchaser's interests hereunder.
(c) Subcontracts. The Master Servicer may, with the prior consent
of the Agent, subcontract with any other Person for servicing, administering or
collecting the Pool Receivables, provided that the Master Servicer shall remain
liable for the performance of the duties and obligations of the Master Servicer
pursuant to the terms hereof and such subservicing arrangement may be terminated
at the Agent's request, on the Purchaser's behalf, at anytime after a Successor
Notice has been given.
SECTION 8.2 DUTIES OF MASTER SERVICER.
(a) Appointment; Duties in General. Each of the Seller, the
Purchaser and the Agent hereby appoints as its agent the Master Servicer, as
from time to time designated pursuant to Section 8.1, to enforce its rights and
interests in and under the Pool Receivables and the Related Security. The Master
Servicer shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Pool Receivable from time to time, all in accordance
with applicable laws, rules and regulations, with reasonable care and diligence,
and in accordance with the Credit and Collection Policy.
(b) Allocation of Collections; Segregation. The Master Servicer
shall identify and hold in trust for the account of the Seller and Purchaser
their respective allocable shares of the Collections of Pool Receivables in
accordance with Section 1.3 but shall not be required (unless otherwise
requested by the Agent, on the Purchaser's behalf, after the occurrence and
during the continuance of a Liquidation Event) to segregate the funds
constituting such portions of such Collections prior to the remittance thereof
in accordance with said Section. If instructed by the Agent, on the Purchaser's
behalf, after the occurrence and during the continuance of a Liquidation Event,
the Master Servicer shall segregate and deposit into the Collection Account, the
Purchaser's share of Collections of Pool Receivables, on the second Business Day
following receipt by the Master Servicer of such Collections in immediately
available funds.
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(c) Modification of Receivables. So long as no Liquidation Event
and no Unmatured Liquidation Event shall have occurred and be continuing,
Cadmus, while it is Master Servicer, may, in accordance with the Credit and
Collection Policy, (i) extend the maturity or adjust the Unpaid Balance of any
Defaulted Receivable as Cadmus may reasonably determine to be appropriate to
maximize Collections thereof, and (ii) adjust the Unpaid Balance of any
Receivable to reflect the reductions or cancellations described in the first
sentence of Section 3.2(a).
(d) Documents and Records. Each Seller Party shall deliver to the
Master Servicer, and the Master Servicer shall hold in trust for the Seller and
the Purchaser in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or disks)
that evidence or relate to Pool Receivables.
(e) Certain Duties to the Seller. The Master Servicer shall, as
soon as practicable following receipt, turn over to the Seller (i) that portion
of Collections of Pool Receivables representing its undivided percentage
interest therein, less the Seller's Share of the Servicer's Fee, and, in the
event that neither Cadmus nor any other Seller Party or Affiliate thereof is the
Master Servicer, all reasonable and appropriate out-of-pocket costs and expenses
of the Master Servicer of servicing, collecting and administering the Pool
Receivables to the extent not covered by the Servicer's Fee received by it, and
(ii) the Collections of any Receivable which is not a Pool Receivable. The
Master Servicer, if other than Cadmus or any other Seller Party or Affiliate
thereof, shall, as soon as practicable upon demand, deliver to the Seller all
documents, instruments and records in its possession that evidence or relate to
Receivables of the Seller other than Pool Receivables, and copies of documents,
instruments and records in its possession that evidence or relate to Pool
Receivables.
(f) Termination. The Master Servicer's authorization under this
Agreement shall terminate upon the
Final Payout Date.
(g) Power of Attorney. The 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 the Seller all steps which are
necessary or advisable to endorse, negotiate or otherwise realize on any writing
or other right of any kind held or transmitted by the Seller or transmitted or
received by the Purchaser (whether or not from the Seller) in connection with
any Receivable.
(h) Rebill of Receivables. The Master Servicer may, prior to the
Rebill Termination Date, rebill one or more Pool Receivables due to one or more
errors in the original invoice or to reflect a discount given to the Obligor
thereof (each such Receivable being a "REBILLED RECEIVABLE"); provided, however,
that (i) for purposes of calculating the age of any such Rebilled Receivable,
such Rebilled Receivable shall be deemed to have been originated on the date of
the invoice of the related original receivable (each such Receivable being an
"ORIGINAL RECEIVABLE"), (ii) no Pool Receivable may be rebilled after the
occurrence of the Rebill Termination Date and (c) if any such Pool Receivable is
so rebilled as a result of a discount given to the Obligor thereof, no such
rebill shall occur unless and until the related Originator has complied with the
provisions of Section 3.5 of the Sale Agreement and the Seller has complied with
the provisions of Section 3.2(a) hereof.
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SECTION 8.3 SERVICER ADVANCES.
For each Settlement Period, if the Master Servicer determines that any
payment (or portion thereof) which was due and payable pursuant to a Contract in
the Receivables Pool during such Settlement Period was not received prior to the
end of such Settlement Period, the Master Servicer may make an advance in an
amount up to the amount of such delinquent payment (or portion thereof); in
addition, if on any day there are not sufficient funds on deposit in the
Collection Account to pay accrued Yield of any Asset Interest the Settlement
Period of which ends on such day, the Master Servicer may make an advance in the
amount necessary to pay such Yield (in either case, any such advance, a
"SERVICER ADVANCE"). Notwithstanding the preceding sentence, the Master Servicer
need not make a Servicer Advance with respect to any Contract if, the Master
Servicer determines (such determination to be conclusive and binding) in good
faith that such Servicer Advance will not ultimately be recoverable from future
collections on, or the liquidation of, the Receivables Pool. The Master Servicer
will deposit any Servicer Advances into the Collection Account on or prior to
12:00 p.m. (Atlanta, Georgia time) on the date necessary to make any payment
required to be made under Section 3.1. All Servicer Advances shall be made by
wire transfer in immediately available funds.
SECTION 8.4 SERVICER DEFAULTS.
If any of the following events shall occur and be continuing, it shall
constitute a servicer default (each such event, a "SERVICER DEFAULT"):
(a) any failure by the Master Servicer to make any payment,
transfer or deposit as required by this Agreement including, without limitation,
delivery of any Settlement Report and, such failure shall remain unremedied for
two (2) Business Days after the earliest to occur of (A) written notice thereof
shall have been given by the Agent to the Master Servicer or (B) the Master
Servicer shall have otherwise become aware of such failure;
(b) any failure on the part of the Master Servicer duly to observe
or perform any term, covenant or agreement of the Master Servicer set forth in
this Agreement or the Sale Agreement or to give instructions or notice to the
Agent as required by the Transaction Documents, which failure continues
unremedied for a period of five (5) days after the first to occur of (i) the
date on which written notice of such failure requiring the same to be remedied
shall have been given to the Master Servicer by the Agent and (ii) the date on
which a Senior Officer of the Master Servicer becomes aware thereof;
(c) any representation, warranty or certification made by the
Master Servicer (or any of its officers) in this Agreement or in any certificate
delivered pursuant to this Agreement shall prove to have been false or incorrect
in any material respect when made;
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(d) An Event of Bankruptcy shall have occurred and remain
continuing with respect to the Master Servicer;
(e) any Change in Control with respect to the Master Servicer
shall occur;
(f) any change by the Master Servicer in the Credit and Collection
Policy which shall materially adversely affect the collectibility of the
Receivables without the prior written consent of the Agent;
(g) [Reserved];
(h) Any default under any other agreement or instrument relating
to the purchase of receivables in an aggregate amount in excess of $5,000,000 of
the Master Servicer, or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such default (i) is to permit the termination of the commitment
of any party to such agreement or instrument to purchase receivables or the
right of the Master Servicer to reinvest in receivables the principal amount
paid by any party to such agreement or instrument for its interest in
receivables or (ii) is to terminate such commitment or right;
(i) [Reserved]; or
(j) An Event of Default (as defined in the Credit Agreement) shall
have occurred.
Notwithstanding anything herein to the contrary, so long as any such Servicer
Default shall not have been remedied, the Agent, by written notice to the Master
Servicer (a "TERMINATION NOTICE"), may terminate all of the rights and
obligations of the Master Servicer as Master Servicer under this Agreement and
appoint a successor Master Servicer satisfactory to the Agent (in the Agent's
sole discretion).
SECTION 8.5 RIGHTS OF THE AGENT.
(a) Notice to Obligors. At any time following the occurrence of a
Liquidation Event, the Agent may notify the Obligors of Pool Receivables, or any
of them, of the ownership of the Asset Interest by the Purchaser; provided,
however, that the Agent may not begin to so notify the Obligors of Pool
Receivables after such Liquidation Event has been waived or otherwise cured.
(b) Notice to Lock-Box Banks. At any time following the occurrence
and during the continuance of an Unmatured Liquidation Event or Liquidation
Event, the Agent is hereby authorized to give notice to the Lock-Box Banks, as
provided in the Lock-Box Agreements, of the transfer to the Agent of dominion
and control over the lock-boxes and related accounts to which the Obligors of
Pool Receivables make payments. The Seller and the Master Servicer hereby
transfer to the Agent, effective when the Agent shall give notice to the
Lock-Box Banks as provided in the Lock-Box Agreements, the exclusive dominion
and control over such lock-boxes and accounts, and shall take any further action
that the Agent may reasonably request to effect such transfer.
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(c) Rights on Servicer Transfer Event. At any time following the
designation of a Master Servicer other than Cadmus pursuant to Section 8.1:
(i) The Agent may direct the Obligors of Pool Receivables, or
any of them, to pay all amounts payable under any Pool Receivable
directly to the Agent or its designee.
(ii) Any Seller Party shall, at the Agent's request and at
such Seller Party's expense, give notice of the Purchaser's ownership
and security interests in the Pool Receivables to each Obligor of Pool
Receivables and direct that payments be made directly to the Agent or
its designee.
(iii) Each Seller Party shall, at the Agent's request, (A)
assemble all of the documents, instruments and other records
(including, without limitation, computer programs, tapes and disks)
which evidence the Pool Receivables, and the related Contracts and
Related Security, or which are otherwise necessary or desirable to
collect such Pool Receivables, and make the same available to the
successor Master Servicer at a place selected by the Agent, and (B)
segregate all cash, checks and other instruments received by it from
time to time constituting Collections of Pool Receivables in a manner
acceptable to the Agent and promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments
of transfer, to the successor Master Servicer.
(iv) Each Seller Party and Purchaser hereby authorizes the
Agent, on the Purchaser's behalf, and grants to the Agent an
irrevocable power of attorney (which shall terminate on the Final
Payout Date), to take any and all steps in such Seller Party's name and
on behalf of the Seller Parties and the Purchaser which are necessary
or desirable, in the determination of the Agent, to collect all amounts
due under any and all Pool Receivables, including, without limitation,
endorsing any Seller Party's name on checks and other instruments
representing Collections and enforcing such Pool Receivables and the
related Contracts.
SECTION 8.6 RESPONSIBILITIES OF THE SELLER PARTIES.
Anything herein to the contrary notwithstanding:
(a) Contracts. Each Seller Party shall remain responsible for
performing all of its obligations (if any) under the Contracts related to the
Pool Receivables and under the related agreements to the same extent as if the
Asset Interest had not been sold hereunder, and the exercise by the Agent or its
designee of its rights hereunder shall not relieve any Seller Party from such
obligations.
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(b) Limitation of Liability. The Agent and Purchaser shall not
have any obligation or liability with respect to any Pool Receivables, Contracts
related thereto or any other related agreements, nor shall any of them be
obligated to perform any of the obligations of any Seller Party or any
Originator thereunder.
SECTION 8.7 FURTHER ACTION EVIDENCING PURCHASES AND REINVESTMENTS.
