EXHIBIT 10.17
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AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT
Dated as of May 17, 2000
between
THE SELLERS NAMED HEREIN,
CADMUS RECEIVABLES CORP.
and
CADMUS COMMUNICATIONS CORPORATION
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TABLE OF CONTENTS
PAGE
ARTICLE I AGREEMENT TO SELL......................................................................................3
SECTION 1.2 TIMING OF PURCHASES...................................................................................5
SECTION 1.3 CONSIDERATION FOR PURCHASES...........................................................................5
SECTION 1.4 SALE TERMINATION DATE.................................................................................6
ARTICLE II CALCULATION OF PURCHASE PRICE.........................................................................6
SECTION 2.1 CALCULATION OF PURCHASE PRICE.........................................................................6
ARTICLE III PAYMENT OF PURCHASE PRICE............................................................................8
SECTION 3.1 INITIAL PURCHASE PRICE PAYMENT........................................................................8
SECTION 3.2 SUBSEQUENT PURCHASE PRICE PAYMENTS....................................................................8
SECTION 3.3 SETTLEMENT AS TO SPECIFIC RECEIVABLES.................................................................9
SECTION 3.4 SETTLEMENT AS TO DILUTION............................................................................10
SECTION 3.5 RECONVEYANCE OF RECEIVABLES..........................................................................10
SECTION 3.6 REBILLED RECEIVABLES.................................................................................10
ARTICLE IV CONDITIONS OF PURCHASES..............................................................................11
SECTION 4.1 CONDITIONS PRECEDENT TO AGREEMENT....................................................................11
SECTION 4.2 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES...................................................11
ARTICLE V REPRESENTATIONS AND WARRANTIES........................................................................12
SECTION 5.1 REPRESENTATIONS OF THE SELLERS.......................................................................12
ARTICLE VI COVENANTS OF THE SELLERS.............................................................................15
SECTION 6.1 AFFIRMATIVE COVENANTS................................................................................15
SECTION 6.2 REPORTING REQUIREMENTS...............................................................................17
SECTION 6.3 NEGATIVE COVENANTS...................................................................................19
ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES.....................................19
SECTION 7.1 RIGHTS OF THE COMPANY................................................................................19
SECTION 7.2 RESPONSIBILITIES OF THE SELLERS......................................................................19
SECTION 7.3 FURTHER ACTION EVIDENCING PURCHASES..................................................................20
ARTICLE VIII INDEMNIFICATION....................................................................................21
SECTION 8.1 INDEMNITIES BY THE SELLERS...........................................................................21
ARTICLE IX ADDITION AND TERMINATION OF SELLERS..................................................................23
SECTION 9.1 ADDITION OF SELLERS..................................................................................23
SECTION 9.2 CONDITIONS PRECEDENT TO THE ADDITION OF A SELLER.....................................................23
SECTION 9.3 TERMINATION OF A SELLER..............................................................................25
ARTICLE X MISCELLANEOUS.........................................................................................26
SECTION 10.1 AMENDMENTS, ETC.....................................................................................26
SECTION 10.2 NOTICES, ETC........................................................................................27
SECTION 10.3 NO WAIVER; CUMULATIVE REMEDIES......................................................................27
SECTION 10.4 BINDING EFFECT; ASSIGNABILITY.......................................................................27
SECTION 10.5 GOVERNING LAW.......................................................................................28
SECTION 10.6 COSTS, EXPENSES AND TAXES...........................................................................28
SECTION 10.7 SUBMISSION TO JURISDICTION..........................................................................28
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SECTION 10.8 WAIVER OF JURY TRIAL................................................................................29
SECTION 10.9 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE...........................................29
SECTION 10.10 EXECUTION IN COUNTERPARTS..........................................................................29
SECTION 10.11 ACKNOWLEDGMENT AND AGREEMENT.......................................................................29
SECTION 10.12 NO PROCEEDINGS.....................................................................................30
EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF PURCHASE REPORT
EXHIBIT B FORM OF THE SELLER NOTE
EXHIBIT C OFFICE LOCATIONS
EXHIBIT D FORM OF CERTIFICATE OF FINANCIAL OFFICER
EXHIBIT E FORM OF LOCK BOX AGREEMENT
SCHEDULE 5.1(N) TRADE NAMES
SCHEDULE 5.1(T) MATERIAL ADVERSE CHANGE
SCHEDULE 10.2 NOTICE ADDRESSES
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AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT
THIS AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT, dated as of May
17, 2000 (as amended, supplemented or modified from time to time, this
"Agreement"), is between the seller parties named herein (each such party being
a "Seller" and collectively, the "Sellers"), as sellers, CADMUS RECEIVABLES
CORP., a Virginia corporation (the "Company"), as purchaser and Cadmus
Communications Corporation ("Cadmus").
RECITALS
WHEREAS, the Company, Cadmus, Cadmus Journal Services, Inc. ("Cadmus
Journal"), Expert Graphics, Inc. ("Expert Graphics") and ▇▇▇▇▇▇▇▇ Graphics, Inc.
("▇▇▇▇▇▇▇▇" and together with Cadmus Journal and Expert Graphics, the "Original
Sellers") have entered into that certain Purchase and Sale Agreement dated as of
October 26, 1999 (the "Original Sale Agreement"), pursuant to which among other
things, the Original Sellers have agreed to sell to the Company, and the Company
has agreed to purchase from the Original Sellers, certain receivables and
related rights described therein;
WHEREAS, the Company, Cadmus and the Original Sellers have agreed to
enter into this agreement in order to, among other things, (i) amend and restate
the Original Sale Agreement in its entirety and (ii) add ▇▇▇▇ Printing Company
("▇▇▇▇ Printing") and Port City Press, Inc. ("Port City") as Additional Sellers
(as defined herein) as of the date hereof (which date shall be the "Seller
Addition Date" with respect to ▇▇▇▇ Printing and Port City (the Original Sale
Agreement, as so amended and restated hereby, the "Agreement");
WHEREAS, it is the intention of the parties hereto that this Agreement
be merely an amendment and restatement of the Original Sale Agreement and not
constitute a novation of the obligations thereunder:
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
DEFINITIONS
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in Appendix A to the Receivables Purchase
Agreement dated October 26, 1999 (as amended, supplemented or otherwise modified
from time to time, the "Receivables Purchase Agreement"), among the Company,
Cadmus Communications Corporation, as initial master servicer, Blue Ridge Asset
Funding Corporation, as purchaser (the "Purchaser") and Wachovia Bank, N.A., as
agent for the Purchaser (the "Agent"). The following terms have the respective
meanings indicated hereinbelow:
Additional Seller: As defined in Section 1.1(a).
Available Funds: As defined in Section 3.2.
Deemed Collections: Amounts payable by the Sellers pursuant to Section 3.3 or
3.4.
Ineligible Receivable: As defined in Section 3.3.
Initial Closing Date: As defined in Section 1.2.
Initial Cut-Off Date: The Business Day immediately preceding the Initial
Closing Date.
Mandatory Seller Termination Date: As defined in Section 9.3(a).
Payment Day: (i) the Initial Closing Date and (ii) each Business Day thereafter
that any Seller is open for business.
Permissive Seller Termination Date: As defined in Section 9.3(b).
Purchase Price: As defined in Section 2.1.
Purchase Report: As defined in Section 2.1.
Related Rights: As defined in Section 1.1(a).
Sale Indemnified Amounts: As defined in Section 8.1.
Sale Indemnified Party: As defined in Section 8.1.
Sale Termination Date: As defined in Section 1.4.
Seller Addition Date: As defined in Section 9.2.
Seller Material Adverse Effect: With respect to any event or circumstance, an
effect caused or resulting from such event or circumstance which has had or
would reasonably be expected to have a material adverse effect on:
(i) the assets, business, financial condition or
operations of Cadmus and its Subsidiaries, taken as a whole;
(ii) the ability of each Seller to perform in all material
respects its obligations under this Agreement or any other Transaction
Document to which such Seller is a party;
(iii) the validity or enforceability as against any Seller
of this Agreement or any other Transaction Document to which such
Seller is a party;
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(iv) the status, existence, perfection, priority or
enforceability of the Company's interest in the Receivables Pool and
the Related Rights; or
(v) the validity, enforceability or collectibility of a
material portion of the Receivables Pool.
Seller Note: As defined in Section 3.1.
Solvent: As to any Person at any time, having a state of affairs such that all
of the following conditions are met: (i) the fair value of the property of such
Person is greater than the amount of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy
Code; (ii) the present fair salable value of the property of such Person in an
orderly liquidation of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (iii) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(iv) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (v) such Person is not engaged in business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute unreasonably small capital.
ARTICLE I
AGREEMENT TO SELL
SECTION 1.1 SALES AND CONTRIBUTIONS.
(a) Agreement to Sell. On the terms and subject to the conditions
set forth in this Agreement (including Article V), and in consideration of the
Purchase Price, from the Initial Closing Date (or, in the case of ▇▇▇▇ Printing,
Port City and any other Seller made a part of this Agreement pursuant to Section
9.1 (each, an "Additional Seller"), from the related Seller Addition Date) until
the Sale Termination Date, each Seller agrees to sell, assign and transfer, and
does hereby sell, assign and transfer to the Company, and the Company agrees to
purchase, and does hereby purchase from each Seller, all of such Sellers' right,
title and interest in and to:
(i) each Receivable of such Seller that existed and was
owing to such Seller as of the close of such Seller's business on the
Initial Cut-Off Date (or, in the case of any Additional Seller, as of
the close of such Additional Seller's business on the Business Day
immediately preceding the related Seller Addition Date (the "Additional
Seller Cut-Off Date"));
(ii) each Receivable created or originated by such Seller
from the close of such Sellers' business on the Initial Cut-Off Date
(or in the case of an Additional Seller,
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from the close of such Additional Seller's business on the related
Additional Seller Cut-Off Date), to and including the Sale Termination
Date;
(iii) all rights to, but not the obligations under, all
Contracts and all Related Security with respect to the Receivables
originated by such Seller whether now existing or hereafter acquired;
(iv) all monies due or to become due with respect to the
foregoing;
(v) all books and records related to any of the foregoing
whether now existing or hereafter acquired;
(vi) all Lock-Boxes, the Collection Account, all amounts
on deposit therein and all related agreements between such Seller and
the Lock-Box Banks, in each case to the extent constituting or
representing items described in paragraph (vii) below; and
(vii) all Collections in respect of, and other proceeds (as
defined in the UCC) of, Receivables sold, assigned and transferred to
the Company hereunder or any other of the foregoing received on or
after the Initial Cut-Off Date (or, in the case of an Additional
Seller, on or after the related Additional Seller Cut-Off Date)
including, without limitation, all funds which either are received by
such Seller, the Company or the Master Servicer from or on behalf of
the Obligors in payment of any amounts owed (including, without
limitation, finance charges, interest and all other charges) in respect
of Receivables sold, assigned and transferred to the Company hereunder,
or are applied to such amounts owed by the Obligors (including without
limitation, insurance payments, if any, that such Seller or the
Servicer (if other than such Seller) applies in the ordinary course of
its business to amounts owed in respect of any Receivable sold,
assigned and transferred to the Company hereunder and net proceeds of
sale or other disposition of repossessed goods or other collateral or
property of the Obligors or any other party directly or indirectly
liable for payment of such Receivable and available to be applied
thereon).
