EXHIBIT 10.18
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AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
DATED AS OF JANUARY 2, 2001
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
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..........................................11
Section 3.3 Payments and Computations, Etc.................................................................13
Section 3.4 Treatment of Collections and Deemed Collections................................................13
ARTICLE IV. FEES AND YIELD PROTECTION 14
Section 4.1 Fees...........................................................................................14
Section 4.2 Yield Protection...............................................................................14
Section 4.3 Funding Losses.................................................................................16
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
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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..............................................................................35
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..........................................38
Section 8.8 Application of Collections.....................................................................39
ARTICLE IX. SECURITY INTEREST 39
Section 9.1 Grant of Security Interest.....................................................................39
Section 9.2 Further Assurances.............................................................................40
Section 9.3 Remedies.......................................................................................40
ARTICLE X. LIQUIDATION EVENTS 40
Section 10.1 Liquidation Events...............................................................................40
Section 10.2 Remedies.........................................................................................42
ARTICLE XI. THE AGENT 42
Section 11.1 Authorization and Action.........................................................................42
Section 11.2 Agent's Reliance, Etc............................................................................42
Section 11.3 Wachovia and Affiliates..........................................................................43
ARTICLE XII. ASSIGNMENT OF THE PURCHASER'S INTEREST 43
Section 12.1 Restrictions on Assignments......................................................................43
Section 12.2 Rights of Assignee...............................................................................44
Section 12.3 Terms and Evidence of Assignment.................................................................44
Section 12.4 Rights of Collateral Agent.......................................................................44
ARTICLE XIII. INDEMNIFICATION 45
Section 13.1 Indemnities by the Seller........................................................................45
Section 13.2 Indemnities by Master Servicer...................................................................47
ARTICLE XIV. MISCELLANEOUS 47
Section 14.1 Amendments, Etc..................................................................................47
Section 14.2 Notices, Etc.....................................................................................48
Section 14.3 No Waiver; Remedies..............................................................................48
Section 14.4 Binding Effect; Survival.........................................................................48
Section 14.5 Costs, Expenses and Taxes........................................................................49
Section 14.6 No Proceedings...................................................................................49
Section 14.7 Confidentiality of the Seller Information........................................................50
Section 14.8 Confidentiality of Program Information...........................................................52
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Section 14.9 Captions and Cross References....................................................................53
Section 14.10 Integration.....................................................................................53
Section 14.11 Governing Law...................................................................................54
Section 14.12 Waiver Of Jury Trial............................................................................54
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities...................................................54
Section 14.14 Execution in Counterparts.......................................................................55
Section 14.15 No Recourse Against Other Parties...............................................................55
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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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
DATED AS OF JANUARY 2, 2001
THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, is
by and 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"),
and amends and restated in its entirety that certain Receivables Purchase
Agreement dated as of October 26, 1999 by and among the parties, as amended
from time to time (the "EXISTING AGREEMENT"). 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.
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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.
7. The parties wish to amend and restate the Existing
Agreement as hereinafter set forth.
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.
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 Invested Amount would exceed $55,000,000 (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%; and provided, further that
(i) each Purchase made pursuant to this Section 1.1 shall have a purchase price
equal to at least $10,000, (ii) Purchases made pursuant to this Section 1.1
shall occur on Settlement Dates and on up to two (2) additional Business Days
in any Settlement Period, and (iii) the number of Purchases pursuant to this
Section 1.1 and Aggregate Reductions pursuant to Section 3.2(b) shall not
exceed, in the aggregate, three (3) in any Settlement Period (or two (2) in any
Settlement Period in which at least one of such Purchases or one of such
Aggregate Reductions does not occur on the applicable Settlement Date).
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 irrevocable 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.
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(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.
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 and CP Costs 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
100% or (II) the Invested Amount 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 Invested Amount to the Purchase Limit
and the Asset Interest to 100%; 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;
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(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).
(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 Invested Amount to the Purchase Limit and (y) the
Asset Interest to 100%, 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 CP
Costs on any Asset Tranche funded by Commercial Paper Notes to the
Agent, on the Purchaser's behalf, on the Settlement Date following the
last day of the then current CP Accrual 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
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(B) on the last day of the then current CP Accrual 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.