(a) Further Assurances. Each Seller Party 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 Agent or its
designee may reasonably request in order to perfect, protect or more fully
evidence the Purchases hereunder and the resulting Asset Interest, or to enable
Purchaser or the Agent or its designee to exercise or enforce any of their
respective rights hereunder or under any Transaction Document in respect
thereof. Without limiting the generality of the foregoing, each Seller Party
will:
(i) upon the request of the Agent, 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, in accordance with the terms of this
Agreement;
(ii) upon the request of the Agent after the occurrence and
during the continuance of a Liquidation Event, ▇▇▇▇ conspicuously each
Contract evidencing each Pool Receivable with a legend, acceptable to
the Agent, evidencing that the Asset Interest has been sold in
accordance with this Agreement; and
(iii) ▇▇▇▇ its master data processing records evidencing such
Pool Receivables and related Contracts with a legend, acceptable to the
Agent, evidencing that the Asset Interest has been sold in accordance
with this Agreement.
(b) Additional Financing Statements; Performance by Agent. If any
Seller Party fails to promptly execute and deliver to the Agent, on the
Purchaser's behalf, any financing statement or continuation statement or
amendment thereto or assignment thereof requested by the Agent, on the
Purchaser's behalf, each Seller Party hereby authorizes the Agent, on the
Purchaser's behalf, to execute such statement on behalf of such Seller Party. If
any Seller Party fails to perform any of its agreements or obligations under
this Agreement, the Agent or its designee may (but shall not be required to)
itself perform, or cause performance of, such agreement or obligation, and the
reasonable expenses of the Agent or its designee incurred in connection
therewith shall be payable by the Seller Parties as provided in Section 14.5.
(c) Continuation Statements; Opinion. Without limiting the
generality of subsection (a), the Seller will, not earlier than six (6) months
and not later than three (3) months prior to the fifth anniversary of the date
of filing of the financing statements referred to in Section 5.1(a)(v) or any
other financing statement filed pursuant to this Agreement or in connection with
any Purchase hereunder, if the Final Payout Date shall not have occurred:
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(i) if necessary, execute and deliver and file or cause to be
filed an appropriate continuation statement with respect to such
financing statement; and
(ii) deliver or cause to be delivered to the Agent an opinion
of the counsel for the Seller Parties, in form and substance reasonably
satisfactory to the Agent, confirming and updating the opinion
delivered pursuant to Section 5.1(a)(viii) to the effect that the Asset
Interest hereunder continues to be a valid and perfected ownership or
security interest, subject to no other Liens of record except as
provided herein or otherwise permitted hereunder.
SECTION 8.8 APPLICATION OF COLLECTIONS.
Any payment by an Obligor in respect of any indebtedness owed by it to
any Originator or the Seller shall, except as otherwise specified by such
Obligor or required by the underlying Contract or law, be applied, first, as a
Collection of any Pool Receivable or Receivables then outstanding of such
Obligor in the order of the age of such Pool Receivables, starting with the
oldest of such Pool Receivables and, second, to any other indebtedness of such
Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.1 GRANT OF SECURITY INTEREST.
To secure all obligations of the Seller arising in connection with this
Agreement and each other Transaction Document, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or contingent,
including, without limitation, all Indemnified Amounts, payments on account of
Collections received or deemed to be received and fees, in each case pro rata
according to the respective amounts thereof, the Seller hereby assigns and
pledges to the Purchaser and its successors and assigns, for the benefit of the
Secured Parties, and hereby grants to the Purchaser, for the benefit of the
Secured Parties, a security interest in, all of the Seller's right, title and
interest now or hereafter existing in, to and under (a) all the Pool Receivables
and Related Assets (and including specifically any undivided interest therein
retained by the Seller hereunder), (b) the Sale Agreement and the other
Transaction Documents and (c) all proceeds of any of the foregoing.
SECTION 9.2 FURTHER ASSURANCES.
The provisions of Section 8.7 shall apply to the security interest
granted under Section 9.1 as well as to the Purchases, Reinvestments and all the
Asset Interests hereunder.
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SECTION 9.3 REMEDIES.
Upon the occurrence of a Liquidation Event, the Purchaser shall have,
with respect to the collateral granted pursuant to Section 9.1, and in addition
to all other rights and remedies available to the Purchaser or the Agent under
this Agreement and the other Transaction Documents or other applicable law, all
the rights and remedies of a secured party upon default under the UCC; provided,
however, the Purchaser shall not exercise any such rights and remedies under the
UCC after such Liquidation Event has been waived or otherwise cured.
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.1 LIQUIDATION EVENTS.
The following events shall be "LIQUIDATION EVENTS" hereunder:
(a) The Seller (i) shall fail to perform or observe any term,
covenant or agreement that is an obligation of the Seller hereunder, and such
failure shall remain unremedied for thirty (30) days after the earliest to occur
of (A) written notice thereof shall have been given by the Agent to the Seller
or (B) a Senior Officer of the Seller shall otherwise become aware of such
failure, or (ii) shall fail to make any payment or deposit to be made by it
hereunder when due which failure shall continue for two (2) Business Days; or
(b) Any representation or warranty made or deemed to be made by
the Seller (or any of its officers) under this Agreement or any other
Transaction Document or other information or report delivered pursuant hereto
and thereto shall prove to have been false or incorrect in any material respect
when made; or
(c) The Seller shall (1) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness when the aggregate
unpaid principal amount is in excess of $10,000, when and as the same shall
become due and payable (after expiration of any applicable grace period) or (2)
fail to observe or perform any other term, covenant, condition or agreement
(after expiration of any applicable grace period) contained in any agreement or
instrument evidencing or governing any such Indebtedness the effect of which
default or other event or condition is to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity; or
(d) An Event of Bankruptcy shall have occurred and remain
continuing with respect to the Seller; or
(e) The Purchaser or its successor shall become an "investment
company" within the meaning of the Investment Company Act of 1940; or
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(f) The Dilution Ratio at any Cut-Off Date exceeds 5.30%; or
(g) The Default Trigger Ratio at any Cut-Off Date exceeds 13.65%;
or
(h) The Delinquency Ratio at any Cut-Off Date exceeds 15.15%; or
(i) On any Settlement Date, after giving effect to the payments
made under Section 3.1(c), (i) the Asset Interest exceeds 100% or (ii) the sum
of (A) the Invested Amount and (B) the Aggregate Accruals exceeds the Purchase
Limit and such situation remains unremedied for two (2) Business Days; or
(j) [Reserved]; or
(k) The Seller or Cadmus is subject to a Change in Control which
has not received the prior written consent of the Agent; or
(l) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Internal Revenue Code with regard to any of the
Receivables or Related Assets and such lien shall not have been released within
seven (7) days, or the Pension Benefit Guaranty Corporation shall, or indicate
its intention to, file notice of a lien pursuant to Section 4068 of the Employee
Retirement Income Security Act of 1974 with regard to any of the Receivables or
Related Assets; or
(m) Any Originator shall make any change in the policies as to the
origination of the Receivables which materially adversely affects the credit
quality of the Receivables in the Receivables Pool without the prior written
consent of the Agent; or
(n) The Purchaser, for any reason, ceases to maintain a valid,
perfected first priority interest in the Pool Receivables and the Related
Assets; or
(o) A final judgment or judgments shall be rendered against the
Seller for the payment of money with respect to which an aggregate amount in
excess of $10,000 is not covered by insurance and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of the Seller to enforce any such
judgment.
SECTION 10.2 REMEDIES.
(a) Optional Liquidation. Upon the occurrence of a Liquidation
Event (other than a Liquidation Event described in subsection (d) of Section
10.1), the Agent shall, at the request, or may with the consent, of the
Purchaser, by notice to the Seller declare the Funding Termination Date to have
occurred and the Liquidation Period to have commenced.
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(b) Automatic Liquidation. Upon the occurrence of a Liquidation
Event described in subsection (d) of Section 10.1, the Funding Termination Date
shall occur and the Liquidation Period shall commence automatically.
(c) Additional Remedies. Upon any Funding Termination Date
pursuant to this Section 10.2, no Purchases or Reinvestments thereafter will be
made, and the Agent, the Purchaser and Wachovia shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE XI
THE AGENT
SECTION 11.1 AUTHORIZATION AND ACTION.
Pursuant to agreements entered into with the Agent, the Purchaser has
appointed and authorized the Agent (or its designees) to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto.
SECTION 11.2 AGENT'S RELIANCE, ETC.
The Agent and its directors, officers, agents or employees shall not be
liable for any action taken or omitted to be taken by it or them in good faith
under or in connection with the Transaction Documents (including, without
limitation, the servicing, administering or collecting of Pool Receivables as
Master Servicer pursuant to Section 8.1), except for its or their own breach of
the terms of the applicable terms of the Transaction Documents or its or their
own gross negligence or willful misconduct. Without limiting the generality of
the foregoing, the Agent: (a) may consult with legal counsel (including counsel
for the Seller), independent certified public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no warranty or representation to the Purchaser
or any other holder of any interest in Pool Receivables and shall not be
responsible to the Purchaser or any such other holder for any statements,
warranties or representations made by any Seller Party in or in connection with
any Transaction Document; (c) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any Transaction Document on the part of any Seller Party or to inspect the
property (including the books and records) of any Seller Party; (d) shall not be
responsible to the Purchaser or any other holder of any interest in Pool
Receivables for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Transaction Document; and (e) shall
incur no liability under or in respect of this Agreement by acting upon any
notice (including notice by telephone where permitted herein), consent,
certificate or other instrument or writing (which may be by facsimile or telex)
in good faith believed by it to be genuine and signed or sent by the proper
party or parties.
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SECTION 11.3 WACHOVIA AND AFFILIATES.
Wachovia and any of its Affiliates may generally engage in any kind of
business with any Seller Party or any obligor, any of their respective
Affiliates and any Person who may do business with or own securities of any
Seller Party or any Obligor or any of their respective Affiliates, all as if
Wachovia was not the Agent, and without any duty to account therefor to the
Purchaser or any other holder of an interest in Pool Receivables, but in any
event subject to Section 14.7.
ARTICLE XII
ASSIGNMENT OF THE PURCHASER'S INTEREST
SECTION 12.1 RESTRICTIONS ON ASSIGNMENTS.
(a) Except as provided in Section 8.1(a), no Seller Party may
assign its rights, or delegate its duties hereunder or any interest herein
without the prior written consent of the Agent. The Purchaser may not assign its
rights hereunder (although it may delegate its duties hereunder as expressly
indicated herein) or the Asset Interest (or any portion thereof) to any Person
without the prior written consent of the Seller, which consent shall not be
unreasonably withheld; provided, however, that
(i) the Purchaser may assign all of its rights and interests
in the Transaction Documents, together with all its interest in the
Asset Interest, to any Liquidity Bank, Wachovia, or any Affiliate
thereof, or to any "bankruptcy remote" special purpose entity, the
business of which is administered by Wachovia or any Affiliate thereof
(which assignee shall then be subject to this Article XII);
(ii) the Purchaser may assign and grant a security interest in
all of its rights in the Transaction Documents, together with all of
its rights and interest in the Asset Interest, to the Collateral Agent,
to secure the Purchaser's obligations under or in connection with the
Commercial Paper Notes, the Liquidity Agreement, and certain other
obligations of the Purchaser incurred in connection with the funding of
the Purchases and Reinvestments hereunder, which assignment and grant
of a security interest (and any subsequent assignment by the Collateral
Agent) shall not be considered an "assignment" for purposes of Section
12.1(b) or, prior to the enforcement of such security interest, for
purposes of any other provision of this Agreement (other than Section
12.3); and
(iii) the Master Servicer may delegate its duties provided
herein to any Originator who agrees to act as a Servicer hereunder and
assumes in writing the obligations of the Master Servicer hereunder
with respect to that portion of the Pool Receivables originated by such
Originator. Notwithstanding any delegation pursuant to this clause
(iii), the Master Servicer shall remain responsible for all of its
obligations hereunder.