All purchases hereunder shall be made without recourse, but shall be made
pursuant to and in reliance upon the representations, warranties and covenants
of the respective Seller, set forth in each Transaction Document. The proceeds
and rights described in subsections (iii) through (vii) of this Section 1.1(a)
are herein collectively called the "Related Rights".
(b) [Reserved].
(c) Absolute Transfer. It is the intention of the parties hereto
that the conveyance of the Receivables and Related Rights by each Seller to the
Company as provided in this Section 1.1 be, and be construed as, an absolute
sale or assignment, without recourse, of such Receivables and Related Rights by
such Seller to the Company. Furthermore, it is not intended that such conveyance
be deemed a pledge of such Receivables and Related Rights by such Seller to the
Company to secure a debt or other obligation of such Seller. If, however,
notwithstanding
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the intention of the parties, the conveyance provided for in this Section 1.1 is
determined to be a transfer for security, then this Agreement shall also be
deemed to be a "security agreement" within the meaning of Article 9 of the UCC
and such Seller hereby grants to the Company a "security interest" within the
meaning of Article 9 of the UCC in all of such Seller's right, title and
interest in and to such Receivables and Related Rights, now existing and
hereafter created, to secure a loan in an amount equal to the aggregate Purchase
Prices therefor and each of such Seller's other payment obligations under this
Agreement.
(d) Capital Contributions. Cadmus may from time to time, at its
option, make capital contributions to the Company in cash. Such capital
contributions may be used by the Company (i) prior to the Sale Termination Date,
for any purpose, including, without limitation, the payment of any obligation of
the Company hereunder or under the Receivables Purchase Agreement and (ii) on
and after the Sale Termination Date, solely for the payment of its obligations
to third parties under the Receivables Purchase Agreement until such obligations
have been paid in full.
SECTION 1.2 TIMING OF PURCHASES.
(a) Initial Closing Date Purchases. On the date of the first
Purchase under the Receivables Purchase Agreement (the "Initial Closing Date")
each Original Seller sold to the Company, and the Company purchased, pursuant to
Section 1.1, such Original Seller's entire right, title and interest in (i) each
Receivable that existed and was owing to such Original Seller as of the close of
such Original Seller's business on the Initial Cut-Off Date, and (ii) all
Related Rights with respect thereto.
(b) Initial Additional Seller Purchases. On each Seller Addition
Date, the related Additional Seller shall sell to the Company, and the Company
shall purchase, pursuant to Section 1.1, such Additional Seller's entire right,
title and interest in (i) each Receivable that existed and was owing to such
Additional Seller as of the related Additional Seller Cut-Off Date, and (ii) all
Related Rights with respect thereto.
(c) Subsequent Purchases. After the Initial Closing Date (or, in
the case of any Additional Seller, after the related Seller Addition Date), and
continuing until the Sale Termination Date, each Receivable described in Section
1.1(a)(ii), and all the Related Rights with respect thereto, created or
originated by a Seller has been or shall be sold by such Seller to the Company
(without any further action) upon the origination of such Receivable. All such
Receivables have been or shall be sold to the Company on such date.
SECTION 1.3 CONSIDERATION FOR PURCHASES.
On the terms and subject to the conditions set forth in this Agreement,
the Company agrees to make all Purchase Price payments to each Seller in
accordance with Article III.
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SECTION 1.4 SALE TERMINATION DATE.
The "Sale Termination Date" shall be the earlier to occur of (i) with
respect to a particular Seller, the date (if any) that is such Seller's
Mandatory Seller Termination Date or Permissive Seller Termination Date and (ii)
the Termination Date under the Receivables Purchase Agreement.
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 CALCULATION OF PURCHASE PRICE.
On each Reporting Date (commencing with the first Reporting Date
following the Initial Closing Date), the Sellers shall deliver to the Company,
the Agent and the Master Servicer a report in substantially the form of Exhibit
A (each such report being herein called a "Purchase Report") with respect to the
Company's purchases of Receivables from the Sellers:
(a) that existed and were owing on the Initial Cut-Off Date (in
the case of the first Purchase Report to be delivered hereunder) and
(b) that (i) were originated by any Seller or (ii) existed and
were owing to any Additional Seller on any Additional Seller Cut-Off Date
occurring during the Settlement Period immediately preceding such Reporting Date
(in the case of each successive Purchase Report).
Each Purchase Report shall designate the amount of such Receivables that were
Eligible Receivables on the date of origination (or, in the case of Receivables
transferred on the Initial Closing Date or any Seller Addition Date, on the
Initial Closing Date or such Seller Addition Date, as the case may be).
The "Purchase Price" (to be paid to a Seller in accordance with the terms of
Article III) for the Receivables and the Related Rights sold and transferred by
such Seller to the Company hereunder shall be determined in accordance with the
following formula:
PP = AUB - (AUB X FMVD)
where:
-----
PP = Purchase Price (to be paid to such Seller in
accordance with the terms of Article III) as
calculated on the relevant purchase date or
Reporting Date.
AUB = (i) for purposes of calculating the Purchase
Price for Receivables sold or transferred by such
Seller on the Initial Closing Date (or, in the case
of any Additional Seller, on the related Seller
Addition Date), the aggregate
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Unpaid Balance of all such Receivables that existed
and were owing to such Seller as measured as at the
Initial Cut-Off Date, or Additional Seller Cut-Off
Date, as the case may be, and
(ii) for purposes of calculating the Purchase
Price for Receivables as of each Reporting Date
thereafter, the aggregate Unpaid Balance of the
Receivables described in Section 1.1(a)(ii) that were
originated by such Seller during the immediately
preceding Settlement Period.
FMVD = Fair Market Value Discount Factor, which is the sum
of the Loss Discount and the Cost Discount, in each
case as calculated on the Initial Closing Date, any
Seller Addition Date or the most recent Reporting
Date, as the case may be, as set forth in the
definitions below.
"Loss Discount" as measured on the Initial Closing Date, any Seller
Addition Date, or any Reporting Date, as the case may be, means the ratio,
expressed as a percentage, of (i) the losses (i.e. write-offs to the bad debt
reserve or other write-offs consistent with the Credit and Collection Policy of
the related Seller, in each case, net of recoveries) recognized for all Pool
Receivables during the period equal to twelve (12) successive months ending on
the Cut-Off Date immediately preceding the Initial Closing Date, such Seller
Addition Date or such Reporting Date, as the case may be, divided by (ii) the
Collections on all Pool Receivables received during such period.
"Cost Discount" as measured on the Initial Closing Date, any Seller
Addition Date or any Reporting Date, as the case may be, means a percentage
determined in accordance with the following formula:
CD = (TD/360) x CR
where:
CD = the Cost Discount as measured on the Initial Closing
Date, such Seller Addition Date or such Reporting
Date, as the case may be;
TD = the Turnover Days, as set forth in the most recent
Purchase Report; and
CR = the Cost Rate as measured on the Initial Closing
Date, such Seller Addition Date or such Reporting
Date, as the case may be.
"Cost Rate" as measured on the Initial Closing Date, any Seller
Addition Date or any Reporting Date, as the case may be, means a per annum
percentage rate equal to the sum of (i) the LIBO Rate for the Initial Closing
Date, such Seller Addition Date or the related Settlement Period, as the case
may be, plus (ii) 5.0%.
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"LIBO Rate" for the Initial Closing Date, any Seller Addition Date or
any Settlement Period, as the case may be, means the offered rate per annum
(rounded upwards, if necessary, to the nearest 1/16th of one percent) appearing
in The Wall Street Journal for three month LIBOR loans on the Initial Closing
Date, such Seller Addition Date or the first Business Day of such Settlement
Period, as the case may be.
"Turnover Days" at any time during a Settlement Period, means the
product of (a) a fraction the numerator of which is the aggregate Unpaid Balance
of all Receivables as of the first day of the next preceding Settlement Period
and the denominator of which is the aggregate amount of collections received on
all Receivables during such next preceding Settlement Period and (b) the number
of days in such next preceding Settlement Period.
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 INITIAL PURCHASE PRICE PAYMENT.
On the terms and subject to the conditions set forth in this Agreement,
the Company agrees to pay to the applicable Sellers on the Initial Closing Date
(or, in the case of any Additional Seller, on the related Seller Addition Date)
the Purchase Price for the purchase to be made by the Company with respect to
Receivables existing on the Initial Cut-Off Date or the related Additional
Seller Cut-Off Date, as the case may be, (a) in cash in an amount equal to the
amount received by the Company in connection with the first Purchase made
pursuant to the Receivables Purchase Agreement (provided that if the aggregate
of the Purchase Prices exceeds the amount of cash so received by the Company,
the Company shall apply such amount of cash ratably among the Purchase Prices
payable to such Sellers) and (b) by the issuance of a promissory note in the
form of Exhibit B to each Seller (each such promissory note, as it may be
amended, supplemented, endorsed or otherwise modified from time to time in
substitution therefor or renewal thereof in accordance with the Transaction
Documents, being herein called a "Seller Note") in the initial principal amount
equal to the remainder of the Purchase Price owing to such Seller on the Initial
Closing Date or such Seller Addition Date, as the case may be, after subtracting
the amount paid in cash.
SECTION 3.2 SUBSEQUENT PURCHASE PRICE PAYMENTS.
On each Business Day after the Initial Closing Date (or, in the case of
any Additional Seller, on each Business Day after the related Seller Addition
Date) on which a Seller sells and transfers any Receivables to the Company
hereunder until the termination of this Agreement pursuant to Section 10.4, the
Company shall pay to each Seller a portion of the Purchase Price due pursuant to
Section 2.1 by depositing into such account as such Seller shall specify
immediately available funds from monies then held by or on behalf of the Company
solely to the extent that such monies do not constitute Collections that are
required to be identified and held in trust by the Master Servicer pursuant to
the Receivables Purchase Agreement or required to be distributed to the Agent or
the Purchaser pursuant to the Receivables Purchase Agreement or
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required to be paid to the Master Servicer as the Servicer's Fee on the next
Settlement Date, or otherwise necessary to pay current expenses of the Company
(in its reasonable discretion) (such available monies, the "Available Funds")
and provided that such Seller has paid all amounts then due from it hereunder.
To the extent that the Available Funds are insufficient to pay the Purchase
Price then due in full, the remaining portion of such Purchase Price shall be
paid by increasing the principal amount owed to such Seller under the related
Seller Note, effective as of the last day of the related Settlement Period;
provided, however, that the aggregate of the principal amounts outstanding at
any time under the Seller Notes may not exceed the lesser of (a) $5,500,000 and
(b) 10% of the Purchase Limit. To the extent that (x) the amount due pursuant to
Section 2.1 with respect to all Receivables created or originated by a
particular Seller that arose during the corresponding Settlement Period is
exceeded by (y) the amount paid to such Seller during such Settlement Period
pursuant to the foregoing sentences for such Receivables, such excess shall be
treated as a reduction in the principal amount of the related Seller Note,
effective as of the last day of the related Settlement Period; provided,
however, that if at any time the unpaid principal amount of such Seller Note has
been reduced to zero, such Seller shall pay the Company the remainder of such
excess payment in immediately available funds.
Each Seller shall make all appropriate record keeping entries with
respect to its Seller Note to reflect payments by the Company thereon and such
Seller's books and records shall constitute rebuttable presumptive evidence of
the principal amount of and accrued interest on the related Seller Note. Each
Seller shall return its Seller Note to the Company upon the final payment
thereof after the termination of this Agreement pursuant to Section 10.4.