(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 100% or the Invested
Amount 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 Invested
Amount does not exceed the Purchase Limit and the Asset Interest does not
exceed 100%, 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:
5
IA + RR
---------
NPB
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 on that portion of the Asset Interest funded with Liquidity
Fundings, 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
funded by a Liquidity Funding. 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 a single 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 funded with a
Liquidity Funding for 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. If the Purchaser funds or refinances
its investment in an Asset Tranche through a Liquidity Funding, in lieu of
paying CP Costs on the Invested Amount thereof, the Seller will pay Earned
Discount thereon at a Bank Rate selected in accordance with this Agreement.
Nothing herein shall be deemed to constitute a commitment of the Purchaser to
issue Commercial Paper Notes.
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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 funded by a Liquidity Funding and the rates at
which fees and other amounts are accruing hereunder. It is understood and
agreed that (i) the CP Costs for any Asset Tranche funded through the issuance
of Commercial Paper Notes are determined in arrears and may change from one
applicable CP Accrual Period to the next, (ii) the Earned Discount Rate for any
Asset Tranche funded through a Liquidity Funding may change from one applicable
Yield Period to the next, (iii) the Bank Rate used to calculate the Earned
Discount Rate may change from time to time during an applicable Yield Period,
(iv) certain rate information provided by the Agent to the Master Servicer
shall be based upon the Agent's good faith estimate, (v) the amount of Earned
Discount actually accrued with respect to an Asset Tranche funded through a
Liquidity Funding during any Yield Period may exceed, or be less than, the
amount identified with respect thereto by Master Servicer, and (vi) 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 and CP Costs; Other Amounts Due.
(i) (A) On or before 12:00 noon (Atlanta, Georgia time)
two (2) Business Days before the last day of each Yield Period, the
Agent shall notify the Master Servicer of the amount of Earned
Discount accrued with respect to any Asset Tranche corresponding to
such Yield Period, and (B) on or before 12:00 noon (Atlanta, Georgia
time) five (5) Business Days before each Reporting Date, the Agent
shall notify the Master Servicer of the amount of CP Costs accrued
during the CP Accrual Period then most recently ended with respect to
any Asset Tranche funded with Commercial Paper Notes during all or any
portion of such CP Accrual Period.
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(ii) 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 Yield
Period and the amount of such CP Costs before 12:00 noon (Atlanta,
Georgia time) on each Settlement Date.
(iii) 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 Broken
Funding Costs, 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 such
Broken Funding Costs, 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.
(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 100%, and (D) the excess (if any)
of the Invested Amount 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 100% or (y)
the Invested Amount 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 Invested Amount to the
Purchase Limit and the Asset Interest to 100%, 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.
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(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 Accrual Period, in an amount
not exceeding the Purchaser's Tranche Investment of the Asset Tranche
funded by Commercial Paper Notes.
(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 , CP Costs and Broken
Funding Costs, plus any previously accrued Earned Discount, CP Costs
and Broken Funding Costs 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)), because Collections during the relevant CP Accrual
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.
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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
(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
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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:
(i) the Seller shall provide the Agent, on the
Purchaser's behalf, with prior written notice in conformity with the
Required Notice Period (a "REDUCTION NOTICE") of any proposed
reduction of the aggregate Invested Amount. Such Reduction Notice
shall designate (i) the date (the "PROPOSED REDUCTION DATE") upon
which any such reduction of aggregate Invested Amount shall occur
(which date shall give effect to the applicable Required Notice
Period), and (ii) the amount of aggregate Invested Amount to be
reduced which shall be applied ratably to all Asset Tranches in
accordance with the respective Invested Amounts thereof (the
"AGGREGATE REDUCTION"). Only one (1) Reduction Notice shall be
outstanding at any time.
(ii) on the Proposed Reduction Date, 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 Aggregate 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 Aggregate Reduction shall be
in (1) an amount of at least $10,000 or (2) an amount equal to the
remaining Invested Amount,
(B) the Seller shall use reasonable efforts to attempt
to choose an Aggregate Reduction amount, and the date of commencement
thereof, so that such reduction shall commence and conclude in the
same Settlement Period,
(C) unless the Invested Amount will be reduced to zero,
after giving effect to such Aggregate Reduction, the Invested Amount
will be at least $25,000,000,
(D) Aggregate Reductions made pursuant to this Section
3.2(b) shall occur on Settlement Dates and on up to two (2) additional
Business Days in any Settlement Period, and
(E) the number of Purchases pursuant to Section 1.1 and
Aggregate Reductions pursuant to this Section 3.2(b) shall not exceed,
in the aggregate, three (3) in any Settlement Period (or two (2) in
any Settlement Period in which at least one of such Purchases or one
of such Aggregate Reductions does not occur on the applicable
Settlement Date).