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(b) The Seller agrees to advise the Agent within five Business
Days after notice to the Seller of any proposed assignment by the Purchaser of
the Asset Interest (or any portion thereof), not otherwise permitted under
subsection (a), of the Seller's consent or non-consent to such assignment, and
if it does not consent, the reasons therefor. If the Seller does not consent to
such assignment, the Purchaser may immediately or at any time thereafter assign
such Asset Interest (or portion thereof) to any Person or Persons permitted
under clause (i) of Section 12.1(a).
SECTION 12.2 RIGHTS OF ASSIGNEE.
Upon the assignment by the Purchaser in accordance with this Article
XII, the assignee receiving such assignment shall have all of the rights of the
Purchaser with respect to the Transaction Documents and the Asset Interest (or
such portion thereof as has been assigned).
SECTION 12.3 TERMS AND EVIDENCE OF ASSIGNMENT.
Any assignment of the Asset Interest (or any portion thereof) to any
Person which is otherwise permitted under this Article XII shall be upon such
terms and conditions as the Purchaser and the assignee may mutually agree, and
may be evidenced by such instrument(s) or document(s) as may be satisfactory to
the Purchaser, the Agent and the assignee.
SECTION 12.4 RIGHTS OF COLLATERAL AGENT.
The Seller hereby agrees that, upon notice to the Seller, the
Collateral Agent or the Liquidity Banks may exercise all the rights of the Agent
and Purchaser hereunder, with respect to the Asset Interest (or any portions
thereof), and Collections with respect thereto, which are owned by the
Purchaser, and all other rights and interests of the Purchaser in, to or under
this Agreement or any other Transaction Document. Without limiting the
foregoing, upon such notice or at any time thereafter (but subject to any
conditions applicable to the exercise of such rights by the Agent), the
Collateral Agent or the Liquidity Banks may request the Master Servicer to
segregate the Purchaser's allocable share of Collections from the Seller's
allocable share, may give a Successor Notice pursuant to and in accordance with
Section 8.1(b), may give or require the Agent to give notice to the Lock-Box
Banks as referred to in Section 8.3(b) and may direct the Obligors of Pool
Receivables to make payments in respect thereof directly to an account
designated by them, in each case, to the same extent as the Agent might have
done.
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ARTICLE XIII
INDEMNIFICATION
SECTION 13.1 INDEMNITIES BY THE SELLER.
(a) General Indemnity. Without limiting any other rights which any
such Person may have hereunder or under applicable law, the Seller hereby agrees
to indemnify each of Wachovia, both individually and as the Agent, the
Purchaser, the Liquidity Banks, the Liquidity Agent, each of their respective
Affiliates, and all successors, transferees, participants and assigns and all
officers, directors, shareholders, controlling persons, employees and agents of
any of the foregoing (each an "INDEMNIFIED PARTY"), forthwith on demand, from
and against any and all damages, losses, claims, liabilities and related costs
and expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or relating to the Transaction
Documents or the ownership or funding of the Asset Interest or in respect of any
Receivable or any Contract, excluding, however, (a) Indemnified Amounts to the
extent determined by a court of competent jurisdiction to have resulted from
gross negligence or willful misconduct on the part of such Indemnified Party or
(b) recourse (except as otherwise specifically provided in this Agreement) for
nonpayment due to a credit problem of the applicable Obligor. Without limiting
the foregoing (but subject to the specified exclusions), the Seller shall
indemnify each Indemnified Party for Indemnified Amounts arising out of or
relating to:
(i) the transfer by any Seller Party of any interest in any
Receivable other than the transfer of Receivables and related property
by the Originators to the Seller pursuant to the Sale Agreement, the
transfer of the Asset Interest to the Purchaser pursuant to this
Agreement and the grant of a security interest to the Purchaser
pursuant to Section 9.1;
(ii) any representation or warranty made by any Seller Party
(or any of its officers) under or in connection with any Transaction
Document, any Settlement Report or any other information or report
delivered by or on behalf of any Seller Party pursuant hereto, which
shall have been false, incorrect or misleading in any material respect
when made or deemed made or delivered, as the case may be;
(iii) the failure by any Seller Party to comply with any
applicable law, rule or regulation with respect to any Pool Receivable
or the related Contract, or the nonconformity of any Pool Receivable or
the related Contract with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in the Purchaser
an undivided percentage ownership interest, to the extent of the Asset
Interest, in the Receivables in, or purporting to be in, the
Receivables Pool, free and clear of any Lien, other than a Lien arising
solely as a result of an act of the Purchaser or the Agent, whether
existing at the time of any Purchase or Reinvestment of such Asset
Interest or at any time thereafter;
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(v) the failure of any Seller Party to file, 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 in, or purporting to be in, the
Receivables Pool, whether at the time of any Purchase or Reinvestment
or at any time thereafter;
(vi) any dispute, claim, offset or defense (other than
nonpayment due to any credit problem of the applicable Obligor) of the
Obligor to the payment of any Receivable in, or purporting to be in,
the Receivables Pool (including, without limitation, a defense based on
such Receivables or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting from the sale of the
merchandise or services related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(vii) any matter described in clause (i) or (ii) of Section
3.2(a);
(viii) any failure of any Seller Party, as Master Servicer or
otherwise, to perform its duties or obligations in accordance with the
provisions of Article III or Article VIII;
(ix) any products liability claim arising out of or in
connection with merchandise or services that are the subject of any
Pool Receivable;
(x) any claim of breach by any Seller Party of any related
Contract with respect to any Pool Receivable; or
(xi) any tax or governmental fee or charge (but not including
taxes upon or measured by net income), 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 Asset Interest, or any other interest in the Pool
Receivables or in any goods which secure any such Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified
Party shall have notice of any attempt to impose or collect any tax or
governmental fee or charge for which indemnification will be sought from any
Seller Party under Section 13.1(a)(xi), such Indemnified Party shall give prompt
and timely notice of such attempt to the Seller and the Seller shall have the
right, at its expense, to participate in any proceedings resisting or objecting
to the imposition or collection of any such tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes (including any
deduction) and the receipt of the indemnity provided hereunder or of any refund
of any such tax previously indemnified hereunder, including the effect of such
tax, deduction or refund on the amount of tax measured by net income or profits
which is or was payable by the Indemnified Party.
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(c) Contribution. If for any reason the indemnification provided
above in this Section 13.1 (and subject to the exceptions set forth therein) is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Seller shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Seller on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
SECTION 13.2 INDEMNITIES BY MASTER SERVICER.
Without limiting any other rights which any Indemnified Party may have
hereunder or under applicable law, the Master Servicer hereby agrees to
indemnify each of the Indemnified Parties forthwith on demand, from and against
any and all Indemnified Amounts awarded against or incurred by any of them
arising out of or relating to the Master Servicer's performance of, or failure
to perform, any of its obligations under or in connection with any Transaction
Document, or any representation or warranty made by Master Servicer (or any of
its officers) under or in connection with any Transaction Document, any
Settlement Report or any other information or report delivered by or on behalf
of Master Servicer, which shall have been false, incorrect or misleading in any
material respect when made or deemed made or delivered, as the case may be, or
the failure of the Master Servicer to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
awarded any Indemnified Amounts (a) to the extent determined by a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Party or (b) recourse for nonpayment
due to any credit problem of the applicable Obligor.
If for any reason the indemnification provided above in this Section
13.2 (and subject to the exceptions set forth therein) is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Master Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party on the one hand and the Master Servicer on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
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ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement nor consent
to any departure by any Seller Party therefrom shall in any event be effective
unless the same shall be in writing and signed by (a) each Seller Party, the
Agent and the Purchaser (with respect to an amendment), or (b) the Agent and the
Purchaser (with respect to a waiver or consent by them) or any Seller Party
(with respect to a waiver or consent by it), as the case may be, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. The parties acknowledge that, before entering
into such an amendment or granting such a waiver or consent, the Purchaser may
also be required to obtain the approval of some or all of the Liquidity Banks or
to obtain confirmation from certain rating agencies that such amendment, waiver
or consent will not result in a withdrawal or reduction of the ratings of the
Commercial Paper Notes.
SECTION 14.2 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 on Schedule
14.2 or at such other address or facsimile number as shall be designated by such
party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered or sent by
express mail or courier or if sent by certified mail, when received, and (b) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means.
SECTION 14.3 NO WAIVER; REMEDIES.
No failure on the part of the Agent, any Affected Party, any
Indemnified Party, the Purchaser or any other holder of the Asset Interest (or
any portion thereof) to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. Without limiting the
foregoing, each of Wachovia, individually, and as Agent, the Collateral Agent,
and each Liquidity Bank is hereby authorized by the Seller at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand provisional or final) at
any time held and other indebtedness at any time owing by Wachovia, the
Collateral Agent and such Liquidity Bank to or for the credit or the account of
the Seller, now or hereafter existing under this Agreement, to the Agent, any
Affected Party, any Indemnified Party or Purchaser, or their respective
successors and assigns.
SECTION 14.4 BINDING EFFECT; SURVIVAL.
This Agreement shall be binding upon and inure to the benefit of each
Seller Party, the Agent, the Purchaser and their respective successors and
assigns, and the provisions of Section 4.2 and Article XIII shall inure to the
benefit of the Affected Parties and the Indemnified Parties, respectively, and
their respective successors and assigns; provided, however, nothing in the
foregoing shall be deemed to authorize any assignment not permitted by Section
12.1. This Agreement shall create and constitute the continuing obligations of
the parties hereto in accordance with its terms, and shall remain in full force
and effect until the Final Payout Date. The rights and remedies with respect to
any breach of any representation and warranty made by the Seller pursuant to
Article VI and the indemnification and payment provisions of Article XIII and
Sections 4.2, 14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and shall
survive any termination of this Agreement.
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SECTION 14.5 COSTS, EXPENSES AND TAXES.
In addition to their obligations under Article XIII, the Seller Parties
jointly and severally agree to pay on demand:
(a) all costs and expenses incurred by the Agent, the Collateral
Agent, any Liquidity Bank, the Purchaser and their respective Affiliates in
connection with
(i) the negotiation, preparation, execution and delivery of
this Agreement, the other Transaction Documents or the Liquidity
Agreement, any amendment of or consent or waiver under any of the
Transaction Documents which is requested or proposed by any Seller
Party (whether or not consummated), or the enforcement by any of the
foregoing Persons of, or any actual or claimed breach of, this
Agreement or any of the other Transaction Documents, including, without
limitation, the reasonable fees and expenses of counsel to any of such
Persons incurred in connection with any of the foregoing or in advising
such Persons as to their respective rights and remedies under any of
the Transaction Documents in connection with any of the foregoing, and
(ii) the administration (including periodic auditing as
provided for herein) of this Agreement and the other Transaction
Documents, including, without limitation, all reasonable out-of-pocket
expenses (including reasonable fees and expenses of independent
accountants), incurred in connection with any review of any Seller
Party's books and records either prior to the execution and delivery
hereof or pursuant to Section 7.2(i) or 7.1(c)(iii); and
(b) all stamp and other 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 the Seller Parties, jointly
and severally agree to indemnify each Indemnified Party against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees).
SECTION 14.6 NO PROCEEDINGS.
The Master Servicer hereby agrees that it will not institute against
the Seller, or join any Person in instituting against the Seller, and each
Seller Party, the Master Servicer and Wachovia (individually or as Agent) each
hereby agrees that it will not institute against the Purchaser, or join any
other Person in instituting against the Purchaser, any insolvency proceeding
(namely, any proceeding of the type referred to in the definition of Event of
Bankruptcy) so long as any Commercial Paper Notes issued by the Purchaser shall
be outstanding or there shall not have elapsed one year plus one day since the
last day on which any such Commercial Paper Notes shall have been outstanding.
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SECTION 14.7 CONFIDENTIALITY OF THE SELLER INFORMATION.