SECTION 3.3 SETTLEMENT AS TO SPECIFIC RECEIVABLES.
If an officer of any Seller obtains knowledge or receives notice from
the Company or the Agent that (a) on the day that any Receivable conveyed to the
Company hereunder was created or originated by such Seller, (or, in the case of
Receivables transferred on the Initial Closing Date or any Seller Addition Date,
on the Initial Closing Date or such Seller Addition Date, as the case may be)
any of the representations or warranties set forth in Section 5.1(l) was not
true with respect to such Receivable, or such Receivable was designated as an
Eligible Receivable on the related Purchase Report and was not an Eligible
Receivable or, (b) on any day any of the representations or warranties set forth
in Section 5.1(l) with respect to any Receivable is no longer true with respect
to a Receivable (each such Receivable, an "Ineligible Receivable"), then the
Purchase Price with respect to Receivables of such Seller that arose during the
same Settlement Period in which such knowledge is obtained or notification is
received shall be decreased by an amount equal to the Unpaid Balance of such
Ineligible Receivable as of the related Settlement Date; provided, however, that
if there have been no purchases of Receivables (or insufficiently large
purchases of Receivables to create a Purchase Price large enough to so reduce by
the amount of such net reduction) from such Seller during such Settlement
Period, any amount owed by which the Purchase Price payable to such Seller would
have been reduced pursuant to the immediately preceding clause of this sentence
shall be paid by either (at the option of such Seller, unless the Company will,
absent such payment in cash, be unable to meet its obligations under the
Receivables Purchase Agreement on the next occurring Settlement
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Date, in which case such Seller shall make a cash payment on or before such
Settlement Date) a reduction in the principal amount of the related Seller Note
(but not below zero) or by payment within two Business Days after the related
Reporting Date in cash by such Seller to the Company by payment of same day
funds; provided, further, that if the Company receives payment on account of
Collections due with respect to such Ineligible Receivable after such Settlement
Date, the Company promptly shall deliver such funds to such Seller. The
enforcement of the obligations of the Sellers set forth in this Section 3.3
shall be the sole remedy of the Company with respect to Ineligible Receivables.
SECTION 3.4 SETTLEMENT AS TO DILUTION.
Each Purchase Report shall include, in respect of the Receivables
previously conveyed by the related Seller, a calculation of the aggregate net
reduction in the aggregate Unpaid Balance of such Receivables owed by particular
Obligors on account of any defective, rejected or returned merchandise or
services, any cash discount, any incorrect ▇▇▇▇▇▇▇▇ or other adjustments, or
setoffs in respect of any claims by the Obligor(s) thereof (whether such claims
arise out of the same or a related or unrelated transaction), or any rebate or
refund during the most recent Settlement Period. The Purchase Price to be paid
to such Seller for the Receivables generated by it during the Settlement Period
for which such Purchase Report is delivered shall be decreased by the amount of
such net reduction; provided, however, that if there have been no purchases of
Receivables (or insufficiently large purchases of Receivables to create a
Purchase Price large enough to so reduce by the amount of such net reduction)
from such Seller during such Settlement Period, any amount owed by which the
Purchase Price payable to such Seller would have been reduced pursuant to the
immediately preceding clause of this sentence shall be paid by either (at the
option of such Seller, unless the Company will absent such payment in cash, be
unable to meet its obligations under the Receivables Purchase Agreement on the
next occurring Settlement Date, in which case, such Seller shall make a cash
payment on or before such Settlement Date) a reduction in the principal amount
of its Seller Note (but not below zero) or by payment within two Business Days
after the related Reporting Date in cash by such Seller to the Company by
payment of same day funds.
SECTION 3.5 RECONVEYANCE OF RECEIVABLES.
In the event that any Seller has paid (by effecting a Purchase Price
reduction or otherwise) to the Company the full Unpaid Balance of any Receivable
pursuant to Section 3.3 or 3.4, the Company shall reconvey such Receivable and
all Related Rights with respect thereto to such Seller, without recourse,
representation or warranty, but free and clear of all Liens created by the
Company; and such reconveyed Receivables and all Related Rights shall no longer
be subject to the terms of this Agreement (including any obligation to turn over
Collections to the Agent on behalf of the Purchaser with respect thereto).
SECTION 3.6 REBILLED RECEIVABLES.
Pursuant to the provisions of Section 8.2(h) of the Receivables
Purchase Agreement, the Master Servicer or the relevant Seller, in its capacity
as Servicer, may, prior to the Rebill
10
Termination Date, rebill one or more Receivables which have been conveyed by
such Seller to the Company hereunder due to one or more errors in the original
invoice or to reflect a discount given to the Obligor thereof.
If any such Receivable is so rebilled prior to the occurrence of the
Rebill Termination Date, then:
(a) the Seller of such Receivable shall repurchase the
Original Receivable at a price equal to the Unpaid Balance thereof on
the date such Receivable is rebilled and, pursuant to the provisions of
Section 1.1, convey the Rebilled Receivable to the Company on the date
such Receivable is rebilled; and
(b) the Seller thereof shall be entitled to receive the
Purchase Price of each Rebilled Receivable, provided, however, that the
Sellers and the Company agree that if the Unpaid Balance of the
Rebilled Receivable exceeds the Unpaid Balance of the Original
Receivable, the amounts shall be netted and such excess shall be the
"Unpaid Balance" for purposes of calculating the Purchase Price of the
Rebilled Receivable; provided, further, however the Sellers and the
Company agree that if the Unpaid Balance of the Original Receivable
exceeds the Unpaid Balance of the Rebilled Receivable, the amounts
shall be netted and such excess shall be paid or credited to the
Company in accordance with the provisions of Section 3.4.
No Receivable conveyed by any Seller to the Company hereunder may be
rebilled on or after the occurrence of the Rebill Termination Date.
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 CONDITIONS PRECEDENT TO AGREEMENT.
This Agreement shall be effective upon satisfaction of the following
conditions precedent:
(a) the requirements of Section 9.2 shall have been satisfied on
or prior to the date hereof with respect to ▇▇▇▇ Printing and Port City; and
(b) Amendment No. 1 to the Receivables Purchase Agreement shall be
duly executed by each of the parties thereto.
SECTION 4.2 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES.
Each Seller, by accepting the Purchase Price related to each purchase
of Receivables (and Related Rights), shall be deemed to have certified that the
representations and warranties
11
contained in Article V are true and correct on and as of the day of such
purchase, with the same effect as though made on and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 REPRESENTATIONS OF THE SELLERS.
In order to induce the Company to enter into this Agreement and to make
purchases hereunder, each Seller, in its capacity as a seller under this
Agreement, hereby makes the representations and warranties set forth in this
Section 5.1.
(a) Organization and Good Standing. It has been duly organized and
is validly existing as a corporation in good standing under the laws of the
state of its incorporation, with power and authority to own its properties and
to conduct its business as such properties are presently owned and such business
is presently conducted.
(b) Due Qualification. It is duly licensed or qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary approvals, in all jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such licensing, qualification
or approvals, except where the failure to be so qualified or have such licenses
or approvals would not have a Seller Material Adverse Effect.
(c) Power and Authority; Due Authorization. It has (a) all
necessary power, authority and legal right (i) to execute and deliver this
Agreement and each other Transaction Document to which it is a party; (ii) to
perform its obligations under each Transaction Document to which it is a party;
(iii) to generate, own, sell and assign Receivables on the terms and subject to
the conditions herein and therein provided; and (b) duly authorized such
execution and delivery and such sale and assignment and the performance of such
obligations by all necessary corporate action.
(d) Valid Sale; Binding Obligations. Each sale of Receivables and
Related Rights made by it pursuant to this Agreement shall constitute a valid
sale, transfer, and assignment thereof to the Company, enforceable against its
creditors by it and this Agreement constitutes, and each other Transaction
Document to be signed by it, when duly executed and delivered, will constitute
its legal, valid, and binding obligation, enforceable against it in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or in law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to which it
is a party and the fulfillment of the terms hereof or thereof will not (a)
conflict with, result in any breach of any of the terms and
12
provisions of, or constitute (with or without notice or lapse of time or both) a
default under (i) its articles of incorporation or by-laws, or (ii) any material
indenture, loan agreement, mortgage, deed of trust, or other agreement or
instrument to which it is a party or by which it is bound, (b) result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such material indenture, loan agreement, mortgage, deed of trust,
or other agreement or instrument, other than the Transaction Documents, or (c)
violate any law or any order, rule, or regulation applicable to it of any court
or of any federal, state or foreign regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over it or any of its
properties; except where any such conflict, breach, default, Lien or violation
would not have a Seller Material Adverse Effect.
(f) No Proceedings. There is no litigation, investigation or
proceeding pending, or to the best of its knowledge, threatened, before any
court, regulatory body, arbitrator, administrative agency, or other tribunal or
governmental instrumentality (a) asserting the invalidity of any Transaction
Document to which it is a party, (b) seeking to prevent the sale of Receivables
and the Related Rights to the Company or the consummation of any of the other
transactions contemplated by any Transaction Document to which it is a party, or
(c) that would have a Seller Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) Government Approvals. Except for the filing of the UCC
financing statements referred to in Article IX or any other Transaction Document
and any required continuation statements, all of which, at the time required in
Article IX or any other Transaction Document, as the case may be, shall have
been duly made and shall be in full force and effect, no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for its due execution, delivery and
performance of this Agreement and each other Transaction Document to which it is
a party; except for such authorizations, approval, notices and filings the
failure of which to obtain or make would not have a Seller Material Adverse
Effect.
(i) Financial Condition. On the Initial Closing Date (or, in the
case of any Additional Seller, on the related Seller Addition Date) it is, and
on the date of each subsequent transfer of a new Receivable hereunder (both
before and after giving effect to such transfer), it shall be Solvent. The
consolidated balance sheet of Cadmus and its Consolidated Subsidiaries (which
includes each Seller) as at June 30, 1999, and the related statements of income,
shareholders' equity and cash flows for the Fiscal Year then ended, reported on
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent certified public accountants, copies of
which have been furnished to the Agent and the Company, fairly present, in
conformity with GAAP, the consolidated financial condition of Cadmus and its
Consolidated Subsidiaries as at such date and the consolidated results of
operations and cash flows for such period stated, and there are no material
liabilities or unusual forward obligations that are not set forth therein. Since
June 30, 1999 there has been no material adverse change in any such financial
condition, business or operations except as described in Schedule 5.1(i).
13
(j) Material Adverse Effect: Since June 30, 1999 there has been no
event, act, condition, circumstance or occurrence having, or would have or
cause, a Seller Material Adverse Effect.
(k) Federal Regulations. No part of any funds obtained by it
hereunder has been used (x) to acquire any equity security of a class that is
registered pursuant to Section 12 of the Exchange Act or (y) for "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect or for any purpose which violates the
provisions of any Regulations of the Federal Reserve Board. If requested by the
Agent at any time, it will furnish to the Agent a statement in conformity with
the requirements of FR Form U-1 referred to in Regulation U.
(l) Quality of Title.