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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.
(c) Method of Computation. All computations of interest, CP
Costs, Broken Funding Costs, 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.
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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 October 26, 1999 (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 October 26, 1999:
(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
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(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,
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.
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(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.
ARTICLE V.
CONDITIONS OF PURCHASES
SECTION 5.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE.
The initial Purchase pursuant to the Existing Agreement was
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;
16
(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;
(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
17
(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;
(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;
18
(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 Invested Amount will not exceed the Purchase Limit and the
Asset Interest will not exceed 100%;
(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.
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
19
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.
(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
20
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.
(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
21
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.
(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) [Reserved].
(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
22
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.
(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 October 26, 1999 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
23
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 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.
24
(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.
(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) [Reserved].
(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 not later than December 26, 1999, 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 October 26, 1999 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.
25
(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;
26
(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. Each Seller Party will deliver to
the Agent for distribution to each of the Investors simultaneously with the
delivery of each set of annual and quarterly financial statements referred to
in paragraphs (a), (b), (c) and (d) above, 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 the Seller Parties are taking or propose
to take with respect thereto.
(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.
27
SECTION 7.3 NEGATIVE COVENANTS OF THE SELLER PARTIES.
From October 26, 1999 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.
(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
28
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 Invested Amount does not exceed the
Purchase Limit and the Asset Interest does not exceed 100% 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).
(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
29
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:
(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
30
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;
(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
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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;
(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.
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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.
(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.
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(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.
(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
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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.
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 Earned Discount or CP Costs on 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 Earned
Discount or CP Costs (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.
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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;
(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;
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(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.
(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.
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(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.
(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
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(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:
(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,
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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.
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
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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
(f) At any Cut-Off Date, the average of the Dilution Ratio for
the immediately preceding three months exceeds 3.10%; or
(g) The Default Trigger Ratio at any Cut-Off Date exceeds 19.5%;
or
(h) At any Cut-Off Date, the average of the Delinquency Ratio for
the immediately preceding three months exceeds 4.00%; 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
Invested Amount 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
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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.
(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
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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.
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
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(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.
(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.
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
47
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.
Upon execution and delivery to the Agent of counterparts of
this Agreement by each of the parties hereto, 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 the Existing Agreement, the other Transaction Documents (other than
this Agreement) 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 October 26, 1999 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;
(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;
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(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.
(d) This Section 14.7 shall survive termination of this
Agreement.
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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.
(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
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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 14.9 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.
SECTION 14.10 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.
53
SECTION 14.11 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 14.12 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 14.13 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.
54
SECTION 14.14 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 14.15 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]
55
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:
56
BLUE RIDGE ASSET FUNDING CORPORATION, as Purchaser
By Wachovia Bank, N.A.,
as Attorney-In-Fact
By:
-------------------------------------------------
Name:
Title:
WACHOVIA BANK, N.A., as Agent
By:
-------------------------------------------------
Name:
Title:
57
APPENDIX A
DEFINITIONS
This is Appendix A to the Amended and Restated Receivables
Purchase Agreement dated as of January 2, 2001, 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 October 26,
1999 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 October 26, 1999 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 REDUCTION": As defined in Section 3.2(b).
"AMORTIZATION PERIOD": The period following the Funding
Termination Date until the date on which all obligations of the Seller hereunder
are paid in full.
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"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.
"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.
59
"BROKEN FUNDING COSTS": for any Asset Tranche which: (i) has
its Invested Amount reduced without compliance by the Seller with the notice
requirements hereunder or (ii) does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice or (iii) is assigned by the
Purchaser to the Liquidity Banks under the Liquidity Agreement or terminated
prior to the date on which it was originally scheduled to end; an amount equal
to the excess, if any, of (A) the CP Costs that would have accrued during the
remainder of the tranche periods for Commercial Paper Notes or (as applicable)
Earned Discount that would have accrued during the remainder of the Yield
Periods determined by the Agent to relate to such Asset Tranche (as applicable)
subsequent to the date of such reduction, assignment or termination (or in
respect of clause (ii) above, the date such Aggregate Reduction was designated
to occur pursuant to the Reduction Notice) of the Invested Amount of such Asset
Tranche if such reduction, assignment or termination had not occurred or such
Reduction Notice had not been delivered, over (B) the sum of (x) to the extent
all or a portion of such Invested Amount is allocated to another Asset Tranche,
the amount of CP Costs or Earned Discount actually accrued during the remainder
of such period on such Invested Amount for the new Asset Tranche, and (y) to the
extent such Invested Amount is not allocated to another Asset Tranche, the
income, if any, actually received during the remainder of such period by the
holder of such Asset Tranche from investing the portion of such Invested Amount
not so allocated. All Broken Funding Costs shall be due and payable hereunder
upon demand.