(a) Confidential Seller Information. Each party hereto (other than
Seller Parties) acknowledges that certain of the information provided to such
party by or on behalf of the Seller Parties in connection with this Agreement
and the transactions contemplated hereby is or may be confidential, and each
such party severally agrees that, unless Cadmus shall otherwise agree in
writing, and except as provided in subsection (b), such party will not disclose
to any other person or entity:
(i) any information regarding, or copies of, any nonpublic
financial statements, reports, schedules and other information
furnished by any Seller Party to the Purchaser or the Agent (A) prior
to the date hereof in connection with such party's due diligence
relating to the Seller Parties and the transactions contemplated
hereby, or (B) pursuant to Section 3.1, 5.1, 6.1(i), 6.1(i), 7.1(c) or
7.2 or otherwise, or
(ii) any other information regarding any Seller Party or any
Originator which is designated by such Seller Party or Originator to
such party in writing as confidential
(the information referred to in clauses (i) and (ii) above, whether furnished by
any Seller Party, any Originator or any attorney for or other representative
thereof (each a "SELLER INFORMATION PROVIDER"), is collectively referred to as
the "SELLER INFORMATION"); provided, however, "SELLER INFORMATION" shall not
include any information which is or becomes generally available to the general
public or to such party on a nonconfidential basis from a source other than any
Seller Information Provider, or which was known to such party on a
nonconfidential basis prior to its disclosure by any Seller Information
Provider.
(b) Disclosure. Notwithstanding subsection (a), each party may
disclose any Seller Information:
(i) to any of such party's independent attorneys, consultants
and auditors, and to any dealer or placement agent for the Purchaser's
commercial paper, who (A) in the good faith belief of such party, has a
need to know such Seller Information, and (B) are informed by such
party of the confidential nature of the Seller Information and the
terms of this Section 14.7 and has agreed, verbally or otherwise, to be
bound by the provisions of this Section 14.7;
(ii) to any Liquidity Bank, any actual or potential assignees
of, or participants in, any rights or obligations of the Purchaser, any
Liquidity Bank or the Agent under or in connection with this Agreement
who has agreed to be bound by the provisions of this Section 14.7;
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(iii) to any rating agency that maintains a rating for the
Purchaser's commercial paper or is considering the issuance of such a
rating, for the purposes of reviewing the credit of the Purchaser in
connection with such rating;
(iv) to any other party to this Agreement (and any independent
attorneys, consultants and auditors of such party), for the purposes
contemplated hereby,
(v) as may be required by any municipal, state, federal or
other regulatory body having or claiming to have jurisdiction over such
party, in order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party,
(vi) subject to subsection (c), in the event such party is
legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to
disclose such Seller Information, or
(vii) in connection with the enforcement of this Agreement or
any other Transaction Document.
In addition, the Purchaser and the Agent may disclose on a "no name" basis to
any actual or potential investor in Purchaser's Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the Purchaser's
commitment and Invested Amount with respect to the Asset Interest and any other
credit enhancement provided by any Seller Party hereunder), the nature, amount
and status of the Pool Receivables, and the current and/or historical ratios of
losses to liquidations and/or outstanding with respect to the Receivables Pool.
(c) Legal Compulsion. In the event that any party hereto (other
than any Seller Party) or any of its representatives is requested or becomes
legally compelled (by interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process) to disclose any of the
Seller Information, such party will (or will cause its representative to):
(i) provide Cadmus with prompt written notice so that (A)
Cadmus may seek a protective order or other appropriate remedy, or (B)
Cadmus may, if it so chooses, agree that such party (or its
representatives) may disclose such Seller Information pursuant to such
request or legal compulsion; and
(ii) unless Cadmus agrees that such Seller Information may be
disclosed, make a timely objection to the request or compulsion to
provide such Seller Information on the basis that such Seller
Information is confidential and subject to the agreements contained in
this Section 14.7.
In the event such protective order or remedy is not obtained, or Cadmus agrees
that such Seller Information may be disclosed, such party will furnish only that
portion of the Seller Information which (in such party's good faith judgment) is
legally required to be furnished and will exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be afforded the Seller
Information.
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(d) This Section 14.7 shall survive termination of this Agreement.
Section 14.8 Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges that
Wachovia, individually and in its capacity as Agent, regards the structure of
the transactions contemplated by this Agreement to be proprietary, and each such
party agrees that:
(i) it will not disclose without the prior consent of Wachovia
(other than to the directors, employees, auditors, counsel or
affiliates (collectively, "representatives") of such party, each of
whom shall be informed by such party of the confidential nature of the
Program Information (as defined below) and of the terms of this Section
14.8), (A) any information regarding the pricing in, or copies of, this
Agreement, any other Transaction Document or any transaction
contemplated hereby or thereby, (B) any information regarding the
organization, business or operations of the Purchaser generally or the
services performed by Wachovia as the Agent for the Purchaser, or (C)
any information which is furnished by Wachovia to such party and which
is designated by Wachovia to such party in writing or otherwise as
confidential or not otherwise available to the general public (the
information referred to in clauses (A), (B) and (C) is collectively
referred to as the "Program Information"); provided, however, that such
party may disclose any such Program Information (I) to any other party
to this Agreement (and any independent attorneys, consultants and
auditors of any such party) for the purposes contemplated hereby, (II)
as may be required by any municipal, state, federal or other regulatory
body having or claiming to have jurisdiction over such party,
including, without limitation, the Securities and Exchange Commission,
(III) in order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party, (IV) subject to subsection
(c), in the event such party is legally compelled (by interrogatories,
requests for information or copies, subpoena, civil investigative
demand or similar process) to disclose any such Program Information, or
(V) in financial statements as required by GAAP;
(ii) it will use the Program Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by this Agreement and making any necessary business
judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to Wachovia, all documents or other written
material received from Wachovia in connection with (a)(i)(B) or (C)
above and all copies thereof made by such party which contain the
Program Information.
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(b) Availability of Confidential Information. This Section 14.8
shall be inoperative as to such portions of the Program Information which are or
become generally available to the public or such party on a nonconfidential
basis from a source other than Wachovia or were known to such party on a
nonconfidential basis prior to its disclosure by Wachovia.
(c) Legal Compulsion to Disclose. In the event that any party or
anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will:
(i) provide Wachovia with prompt written notice so that
Wachovia may seek a protective order or other appropriate remedy
and/or, if it so chooses, agree that such party may disclose such
Program Information pursuant to such request or legal compulsion; and
(ii) unless Wachovia agrees that such Program Information may
be disclosed, make a timely objection to the request or confirmation to
provide such Program Information on the basis that such Program
Information is confidential and subject to the agreements contained in
this Section 14.8.
In the event that such protective order or other remedy is not obtained, or
Wachovia agrees that such Program Information may be disclosed, such party will
furnish only that portion of the Program Information which (in such party's good
faith judgment) is legally required to be furnished and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded the Program Information. In the event any Seller Party is required to
file a copy of this Agreement with the SEC or any other governmental authority,
it will (A) provide Wachovia with prompt written notice of such requirement and
(B) exercise reasonable efforts to obtain reliable assurance that such
governmental authority will give confidential treatment to this Agreement;
provided, however, that this clause (B) shall not apply to the ordinary filing
of material agreements with the SEC.
(d) Survival. This Section 14.8 shall survive termination of this
Agreement.
SECTION 14.8 CAPTIONS AND CROSS REFERENCES.
The various captions (including, without limitation, the table of
contents) in this Agreement are provided solely for convenience of reference and
shall not affect the meaning or interpretation of any provision of this
Agreement. Unless otherwise indicated, references in this Agreement to any
Section, Appendix, Schedule or Exhibit are to such Section of or Appendix,
Schedule or Exhibit to this Agreement, as the case may be, and references in any
Section, subsection, or clause to any subsection, clause or subclause are to
such subsection, clause or subclause of such Section, subsection or clause.
54
SECTION 14.9 INTEGRATION.
This Agreement and the other Transaction Documents contain a final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire understanding among
the parties hereto with respect to the subject matter hereof, superseding all
prior oral or written understandings.
SECTION 14.10 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
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF
THE PURCHASER IN THE RECEIVABLES OR RELATED PROPERTY IS GOVERNED BY THE LAWS OF
A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14.11 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, 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 BANKING OR
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL NOT BE
TRIED BEFORE A JURY.
SECTION 14.12 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
EACH SELLER PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY NEW YORK STATE COURT, AS APPROPRIATE, IN EITHER CASE SITTING
IN NEW YORK COUNTY, NEW YORK, AS APPROPRIATE IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK
STATE OR FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN
CONNECTION WITH THIS AGREEMENT.
55
SECTION 14.13 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when 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.
SECTION 14.14 NO RECOURSE AGAINST OTHER PARTIES.
The obligations of the Purchaser under this Agreement are solely the
corporate obligations of the Purchaser. No recourse shall be had for the payment
of any amount owing by the Purchaser under this Agreement or for the payment by
the Purchaser of any fee in respect hereof or any other obligation or claim of
or against the Purchaser arising out of or based upon this Agreement, against
Wachovia or against any employee, officer, director, incorporator or stockholder
of the Purchaser. For purposes of this Section 14.14, the term "WACHOVIA" shall
mean and include Wachovia Bank, N.A. and all affiliates thereof and any
employee, officer, director, incorporator, stockholder or beneficial owner of
any of them; provided, however, that the Purchaser shall not be considered to be
an affiliate of the Bank for purposes of this paragraph. Each of the Seller, the
Master Servicer and the Administrative Agent agree that the Purchaser shall be
liable for any claims that such party may have against the Purchaser only to the
extent the Purchaser has excess funds and to the extent such assets are
insufficient to satisfy the obligations of the Purchaser hereunder, the
Purchaser shall have no liability with respect to any amount of such obligations
remaining unpaid and such unpaid amount shall not constitute a claim against the
Purchaser. Any and all claims against the Purchaser or the Administrative Agent
shall be subordinate to the claims of the holders of Commercial Paper and the
Liquidity Banks.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
56
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CADMUS RECEIVABLES CORP.,
as Seller
By:--------------------------------------
Name:
Title:
CADMUS COMMUNICATIONS CORPORATION,
as Master Servicer
By:--------------------------------------
Name:
Title:
BLUE RIDGE ASSET FUNDING CORPORATION,
as Purchaser
By Wachovia Bank, N.A.,
as Attorney-In-Fact
By:--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
WACHOVIA BANK, N.A.,
as Agent
By:--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
APPENDIX A
DEFINITIONS
This is Appendix A to the Receivables Purchase Agreement dated as of
October 26, 1999, among Cadmus Receivables Corp., as the Seller, Cadmus
Communications Corporation, as the Master Servicer, Blue Ridge Asset Funding
Corporation, as the Purchaser, and Wachovia Bank, N.A., as the Agent (as
amended, supplemented or otherwise modified from time to time, this
"AGREEMENT"). Each reference in this Appendix A to any Section, Appendix or
Exhibit refers to such Section of or Appendix or Exhibit to this Agreement.
(a). Defined Terms. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
below:
Adjusted Dilution Ratio: (a) For any day from the Closing Date to and including
last day of the first Settlement Period, the average of 1.49%, 1.74% and 1.35%,
(b) for any day thereafter until the beginning of the tenth Settlement Period,
the percentage equivalent of a fraction the numerator of which is the sum of all
Dilution Ratios for each preceding Settlement Period (including the two
percentages set forth in clause (a) above) and the denominator of which is the
sum of two (2) and the number of Settlement Periods that have been completed
following the Closing Date until such date and (c) for any day thereafter, the
twelve-month rolling average of the Dilution Ratios.
Advance Rate: An amount equal to 1.0 minus the Required Reserve Factor.
Affected Party: Each of the Purchaser, each Liquidity Bank, any assignee or
participant of the Purchaser or any Liquidity Bank, Wachovia, any successor to
Wachovia, as Agent, or any sub-agent of the Agent.
Affiliate: With respect to any Person, any other Person controlling, controlled
by, or under common control with, such Person.