(i) Each Receivable (together with the Related Rights
with respect to such Receivable) which is to be sold to the Company
hereunder is or shall be, at the time of such sale, owned by it, free
and clear of any Lien. Whenever the Company makes a purchase of a
Receivable hereunder, it shall acquire a valid and perfected ownership
interest (free and clear of any Lien, other than a Lien created by or
arising through the Company, the Purchaser or the Agent) in such
Receivable and all Collections related thereto, and in its entire
right, title and interest in and to the Related Rights with respect
thereto.
(ii) No currently effective financing statement or other
instrument similar in effect covering any Receivable or any Related
Right is on file in any recording office except such as may be filed
(1) in favor of it in accordance with the Contracts, (2) in favor of
the Company in accordance with this Agreement, (3) in favor of the
Purchaser or the Agent in accordance with the Receivables Purchase
Agreement or in connection with any Lien arising solely as the result
of any action taken by the Purchaser (or any assignee thereof) or by
the Agent or (4) in favor of the Collateral Agent.
(m) Accuracy of Information. No information heretofore or
contemporaneously furnished in writing (and prepared) by it, as seller, to the
Company, the Purchaser or the Agent for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby or thereby is
inaccurate in any material respect as of the date it was furnished or (except as
otherwise disclosed to the Company at or prior to such time) as of the date as
of which such information is dated or certified, or contained any material
misstatement of fact or omitted or will omit to state any material fact
necessary to make such information not materially misleading.
(n) Offices. Its principal place of business and chief executive
office is located at the address set forth in Exhibit C, and the offices where
it keeps all its books, records and documents evidencing the Receivables, the
related Contracts and all other agreements related to
14
such Receivables are located at the address specified in Exhibit C (or at such
other locations, notified to Master Servicer, the Company and the Agent in
accordance with Section 6.1(f), in jurisdictions where all action required by
Section 7.3 has been taken and completed).
(o) Eligible Receivables. Subject to the last sentence of Section
3.3, each Receivable included in the Net Pool Balance as an Eligible Receivable
on the date of any Purchase, Reinvestment or computation of Net Pool Balance
shall be an Eligible Receivable on such date.
(p) [Reserved].
(q) [Reserved].
(r) Compliance with Credit and Collection Policy. With respect to
each Pool Receivable, it has complied in all material respects with the Credit
and Collection Policy.
(s) Compliance with Laws. It is in compliance with all applicable
laws, including, without limitation, all Environmental Laws, except where any
failure to comply with any such laws would not, alone or in the aggregate, have
a Seller Material Adverse Effect.
(t) Trade Names. Except as disclosed on Schedule 5.1(t), it does
not use any trade name other than its actual corporate name. From and after the
date that fell five (5) years before the date hereof, it has not been known by
any legal name other than its corporate name as of the date hereof, nor has it
been the subject of any merger or similar change in corporate structure, except
as disclosed on Schedule 5.1(t).
(u) Taxes. It has filed all material tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental
charges thereby shown to be owing, except to the extent any failure to file such
returns or reports or pay such taxes or charges would not have a Seller Material
Adverse Effect.
(v) Reliance on Separate Legal Identity. It is aware that the
Purchaser, the Liquidity Banks and the Agent are entering into the Transaction
Documents to which they are parties in reliance upon the Company's identity as a
legal entity separate from it and any of its other Affiliates.
ARTICLE VI
COVENANTS OF THE SELLERS
SECTION 6.1 AFFIRMATIVE COVENANTS.
From the Initial Closing Date (or, in the case of any Additional
Seller, from the related Seller Addition Date) until the Final Payout Date, each
Seller will, unless the Company and the Agent shall otherwise consent in
writing:
15
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders, including those with
respect to the Receivables generated by it and the Contracts and other
agreements related thereto, except where such noncompliance, individually or in
the aggregate, would not have a Seller Material Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification would
have a Seller Material Adverse Effect.
(c) Receivables Review. At any time and from time to time, upon
not less than five (5) Business Days' notice (unless a Liquidation Event has
occurred and is continuing (or the Agent believes in good faith that a
Liquidation Event has occurred and is continuing), in which case no such notice
shall be required) permit the Company and the Agent or their respective agents
or representatives, (i)(A) to examine, to audit and make copies of and abstracts
from all books, records and documents (including, without limitation, computer
tapes and disks) in the possession or under its control relating to the
Receivables generated by it, including, without limitation, the Contracts, and
purchase orders and other agreements related thereto, and (B) to visit its
offices and properties for the purpose of examining such materials described in
the foregoing clause (A) and discussing matters relating to the Receivables
generated by it or its performance hereunder with any of its officers or
employees having knowledge of such matters; (ii) to meet with its independent
auditors, to review such auditor's work papers and otherwise to review with such
auditors its books and records with respect to the Receivables generated by it
and the Related Rights thereto; and (iii) without limiting the provisions of
clause (i) next above, from time to time, at its expense, permit certified
public accountants or other auditors acceptable to the Agent to conduct a review
of its books and records with respect to the Receivables and the Related Rights
conveyed to the Company hereunder; provided that, so long as no Liquidation
Event has occurred and is continuing, (x) such examinations, visits, meetings
and reviews shall not be done more than two (2) times in any one calendar year
and (y) it shall only be responsible for the costs and expenses of one such
review in any one calendar year.
(d) Keeping of Records and Books of Account. Maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Receivables in the
event of the destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of outstanding Unpaid
Balances by Obligor and related debit and credit details of the Receivables).
(e) Performance and Compliance with Receivables and Contracts. At
its expense timely and fully perform and comply in all material respects with
all provisions, covenants and other promises required to be observed by it under
the Contracts and all purchase orders and other agreements related to the
Receivables conveyed by it, except where a failure to do so would not have a
Seller Material Adverse Effect.
16
(f) Location of Records. Keep its principal place of business and
chief executive office, and the offices where it keeps its records concerning or
related to Receivables, at the address(es) referred to in Exhibit C or, upon 30
days' prior written notice to the Company and the Agent, at such other locations
in jurisdictions where all action required by Section 7.3 shall have been taken
and completed.
(g) Credit and Collection Policies. Comply in all material
respects with its Credit and Collection Policy in connection with the
Receivables and all Contracts related thereto.
(h) Separate Corporate Existence of the Company. Take such actions
as shall be required in order to maintain the separate identity of the Company
separate and apart from it and its Affiliates, including those actions
applicable to it set forth in Section 7.4 of the Receivables Purchase Agreement.
(i) [Reserved].
(j) Accurate Reports. Furnish reports, information, financial
statements, documents, books, records or other material prepared by or on behalf
of it in writing that are true, complete and accurate in all material respects
as of the date so furnished and do not contain any material misstatement of fact
and do not omit to state a material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances made
or presented.
(k) Servicing Programs. Use reasonable efforts to secure within 60
days of the Closing Date (or, in the case of any Additional Seller, within 60
days of the related Seller Addition Date), any license or approval which may be
required for the Agent's use of any program used by such Seller or the Master
Servicer in the servicing of Receivables.
SECTION 6.2 REPORTING REQUIREMENTS.
From the Initial Closing Date (or in the case of any Additional Seller,
from the related Seller Addition Date) until the Final Payout Date, each Seller
will, unless the Company and the Agent shall otherwise consent in writing,
furnish to the Company and the Agent:
(a) Proceedings. As soon as possible and in any event within ten
Business Days after it has knowledge thereof, written notice of (i) all pending
proceedings and investigations of the type described in Section 5.1(f) not
previously disclosed to the Company and/or the Agent and (ii) any development in
previously disclosed litigation which development would have a Seller Material
Adverse Effect.
(b) Credit and Collection Policy. Prior to its effective date,
notice of any material change in the character of its business or in the Credit
and Collection Policy.
(c) Quarterly Financial Statements. As soon as available and in
any event within 45 days after the end of each of the first three fiscal
quarters of each of its Fiscal Years, copies of its
17
balance sheets and related statements of income, showing its financial condition
as of the close of such fiscal quarter and the results of its operations during
such fiscal quarter and the then elapsed portion of the fiscal year, together
with a Certificate of Financial Officer in the form attached hereto as Exhibit D
executed by its chief financial officer or treasurer provided, however, if in
accordance with GAAP, any Seller is required to consolidate its financial
statements with Cadmus, such Seller may, in lieu of providing its own financial
statements, provide the consolidated, and, to the extent otherwise available,
consolidating balance sheets and related statements of income and statements of
cash flow of Cadmus, showing the financial condition of Cadmus and its
Consolidated Subsidiaries for the related fiscal quarter.
(d) Annual Financial Statements. As soon as available and in any
event within 90 days after the end of each of its Fiscal Years, copies of its
balance sheets and related statements of income, showing its financial condition
as of the close of such fiscal year and the results of its operations during
such year; provided, however, if in accordance with GAAP, any Seller is required
to consolidate its financial statements with Cadmus, such Seller may, in lieu of
providing its own financial statements, provide the consolidated, and, to the
extent otherwise available, consolidating balance sheets and related statements
of income and statements of cash flow of Cadmus, showing the financial condition
of Cadmus and its consolidated Subsidiaries for the related Fiscal Year, all
such statements under this clause (d) certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other
independent public accountants of recognized national standing, with such
certification to be free of exceptions and qualifications not acceptable to the
Agent.
(e) Reports to Holders and Exchanges. In addition to the reports
required by subsections (c) and (d) next above, promptly upon the Company's or
the Agent's request, copies of any reports specified in such request which such
Seller sends to any of its securityholders, and any reports or registration
statements that such Seller files with the SEC or any national securities
exchange other than registration statements relating to employee benefit plans
and to registrations of securities for selling securities.
(f) ERISA. If and when any Seller or any member of the Controlled
Group (i) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in the Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for termination of such Plan under Title IV of ERISA,
or knows that the plan administrator of any Plan has given or is required to
give such notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal under Title IV of ERISA, a copy of such
notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer any Plan, a copy of such
notice
(g) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables generated by it and/or
its performance as Seller hereunder that the Company or the Agent may from time
to time reasonably request in order to protect the interests of the Company, the
Purchaser, the Agent, or any other Affected Party under or as contemplated by
the Transaction Documents.
18
SECTION 6.3 NEGATIVE COVENANTS.
From the Initial Closing Date (or, in the case of any Additional
Seller, from the related Seller Addition Date) until the Final Payout Date, each
Seller agrees that, unless the Agent shall otherwise consent in writing, it
shall not:
(a) Sales, Liens, Etc. Except as otherwise provided herein or in
any other Transaction Document, sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Lien upon or with
respect to, any Receivable conveyed to the Company hereunder or related Contract
or other Related Right, or any interest therein, or any Collections thereon, or
assign any right to receive income in respect thereof.
(b) Change in Credit and Collection Policy. Make any material
change in the Credit and Collection Policy that would impair the collectibility
of any significant portion of the Receivables conveyed to the Company hereunder
or otherwise adversely affect the interests or remedies of the Company hereunder
or the Purchaser under any Transaction Document.
(c) Receivables Not to be Evidenced by Promissory Notes. Take any
action to cause or permit any Receivable conveyed to the Company hereunder
generated by it to become evidenced by any "instrument" (as defined in the
applicable UCC), except in connection with the collection of overdue
Receivables, provided that the original of such instrument is delivered to the
Agent, duly endorsed.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
SECTION 7.1 RIGHTS OF THE COMPANY.