"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 or a Sunday or a 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) on which
The Depository Trust Company of New York is open for business.
"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
60
(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.
"COMMERCIAL PAPER NOTES": Commercial paper notes issued by the
Purchaser in the United States commercial paper market.
"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.
61
"CP ACCRUAL PERIOD": Each Settlement Period during which any
Asset Tranche is funded with Commercial Paper Notes.
"CP COSTS": for each day, the sum of (i) discount or interest
accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued
commissions in respect of placement agents and Commercial Paper Note dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase or financing facilities
which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual
of income net of expenses received on such day from investment of collections
received under all receivable purchase or financing facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any investment of Purchaser pursuant to the terms of any
receivable purchase or financing facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if Seller shall request
any Purchase during any period of time determined by the Agent in its sole
discretion to result in incrementally higher CP Costs applicable to such
Purchase, the principal associated with any such Purchase shall, during such
period, be deemed to be funded by Purchaser in a special pool (which may include
capital associated with other receivable purchase or financing facilities) for
purposes of determining such additional CP Costs applicable only to such special
pool and charged each day during such period against such principal.
Notwithstanding the foregoing, on any day when any Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, the CP Costs
for each Asset Tranche funded through the issuance of Commercial Paper Notes
shall equal the greater of (a) the amount determined for such day pursuant to
the preceding two sentences, and (b) interest on the Invested Amount associated
with such Asset Tranche a rate per annum equal to the Base Rate plus 2% per
annum.
"CP RATE": With respect to any CP Accrual Period, the rate per
annum equivalent to the CP Costs accrued with respect to the Invested Amount
allocated to any Asset Tranche funded with Commercial Paper Notes.
"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.
"CUMULATIVE SALES": For each Settlement Period, the amount of
Receivables originated by the Originators and sold to the Seller pursuant to the
Sale Agreement.
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"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 Net
Pool Balance 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.
"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
63
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) 2.25 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, as applicable, for
any Asset Tranche funded with a Liquidity Funding:
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, as applicable,
ER = the Earned Discount Rate for such Yield Period,
ED = the actual number of days elapsed during such Yield
Period, and
LF = the Liquidation Fee, if any, during such Yield
Period.
"EARNED DISCOUNT RATE": For any Yield Period for any Asset
Tranche funded by a Liquidity Funding the Bank Rate for such Asset Tranche and
such Yield Period; PROVIDED, HOWEVER, that on any day when any Liquidation Event
or Unmatured Liquidation Event shall
64
have occurred and be continuing, the Earned Discount Rate for each Asset Tranche
(including, without limitation, Asset Tranches funded through the issuance of
Commercial Paper Notes) 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;
(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
65
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) which is not the result of a finance charge; and
(m) the original term of which has not been extended and
the Unpaid Balance of which has not been adjusted more than once.
"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.
66
"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.
"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
67
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.
"EXISTING AGREEMENT": As defined in the preamble.
"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.
"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.
68
"FUNDING TERMINATION DATE": The earliest of the following:
(a) October 24, 2001;
(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.
"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.
69
"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 Liquidity Banks.
"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)
funded through a Liquidity Funding for each day in any Yield Period, the amount,
if any, by which:
(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 (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 October 26, 1999 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,
70
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.
"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;
71
(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.
"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
MOODY'S % 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).
72
"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.
"POOLED COMMERCIAL PAPER": Commercial Paper Notes of Purchaser
subject to any particular pooling arrangement by Purchaser, but excluding
Commercial Paper Notes issued by Purchaser for a tenor and in an amount
specifically requested by any Person in connection with any agreement effected
by Purchaser.
"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).
"PROPOSED REDUCTION DATE": As defined in Section 3.2(b).
"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).
73
"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.
"REDUCTION NOTICE": As defined in Section 3.2(b).
"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).