Affiliated Obligor: In relation to any Obligor, an Obligor that is an Affiliate
of such Obligor.
Agent: As defined in the preamble.
Agent's Office: The office of the Agent at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Asset Backed Finance, or such
other address as shall be designated by the Agent in writing to the Seller and
the Purchaser.
Aggregate Accruals: On any day, the sum of (i) the aggregate amount of CP
Discounts of all Commercial Paper Notes outstanding on such day and (ii) the
aggregate accrued and unpaid interest on the principal amount of all Liquidity
Fundings outstanding on such day.
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Allocation Limit: As defined in Section 1.1.
Amortization Period: The period following the Funding Termination Date until the
date on which all obligations of the Seller hereunder are paid in full.
Asset Interest: The Purchaser's undivided percentage ownership interest,
determined from time to time as provided in Section 1.4(b), in (i) all then
outstanding Pool Receivables and (ii) all Related Assets.
Asset Tranche: At any time, a portion of the Asset Interest selected by the
Agent pursuant to Section 2.1.
Bank Rate: For any Yield Period with respect to any Asset Tranche:
(a) in the case of any Yield Period other than a Yield
Period described in clause (b), an interest rate per annum equal to the
sum of (x) the Bank Rate Spread per annum, plus (y) Eurodollar Rate
(Reserve Adjusted) for such Yield Period;
(b) in the case of
(i) any Yield Period commencing on or after the first
day of which the Purchaser or any Liquidity Bank shall have notified
the Agent that (A) the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserts that it is
unlawful, for such Person to fund such Asset Tranche at the rate
described in clause (a), or (B) due to market conditions affecting the
interbank eurodollar market, funds are not reasonably available to such
Person in such market in order to enable it to fund such Asset Tranche
at the rate described in clause (a) (and in the case of subclause (A)
or (B), such Person shall not have subsequently notified the Agent that
such circumstances no longer exist), or
(ii) any Yield Period as to which the Agent does not
receive notice pursuant to Section 1.2(a) or determine, by no later
than 12:00 noon (Atlanta, Georgia time), in each case, on the third
Business Day preceding the first day of such Yield Period, that the
related Asset Tranche will be funded by Liquidity Fundings and not by
the issuance of Commercial Paper Notes,
an interest rate per annum equal to (x) 1.0% per annum, plus (y) the
Base Rate in effect from time to time during such Yield Period; it
being understood that, in the case of paragraph (b)(i) above, such rate
shall only apply to the Person affected by the circumstances described
in such paragraph (b)(i).
Bank Rate Spread: As defined in the Fee Letter.
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Base Rate: For any day, the rate per annum equal to the higher as of such day of
(i) the Prime Rate, or (ii) one-half of one percent above the Federal Funds
Rate. For purposes of determining the Base Rate for any day, changes in the
Prime Rate or the Federal Funds Rate shall be effective on the date of each such
change. The Base Rate is not necessarily intended to be the lowest rate of
interest determined by Wachovia in connection with extensions of credit.
Business Day: (i) with respect to any matters relating to the Eurodollar Rate, a
day on which banks are open for business in New York, New York, and in Atlanta,
Georgia, and on which dealings in Dollars are carried on in the London interbank
market and (ii) for all other purposes, any day other than a Saturday, Sunday or
other day on which banking institutions or trust companies in New York, New
York, or Atlanta, Georgia, are authorized or obligated by law, executive order
or governmental decree to be closed.
Cadmus: As defined in the preamble.
Change in Control:
(a) in relation to Cadmus, (i) the acquisition by any Person
or two or more Persons acting in concert of a beneficial ownership
(within the meaning of Section 13d-3 of the Securities and Exchange
Commission under the Exchange Act) of 20% or more of the outstanding
shares of the voting stock of Cadmus; or (ii) the date on which a
majority of the board of directors of Cadmus consists of individuals
who were not either (A) directors of Cadmus as of the corresponding
date of the previous year, (B) selected or nominated to become
directors by the board of directors of Cadmus of which a majority
consisted of individuals described in clause (A), or (C) selected or
nominated to become directors by the board of directors of Cadmus of
which a majority consisted of individuals described in clause (A) and
individuals described in clause (B); and
(b) in relation to the Seller, the failure of Cadmus to own
(directly or through one or more wholly-owned Subsidiaries of Cadmus)
100% of the issued and outstanding shares of the capital stock
(including all warrants, options, conversion rights, and other rights
to purchase or convert into such stock) of the Seller on a fully
diluted basis.
Code: The Internal Revenue Code of 1986, as the same may be amended from time to
time.
Collateral Agent: Such Person as may be appointed as collateral agent from time
to time by the Purchaser.
Collection Account: The segregated account number 6260-049964 maintained at
Wachovia in the name of Cadmus, in its capacity as Master Servicer.
Collections: With respect to any Receivable, all funds which either (a) are
received by the Seller, the Originators or the Master Servicer from or on behalf
of the related Obligor in payment of any amounts owed (including, without
limitation, purchase prices, finance charges, interest and all other charges) in
respect of such Receivable, or applied to such amounts owed by such Obligor
(including, without limitation, insurance payments that the Seller, the
Originators or the Master Servicer applies in the ordinary course of its
business to amounts owed in respect of such Receivable and net proceeds of sale
or other disposition of repossessed goods or other collateral or property of the
Obligor or any other party directly or indirectly liable for payment of such
Receivable and available to be applied thereon), or (b) are Deemed Collections;
provided that, prior to such time as Cadmus shall cease to be the Master
Servicer, late payment charges, collection fees and extension fees shall not be
deemed to be Collections.
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Commercial Paper Notes: The commercial paper promissory notes, if any, issued by
or on behalf of the Purchaser or that fund the Purchase by the Purchaser of an
Asset Tranche funded at the CP Rate.
Consolidated EBITDA: As defined in the Credit Agreement.
Consolidated Total Assets: As defined in the Credit Agreement.
Contract: A contract between the Seller or any Originator and any Person, or an
invoice sent or to be sent by the Seller or any Originator, pursuant to or under
which a Receivable shall arise or be created, or which evidences a Receivable. A
`related Contract' or similar reference means rights to payment, collection and
enforcement, and other rights under a Contract to the extent directly related to
a Receivable in the Receivables Pool, but not any other rights under such
Contract.
Controlled Group: All members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which,
together with Cadmus, are treated as a single employer under Section 414 of the
Code.
CP Discount: The Face Amount of any Commercial Paper Note, net of proceeds
received by the Purchaser with respect to such Commercial Paper Note.
CP Rate: With respect to any CP Tranche Period, the rate equivalent to the rate
(or if more than one rate, the weighted average of the rates) at which
Commercial Paper Notes having a term equal to such CP Tranche Period are sold
plus the amount of any placement agent or commercial paper dealer fees incurred
in connection with such sale.
CP Tranche Period: A period of up to 270 days commencing on a Business Day
determined in accordance with Section 2.4. If such CP Tranche Period would end
on a day which is not a Business Day, such CP Tranche Period shall end on the
preceding Business Day.
Credit Agreement: The Credit Agreement dated as of April 1, 1999 among Cadmus,
the banks listed therein, Nationsbank, N.A., as Documentation Agent, First Union
National Bank, as Syndication Agent and Wachovia, as Agent, as the same may be
amended from time to time in accordance with the terms thereof.
Credit and Collection Policy: Those credit and collection policies and practices
of the Originators relating to Contracts and Receivables as in effect on the
date of this Agreement, as modified without violating Section 7.3(c), but
subject to compliance with applicable tariffs or state regulations in effect
from time to time; provided that if a Liquidation Event has occurred, at the
request of the Agent, the Master Servicer shall provide a detailed written
summary of the Credit and Collection Policy.
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Cumulative Sales: For each Settlement Period, the amount of Receivables
originated by the Originators and sold to the Seller pursuant to the Sale
Agreement.
Cut-Off Date: The last day of each Settlement Period.
Days Sales Outstanding or DSO: As of any day, an amount equal to the product of
(x) 91, multiplied by (y) the amount obtained by dividing (i) the aggregate
Unpaid Balance of Receivables as of the most recent Cut-Off Date, by (ii) the
aggregate amount of Receivables created during the three Settlement Periods
including and immediately preceding such Cut-Off Date.
Deemed Collections: As defined in Section 3.2(a).
Defaulted Receivable: A Pool Receivable (i) for which a payment is 90 or more
days past due, (ii) for which collection proceedings have been commenced, (iii)
the Obligor of which has had an Event of Bankruptcy or (iv) that has been
written off or would be written off in accordance with the Credit and Collection
Policy.
Default Horizon Ratio: As of any Cut-Off Date, the ratio (expressed as a
percentage) of (i) the Cumulative Sales of the Originators during the
immediately preceding four Settlement Periods divided by (ii) the aggregate
Unpaid Balance of Eligible Receivables as of the most recent Cut-Off Date.
Default Ratio: At any time, the ratio (expressed as a percentage) computed as of
the Cut-Off Date for the immediately preceding Settlement Period by dividing (x)
the aggregate Unpaid Balance of all Pool Receivables that became Defaulted
Receivables during such immediately preceding Settlement Period by (y)
Cumulative Sales generated during the Settlement Period four months prior to the
most recent Settlement Period.
Default Trigger Ratio: At any time, the ratio (expressed as a percentage)
computed as of the Cut-Off Date for the immediately preceding Settlement Period
by dividing (x) the aggregate Unpaid Balance of all Pool Receivables that are
Defaulted Receivables on such Cut-Off Date by (y) the Cumulative Sales generated
during the Settlement Period four months prior to the most recent Settlement
Period.
Delinquency Ratio: At any time, the ratio (expressed as a percentage) computed
as of the Cut-Off Date for the immediately preceding Settlement Period by
dividing (x) the aggregate Unpaid Balance of all Pool Receivables that are
Delinquent Receivables on such Cut-Off Date by (y) the aggregate Unpaid Balance
of Pool Receivables on such Cut-Off Date.
A-5
Delinquent Receivable: A Pool Receivable (a) that is not a Defaulted Receivable
and (b) as to which any payment, or part thereof, remains unpaid for 61-90 days
or more from the original due date for such payment.
Dilution: The amount of any reduction or cancellation of the Unpaid Balance of a
Pool Receivable as described in Section 3.2(a).
Dilution Horizon Ratio: As of any date, an amount (expressed as a percentage)
calculated by dividing Cumulative Sales for the immediately preceding two
Settlement Periods by the Unpaid Balance of all Eligible Receivables as of the
most recent Cut-Off Date.
Dilution Ratio: As of any date, an amount (expressed as a percentage) equal to a
fraction, the numerator of which is the total amount of Dilution during the
previous Settlement Period, and the denominator of which is the Cumulative Sales
generated during the Settlement Period one months prior to the most recent
Settlement Period.
Dilution Reserve: An amount (expressed as a percentage) equal to the product of
(a) the sum of (i) 2.5 times the Adjusted Dilution Ratio and (ii) the Dilution
Volatility Component and (b) the Dilution Horizon Ratio.
Dilution Volatility Component: An amount (expressed as a percentage) equal to
the product of (a) the difference between (i) the highest three month rolling
average Dilution Ratio over the past 12 months and (ii) the Adjusted Dilution
Ratio and (b) a fraction, the numerator of which is the highest three month
rolling average Dilution Ratio over the past 12 months and the denominator of
which is the Adjusted Dilution Ratio.
Downgraded Liquidity Bank: A Liquidity Bank which has been the subject of a
Downgrading Event.
Downgrading Event: With respect to any Person means the lowering of the rating
with regard to the short-term securities of such Person to below (i) A-1 by S&P,
or (ii) P-1 by Moody's.