Each Seller hereby authorizes the Company and the Master Servicer or
their respective designees to take any and all steps in such Seller's name
necessary or desirable, in their respective determination, to collect all
amounts due under any and all Receivables conveyed to the Company hereunder,
including, without limitation, endorsing such Seller's name on checks and other
instruments representing Collections and enforcing such Receivables and the
provisions of the related Contracts that concern payment and/or enforcement of
rights to payment.
SECTION 7.2 RESPONSIBILITIES OF THE SELLERS.
Anything herein to the contrary notwithstanding:
(a) Collection Procedures. Each Seller agrees to direct the
Obligors to make payments of Receivables generated by it directly to a Lock-Box
that is the subject of a Lock Box Agreement at a Lock-Box Bank. Each Seller
further agrees to transfer any Collections
19
(including any security deposits applied to the Unpaid Balance of any
Receivable) that it receives directly to the Master Servicer within two Business
Days of receipt thereof, and agrees that all such Collections shall be deemed to
be received in trust for the Company; provided that, to the extent permitted
pursuant to Section 3.2, such Seller may retain such Collections as a portion of
the Purchase Price then payable or apply such Collections to the reduction of
the outstanding balance of the related Seller Note.
(b) Performance Under Contract. Each Seller shall remain
responsible for performing its obligations hereunder and under its applicable
Contracts, and the exercise by the Company or its designee of its rights
hereunder shall not relieve such Seller from such obligations.
(c) Power of Attorney. Each Seller hereby grants to the Master
Servicer an irrevocable power of attorney, with full power of substitution,
coupled with an interest, to take in the name of such Seller all steps necessary
or advisable to indorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by such Seller or transmitted or received
by the Company (whether or not from such Seller) in connection with any
Receivable.
(d) Sellers as Servicers. Each Seller hereby agrees to act as
servicer with respect to all Receivables conveyed by such Seller to the Company
hereunder and, with respect thereto shall be a "Servicer" under the Receivables
Purchase Agreement. Accordingly, in connection with such Receivables conveyed by
such Seller to the Company hereunder, each Seller hereby assumes all of the
responsibilities and obligations under the Receivables Purchase Agreement of the
Master Servicer with respect to the servicing of all Receivables conveyed by it
to the Company hereunder.
SECTION 7.3 FURTHER ACTION EVIDENCING PURCHASES.
Each Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action that the Company may reasonably request in order to perfect,
protect or more fully evidence the Company's ownership of the Receivables
conveyed by such Seller to the Company hereunder (and the Related Rights) or to
enable the Company to exercise or enforce any of its rights hereunder or under
any other Transaction Document. Without limiting the generality of the
foregoing, upon the request of the Company, each Seller will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and
(b) ▇▇▇▇ the summary master control data processing records with
the legend set forth in Section 9.2(i).
20
Each Seller hereby authorizes the Company or its designee to file one or more
financing or continuation statements, and amendments thereto and assignment
thereof, related to all or any of the Receivables conveyed by such Seller to the
Company hereunder (and the Related Rights) now existing or hereafter sold by
such Seller. If any Seller fails to perform any of its agreements or obligations
under this Agreement, the Company or its designee may (but shall not be required
to) itself, on behalf of such Seller, perform, or cause performance of, such
agreement or obligation, and the expenses of the Company or its designee
incurred in connection therewith shall be payable by such Seller as provided in
Section 10.6.
SECTION 7.4 APPLICATION OF COLLECTIONS.
Any payment by an Obligor in respect of any indebtedness owed by it to
a Seller in respect of any Contract shall, except as otherwise specified by such
Obligor or otherwise required by contract or law, be applied first, as a
Collection of the Receivables of such Obligor, in the order of the age of such
Receivables, starting with the oldest of such Receivables, and second, to any
other indebtedness of such Obligor.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 INDEMNITIES BY THE SELLERS.
Without limiting any other rights which the Company may have hereunder
or under applicable law, each Seller hereby agrees to indemnify the Company and
each of its permitted assigns, officers, directors, employees and agents (each
of the foregoing Persons being individually called a "Sale Indemnified Party"),
on demand, from and against any and all damages, losses, claims, judgments,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively called "Sale
Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a result of the following:
(a) the transfer by such Seller of an interest in any Receivable
conveyed by such Seller to the Company hereunder or Related Right to any Person
other than the Company;
(b) subject to the last sentence of Section 3.3, the breach of any
representation or warranty made by such Seller under or in connection with this
Agreement or any other Transaction Document, or any information or report
delivered by such Seller pursuant hereto or thereto which shall have been false
or incorrect in any material respect when made or deemed made;
(c) the failure by such Seller to comply with any applicable law,
rule or regulation with respect to any Receivable conveyed by such Seller to the
Company hereunder or the related Contract, or the nonconformity of any
Receivable conveyed by such Seller to the Company hereunder or the related
Contract with any such applicable law, rule or regulation;
21
(d) the failure to vest and maintain vested in the Company an
ownership interest in the Receivables conveyed by such Seller to the Company
hereunder and the Related Rights free and clear of any Lien, other than a Lien
arising solely as a result of an act of the Company, the Purchaser or the Agent,
whether existing at the time of the purchase of such Receivables or at any time
thereafter;
(e) the failure of such Seller to file with respect to itself, or
any delay in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other applicable laws
with respect to any Receivables conveyed by such Seller to the Company hereunder
or purported Receivables originated by such Seller, whether at the time of any
purchase or at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy or nonpayment due to a credit problem with the Obligor) of the
Obligor to the payment of any Receivable or purported Receivable conveyed by
such Seller to the Company hereunder (including, without limitation, a defense
based on such Receivables or the related Contracts not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the services or merchandise related to
any such Receivable or the furnishing of or failure to furnish such services or
merchandise;
(g) any product liability claim arising out of or in connection
with services or merchandise that are the subject of any Receivable conveyed by
such Seller to the Company hereunder; and
(h) any tax or governmental fee or charge (but not including taxes
upon or measured by net income or representing a franchise or unincorporated
business tax on such Sale Indemnified Party), all interest and penalties thereon
or with respect thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against the same, which may
arise by reason of the purchase or ownership of the Receivables generated by
such Seller or any Related Right connected with any such Receivables;
excluding, however, (i) Sale Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Sale Indemnified
Party, and (ii) any indemnification which has the effect of recourse to such
Seller for non-payment of related Receivables due to credit problems of the
Obligors.
If for any reason the indemnification provided above in this Section
8.1 is unavailable to a Sale Indemnified Party or is insufficient to hold such
Sale Indemnified Party harmless, then the related Seller shall contribute to the
amount paid or payable by such Sale Indemnified Party to the maximum extent
permitted under applicable law.
22
ARTICLE IX
ADDITION AND TERMINATION OF SELLERS
SECTION 9.1 ADDITION OF SELLERS.
Subject to Section 9.2, from time to time one or more Subsidiaries who
are 100% owned, directly or indirectly, by Cadmus may become Sellers hereunder
and parties hereto. If any such Subsidiary wishes to become an additional Seller
or if Cadmus or any Seller desires to acquire any Person as a new wholly-owned
Subsidiary and cause such Subsidiary to be an additional Seller at the time such
acquisition is consummated, it shall submit a request to such effect in writing
to the Company and the Agent. If the Company (which, for purposes of this
provision shall not include any assignee under Section 10.11) shall have agreed
to any such request, such Subsidiary shall become an additional Seller hereunder
and a party hereto on the related Seller Addition Date upon the satisfaction of
the conditions set forth in Section 9.2.
SECTION 9.2 CONDITIONS PRECEDENT TO THE ADDITION OF A SELLER.
No Subsidiary of Cadmus approved by the Company as an additional Seller
pursuant to Section 9.1 shall be added as a Seller hereunder unless the
conditions set forth below shall have been satisfied on or before the date
designated for the addition of such Seller (the "Seller Addition Date"):
(a) the Company and the Agent shall have received copies
of duly adopted resolutions of the board of directors of such Seller,
as in effect on the related Seller Addition Date, authorizing this
Agreement, the execution of a supplement to this Agreement and the
related Seller Note, substantially in the form of Exhibit B, making
such Seller a "Seller" herein and thereunder, the documents to be
delivered by such Seller hereunder and under any other Transaction
Document and the transactions contemplated hereby, certified by the
secretary or assistant secretary of such Seller;
(b) the Company and the Agent shall have received duly
executed certificates of the secretary or an assistant secretary of
such Seller, dated the related Seller Addition Date, certifying the
names and true signatures of the officers authorized on behalf of such
Seller to sign any instruments or documents in connection with the
addition of such Seller as a "Seller" under this Agreement or any other
Transaction Document;
(c) a Lock-Box with respect to the Receivables and
Related Rights to be sold by such Seller shall have been established
and approval of the Agent has been obtained pursuant to Section 7.3(d)
of the Receivables Purchase Agreement;
(d) the Company and the Agent shall have received
acknowledgment copies (or other evidence of filing reasonably
acceptable to the Agent, on the Purchaser's behalf,) of proper
financing statements (Form UCC-1), in such form as the Agent, on the
Purchaser's behalf, may reasonably request, naming such Seller as the
debtor and seller
23
of the Receivables and the Related Rights to be sold by such Seller,
the Company as the secured party and the purchaser thereof and the
Agent on behalf of the Purchaser as assignee, or other, similar
instruments or documents, as may be necessary or, in the opinion of the
Agent, on the Purchaser's behalf, desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect the sale by
such Seller to the Company of, and the Purchaser's undivided percentage
interest in, the Receivables and the Related Rights to be sold by such
Seller;
(e) the Company and the Agent, on the Purchaser's behalf,
shall have received search reports (i) listing all financing statements
that name such Seller as debtor and that are filed in the jurisdictions
in which filings were made pursuant to subsection (d) above and in such
other jurisdictions that the Agent shall reasonably request, together
with copies of such financing statements (none of which (other than any
of the financing statements described in subsection (d) above) shall
cover any Receivables or Related Rights unless appropriate releases
and/or termination statements with respect thereto are executed and
delivered to the Company and the Agent), and (ii) listing all tax liens
and judgment liens (if any) filed against any debtor referred to in
clause (i) above in the jurisdictions described therein and showing no
such Liens;
(f) such Seller shall have delivered or transmitted to
the Company, with respect to the Receivables originated by it, a
computer tape, diskette or data transmission reasonably acceptable to
the Company showing, as of a date no later than five Business Days
preceding the related Seller Addition Date, the information required to
be contained in a Purchase Report as to all Receivables to be
transferred by such Seller to the Company on the related Seller
Addition Date;
(g) such Seller shall have delivered to the Company, the
Agent and the Purchaser, opinions of counsel (each such opinion to be
in form and substance, and reviewed by a law firm, satisfactory to the
Agent) (i) concerning the existence of a "true sale" of the Receivables
and the proceeds thereof from such Seller to the Company hereunder,
(ii) concerning the inapplicability of the doctrine of substantive
consolidation to the Company and in connection with any bankruptcy
proceeding involving such Seller, (iii) to the effect that the Company
has obtained a valid and perfected ownership or security interest in
the Receivables and the proceeds thereof of such Seller and (iv) the
enforceability of the Transaction Documents against such Seller, due
incorporation of the Seller, certain corporate matters and such other
matters as the Agent may reasonably request; and
(h) the Agent shall be satisfied that such Receivables
and the proceeds thereof are subject to no other Liens of record,
except as otherwise permitted under the Transaction Documents;
(i) such Seller shall have delivered to the Company and
the Agent a certificate from an officer of such Seller to the effect
that the Master Servicer and such Seller have placed on the most
recent, and have taken all steps reasonably necessary to
24
ensure that there shall be placed on subsequent, summary master control
data processing reports the following legend (or the substantive
equivalent thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD
TO CADMUS RECEIVABLES CORP. PURSUANT TO AN AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT, DATED AS OF MAY 17, 2000, AS AMENDED FROM
TIME TO TIME, BETWEEN THE SELLERS NAMED THEREIN, CADMUS RECEIVABLES
CORP. AND CADMUS COMMUNICATIONS CORPORATION AND AN OWNERSHIP AND
SECURITY INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN GRANTED
AND ASSIGNED TO WACHOVIA BANK, N.A. AS AGENT ON BEHALF OF BLUE RIDGE
ASSET FUNDING CORPORATION, PURSUANT TO A RECEIVABLES PURCHASE
AGREEMENT, DATED AS OF OCTOBER 26, 1999, AS AMENDED FROM TIME TO TIME,
AMONG BLUE RIDGE ASSET FUNDING CORPORATION, CADMUS RECEIVABLES CORP.,
CADMUS COMMUNICATIONS CORPORATION AND WACHOVIA BANK, N.A.