"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
74
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 NOTICE PERIOD": The number of days required notice
set forth below applicable to the Aggregate Reduction indicated below:
AGGREGATE REDUCTION REQUIRED NOTICE PERIOD
----------------------------- ----------------------
less than 25% of the Purchase 2 Business Days
Limit
greater than 25% but less than 5 Business Days
50% of the Purchase Limit
greater than 50% of the 10 Business Days
Purchase Limit
"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 Obligor Concentration Limit
applicable to Obligors which are unrated or noninvestment grade, (b) two times
the Obligor Concentration Limit applicable to Obligors which are A-3/P-3 rated
or (c) one times the Obligor Concentration Limit applicable to Obligors which
are A-2/P-2 rated and (iii) 2%.
75
"REVOLVING PERIOD": The period from October 26, 1999 until the
Funding Termination Date or such other date consented to in writing by the Agent
on behalf of the Purchaser.
"S&P": Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"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.
"SERVICER'S FEE RATE": 1.0% per annum.
76
"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.
"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,
77
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, CP Costs, Broken Funding Costs 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.
"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,
78
(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.
"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:
(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
79
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."
80
SCHEDULE 6.1(I)
DESCRIPTION OF MATERIAL ADVERSE CHANGES
On October 14, 1999, Cadmus announced that it would close its
Atlanta-based Cadmus Point of Purchase business unit, integrate certain
functions and facilities in connection with the acquisition of ▇▇▇▇ Printing
Company, and consolidate certain corporate functions. As a result, Cadmus
recorded certain accounting charges related thereto in the pre-tax amounts of
$16,590,000 in the fiscal quarter ended September 30, 1999, $15,971,000 in the
fiscal quarter ended December 31, 1999, and $1,583,000 in the fiscal quarter
ended March 31, 2000. No further charges are expected in connection with these
actions.
81
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.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
82
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.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ Printing Company
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Port City Press, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ Graphics, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
83
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: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
84
SCHEDULE A
INITIAL ORIGINATORS AND SERVICERS
Originators and Servicers
-------------------------
Cadmus Journal Services, Inc.
Expert Graphics, Inc.
▇▇▇▇ Printing Company
Port City Press, Inc.
▇▇▇▇▇▇▇▇ Graphics, Inc.
85
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
86
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 Amended and Restated Receivables
Purchase Agreement dated as of January 2, 2001 (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
(d) the Termination Date shall not have occurred.
II. The undersigned, as Seller hereby irrevocably requests that the Agent,
on behalf of the Purchaser, make the following Purchase:
87
(a) Proposed Purchase Date: __________________ (which is
a Business Day)
(b) Purchase Price: $________________ (which is at least
$10,000)
III. 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:
88
EXHIBIT 3.1(A)
FORM OF SETTLEMENT REPORT
[see attached]
89
EXHIBIT 5.1(H)
FORM OF OPINION OF SPECIAL COUNSEL FOR THE SELLER PARTIES
[see attached]
90
EXHIBIT A-1
[FORM OF LOCK-BOX AGREEMENT]
[Date]
[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 an Amended and Restated
Purchase and Sale Agreement, dated as of May 17, 2000 as amended, restated
supplemented or otherwise modified from time to time, among Cadmus Journal
Services, Inc. ("CADMUS JOURNAL"), Expert Graphics, Inc. ("EXPERT GRAPHICS"),
▇▇▇▇▇▇▇▇ Graphics, Inc. ("▇▇▇▇▇▇▇▇ GRAPHICS"), ▇▇▇▇ Printing Company ("▇▇▇▇")
and Port City Press, Inc. ("PORT CITY"), as sellers, Cadmus Communications
Corporation (together, with Cadmus Journal, Expert Graphics, ▇▇▇▇▇▇▇▇ Graphics,
▇▇▇▇ and Port City, 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
91
documentation in effect from time to time, or other customary documentation
related to wire transfers, prior to the initiation of any wire transfers.
We also hereby notify you that, at all times from and after
the date of your receipt of notice from the Agent as described above, the Agent
shall be irrevocably entitled to exercise in our place and stead any and all
rights in respect of or in connection with the Account, including, without
limitation, (a) the right to specify when payments are to be made out of or in
connection with the Account and (b) the right to require preparation of
duplicate monthly bank statements on the Account for the Agent's audit purposes
and mailing of such statements directly to the Agent at an address specified by
the Agent.
Notices from the Agent and other notices or communications
under this letter agreement may be personally served or sent by facsimile or by
certified mail, return receipt requested, or by express mail or courier, to the
address or facsimile number set forth under the signature of the relevant party
to this letter agreement (or to such other address or facsimile number as the
relevant party shall have designated by written notice to the party giving the
aforesaid notice or other communication). Notwithstanding the foregoing, any
notice delivered by you may be delivered by regular mail. If notice is given by
facsimile, it will be deemed to have been received when the notice is sent and
receipt is confirmed by telephone or other electronic means. All other notices
will be deemed to have been received when actually received or, in the case of
personal delivery, delivered.