Earned Discount: For any Yield Period or CP Tranche Period, as applicable, for
any Asset Tranche:
PTI x ER x ED + LF
-------------
360
where:
PTI = the daily average (calculated at the close of
business each day) of the Purchaser's Tranche
Investment in such Asset Tranche during such
Yield Period or CP Tranche Period, as applicable,
ER = the Earned Discount Rate for such Yield Period or
CP Tranche Period,
A-6
ED = the actual number of days elapsed during such
Yield Period or CP Tranche Period, and
LF = the Liquidation Fee, if any, during such Yield
Period or CP Tranche Period.
Earned Discount Rate: For any Yield Period or any CP Tranche Period, as
applicable, for any Asset Tranche:
(a) in the case of an Asset Tranche funded by a Liquidity Funding, the
Bank Rate for such Asset Tranche and such Yield Period; and
(b) in the case of an Asset Tranche funded by Commercial Paper Notes,
the CP Rate for such CP Tranche Period;
provided, however, that on any day when any Liquidation Event or Unmatured
Liquidation Event shall have occurred and be continuing, the Earned Discount
Rate for each Asset Tranche shall mean a rate per annum equal to the Base Rate
plus 2% per annum.
Eligible Originator: Any direct or indirect wholly-owned Subsidiary of Cadmus
with respect to which the Agent has received satisfactory opinions of counsel
(i) concerning the existence of a "true sale" of the Receivables and the
proceeds thereof from such Originator to the Seller under the Sale Agreement;
(ii) concerning the inapplicability of the doctrine of substantive consolidation
of the Seller and in connection with any bankruptcy proceeding involving such
Originator, (iii) to the effect that the Seller has obtained a valid and
perfected ownership or security interest in such Originator's Receivables and
the Agent is satisfied that such Originator's Receivables are subject to no
other Liens of record, except as otherwise permitted under the Transaction
Documents and (iv) as to enforceability of the Transaction Documents against
such Originator, corporate matters and such other matters as the Agent may
reasonably request.
Eligible Receivable: At any time, a Receivable:
(a) which is a Pool Receivable representing goods that have been
shipped or services that have been performed and which arises out of the sale by
the Originators in the ordinary course of its business that has been sold to the
Seller pursuant to the Sale Agreement in a "true sale" transaction;
(b) as to which the perfection of the Purchaser's undivided ownership
interest therein is governed by the laws of a jurisdiction where the Uniform
Commercial Code - Secured Transactions is in force, and which constitutes an
"account" as defined in the Uniform Commercial Code as in effect in such
jurisdiction;
(c) the Obligor of which is (i) a resident of the United States, or any
of its possessions or territories, (ii) not an Affiliate of any Seller Party and
(iii) not a Governmental Authority;
A-7
(d) which is not a Defaulted Receivable;
(e) with regard to which the representations and warranties of the
Seller are true and correct;
(f) the sale of an undivided interest in which does not contravene or
conflict with any applicable federal, state or local law or regulation;
(g) which is denominated and payable only in U.S. Dollars in the
United States;
(h) which arises under a Contract that has been duly authorized and
executed and that, together with such Receivable, is in full force and effect
and constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms and is
not subject to any dispute, offset, counterclaim or defense whatsoever;
provided, however, that if such dispute, offset, counterclaim or defense affects
only a portion of the Unpaid Balance of such Receivable then such Receivable may
be deemed an Eligible Receivable to the extent of the portion of such Unpaid
Balance which is not so affected, and provided, further, that Receivables of any
Obligor which has any accounts payable by any Originator (thus giving rise to a
potential offset against such Receivables) may be treated as Eligible
Receivables to the extent that the Obligor of such Receivables has agreed
pursuant to a written agreement in form and substance satisfactory to the Agent,
that such Receivables shall not be subject to such offset;
(i) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury, truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and with respect
to which no party to the Contract related thereto is in violation of any such
law, rule or regulation in any material respect if such violation would impair
the collectibility of such Receivable;
(j) which satisfies in all material respects all applicable
requirements of the Credit and Collection Policy;
(k) which, according to the Contract related thereto, is due
and payable within 60 days from the invoice date of such Receivable;
(1) [reserved]; and
(m) the original term of which has not been extended and the Unpaid
Balance of which has not been adjusted more than once.
A-8
Environmental Laws: Any and all federal, state, local and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges or releases
of pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes into the environment,
including, without limitation, ambient air, surface water, groundwater or land,
or otherwise relating to the manufacture, processing, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes or
the clean-up or other remediation thereof.
ERISA: The U.S. Employee Retirement Income Security Act of 1974, as amended from
time to time.
ERISA Affiliate: Any trade or business (whether or not incorporated) that is a
member of a group of which Cadmus is a member and which is treated as a single
employer under Section 414 of the Code.
Eurodollar Business Day: A day of the year as defined in clause (i) of the
definition of Business Day.
Eurodollar Rate: For any Yield Period, the rate per annum determined on the
basis of the offered rate for deposits in Dollars of amounts equal or comparable
to the principal amount of the related Liquidity Funding offered for a term
comparable to such Yield Period, which rate appears on the Telerate Page 3750
effective as of 11:00 A.M., London time, two Eurodollar Business Days prior to
the first day of such Yield Period, PROVIDED THAT if no such offered rates
appear on such page, the Eurodollar Rate for such Yield Period will be the
arithmetic average (rounded upwards, if necessary, to the next higher 1/100th of
1%) of rates quoted by not less than two major banks in New York City, selected
by the Agent, at approximately 10:00 A.M., New York City time, two Eurodollar
Business Days prior to the first day of such Yield Period, for deposits in
Dollars offered by leading European banks for a period comparable to such Yield
Period in an amount comparable to the principal amount of such Liquidity
Funding.
Eurodollar Rate (Reserve Adjusted): With respect to any Yield Period means a
rate per annum equal to the quotient obtained (rounded upwards, if necessary, to
the next higher 1/100th of 1%) by dividing (i) the applicable Eurodollar Rate
for such Interest Period by (ii) 1.0 minus the Eurodollar Reserve Percentage.
Eurodollar Reserve Percentage: With respect to any Yield Period, the maximum
reserve percentage, if any, applicable to the Liquidity Bank under Regulation D
during such Yield Period (or if more than one percentage shall be applicable,
the daily average of such percentages for those days in such Yield Period during
which any such percentage shall be applicable) for determining the Liquidity
Bank's reserve requirement (including any marginal, supplemental or emergency
reserves) with respect to liabilities or assets having a term comparable to such
Yield Period consisting or included in the computation of "Eurocurrency
Liabilities" pursuant to Regulation D. Without limiting the effect of the
foregoing, the Eurodollar Reserve Percentage shall reflect any other reserves
required to be maintained by the Liquidity Bank by reason of any Regulatory
Change against (a) any category of liabilities which includes deposits by
reference to which the "London Interbank Offered Rate" or "LIBOR" is to be
determined or (b) any category of extensions of credit or other assets which
include LIBOR-based credits or assets.
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Event of Bankruptcy: With respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or substantially all of its assets, or any similar action with respect to such
Person under any law relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60 consecutive
days; or an order for relief in respect of such Person shall be entered in an
involuntary case under the federal bankruptcy laws or other similar laws now or
hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall be adjudicated insolvent, or admit in
writing its inability to pay its debts generally as they become due, or, if a
corporation or similar entity, its board of directors shall vote to implement
any of the foregoing.
Excess Concentration Amount: As of any date, the sum of the amounts by which the
aggregate Unpaid Balance of Receivables of each Obligor exceeds the Obligor
Concentration Limit for such Obligor.
Exchange Act: The Securities Exchange Act of 1934.
Face Amount: With respect to any Commercial Paper Note, (i) the face amount
stated thereon in the case of any Commercial Paper Note issued on a discount
basis and (ii) the principal amount stated thereon plus the amount of all
interest scheduled to accrue on such Commercial Paper Note through its stated
maturity date in the case of any Commercial Paper Note issued on an interest
bearing basis.
Federal Funds Rate: For any day, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Domestic Business Day next
succeeding such day, PROVIDED THAT (i) if the day for which such rate is to be
determined is not a Domestic Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent on such day on such transactions,
as reasonably determined by the Agent.
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Federal Reserve Board: The Board of Governors of the Federal Reserve System, or
any successor thereto or to the functions thereof.
Fee Letter: As defined in Section 4.1.
Final Payout Date: The date following the Termination Date on which the Invested
Amount shall have been reduced to zero and all other amounts payable by the
Seller under the Transaction Documents shall have been paid in full.
Fiscal Quarter: A fiscal quarter of Cadmus and its Subsidiaries ending on the
dates specified in Schedule B
attached hereto.
Fiscal Year: A fiscal year of Cadmus and its Subsidiaries ending on June 30 of
the applicable year.
Funding Termination Date: The earliest of the following:
(a) 364 days following the date hereof;
(b) the Agent declares a Funding Termination Date in a notice to the
Seller in accordance with Section 10.2(a); or
(b) in accordance with Section 10.2(b), the Funding Termination Date
occurs automatically.
GAAP: Generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such accounting
profession, which are applicable to the circumstances as of the date of
determination.
Governmental Authority: Any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.
Guarantee: With respect to any person, any obligation, contingent or otherwise,
of such person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such person, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (b) to
purchase property, securities or services for the purpose of assuring the owner
of such Indebtedness of the payment of such Indebtedness or (c) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however that the term Guarantee shall not include
endorsements for collection or deposit, in either case, in the ordinary course
of business.
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Indebtedness: With respect to any person means at any date, without duplication,
(a) all obligations of such person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services (except trade accounts payable arising in the ordinary course of
business that are not overdue by 90 days or more or are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted),
(d) all obligations of such Person as lessee under capital leases, (e) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts payable under a banker's acceptance, (f) all redeemable preferred stock
of such Person (in the event such Person is a corporation), (g) all obligations
of such Person to reimburse any bank or other Person in respect of amounts under
a letter of credit or similar instrument, (h) all Indebtedness (as defined in
clauses (a) through (g)) secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person and (i) all Indebtedness (as
defined in clauses (a) through (i)) of others Guaranteed by such Person.
Indemnified Amounts: As defined in Section 13.1.
Indemnified Party: As defined in Section 13.1.
Initial Due Diligence Auditor: Such person designated by the Agent as the
initial due diligence auditor.
Invested Amount: means at any time with respect to the Asset Interest an amount
equal to (a) the aggregate of the amounts theretofore paid to the Seller for
Purchases pursuant to Section 1.1 and 1.2, less (b) the aggregate amount of
Collections theretofore received and actually distributed to the Agent, on
behalf of the Purchaser, on account of the Invested Amount pursuant to Section
1.3.
Investors: The Purchaser and the parties listed on the signature pages of the
Liquidity Agreement as "INVESTORS."
Letter Agreement: The letter of Cadmus dated June 16, 1999 to Wachovia
Securities, Inc.
Lien: Any security interest, lien, encumbrance, pledge, assignment, title
retention, similar claim, right or interest.
Liquidation Event: As defined in Section 10.1.
Liquidation Fee: For each Asset Tranche (or portion thereof) for each day in any
Yield Period or CP Tranche Period, the amount, if any, by which:
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(a) the additional Earned Discount (calculated without taking into
account any Liquidation Fee) which would have accrued on the reductions of the
Purchaser's Tranche Investment with respect to such Asset Tranche during such
Yield Period or CP Tranche Period (as so computed) if such reductions had not
been made, exceeds
(b) the income, if any, received by the Purchaser from investing the
proceeds of such reductions of the Purchaser's Tranche Investment.
Liquidation Period: The period commencing on the date on which the conditions
precedent to Purchases and Reinvestment set forth in Section 5.2 are not
satisfied (or expressly waived by the Purchaser) and the Agent shall have
notified the Seller and the Master Servicer in writing that the Liquidation
Period has commenced, and ending on the Final Payout Date.
Liquidity Agent: Wachovia, as agent for the Liquidity Banks under the Liquidity
Agreement, or any successor to Wachovia in such capacity.