(j) the Company and the Agent shall have received such
other approvals, opinions or documents as the Company or the Agent, as
the case may be, shall reasonably request.
SECTION 9.3 TERMINATION OF A SELLER.
(a) Any Seller shall be terminated as a Seller hereunder by the
Company and with prior written notice to the Agent, on behalf of the Purchaser,
on the date such Seller ceases to be a wholly-owned direct or indirect
Subsidiary of Cadmus (a "Mandatory Seller Termination Date"); provided that (i)
the aggregate Outstanding Balance of the Receivables of any such Sellers which
so cease to be wholly-owned Subsidiaries at such time (together with the
aggregate Outstanding Balance of Receivables of all Sellers which have been
terminated pursuant to this Section 9.3 within the preceding 90 days) shall not
exceed 10% of the aggregate Outstanding Balance of all Receivables at such time
and (ii) the Termination Date has not occurred and no Termination Date would
occur as a result thereof. From and after any Mandatory Seller Termination Date,
the Company shall cease buying Receivables and other Related Rights from the
related Seller. Each such Seller shall be released as a Seller party hereto for
all purposes and shall cease to be a party hereto on the date that is the later
of (A) 90 days after the Mandatory Seller Termination Date and (B) the date on
which all amounts outstanding with respect to Receivables previously sold by
such Seller to the Company have been collected or written off in accordance with
the Credit and Collection Policy of such Seller. Prior to such day, such Seller
shall continue to be obligated to perform its servicing and other obligations
hereunder and under the Transaction Documents to which it is a party with
respect to Receivables previously sold by such Seller to the Company, including,
without limitation, its obligation to direct the deposit of Collections into the
appropriate Lock-Box.
(b) From time to time, the Sellers, or the Master Servicer on
behalf of the Sellers, may request in writing (with a copy to the Agent) that
the Company designate one or more Sellers as Sellers that shall cease to be
parties to this Agreement (a "Permissive Seller
25
Termination"); provided that no Termination Date has occurred or will occur as a
result thereof. Promptly after receipt of any such designation by the Company,
the Agent and each other Seller, such Seller shall select a date, which date
shall not be earlier than 30 days after the date of receipt by the Agent of
written notice of such designation, as such Seller's "Permissive Seller
Termination Date"; provided that such Permissive Seller Termination may not
occur with respect to a Seller without the written consent of the Agent, on
behalf of the Purchaser, if the aggregate Outstanding Balance of the Receivables
of such Seller exceeds 10% of the aggregate Outstanding Balance of all
Receivables on the Reporting Date immediately preceding the date of such notice
to the Agent. From and after any Permissive Seller Termination Date, the Company
shall cease buying Receivables and other Related Rights from the related Seller.
Each such Seller shall be released as a Seller party hereto for all purposes and
shall cease to be a party hereto on the date that is the later of (i) 90 days
after the Permissive Seller Termination Date and (ii) the date on which all
amounts outstanding with respect to Receivables previously sold by such Seller
to the Company have been collected or written off in accordance with the Credit
and Collection Policy of such Seller. Prior to such day, such Seller shall
continue to be obligated to perform its servicing and other obligations
hereunder and under the Transaction Documents to which it is a party with
respect to Receivables previously sold by such Seller to the Company, including,
without limitation, its obligation to direct the deposit of Collections into the
appropriate Lock-Box.
(c) A terminated Seller's Obligations relating to breaches of its
representations and warranties made in Article V, its indemnification
obligations and payment provisions set forth in Article VIII and Section 10.6
and its agreement in Section 10.12 shall be continuing and shall survive any
termination of a Seller hereunder. Such terminated Seller will have continuing
obligations with respect to any Receivables previously sold by it to the Company
(including, without limitation, the payment of any Sale Indemnified Amounts) to
the extent such obligations arise hereunder or under any Transaction Document to
which such Seller is a party, but otherwise shall have no obligation to
repurchase any Receivables previously sold by it to the Company. A terminated
Seller shall be entitled to receive any Collections on reconveyed Receivables or
other amounts pursuant to Section 3.5.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 AMENDMENTS, ETC.
(a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and consented to by each Seller, the Company, the Agent and the Master
Servicer.
(b) No failure or delay on the part of the Company, the Master
Servicer, any Seller or any third party beneficiary in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on
26
the Company, the Master Servicer, or any Seller in any case shall entitle it to
any notice or demand in similar or other circumstances. No waiver or approval by
the Company or the Master Servicer under this Agreement shall, except as may
otherwise be stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval under this Agreement shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2 NOTICES, ETC.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by express mail or
courier or by certified mail, postage-prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth below, or to
such other address as may be hereafter notified by the respective parties
hereto.
(a) The Company:
CADMUS RECEIVABLES CORP.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The Sellers:
to the addresses set forth in Schedule 10.2.
All such notices and communications shall be effective, (i) if personally
delivered or sent by express mail or courier or if sent by certified mail, when
received, and (ii) if transmitted by facsimile, when sent, receipt confirmed by
telephone or electronic means.
SECTION 10.3 NO WAIVER; CUMULATIVE REMEDIES.
The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 10.4 BINDING EFFECT; ASSIGNABILITY.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Sellers and their respective successors and permitted assigns. No
Seller may assign its rights hereunder or any interest herein except to another
wholly-owned direct or indirect Subsidiary of Cadmus that has been admitted as a
Seller hereunder without the prior written consent of the Company and the Agent.
Subject to Section 10.11, the Company may not assign its rights hereunder or any
interest herein without the prior written consent of the Sellers and the Agent.
27
The Agreement shall create and constitute the continuing obligations of the
parties hereto in accordance with its terms, and shall remain in full force and
effect until the date after the Sale Termination Date on which each Seller has
received payment in full for all Receivables originated by it and Related Rights
conveyed pursuant to Section 1.1 and has paid and performed all of its
obligations hereunder in full. The rights and remedies with respect to any
breach of any representation and warranty made by the Sellers pursuant to
Article V and the indemnification and payment provisions of Article VIII and
Section 10.6 and each Person's agreement set forth in Section 10.12 shall be
continuing and shall survive any termination of this Agreement.
SECTION 10.5 GOVERNING LAW.
THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
COMMONWEALTH OF VIRGINIA, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE
INTERESTS OF THE COMPANY IN THE RECEIVABLES OR RELATED RIGHTS IS GOVERNED BY THE
LAWS OF JURISDICTIONS OTHER THAN THE COMMONWEALTH OF VIRGINIA.
SECTION 10.6 COSTS, EXPENSES AND TAXES.
In addition to the obligations of the Sellers under Article VIII, each
Seller agrees to pay on demand:
(a) all reasonable costs and expenses, including attorneys' fees,
in connection with any enforcement against such Seller relating to any breach of
such Seller's obligations hereunder or under any other Transaction Document; and
(b) all stamp and other similar taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement or the other Transaction Documents, and agrees to
indemnify each Sale Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
SECTION 10.7 SUBMISSION TO JURISDICTION.
EACH PARTY HERETO HEREBY IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN THE
STATE OF NEW YORK, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY TRANSACTION DOCUMENT; (B) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL
COURT; (C) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING; (D) CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
SUCH ACTION OR PROCEEDING BY
28
THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN
SECTION 10.2; AND (E) TO THE EXTENT ALLOWED BY LAW, AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT ANY PARTY'S RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY OTHER PARTY OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.
SECTION 10.8 WAIVER OF JURY TRIAL.
EACH PARTY HERETO EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY
OTHER TRANSACTION DOCUMENT, OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 10.9 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY
REFERENCE.
The various captions (including, without limitation, the table of
contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any Section or Exhibit are to such Section or
Exhibit of this Agreement, as the case may be. The Exhibits hereto are hereby
incorporated by reference into and made a part of this Agreement.
SECTION 10.10 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement.
SECTION 10.11 ACKNOWLEDGMENT AND AGREEMENT.
By execution below, each Seller expressly acknowledges and agrees that
all of the Company's rights, title, and interests in, to, and under this
Agreement shall be assigned by the Company to the Purchaser pursuant to the
Receivables Purchase Agreement (and the Purchaser may further assign such rights
in accordance with the Receivables Purchase Agreement), and each Seller consents
to such assignment. Each of the parties hereto acknowledges and agrees that the
Agent and the Purchaser are third party beneficiaries of the rights of the
Company
29
arising hereunder and under the other Transaction Documents to which such Seller
is a party as seller.
SECTION 10.12 NO PROCEEDINGS.
Each Seller agrees that it shall not institute against the Company, or
join any other Person in instituting against the Company, or join any other
Person in instituting against the Company, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Event of Bankruptcy)
as long as there shall not have elapsed one year plus one day since the Final
Payout Date. The foregoing shall not limit any Seller's right to file any claim
in or otherwise take any action with respect to any insolvency proceeding that
was instituted by any Person other than such Seller.
[Remainder of page intentionally left blank]
30
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duty authorized, as of the date
first above written.
CADMUS JOURNAL SERVICES, INC.
By:____________________________
Name:______________________
Title:_____________________
EXPERT GRAPHICS, INC.
By:____________________________
Name:______________________
Title:_____________________
▇▇▇▇ PRINTING COMPANY
By:____________________________
Name:______________________
Title:_____________________
PORT CITY PRESS, INC.
By:____________________________
Name:______________________
Title:_____________________
▇▇▇▇▇▇▇▇ GRAPHICS, INC.
By:____________________________
Name:______________________
Title:_____________________
CADMUS RECEIVABLES CORP.
By:____________________________
Name:______________________
Title:_____________________
CADMUS COMMUNICATIONS CORPORATION
By:____________________________
Name:______________________
Title:_____________________
Sale Agreement
EXHIBIT A
PURCHASE REPORT
[NAME OF ORIGINATOR]
CADMUS RECEIVABLES CORP.