By executing this letter agreement, you acknowledge the
existence of the Agent's right to ownership and control of the Account and its
ownership (on behalf of Blue Ridge and Cadmus Receivables as the parties having
interests in such amounts) of the amounts from time to time on deposit therein,
and agree that from the date of the Existing Agreement, the Account shall be
maintained by you for the benefit of, and amounts from time to time therein held
by you for, the Agent (on behalf of Blue Ridge and Cadmus Receivables) on the
terms provided herein. Except as otherwise provided in this letter agreement,
payments to the Account are to be processed in accordance with the standard
procedures currently in effect. All service charges and fees with respect to the
Account shall continue to be payable by us under the arrangements currently in
effect.
By executing this letter agreement, you irrevocably waive and
agree not to assert, claim or endeavor to exercise, irrevocably bar and stop
yourself from asserting, claiming or exercising, and acknowledge that you have
not heretofore received a notice, writ, order or any form of legal process from
any other party asserting, claiming or exercising, any rights of set-off,
banker's lien or other purported form of claim with respect to the Account or
any funds from time to time therein. Except for your right to payment of your
service charges and fees and your right to make deductions for returned items,
you shall have no rights in the Account or funds therein. To the extent you may
ever have such rights, you hereby expressly subordinate all such rights to all
rights of the Agent.
You may terminate this letter agreement by canceling the
Account maintained with you, which cancellation and termination shall become
effective only upon 90 days' prior
92
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.:
93
CADMUS JOURNAL SERVICES, INC.
By:
-------------------------------
Title:
----------------------------
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address:
EXPERT GRAPHICS, INC.
By:
-------------------------------
Title:
----------------------------
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address:
▇▇▇▇▇▇▇▇ GRAPHICS, INC.
By:
-------------------------------
Title:
----------------------------
Address for notice:
Attention:
Facsimile No.:
▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇
▇▇
▇▇▇▇ Printing Company
By:
-------------------------------
Title:
----------------------------
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address
Port City Press, Inc.
By:
-------------------------------
Title:
----------------------------
Address for notice:
Attention:
Facsimile No.:
▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇
▇▇
Accepted and confirmed as of
the date first written above:
BLUE RIDGE ASSET FUNDING
CORPORATION
as Purchaser
By:
-------------------------------
Title:
----------------------------
Address for notice:
Attention:
Facsimile No.:
WACHOVIA BANK, N.A.,
as Agent
By:
-------------------------------
Title:
----------------------------
Address for notice:
Attention:
Facsimile No.:
Acknowledged and agreed to as of
the date first written above:
CADMUS RECEIVABLES CORP.
By:
-------------------------------
Title:
----------------------------
Address for notice:
Attention:
Facsimile No.:
96
[LOCKBOX BANK]
By:
-------------------------------
Title:
----------------------------
Address for notice:
----------------------------------
----------------------------------
----------------------------------
Attention:
------------------------
Facsimile No.:
--------------------
97
ANNEX A to
Lock-Box Agreement
[FORM OF NOTICE OF ASSUMPTION OF CONTROL OF ACCOUNT]
[Letterhead of Wachovia]
[Date]
____________________________________
____________________________________
____________________________________
____________________________________
Re: Cadmus Communications Corporation
Cadmus Journal Services, Inc.
Expert Graphics, Inc.
▇▇▇▇▇▇▇▇ Graphics, Inc.
▇▇▇▇ Printing Company
Port City Press, Inc.
Lock-Box Account No.
Ladies and Gentlemen:
Reference is made to the letter agreement dated _________ (as
amended, supplemented or otherwise modified from time to time, the "LETTER
AGREEMENT") among Cadmus Journal Services, Inc., Expert Graphics, Inc., ▇▇▇▇▇▇▇▇
Graphics, Inc., ▇▇▇▇ Printing Company, Port City Press, 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.______________)].
98
[other instructions]
Very truly yours,
Wachovia Bank, N.A., as Agent
By:
-------------------------------
Name:
Title:
99
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 Amended
and Restated Receivables Purchase Agreement, dated as of January 2, 2001 (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
____ day of _____________________.
----------------------------------
[Name]
[Title]
100