Liquidity Agreement: The Liquidity Asset Purchase Agreement dated as of the date
hereof among Purchaser, Wachovia, as Agent, Wachovia, as Liquidity Agent, and
Wachovia and/or one or more other banks or other financial institutions, as
Liquidity Banks, and any other agreement hereafter entered into by the Purchaser
providing for the making of loans, purchase of assets or other extensions of
credit to the Purchaser secured by a direct or indirect security interest in the
Asset Interest (or any portion thereof), to support all or part of the
Purchaser's payment obligations under the Commercial Paper Notes or to provide
an alternate means of funding Purchaser's investments in accounts receivable or
other financial assets, and under which the amount available from such
extensions of credit is limited to an amount calculated by reference to the
value or eligible unpaid balance of such accounts receivable or other financial
assets or any portion thereof or the level of deal-specific credit enhancement
available with respect thereto, as such Liquidity Agreement or other agreement
may be amended, supplemented or otherwise modified from time to time.
Liquidity Bank: The commercial lending institutions that are at any time parties
to the Liquidity Agreement as liquidity providers thereunder.
Liquidity Funding: A purchase made by the Liquidity Bank (or simultaneous
purchases made by the Liquidity Banks) pursuant to the Liquidity Agreement.
Lock-Box: Any post office box, as listed on Schedule 6.1(o), to which
Collections are remitted for retrieval by a Lock-Box Bank and deposited by such
Lock-Box Bank into the Collection Account.
Lock-Box Agreement: A letter agreement, in substantially the form of Exhibit
A-1, among the Master Servicer, the Originators, the Purchaser, the Agent, the
Seller and any Lock-Box Bank.
Lock-Box Bank: Any of the banks holding one or more Lock-Boxes or the Collection
Account receiving Collections from Pool Receivables.
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Lock-Box Notice: A notice, in substantially the form attached to Exhibit A-1,
from the Agent to the Lock-Box Bank.
Loss Reserve: At any time, means (expressed as a percentage) the product of (i)
two, (ii) the highest rolling three month average Default Ratio to have occurred
during the most recently ended twelve consecutive month period and (iii) the
most recently calculated Default Horizon Ratio.
Mandate Letter: As defined in Section 4.1.
Master Servicer: As defined in the preamble.
Material Adverse Effect: With respect to any event or circumstance, an effect
caused or resulting from such event or circumstance which has or would
reasonably be expected to have a material adverse effect on:
(i) (A) the assets, operations, business or financial
condition of the Seller or (B) the business, assets, operations or
financial condition of Cadmus and its Subsidiaries, taken as a whole;
(ii) the ability of any Seller Party or any Originator to
perform in all material respects its obligations under this Agreement
or any other Transaction Document; or
(iii) the status, existence, perfection, priority or
enforceability of the Secured Parties' interest in the Receivables
Pool.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
Net Pool Balance: On any date, an amount equal to (i) the aggregate Unpaid
Balance of all Eligible Receivables in the Receivables Pool on such date, minus
(ii) the Excess Concentration Amount on such date.
Obligor: A Person obligated to make payments with respect to a Receivable,
including any guarantor thereof.
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Obligor Concentration Limit: At any time, in relation to the aggregate Unpaid
Balance of Receivables owed by any single Obligor and its Affiliated obligors
(if any):
(a) for Obligors who have a short term unsecured debt rating currently
assigned to them by either S&P or Moody's, the applicable concentration limit
shall be determined according to the following table (and, if such Obligor is
rated by both agencies and has a split rating, the applicable rating will be the
lower of the two):
Allowable
% of Eligible
S&P Rating or ▇▇▇▇▇'▇ Rating Receivables
A-1+ P-1 10%
A-1 P-1 8%
A-2 P-2 6%
A-3 P-3 3%; or
(b) for Obligors who do not have a debt rating listed above, 2% of the
aggregate Unpaid Balance of Eligible Receivables at such time;
provided, however that at the Originator's request and in the Agent's sole
discretion, the Agent may permit certain obligors to have an Obligor
Concentration Limit in excess of those described in clauses (a) and (b) above.
Original Receivable: As defined in Section 8.2(h).
Originator: Each Person (1) listed as an Originator on Schedule A hereto, as
such Schedule A may be modified from time to time pursuant to this Agreement,
(2) who is an Eligible Originator and (3) who is listed as a "Seller" under the
Sale Agreement (as such agreement may be modified from time to time) in its
capacity as Seller of Receivables under the Sale Agreement.
Person: An individual, partnership, corporation (including a business trust),
joint stock company, trust, unincorporated association, joint venture,
government or any agency or political subdivision thereof or any other entity.
Plan: Any pension plan subject to the provisions of Title IV of ERISA or Section
412 of the Code which is maintained for employees of Cadmus or any ERISA
Affiliate.
Pool Receivable: A Receivable in the Receivables Pool.
Prime Rate: Refers to that interest rate so denominated and set by Wachovia from
time to time as an interest rate basis for borrowings. The Prime Rate is but one
of several interest rate bases used by Wachovia. Wachovia lends at interest
rates above and below the Prime Rate.
Program Information: As defined in Section 14.8(a)(i).
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Purchase: As defined in Section 1.1.
Purchase Limit: As defined in Section 1.1.
Purchaser: As defined in the preamble.
Purchaser's Share: With respect to any amount, on any day, the lesser of (i) the
most recently calculated Asset Interest and (ii) 100%.
Purchaser's Tranche Investment: In relation to any Asset Tranche, the amount of
the Invested Amount allocated by the Agent to that Asset Tranche pursuant to
Section 2.1, provided, that at all times the aggregate amounts allocated to all
Asset Tranches shall equal the Invested Amount.
Qualifying Liquidity Bank: A Liquidity Bank with a rating of its short-term
securities equal to or higher than (i) A-1 by S & P and (ii) P-1 by Moody's.
Rebilled Receivable: As defined in Section 8.2(h).
Rebill Termination Date: The earliest to occur of (i) the Sale Termination Date,
(ii) the date on which an Unmatured Liquidation Event occurs, and (iii) the
insolvency or bankruptcy of the Originator of the related Rebilled Receivable.
Receivable: Any right to payment from a Person, whether constituting an account,
chattel paper, instrument or general intangible, arising from the sale of goods
or rendering of services by any Originator and includes the right to payment of
any interest or finance charges and other amounts with respect thereto, other
than those reconveyed to such Originator pursuant to Section 3.5 of the Sale
Agreement.
Receivables Pool: At any time all then outstanding Receivables which have been
sold or contributed as capital, or purported to have been sold or contributed as
capital, by any Originator to the Seller, other than those reconveyed to such
Originator pursuant to Section 3.5 of the Sale Agreement.
Regulation: Any specified Regulation of the Federal Reserve Board, as the same
may be amended or supplemented from time to time.
Regulatory Change: Any change after the date of this Agreement in United States
(federal, state or municipal laws or regulations (including Regulation D)) or
foreign laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks (including
the Liquidity Bank) of or under any United States (federal, state or municipal)
or foreign, laws, or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
Reinvestment: As defined in Section 1.3(a)(iii).
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Related Assets: (a) all rights to, but not any obligations under, all Related
Security related to any Pool Receivables, (b) all rights and interests of the
Seller under the Sale Agreement in relation to any Pool Receivables, (c) all
books and records evidencing or otherwise relating to any Pool Receivables, (d)
all Lock-Boxes and the Collection Account and all cash and investments therein,
to the extent constituting or representing the items in the following clause (e)
and (e) all Collections in respect of, and other proceeds of, any Pool
Receivables or any other Related Assets.
Related Security: With respect to any Pool Receivable, all of the Seller's (in
the case of usage in the Receivables Purchase Agreement) or the applicable
Originator's (in the case of usage in the Sale Agreement) right, title and
interest in and to: (a) all Contracts that relate to such Pool Receivable; (b)
all merchandise (including returned merchandise), if any, relating to the sale
which gave rise to such Pool Receivable; (c) all security deposits and other
security interests or liens and property subject thereto from time to time
purporting to secure payment of such Pool Receivable, whether pursuant to the
Contract related to such Pool Receivable or otherwise; (d) all UCC financing
statements covering any collateral securing payment of such Pool Receivable (but
only to the extent of the interest of the Purchaser in the respective Pool
Receivable); (e) all guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Pool
Receivable whether pursuant to the Contract related to such Pool Receivable or
otherwise; and (f) all insurance policies, and all claims thereunder, related to
such Pool Receivable, in each case to the extent directly related to rights to
payment, collection and enforcement, and other rights with respect to such Pool
Receivable. The interest of the Purchaser in any Related Security is only to the
extent of the Purchaser's undivided percentage interest, as more fully described
in the definition of Asset Interest.
Reportable Event: Any reportable event as defined in Section 4043(b) of ERISA or
the regulations issued thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code).
Reporting Date: The fifteenth day of each month, or, if such day is not a
Business Day, the next succeeding Business Day.
Required Reserves: On any day, an amount equal to the product of (a) the
Required Reserve Factor and (b)the Net Pool Balance.
Required Reserve Factor: On any day during the Settlement Period, an amount
equal to the greater of (x) the Required Reserve Factor Floor and (y) the sum of
(i) the Loss Reserve, (ii) the Dilution Reserve, (iii) the Yield Reserve, and
(iv) the Servicing Reserve.
Required Reserve Factor Floor: On any day during the Settlement Period, the
amount (expressed as a percentage) equal to the sum of (i) the product of (a)
the Adjusted Dilution Ratio and (b) the Dilution Horizon Ratio and (ii) the
greater of (a) four times the percentage of Eligible Receivables the Obligors of
which are unrated or noninvestment grade, (b) two times the percentage of
Eligible Receivables the Obligors of which are A-3/P-3 rated or (c) one times
the percentage of Eligible Receivables the Obligors of which are A-2/P-2 rated.
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Revolving Period: The period from the Closing Date until the Funding Termination
Date or such other date consented to in writing by the Agent on behalf of the
Purchaser.
S&P: Standard & Poor's Ratings Service.
Sale Agreement: The Purchase and Sale Agreement dated as of October 26, 1999
among the Originators and the Seller, as purchaser thereunder, as it may be
amended, supplemented or otherwise modified in accordance with Section 7.3(f).
SEC: The Securities and Exchange Commission.
Secured Parties: The Purchaser, the Agent, the Indemnified Parties and the
Affected Parties.
Seller: As defined in the preamble.
Seller Information: As defined in Section 14.7(a).
Seller Information Provider: As defined in Section 14 .7(a).
Seller Notes: As defined in the Sale Agreement.
Seller Party: As defined in the preamble.
Seller's Share: With respect to amount, on any day, 100% minus the Purchaser's
Share on such day.
Senior Officer: With respect to any Person, the chief executive officer, chief
financial officer or president of such Person.
Servicer: Initially, each Servicer identified in Schedule B to this Agreement,
and after any Servicer Transfer Event, the Successor Servicer with respect to
such Servicer.
Servicer Advance: As defined in Section 8.3.
Servicer Default. As defined in Section 8.4.
Servicer Transfer Event: As defined in Section 8. 1(b)
Servicer's Fee: For any day in a Settlement Period, an amount equal to the
product of (x) the Servicer's Fee Rate, (y) the aggregate Unpaid Balance of the
Pool Receivables at the close of business on the first day of such Settlement
Period, and (z) 1/360.
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Servicer's Fee Rate: 1.0% per annum.
Servicing Reserve: On any day, the product of (a) the Servicer's Fee Rate and
(b) a fraction, the numerator of which is the highest Days Sales Outstanding
calculated for each of the most recent 12 monthly periods and the denominator of
which is 360.
Settlement Date: The second Business Day following each Reporting Date.
Settlement Period:
(a) The period beginning on the date of the initial Purchase to and
including the last day of the calendar month in which such date occurs; and
(b) thereafter each period, beginning on, but excluding the last day of
the immediately preceding Settlement Period to and including the last day of the
next following calendar month;
provided, however, that the last Settlement Period shall end on the Final Payout
Date.
Settlement Report: As defined in Section 3.1(a).
Significant Subsidiary: (a) Each Subsidiary that is a member of the Significant
Subsidiary Group and (b) in addition to the Subsidiaries described in clause
(a), each Subsidiary that at any time Guarantees all or any part of the
Subordinated Debt (as defined in the Credit Agreement). As used herein,
"Significant Subsidiary Group" as at any date means one or more Subsidiaries
which account for (or in the case of a recently formed or acquired Subsidiary
would so account for on a pro forma historical basis) at least (i) 90% of
Consolidated Total Assets as measured as at the end of the most recently ended
Fiscal Year or (ii) 90% of Consolidated EBITDA for either of the two most
recently ended Fiscal Years. A Subsidiary shall be a "Significant Subsidiary" if
such Subsidiary is included in the group of Subsidiaries, determined in
accordance with the terms of the following sentence, accounting for either: (A)
the Consolidated Total Assets measured under part (i) of the preceding sentence,
but not the Consolidated EBITDA measured under part (ii) of the preceding
sentence or (B) the Consolidated EBITDA measured under part (ii) of the
preceding sentence, but not the Consolidated Total Assets measured under part
(i) of the preceding sentence or (C) the Consolidated EBITDA measured under part
(ii) of the preceding sentence and the Consolidated Total Assets measured under
part (i) of the preceding sentence. The determination of the Significant
Subsidiary or the Significant Subsidiaries comprising the Significant Subsidiary
Group as of any date shall be made on the basis of a group consisting of the
smallest number of Subsidiaries necessary to comprise the Significant Subsidiary
Group as of such date.
Structuring Fee: The structuring fee described in the Fee Letter.
A-19
Subsidiary: With respect to any Person means (i) a corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned or controlled by such Person, directly or
indirectly through Subsidiaries, and (ii) any partnership, association, joint
venture or other entity in which such Person, directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
Successor Notice: As defined in Section 8.1(b).
Termination Date: The earliest of
(a) the date of termination (whether by scheduled expiration,
termination on default or otherwise) of the Liquidity Bank's commitments under
the Liquidity Agreement (unless such commitments are renewed, extended or
replaced on or before such date);
(b) the Funding Termination Date;
(c) the date designated by the Seller as the "Termination Date" on not
less than five (5) Business Days' notice to the Agent, provided that on or prior
to such date the Invested Amount has been reduced to zero, all accrued Earned
Discount and fees have been paid in full and all other amounts due to the
Purchaser and the Agent have been paid in full;
(d) the date on which any of the following shall occur:
(i) Failure to obtain a Liquidity Agreement in substitution
for the then existing Liquidity Agreement on or before 30 days prior to
the expiration of the commitments of the Liquidity Banks thereunder; or
(ii) A Downgrading Event with respect to a Liquidity Bank
shall have occurred and been continuing for not less than 45 days, (ii)
the Downgraded Liquidity Bank shall not have been replaced by a
Qualifying Liquidity Bank pursuant to a Liquidity Agreement in form and
substance acceptable to the Purchaser and the Agent, and (iii) the
commitment of such Downgraded Liquidity Bank under the Liquidity
Agreement shall not have been funded or collateralized in such a manner
that such Downgrading Event will not result in a reduction or
withdrawal of the credit rating applied to the Commercial Paper Notes
by any of the rating agencies then rating the Commercial Paper Notes;
or
(iii) Purchaser shall become an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
Transaction Documents: This Agreement, the Lock-Box Agreements, the Sale
Agreement, the Fee Letter, the Mandate Letter and the other documents to be
executed and delivered in connection herewith.
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Transactions Fees: All reasonable expenses of the Agent incurred in connection
with the consummation of this Agreement and each other Transaction Document,
including but not limited to (i) the legal fees of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
counsel to the Agent, (ii) expenses incurred in connection with any due
diligence audit and (iii) out-of-pocket expenses of the Agent.
UCC: The Uniform Commercial Code, as from time to time in effect in the
applicable jurisdiction or jurisdictions.
Unmatured Liquidation Event: Any event which, with the giving of notice or lapse
of time, or both, would become a Liquidation Event.
Unpaid Balance: With respect to any Receivable means at any time the unpaid
amount thereof, but excluding all late payment charges, delinquency charges and
extension or collection fees.
Unused Fee: As defined in the Fee Letter.
Usage Fee: As defined in the Fee Letter.
U.S. Dollars: Dollars in lawful money of the United States of America.
Wachovia: As defined in the preamble.
Year 2000 Compliant and Ready: With respect to any Seller Party, (a) hardware
and software systems material to the operation of its business and its general
business plan will: (i) handle date information involving any and all dates
before, during and/or after January 1, 2000, including accepting input,
providing output and performing date calculations in whole or in part (ii)
operate, accurately without interruption on and in respect of any and all dates
before, during and/or after January 1, 2000 and without any material change in
performance and (iii) store and provide date input information without creating
any ambiguity as to the century and (b) Cadmus and its Subsidiaries have
developed alternative plans to ensure business continuity in the event of the
failure of any or all of items (i) through (iii) above.
Yield Period: With respect to any Asset Tranche funded by a Liquidity Funding,
(a) the period commencing on the date of the initial Purchase of the
Asset Interest, the making of such Liquidity Funding or the creation of such
Asset Tranche pursuant to Section 2.1 (whichever is latest) and ending such
number of days thereafter as the Agent shall select; and
(b) each period commencing on the last day of the immediately preceding
Yield Period for the related Asset Tranche and ending such number of days
thereafter as the Agent shall select;
provided, however, that
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(i) any such Yield Period (other than a Yield Period
consisting of one day) which would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day
(unless the related Asset Tranche shall be accruing Earned Discount at
a rate determined by reference to the Eurodollar Rate (Reserve
Adjusted), in which case if such succeeding Business Day is in a
different calendar month, such Yield Period shall instead be shortened
to the next preceding Business Day);
(ii) in the case of Yield Periods of one day for any Asset
Tranche, (A) the initial Yield Period shall be the date such Yield
Period commences as described in clause (a) above; and (B) any
subsequently occurring Yield Period which is one day shall, if the
immediately preceding Yield Period is more than one day, be the last
day of such immediately preceding Yield Period, and if the immediately
preceding Yield Period is one day, shall be the next day following such
immediately preceding Yield Period; and
(iii) in the case of any Yield Period for any Asset Tranche
which commences before the Termination Date and would otherwise end on
a date occurring after such Termination Date, such Yield Period shall
end on such Termination Date and the duration of each such Yield Period
which commences on or after the Termination Date for such Asset Tranche
shall be of such duration as shall be selected by the Agent.
Yield Reserve: On any day, an amount equal to the product of (a) 1.5, (b) the
Base Rate and (c) by a fraction, the numerator of which is the 12-month high
Days Sales Outstanding and the denominator of which is 360.
(b) Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.
(c) Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "FROM" means "FROM AND INCLUDING" and the words
"TO" and "UNTIL" each mean "to but excluding."
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SCHEDULE 6.1(i)
DESCRIPTION OF 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 6.1(n)
LIST OF OFFICES OF THE MASTER SERVICER AND THE SELLER WHERE RECORDS ARE KEPT
MASTER SERVICER:
Cadmus Communications Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
SELLER:
Cadmus Receivables Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE 6.1(o)
LIST OF LOCK-BOX BANKS
Lock-Box Bank Collection Account Number Lock-Boxes
------------- ------------------------- ----------
Wachovia Bank, N.A. 6260-049964 Cadmus Journal Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ P.O. Box 751898
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Expert Graphics, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ Graphics, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
SCHEDULE 14.2
NOTICE ADDRESSES
Cadmus Receivables Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
BLUE RIDGE ASSET FUNDING CORPORATION
c/o Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
WACHOVIA BANK, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE A
INITIAL ORIGINATORS AND SERVICERS
Cadmus Journal Services, Inc.
Expert Graphics, Inc.
▇▇▇▇▇▇▇▇ Graphics, Inc.
2
SCHEDULE B
FISCAL PERIODS
Fiscal Quarter Last Day of Quarter
-------------- -------------------
First Quarter September 30
Second Quarter December 31
Third Quarter March 31
Fourth Quarter June 30
EXHIBIT 1.2(a)
FORM OF PURCHASE REQUEST
CADMUS RECEIVABLES CORP.
PURCHASE REQUEST
FOR PURCHASE ON __________________
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Ladies and Gentlemen:
Reference is made to the 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 Corp., as Seller,
Cadmus Communications Corporation, as initial Master Servicer (and together with
Seller, collectively referred to as the "SELLER PARTIES"), Blue Ridge Asset
Funding Corporation, as purchaser (the "PURCHASER"), and Wachovia Bank N.A., as
agent for Purchaser (the "AGENT"). Capitalized terms defined in the Purchase
Agreement are used herein with the same meanings.
I. Each of the Seller Parties hereby certifies, represents and warrants to
the Purchaser, and the Administrative Agent that on and as of the
Purchase Date (as hereinafter defined):
(a) all applicable conditions precedent set forth in
Article V of the Purchase Agreement have been satisfied;
(b) each of its respective representations and warranties
contained in Section 6.1 of the Purchase Agreement will be true and
correct, in all material respects, as if made on and as of the Purchase
Date;
(c) no event will have occurred and is continuing, or would
result from the requested Purchase, that constitutes a Liquidation
Event or an Unmatured Liquidation Event; and
III. (d) the Termination Date shall not have occurred.
IV. The undersigned, as Seller hereby irrevocably requests that the Agent, on
behalf of the Purchaser, make the following Purchase:
(a) Proposed Purchase Date:--------------------------- (which is
a Business Day)
(b) Purchase Price: $ -------------- (which is at least
$1,000,000 and an integral multiple of $100,000)
Please credit the Purchase Price, in immediately available funds, to:
Account Name:--------------------------------
Account Number-------------------------------
Bank Name and Address:-----------------------
-----------------------
ABA#:----------------------------------------
Reference:-----------------------------------
IN WITNESS WHEREOF, the Seller has caused this Purchase Request to be executed
and delivered as of this ____ day of ___________, _____.
CADMUS RECEIVABLES CORP.,
as Seller
By:___________________________
Name:
Title:
2
EXHIBIT 3.1(a)
FORM OF SETTLEMENT REPORT
[to be provided by Wachovia]
EXHIBIT 5.1(h)
FORM OF OPINION OF SPECIAL COUNSEL FOR THE SELLER PARTIES
[to be provided by ▇▇▇▇ & Valentine]
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.
1
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.
2
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:
3
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.:
4
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.:-------------
5
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:
6
EXHIBIT B
FORM OF CERTIFICATE OF FINANCIAL OFFICER
FORM OF CERTIFICATE OF FINANCIAL OFFICER
In accordance with Section 5.1(a)(xvi) of that certain Receivables
Purchase Agreement, dated as of October 26, 1999 (the "RECEIVABLES PURCHASE
AGREEMENT"), among Cadmus Receivables Corp., as seller, Cadmus Communications
Corporation., as master servicer, Blue Ridge Asset Funding Corporation, as
purchaser and Wachovia Bank, N.A., as agent, I, ___________, in my capacity as
____________ of [Cadmus Receivables Corp.][Cadmus Communications Corporation] ,
a Virginia corporation (the "COMPANY") (terms defined in the Receivables
Purchase Agreement being used herein as therein defined), DO HEREBY CERTIFY
that:
1. Each of the representations and warranties of the Company contained
in Article VI of the Receivables Purchase 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 is a true and correct copy of the
Company's consolidated balance sheet, income statement and statement of
shareholders' equity as at June 30, 1999]. [Attached hereto as Exhibit A is a
true and correct copy of the Company's balance sheet as at September 30, 1999.]
Such financial statements fairly present, in conformity with GAAP, the
[consolidated] financial position of the Company [and its Consolidated
Subsidiaries] as of such dates and [its] [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.] [Since September 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]