As of (DATE)
Cut-Off Date
Total Receivables $ Input
Aggregate Unpaid Balance of Receivables AUB $ Calculated
LIBOR Input
Turnover Days Input
12 Month Losses $ Input
12 Month Collections $ Input
Purchaser's Total Investment PTI Fixed
Cost Rate (LIBOR + 5.0%) CR Calculated
Cost Discount (TD/360)*CR CD Calculated
Loss Discount (12 Month Losses/12 Month Collections) LD Calculated
Fair Market Value Discount (CD + LD) FMVD Calculated
Purchase Price (AUB - (AUB*FMVD)) PP Calculated
Eligible Receivables $ Input
Ineligible Receivables $ Input
A-1
EXHIBIT B
PROMISSORY NOTE
(NON-NEGOTIABLE
SELLER NOTE)
[EFFECTIVE DATE]
FOR VALUE RECEIVED, the undersigned, CADMUS RECEIVABLES CORP., a
Virginia corporation (the "Company"), promises to pay to [NAME OF SELLER], a
[________] corporation ("[Name of Seller"), on the terms and subject to the
conditions set forth herein and in the Purchase Agreement referred to below, the
principal sum of the aggregate unpaid Purchase Price of all Receivables
purchased from time to time by the Company from [Name of Seller] pursuant to
such Purchase Agreement, as such unpaid Purchase Price is shown in the records
of [Name of Seller].
1. Purchase Agreement. This promissory note (this "Seller Note")
is one of the Seller Notes described in, and is subject to the terms and
conditions set forth in, that certain Amended and Restated Purchase and Sale
Agreement dated as of May 17, 2000 (as the same may be amended or otherwise
modified from time to time, the "Purchase Agreement"), between the sellers named
therein, the Company and Cadmus Communications Corporation. Reference is hereby
made to the Purchase Agreement for a statement of certain other rights and
obligations of [Name of Seller] and the Company.
2. Definitions. Capitalized terms used (but not defined) herein
have the meanings assigned thereto in the Purchase Agreement and in Appendix A
to the Receivables Purchase Agreement dated as of October 26, 1999 among Cadmus
Communications Corporation, as initial master servicer, the Company, Blue Ridge
Asset Funding Corporation, as purchaser and Wachovia Bank, N.A., as agent (as it
may be amended or otherwise modified from time to time, the "Receivables
Purchase Agreement"). In addition, as used herein, the following terms have the
following meanings:
Bankruptcy Proceedings: As defined in clause (b) of paragraph 9 hereof.
Final Maturity Date: The date that is one year and one day following the Final
Payout Date.
Interest Period: The period from and including a Reporting Date (or, in the case
of the first Interest Period, the date hereof) to but excluding the next
Reporting Date.
Senior Interest: Collectively, (i) the obligation of the Company and the Master
Servicer to identify, and to turn over, Collections and other proceeds of the
Asset Interest acquired by the Purchaser pursuant to the Receivables Purchase
Agreement, (ii) any Indemnified Amounts and (iii) all other obligations of the
Company that are due and payable to any Affected Party,
B-1
together with all interest accruing on any such amounts after the commencement
of any Bankruptcy Proceedings, notwithstanding any provision or rule of law that
might restrict the rights of any Senior Interest Holder, as against the Company
of anyone else, to collect such interest.
Senior Interest Holders: Collectively, the Purchaser, the Agent, the other
Affected Parties and the Indemnified Parties.
3. Interest. Subject to the provisions set forth below, the
Company promises to pay interest on this Seller Note as follows:
(a) Prior to the Final Payout Date, the aggregate unpaid Purchase
Price from time to time outstanding during any Interest Period shall bear
interest at a rate per annum equal to the LIBO Rate as in effect from time to
time on the first Business Day of each Settlement Period, as determined by [Name
of Seller], plus 1.5%; and
(b) From (and including) the Final Payout Date to (but excluding)
the date on which the entire aggregate unpaid Purchase Price is fully paid, the
aggregate unpaid Purchase Price from time to time outstanding shall bear
interest at a rate per annum equal to the LIBO Rate as in effect from time to
time on the first Business Day of each Settlement Period, as determined by [Name
of Seller], plus 1.5%,
but in no event in excess of the maximum rate permitted by law. In this event
that, contrary to the intent of [Name of Seller] and the Company, the Company
pays interest hereunder and it is determined that such interest rate was in
excess of the then legal maximum rate, then that portion of the interest payment
representing an amount in excess of the then legal maximum rate shall be deemed
a payment of principal and applied against the principal then due hereunder.
4. Interest Payment Dates. Subject to the provisions set forth
below, the Company shall pay accrued interest on this Seller Note on each
Settlement Date, and shall pay accrued interest on the amount of each principal
payment made in cash on a date other than a Settlement Date at the time of such
principal payment.
5. Basis of Computation. Interest accrued hereunder shall be
computed for the actual number of days elapsed on the basis of a 365- or 366-day
year.
6. Principal Payment Dates. Subject to the provisions set forth
below, payments of the principal amount of this Seller Note shall be made as
follows:
(a) The principal amount of this Seller Note shall be reduced from
time to time pursuant to Sections 3.2, 3.3, 3.4 and 7.2 of the Purchase
Agreement;
(b) The entire remaining unpaid balance of this Seller Note shall
be paid on the final Maturity Date.
B-2
Subject to the provisions set forth below, the principal amount of and accrued
interest on this Seller Note may be prepaid on any Business Day without premium
or penalty.
7. Payments. All payments of principal and interest hereunder are
to be made in lawful money of the United States of America.
8. Enforcement Expenses. In addition to and not in limitation of
the foregoing, but subject to the provisions set forth below and to any
limitation imposed by applicable law, the Company agrees to pay all expenses,
including reasonable attorneys' fees and legal expenses, incurred by [Name of
Seller] in seeking to collect any amounts payable hereunder which are not paid
when due.
9. Provisions Regarding Restrictions on Payment. The Company
covenants and agrees, and [Name of Seller], by its acceptance of this Seller
Note, likewise covenants and agrees on behalf of itself and any holder of this
Seller Note, that the payment of the principal amount of, and interest on, this
Seller Note is hereby expressly subject to certain restrictions set forth in the
following clauses of this paragraph 9:
(a) No payment or other distribution of the Company's assets of
any kind or character, whether in cash, securities, or other rights or property,
shall be made on account of this Seller Note except to the extent such payment
or other distribution is permitted under the Purchase Agreement and the
Receivables Purchase Agreement;
(b) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Company,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency or receivership proceedings, or upon an assignment for
the benefit of creditors, or any other marshalling of the assets and liabilities
of the Company or any sale of all or substantially all of the assets of the
Company (such proceedings being herein collectively called "Bankruptcy
Proceedings"), the Senior Interest shall first be paid and performed in full and
in cash before Cadmus shall be entitled to receive and to retain any payment or
distribution in respect to this Seller Note. In order to implement the
foregoing, [Name of Seller] hereby irrevocably agrees that the Agent, in the
name of [Name of Seller] or otherwise, may demand, ▇▇▇ for, collect, receive and
receipt for any and all such payments or distributions, and the file, prove and
vote or consent in any such Bankruptcy Proceedings with respect to any and all
claims of [Name of Seller] relating to this Seller Note, in each case until the
Senior Interests shall have been paid and performed in full and in cash;
(c) In the event that [Name of Seller] receives any payment or
other distribution of any kind or character from the Company or from other
source whatsoever, in respect of this Seller Note, other than as expressly
permitted by the terms of this Seller Note, such payment or other distribution
shall be received for the sole benefit of the Senior Interest Holders to the
extent of the Senior Interest and shall be turned over by [Name of Seller] to
the Agent (for the benefit of the Senior Interest Holders) forthwith;
B-3
(d) Notwithstanding any payments or distributions received by the
Senior Interest Holders in respect of this Seller Note, [Name of Seller] shall
not be subrogated to the rights of the Senior Interest Holders in respect of the
Senior Interests;
(e) The provisions set forth in this Paragraph 9 are intended
solely for the purpose of defining the relative rights of [Name of Seller], on
the one hand, and the Senior Interest Holders on the other hand;
(f) [Name of Seller] shall not, until Final Payout Date, transfer,
pledge or assign, or commence legal proceedings to enforce or collect this
Seller Note or any rights in respect hereof;
(g) [Name of Seller] shall not, without the advance written
consent of the Agent, commence, take any action to cause any other Person to
commence, or join with any other Person in commencing, any Bankruptcy
Proceedings with respect to the Company until the Final Payout Date shall have
occurred;
(h) If, at any time, any payment (in whole or in part) of any
Senior Interest is rescinded or must be restored or returned by a Senior
Interest Holder (whether in connection with Bankruptcy Proceedings or
otherwise), these provisions shall continue to be effective or shall be
reinstated, as the case may be, as though such payment had not been made;
(i) [Name of Seller] hereby waives; (i) notice of acceptance of
these provisions by any of the Senior Interest Holders; (ii) notice of the
existence, creation, non-payment or non-performance of all or any of the Senior
Interests; and (iii) all diligence in enforcement, collection or protection of,
or realization upon, the Senior Interests, or any thereof, or any security
therefor;
(j) These provisions constitute a continuing offer from the holder
of this Seller Note to all Persons who become the holders of, or who continue to
hold, Senior Interests; and these provisions are made for the benefit of the
Senior Interest Holders, and the Agent or the Purchaser may proceed to enforce
such provisions on behalf of each of such Persons.
10. General. No failure or delay on the part of [Name of Seller]
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power of right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Seller Note shall in any event be effective unless (i) the
same shall be in writing and signed and delivered by the Company and [Name of
Seller] and (ii) all consent required for such actions under the Transaction
Documents shall have been received by the appropriate Persons.
11. No Negotiation. This Seller Note is not negotiable.
B-4
12. Governing Law. THIS PROMISSORY NOTE SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
13. Captions. Paragraph captions used in this Seller Note are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Seller Note.
CADMUS RECEIVABLES CORP.
By:________________________
Name:______________________
Title:_____________________
B-5
Exhibit C
Office Location Where Records are Kept
Cadmus Journal Services, Inc.
- ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Henrico County)
- ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇▇ Arundel County)
- ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Lancaster County)
Expert Graphics, Inc.
- ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Henrico County)
▇▇▇▇ Printing Company
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Northampton County)
- ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Monroe County)
- ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(Lancaster County)
Port City Press, Inc.
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Baltimore County)
▇▇▇▇▇▇▇▇ Graphics, Inc.
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Mecklenburg County)
Schedule 5.1(i)
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.
Schedule 5.1 (t)
Trade Names
Cadmus Journal Services, Inc.
Current Trade Names:
Cadmus
Cadmus Communications
Cadmus Journal Services
Cadmus Journals
Cadmus Lancaster
Cadmus Magazines
CJS
CJS Backcopy
CJS Reprints
Dynamic Diagrams
E-Doc
Tapsco
Other Corporate Names; Recent Mergers:
Cadmus Journal Services, Inc. is the result of a June 30, 1998, merger
of Lancaster Press, Inc. and Cadmus Journal Services, Inc. with and
into The ▇▇▇▇▇▇▇ ▇▇▇▇ Press, Incorporated, which simultaneously changed
its name to "Cadmus Journal Services, Inc."
Expert Graphics, Inc.
Current Trade Names:
Cadmus
Cadmus Airport
Cadmus Communications
Cadmus Graphic Solutions
Cadmus Promotional
Cadmus Promotional Printing
Expert Graphics
Other Corporate Names; Recent Mergers:
On December 22, 1995, Cadmus Color Center, Inc. was merged with and
into Expert Graphics, Inc., which was the surviving corporation of such
merger.
Schedule 5.1(t)
Trade Names
(continued)
▇▇▇▇ Printing Company
Current Trade Names:
Cadmus
Cadmus Communications Corporation
Cadmus Professional Communications
CadmusMack
▇▇▇▇ Printing Company
▇▇▇▇ Printing Company - Easton Division
CadmusMack - Easton Division
Cadmus Professional Communications - Easton Division
Easton Division
▇▇▇▇ Printing Company - East Stroudsburg Division
CadmusMack - East Stroudsburg Division
Cadmus Professional Communications - East Stroudsburg Division
East Stroudsburg Division
▇▇▇▇▇▇ Printing
Monroe Printing
▇▇▇▇ Printing Company - Science Press
▇▇▇▇ Printing Company - Ephrata Division
CadmusMack - Science Press
CadmusMack - Ephrata Division
Cadmus Professional Communications - Science Press
Cadmus Professional Communications - Ephrata Division
Ephrata Division
Science Press
Monroe Printing
Other Corporate Names, Recent Mergers:
▇▇▇▇ Printing Company recently completed a merger transaction with its
former parent companies, Melham, Inc. and Melham Holdings, Inc. ▇▇▇▇
Printing Company is the surviving corporation.
On February 14, 1997, ▇▇▇▇ Printing Company was merged with and into
▇▇▇▇ Printing Companies, Inc., which then immediately changed its name
to "▇▇▇▇ Printing Company."
Port City Press, Inc.
Cadmus
Cadmus Communications Corporation
Cadmus Professional Communications
CadmusMack
▇▇▇▇ Printing Company - Port City Press
CadmusMack - Port City Press
Cadmus Professional Communications - Port City Press
Port City Press Division
Port City Press
Port City Press, Inc.
PCP
Other Corporate Names, Recent Mergers:
None
▇▇▇▇▇▇▇▇ Graphics, Inc.
Current Trade Names:
Cadmus
Cadmus ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Communications
Cadmus Specialty Packaging
Cadmus Promotional Printing
Cadmus Whitehall
Cadmus-Whitehall Group
Other Corporate Names; Recent Mergers:
None
Except as described above, from and after the date that fell five (5) years
before the date hereof, none of the corporations has been known by any legal
name other than its corporate name as of the date hereof, nor has any of the
corporations been the subject of any merger or similar change in corporate
structure.
Schedule 10.2
Notice Addresses
Cadmus Journal Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Expert Graphics, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ Printing Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Port City Press, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Graphics, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT D
FORM OF CERTIFICATE OF FINANCIAL OFFICER
FORM OF CERTIFICATE OF FINANCIAL OFFICER
In accordance with Section 6.2(c) of that certain Amended and Restated
Purchase and Sale Agreement, dated as of May 17, 2000 (the "Sale Agreement")
(terms defined in the Receivables Purchase Agreement being used herein as
therein defined), between the sellers named therein and Cadmus Receivables
Corp., I, _________, in my capacity as __________ of [Name of Seller] (the
"Company") DO HEREBY CERTIFY that:
1. Each of the representations and warranties of the Company
contained in Article V of the Sale Agreement is true and correct in all material
respects on and as of the date hereof as if made on and as of such date.
2. Attached hereto as Exhibit A are the consolidated balance
sheet, income statement and statement of shareholders' equity as of ____________
of Cadmus Communications Corporation. Such financial statements fairly present,
in conformity with GAAP, the consolidated financial position of Cadmus
Communications Corporation and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and cash flows for such periods stated
and there are no material liabilities or unusual forward obligations that are
not set forth therein.
3. No Liquidation Event or Unmatured Liquidation Event has
occurred and is continuing on the date hereof.
4. Since ____________ 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]
EXHIBIT A-1
[FORM OF LOCK-BOX AGREEMENT]
_____________________ , 199____
[Lock-Box Bank]
Ladies and Gentlemen:
Reference is made to our collection account no. ___________ maintained
with you (the "Account") pursuant to a lockbox agreement between each of the
undersigned and you, the terms and conditions of which are incorporated herein
by reference (the "Lockbox Agreement"). Pursuant to an Amended and Restated
Purchase and Sale Agreement, dated as of May 17, 2000 as amended, supplemented
or otherwise modified from time to time, among the sellers named therein, Cadmus
Communications Corporation (together, with [Name of Seller(s)], the "Lock-Box
Parties") and Cadmus Receivables Corp. ("Cadmus Receivables"), as purchaser,
we have sold and/or may hereafter sell to Cadmus Receivables certain of the
accounts, chattel paper, instruments or general intangibles (collectively,
"Receivables") with respect to which payments are or may hereafter be made to
the Account. Pursuant to a Receivables Purchase Agreement, dated as of October
26, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Purchase Agreement"), among Cadmus Receivables, as seller, Cadmus
Communications Corporation, as master servicer, Blue Ridge Asset Funding
Corporation, as purchaser ("Blue Ridge"), as purchaser and Wachovia Bank, N.A.
as Agent (the "Agent") for Blue Ridge, Cadmus Receivables has assigned and/or
may hereafter assign to the Agent on behalf of Blue Ridge an undivided
percentage interest in the Receivables.
For purposes of this letter agreement, Wachovia Bank, N.A. is acting as
Agent for Blue Ridge. We hereby transfer exclusive ownership and control of the
Account to the Agent, for the benefit of Blue Ridge, subject only to the
condition subsequent that the Agent shall have given you notice of its election
to assume such ownership and control, which notice shall be substantially in the
form attached hereto as Annex A.
We hereby irrevocably instruct you, at all times from and after the
date of your receipt of notice from the Agent of its assumption of control of
the Account as described above, (i) to make all payments to be made by you out
of or in connection with the Account directly to the Agent in accordance with
the instructions of the Agent, (ii) to hold all moneys and instruments delivered
to the Account or any lockbox administered by you for the order of the Agent
(for the benefit of Blue Ridge), (iii) to refrain from initiating any transfer
from the Account to any Lock-Box Party and (iv) to change the name of the
Account to "Wachovia Bank, N.A. as Agent for Blue Ridge". The Agent agrees to
execute standard wire transfer documentation in effect from time to time, or
other customary documentation related to wire transfers, prior to the initiation
of any wire transfers.
We also hereby notify you that, at all times from and after the date of
your receipt of notice from the Agent as described above, the Agent shall be
irrevocably entitled to exercise in our place and stead any and all rights in
respect of or in connection with the Account, including, without limitation, (a)
the right to specify when payments are to be made out of or in connection with
the Account and (b) the right to require preparation of duplicate monthly bank
statements on the Account for the Agent's audit purposes and mailing of such
statements directly to the Agent at an address specified by the Agent.
Notices from the Agent and other notices or communications under this
letter agreement may be personally served or sent by facsimile or by certified
mail, return receipt requested, or by express mail or courier, to the address or
facsimile number set forth under the signature of the relevant party to this
letter agreement (or to such other address or facsimile number as the relevant
party shall have designated by written notice to the party giving the aforesaid
notice or other communication). Notwithstanding the foregoing, any notice
delivered by you may be delivered by regular mail. If notice is given by
facsimile, it will be deemed to have been received when the notice is sent and
receipt is confirmed by telephone or other electronic means. All other notices
will be deemed to have been received when actually received or, in the case of
personal delivery, delivered.
By executing this letter agreement, you acknowledge the existence of
the Agent's right to ownership and control of the Account and its ownership (on
behalf of Blue Ridge and Cadmus Receivables as the parties having interests in
such amounts) of the amounts from time to time on deposit therein, and agree
that from the date hereof the Account shall be maintained by you for the benefit
of, and amounts from time to time therein held by you for, the Agent (on behalf
of Blue Ridge and Cadmus Receivables) on the terms provided herein. Except as
otherwise provided in this letter agreement, payments to the Account are to be
processed in accordance with the standard procedures currently in effect. All
service charges and fees with respect to the Account shall continue to be
payable by us under the arrangements currently in effect.
By executing this letter agreement, you irrevocably waive and agree not
to assert, claim or endeavor to exercise, irrevocably bar and stop yourself from
asserting, claiming or exercising, and acknowledge that you have not heretofore
received a notice, writ, order or any form of legal process from any other party
asserting, claiming or exercising, any rights of set-off, banker's lien or other
purported form of claim with respect to the Account or any funds from time to
time therein. Except for your right to payment of your service charges and fees
and your right to make deductions for returned items, you shall have no rights
in the Account or funds therein. To the extent you may ever have such rights,
you hereby expressly subordinate all such rights to all rights of the Agent.
You may terminate this letter agreement by canceling the Account
maintained with you, which cancellation and termination shall become effective
only upon 90 days' prior written notice thereof from you to the Agent. Incoming
mail addressed to the Account received after such cancellation shall be
forwarded in accordance with the Agent's instructions. This letter agreement may
also be terminated upon written notice to you by the Agent stating that the
Purchase Agreement is no longer in effect. Except as otherwise provided in this
paragraph, this letter agreement may not be terminated or amended without the
prior written consent of the Agent.
Notwithstanding any other provision of this letter agreement, it is
agreed by the parties hereto that you shall not be liable to Blue Ridge or the
Agent for any action taken by you or any of your directors, officer, agents or
employees in accordance with this letter agreement at the request of the Agent,
except for your or such person's own gross negligence or willful misconduct.
This letter agreement may be executed by the signatories hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall together constitute but one and the same letter agreement. This
letter agreement shall be governed by and interpreted under the laws of the
State of North Carolina.
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing the six copies of this letter agreement enclosed herewith
in the space provided below and returning each of such signed copies to the
Agent.
Very truly yours,
[NAME OF SELLER]
By:______________________________
Title:___________________________
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address:
Accepted and confirmed as of
the date first written above:
BLUE RIDGE ASSET FUNDING CORPORATION
as Purchaser
By:___________________________________
Title:________________________________
Address for notice:
Attention:
Facsimile No.:
WACHOVIA BANK, N.A.,
as Agent
By:___________________________________
Title:________________________________
Address for notice:
Attention:
Facsimile No.:
Acknowledged and agreed to as of
the date first written above:
CADMUS RECEIVABLES CORP.
By:___________________________________
Title:________________________________
Address for notice:
Attention:
Facsimile No.:
[LOCKBOX BANK]
By:___________________________________
Title:________________________________
Address for notice:
_________________________________
_________________________________
_________________________________
Attention:_______________________
Facsimile No.:___________________
ANNEX A to
Lock-Box Agreement
[FORM OF NOTICE OF ASSUMPTION OF CONTROL OF ACCOUNT]
[Letterhead of Wachovia]
_________, 199____
_________________________________
_________________________________
_________________________________
_________________________________
RE: [Name of Seller(s)]
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 [Name of Seller[s]), Cadmus Communications Corporation, Cadmus
Receivables Corp., Blue Ridge Asset Funding Corporation (the "Purchaser"),
Wachovia Bank, N.A., as Agent for the Purchaser, and you, concerning the above
described lock-box account (the "Account").
We hereby give you notice of our assumption of ownership and control of
the Account as provided in the Letter Agreement.
We hereby instruct you to make all payments to be made by you out of or
in connection with the Account [directly to the undersigned, at [our address set
forth above], for the account of [Blue Ridge Asset Funding Corporation (account
no. ______________)].
[other instructions]
Very truly yours,
Wachovia Bank, N.A., as Agent
By:___________________________
Name:
Title: