MAIL-WELL I CORPORATION,
as Servicer,
MAIL-WELL TRADE RECEIVABLES CORPORATION,
as Seller under the Receivables Purchase Agreement,
and
BANK OF AMERICA NATIONAL TRUST AND SAVING ASSOCIATION,
as Administrator
SERVICING AGREEMENT
Dated as of July 1, 1999
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.1. Definitions 1
SECTION 1.2. Usage of Terms 2
SECTION 1.3. Section References 3
SECTION 1.4. Other Terms 3
ARTICLE II
The Receivables
SECTION 2.1. Custody of Contract Documents 3
SECTION 2.2. Duties of Servicer as Custodian 3
SECTION 2.3. Instructions; Authority to Act 4
SECTION 2.4. Custodian's Indemnification 4
SECTION 2.5. Effective Period and Termination 4
ARTICLE III
Administration and Servicing of Receivables
SECTION 3.1. Duties of Servicer 5
SECTION 3.2. Collection of Pool Receivables
Payments 5
SECTION 3.3. Realization Upon Related Security 6
SECTION 3.4. Servicing Fee 6
SECTION 3.5. Servicer Expenses 6
SECTION 3.6. Covenants of Servicer 6
SECTION 3.7. Purchase of Receivables Upon Breach 7
SECTION 3.8. Appointment of SubServicer 7
SECTION 3.9. Seller Report 8
SECTION 3.10. Annual Statement as to Compliance;
Notice of Default 8
SECTION 3.11. Annual Independent Certified Public
Accountant's Report 9
ARTICLE IV
Collections
SECTION 4.1. Collection Account 9
SECTION 4.2. Collections 9
ARTICLE V
The Servicer
SECTION 5.1. Representations and Warranties of
Servicer 10
SECTION 5.2. (a) Liability of Servicer;
Indemnities 14
SECTION 5.3. Covenants of Servicer 18
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ARTICLE VI
Servicer Termination
SECTION 6.1. MailWell Not to Resign as Servicer 25
SECTION 6.2. Servicer Termination 26
SECTION 6.3. Appointment of Successor 26
ARTICLE VII
Miscellaneous Provisions
SECTION 7.1. Amendment 27
SECTION 7.2. Protection of Title to Pool
Receivables 28
SECTION 7.3. GOVERNING LAW AND JURISDICTION 28
SECTION 7.4. Notices, Etc 29
SECTION 7.5. Severability of Provisions 29
SECTION 7.6. Assignment 29
SECTION 7.7. Counterparts 30
SECTION 7.8. Third Party Beneficiary 31
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SCHEDULE A SCHEDULE OF PERMITTED INVESTMENTS
EXHIBIT A FORM OF SELLER REPORT
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SERVICING AGREEMENT
This Servicing Agreement (as amended, supplemented or otherwise
modified, this "Agreement"), dated as of July 1, 1999, is made among
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MAIL-WELL I CORPORATION, a Delaware corporation ("Mail-Well"), as
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initial Servicer (in such capacity, together with its successors and
permitted assigns in such capacity, the "Servicer"), MAIL-WELL TRADE
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RECEIVABLES CORPORATION, a Colorado corporation, as the Seller under the
Receivables Purchase Agreement (the "Seller"), and BANK OF AMERICA
------
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association,
as administrator (in such capacity, together with its successors and
assigns in such capacity, the "Administrator").
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WITNESSETH THAT: In consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.1. Definitions. Whenever used in this Agreement
-----------
the following words and phrases, unless the context otherwise requires,
shall have the following meanings:
"Agreement" has the meaning set forth in the preamble.
---------
"Indemnified Party" means each of the Securitization Parties
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and each of their respective Affiliates, employees, agents, successors,
transferees and assigns.
"Mail-Well" has the meaning set forth in the preamble.
---------
"Officer's Certificate" means a certificate signed by the
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president, secretary or assistant secretary, any vice president, the
treasurer, any assistant treasurer or the controller of the Seller or
the Servicer, as appropriate.
"Opinion of Counsel" means a written opinion of counsel who
------------------
may but need not be counsel to the Seller or Servicer, which opinion
shall be reasonably acceptable to the Administrator.
"Payment Day" has the meaning set forth in the Purchase and
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Sale Agreement.
"Permitted Investments" means any of the Permitted
---------------------
Investments set forth in Schedule A.
"Purchasing Certificate" means a certificate completed and
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executed on behalf of the Servicer by the president, any secretary or
assistant secretary, any vice president, the treasurer, any assistant
treasurer or the controller of the Servicer pursuant to Section 3.9,
substantially in the form of Exhibit B.
"Receivables Purchase Agreement" means the Receivables
------------------------------
Purchase Agreement, dated as of July 1, 1999, among the Servicer, the
Seller, Quincy Capital Corporation, as Issuer, and the Administrator, as
amended, supplemented or otherwise modified from time to time.
"Repurchase Amount" has the meaning set forth in the Purchase
-----------------
and Sale Agreement.
"Seller Report" means a certificate completed and executed by
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the Servicer by its president, any vice president, any secretary or
assistant secretary, the treasurer, any assistant treasurer or the
controller of the Servicer pursuant to Section 3.9, substantially in the
form of Exhibit A.
"Servicer" means Mail-Well, together with its successors and
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permitted assigns in such capacity, pursuant to Section 6.3.
"Servicer Report Date" means the date three Business Days
--------------------
prior to the Settlement Date.
"Servicing Fee"means the fee payable to the Servicer for
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services rendered during each Fixed Period, determined pursuant to
Section 3.8.
"Servicing Fee Rate" means 0.5% per annum (or, in the case of
------------------
a Servicer other than Mail-Well or any Affiliate thereof, such higher
amount as is agreed by such Servicer and the Administrator, if any, not
to exceed 110% of such Servicer's reasonable estimate of costs and
expenses that it shall incur in connection with performing its
obligations as Servicer).
"State" means any state of the United States of America or
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the District of Columbia.
SECTION 1.2. Usage of Terms. With respect to all terms in
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this Agreement, the singular includes the plural and the plural the
singular; words importing any gender include the other gender;
references to "writing" include printing, typing, lithography and other
means of reproducing words in a visible form; references to agreements
and other contractual instruments include all subsequent amendments
thereto or changes therein entered into in accordance with their
respective terms and not
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prohibited by this Agreement; references to Persons include their
permitted successors and assigns; and the term "including" means
"including without limitation."
SECTION 1.3. Section References. All Section references
------------------
shall be to this Agreement.
SECTION 1.4. Other Terms. Capitalized terms used herein and
-----------
not defined herein shall have the meanings assigned to such terms in the
Receivables Purchase Agreement.
ARTICLE II
The Receivables
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SECTION 2.1. Custody of Contract Documents. To assure
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uniform quality in servicing the Pool Receivables and to reduce
administrative costs, the Seller and the Administrator, as agent for the
Securitization Parties, upon the execution and delivery of this
Agreement, hereby appoints the Servicer (subject to the Administrator's
right to terminate the Servicer (or any sub-servicer) in accordance
herewith), and the Servicer hereby accepts such appointment, to act as
the agent of the Seller and the Securitization Parties as custodian of
the Contract Documents for each Pool Receivable. Neither the
Administrator nor any other Securitization Party shall have any duty to
monitor the performance of the Servicer and shall have no liability in
connection with the Servicer's performance hereunder.
SECTION 2.2. Duties of Servicer as Custodian. (a) Safekeeping.
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The Servicer shall hold the Contract Documents on behalf of the Seller
and the Securitization Parties for the use and benefit of the Seller
and the Securitization Parties and maintain such accurate and complete
accounts, records and computer systems pertaining to each Contract
Document as shall enable compliance with this Agreement. In performing
its duties as custodian the Servicer shall act with reasonable care,
using that degree of skill and attention that the Servicer exercises
with respect to the contract documents relating to all comparable
receivables that the Servicer services for itself or others. The
Servicer shall promptly report to the Seller and the Administrator
any material failure on its part to hold the Contract Documents and
maintain its accounts, records and computer systems as herein provided
and promptly take appropriate action to remedy any such failure.
Nothing herein shall be deemed to require an initial review or
any periodic review by the Administrator or any other Securitization
Party of the Contract Documents.
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(b) Maintenance of and Access to Records. The Servicer
------------------------------------
shall maintain each Contract Document at its address set forth on its
signature page to the Receivables Purchase Agreement or at one of the
locations specified in Schedule III to the Receivables Purchase
Agreement, or at such other office as shall be specified to the Seller
and the Administrator with 60 days prior written notice of such change
or additions in location. The Servicer shall make available to the
Seller and the Administrator or its duly authorized representatives,
attorneys or auditors a list of locations of the Contract Documents, and
shall also so make available the Contract Documents themselves, and the
related accounts, records and computer systems maintained by the
Servicer, at such times during reasonable business hours as the Seller
or the Administrator shall reasonably instruct.
(c) Release of Documents. Upon instruction from the
--------------------
Administrator, the Servicer shall release any Contract Document (or, if
requested, copies thereof) to the Administrator or the Administrator's
agent or designee, as the case may be, at such place or places as the
Administrator may designate, as soon as practicable.
SECTION 2.3. Instructions; Authority to Act. The Servicer
------------------------------
shall be deemed to have received proper instructions with respect to the
Contract Documents upon its receipt of written instructions signed by an
authorized officer of the Administrator.
SECTION 2.4. Custodian's Indemnification. The Servicer as
---------------------------
custodian shall indemnify the Seller and each Indemnified Party for any
and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses of any kind whatsoever that may be imposed
on, incurred or asserted against the Seller or such Indemnified Party,
as the case may be, as the result of any improper act or any omission in
any way relating to the maintenance and custody by the Servicer as
custodian of the Contract Documents; provided, however, that the
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Servicer shall not be liable for any portion of any such amount
resulting from the willful misconduct or gross negligence of the Seller
or such Indemnified Party, as the case may be.
SECTION 2.5. Effective Period and Termination. The Servicer's
--------------------------------
appointment as custodian shall become effective as of the date hereof
and shall continue in full force and effect until terminated pursuant
to this Section 2.5. If Mail-Well shall resign as Servicer in accordance
with the provisions of this Agreement or if all the rights and obligations
of the Servicer (or any sub-servicer) shall have been terminated under
Section 6.2, the appointment of the Servicer (or such sub-servicer) as
custodian may be terminated by the Administrator. The Administrator
may terminate the Servicer's (or such sub-
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servicer's) appointment as custodian upon a Termination Event or in the
event that the Servicer (or such sub-servicer) shall no longer be
permitted under law to act as custodian at any time upon written notice
to the Servicer. As soon as practicable after any termination of such
appointment, the Servicer shall deliver (and cause each sub-servicer to
deliver) the Contract Documents to the Administrator or the
Administrator's agent or designee at such place or places as the
Administrator may reasonably designate.
ARTICLE III
Administration and Servicing of Receivables
-------------------------------------------
SECTION 3.1. Duties of Servicer. The Servicer as agent for
------------------
the Seller and the Securitization Parties (to the extent provided
herein) shall manage, service, administer and make collections on the
Pool Receivables with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to all comparable
receivables that it services for itself or others. The Servicer's
duties shall include collection and posting of all payments, responding
to inquiries of Obligors on such Pool Receivables, investigating
delinquencies, sending payment statements or coupon books to Obligors,
reporting tax information to Obligors as required by law, accounting for
collections and furnishing monthly and annual statements to the Seller,
the Administrator and other Securitization Parties with respect to
distributions. The Servicer shall follow its customary standards,
policies and procedures in performing its duties as Servicer and the
Credit and Collection Policy. Without limiting the generality of the
foregoing, subject to Section 3.6, the Servicer is authorized and
empowered by the Seller and the Securitization Parties to execute and
deliver, on behalf of itself, the Seller or the Securitization Parties,
any and all instruments of satisfaction or cancellation, or partial or
full release or discharge, and all other comparable instruments, with
respect to such Pool Receivables. If the Servicer shall commence a
legal proceeding to enforce a Pool Receivable pursuant to such policies
and procedures, the Seller and the Securitization Parties shall
thereupon be deemed to have automatically assigned, solely for the
purpose of collection on behalf of the party retaining an interest in
such Pool Receivable, such Pool Receivable to the Servicer.
SECTION 3.2. Collection of Pool Receivables Payments. (a)
---------------------------------------
Collection of the Receivables shall be administered by the Servicer in
accordance with the terms of this Agreement, and the Receivables
Purchase Agreement. The Seller shall provide to the Servicer on a
timely basis all information necessary for such
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administration, including notice of the occurrence of any Termination
Day and current computations of Purchased Interests. All amounts
deposited to a Lock-Box Account shall be identified as Collections of
Pool Receivables or other collections within two Business Days.
(b) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Pool
Receivables which the Servicer deems reasonably collectable as and when
the same shall become due and shall follow such collection procedures as
it follows with respect to all comparable receivables that it services
for itself or others in addition to the Credit and Collection Policy.
On each day on which Collections of Pool Receivables are received (or
deemed received), the Servicer shall follow the procedures set forth in
Sections 1.4(a) and (b) of the Receivables Purchase Agreement. Pursuant
to this Agreement and to the Credit and Collection Policy, the Servicer
may grant extensions, rebates or adjustments on a Pool Receivable
subject to the provisions of Section 3.6, and may waive any late payment
charge or any other fees that may be collected in the ordinary course of
servicing a Pool Receivable.
SECTION 3.3. Realization Upon Related Security. On behalf of
---------------------------------
the Seller and the Securitization Parties, the Servicer shall use its
commercially reasonable efforts, consistent with its customary servicing
procedures and the Credit and Collection Policy of the Seller, to
realize upon, foreclose or repossess the Related Security securing an
Obligor's indebtedness under any such Pool Receivable as to which the
Servicer shall have determined eventual payment in full is unlikely.
SECTION 3.4. Servicing Fee. The Servicing Fee for each Fixed
-------------
Period shall equal the product of one twelfth times the Servicing Fee
Rate times the Outstanding Principal Balance of all Pool Receivables as
of the first day of such Fixed Period.
SECTION 3.5. Servicer Expenses. The Servicer shall be
-----------------
required to pay all expenses incurred by it in connection with its
activities hereunder, including fees and disbursements of independent
accountants, taxes imposed on the Servicer and expenses incurred in
connection with distributions and reports to the Seller, the
Administrator or any other Securitization Party.
SECTION 3.6. Covenants of Servicer. The Servicer shall not
---------------------
impair the rights of the Seller or the Securitization Parties in any
Pool Receivable. The Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of Pool
Receivables as and when the same shall become due and follow such
collection procedures and the Credit and Collection Policy as it follows
with respect to
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comparable receivables that it services for itself and others. The
Servicer shall maintain the Lock-Box Accounts and identify all amounts
deposited into such Lock-Box Accounts as Collections of Pool Receivables
or other collections. The Servicer shall not sell, pledge, transfer,
deliver or otherwise dispose of any Pool Receivable, except as provided
in this Agreement. The Servicer will not extend, rewrite or otherwise
modify the payment terms of a Pool Receivable; provided, however,
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that prior to the occurrence of a Termination Event or Unmatured
Termination Event, the Servicer may, subject to the limitations below,
extend any Receivable (but not beyond 30 days) in accordance with the
Credit and Collection Policy as in effect on the date hereof (with such
changes as have been approved by the Administrator); provided
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further, that any such extension shall not affect such Receivables
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status as a delinquent Receivable or a Defaulted Receivable. In the
event that the Servicer fails to comply with the provisions of the
preceding sentence or if there is a determination by the Servicer and
the Administrator or a Governmental Authority that the Servicer has
modified the terms of a Pool Receivable in such a manner as to
constitute a cancellation of such Pool Receivable and the creation of a
new Pool Receivable for federal income tax purposes, the Servicer shall
be required to purchase such Pool Receivable for the Repurchase Amount,
in the manner specified in Section 3.7 as of the Settlement Date
following the Fixed Period in which such failure occurs.
SECTION 3.7. Purchase of Receivables Upon Breach. The
-----------------------------------
Servicer, the Seller or the Administrator shall inform the other parties
promptly, in writing, upon the discovery of any breach by Servicer of
its obligations pursuant to Section 3.6. Unless the breach shall have
been cured by the Settlement Date in the month following such discovery,
the Servicer shall purchase any Pool Receivable, which as a result of
such breach would materially and adversely affect the interests of the
Seller or the Securitization Parties, as of such Settlement Date. In
consideration of the purchase of such Pool Receivable, the Servicer
shall remit the Repurchase Amount on such Settlement Date to the
Collection Account. The sole remedy with respect to a breach of
Section 3.6 shall be to require the Servicer to repurchase Pool
Receivables pursuant to this Section 3.7.
SECTION 3.8. Appointment of Sub-Servicer. The Servicer may,
---------------------------
at any time, at the direction of the Seller appoint a sub-servicer to
perform all or any portion of its obligations as Servicer hereunder,
including, without limitation, in its capacity as custodian of the
Contract Documents; provided, however, that the Servicer shall
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remain obligated and be liable for the servicing and administering of
the Pool Receivables and custody of the Contract Documents in accordance
with the Receivables Purchase Agreement and this Agreement without
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diminution of such obligation and liability by virtue of the appointment
of such sub-servicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Pool Receivables and maintaining the custody of the Contract Documents.
The fees and expenses of the sub-servicer shall be as agreed between the
Servicer and its sub-servicer from time to time and none of the Seller,
the Administrator or any other Securitization Party shall have any
responsibility therefor. Following the occurrence of a Termination
Event, the Administrator may terminate or replace any sub-servicer in
accordance with Section 6.2.
SECTION 3.9. Seller Report. On or before each Servicer
-------------
Report Date, the Servicer shall deliver to the Seller and the
Administrator a Seller Report, containing all information necessary to
make the transfers and distributions pursuant to the Receivables
Purchase Agreement for the Fixed Period immediately preceding the date
of such Seller Report. If on any Settlement Date there is a default by
the Seller or the Servicer in respect of any Repurchase Amounts to be
deposited into the Collection Account, the Servicer shall recalculate
all of the amounts described in the Seller Report to reflect such
default and deliver to the Seller and the Administrator a revised Seller
Report reflecting such recalculations on such Settlement Date. Prior to
each purchase by any Securitization Party under the Receivables Purchase
Agreement, the Servicer shall deliver to the Administrator a Borrowing
Certificate in accordance therewith.
SECTION 3.10. Annual Statement as to Compliance; Notice of
--------------------------------------------
Default. (a) The Servicer shall deliver to the Seller and the
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Administrator, on or before July 31 of each year, beginning July 31,
2000, an Officer's Certificate, dated as of June 30 of such year,
stating that (i) a review of the activities of the Servicer during the
preceding 12-month period and of its performance under this Agreement
has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has
fulfilled in all material respects all its obligations under this
Agreement throughout such year (or such shorter period, as the case may
be), or, if there has been a material default in the fulfillment of any
such obligation, specifying each such material default known to such
officer and the nature and status thereof.
(b) The Servicer shall deliver to the Seller and the
Administrator promptly after having obtained knowledge thereof, but in
no event later than two Business Days thereafter, written notice in an
Officer's Certificate of any event which with the giving of notice or
lapse of time, or both, would become a Termination Event.
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SECTION 3.11. Annual Independent Certified Public Accountant's
-------------------------------------------------
Report. The Servicer shall cause a firm of independent certified
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public accountants acceptable to the Administrator (who may also render
other services to the Servicer and the Seller) to deliver to the Seller
and the Administrator on or before March 31 of each year commencing
March 31, 2000, a report on applying agreed upon procedures as outlined
by the standards established by the American Institute of Certified
Public Accountants, verifying the accuracy of the information contained
within the monthly Seller Reports. Procedures performed in the
preparation of the report will be agreed upon by the Seller and the
Administrator prior to the commencement of the engagement and will be
specifically outlined in the issued report. These procedures can
include, on a nonstatistical selection basis, the selection of a monthly
Seller Report which was prepared in the year reported on, the
verification of divisional and individual receivable balances which
comprise the Net Receivables Pool Balance, recalculation and
verification of receivable classifications and agings, and the
recalculation of mathematical ratios and formulas. The accountants
report will denote exceptions to the agreed upon procedures based upon
materiality levels agreed upon by the Seller and the Administrator.
ARTICLE IV
Collections
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SECTION 4.1. Collection Account. (a) All amounts held in the
------------------
Collection Account may be invested in Permitted Investments by the
Servicer, in each case such investments maturing not later than the next
Settlement Date. All income or other gains from the investment of
moneys deposited in the Collection Account shall be deposited in such
account immediately upon receipt.
(b) The Servicer (if the Servicer is Mail-Well or any
affiliate thereof) shall be liable for any insufficiency in the
Collection Account resulting from net losses on investments made in
accordance with the provisions of this Section 4.1. No successor
Servicer (that is not an affiliate of Mail-Well) nor any Securitization
Party shall be liable for any investment made by it in accordance with
this Section 4.1.
SECTION 4.2. Collections. The Servicer shall remit and apply
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all Collections and other amounts in accordance with the Receivables
Purchase Agreement.
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ARTICLE V
The Servicer
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SECTION 5.1. Representations and Warranties of Servicer. The
------------------------------------------
Servicer makes the following representations on which the Seller and the
Securitization Parties rely. The representations speak as of the
execution and delivery of this Agreement and as of each Payment Day and
shall survive the sale of the Pool Receivables to the Seller pursuant to
the terms of the Purchase and Sale Agreement and to the Administrator,
for the benefit of the Securitization Parties, pursuant to the terms of
the Receivables Purchase Agreement.
(a) Organization and Good Standing. The Servicer is a
------------------------------
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, and is duly qualified to do
business, and is in good standing as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so
qualified and had at all relevant times, and shall have, power,
authority and legal right to acquire, own, sell and service the Pool
Receivables and to hold the Contract Documents as custodian on behalf of
the Seller and the Securitization Parties.
(b) Power and Authority; Due Authorization; No Violation.
----------------------------------------------------
The execution, delivery and performance by the Servicer of the Agreement
and the other Transaction Documents to which it is a party, including
the Servicer's use of the proceeds of purchases and reinvestments, (i)
are within the Servicer's corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) do not contravene or
result in a default under or conflict with (1) the Servicer's charter or
by-laws, (2) any law, rule or regulation applicable to the Servicer,
except to the extent such contravention, default or conflict will not
have a Material Adverse Effect, (3) any contractual restriction binding
on or affecting the Servicer or its property or (4) any order, writ,
judgment, award, injunction or decree binding on or affecting the
Servicer or its property, and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its
properties. The Agreement and the other Transaction Documents to which
it is a party have been duly executed and delivered by the Servicer.
(c) Government Approvals. No authorization or approval or
--------------------
other action by, and no notice to or filing with, any Governmental
Authority or other Person is required for the due execution, delivery
and performance by the Servicer of this Agreement or any other
Transaction Document to which it is a party.
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(d) Valid, Binding Obligations. Each of the Agreement and
--------------------------
the other Transaction Documents to which the Servicer is a party each
constitute a legal, valid and binding obligation of the Servicer
enforceable 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 at law.
(e) Financial Condition. The balance sheets of Mail-Well,
-------------------
Inc. and its subsidiaries as at December 31, 1998, and the related
statements of income and retained earnings for the fiscal year then
ended, copies of which have been furnished to the Administrator, fairly
present the financial condition thereof as at such date and the results
of operations thereof for the period ended on such date, all in
accordance with generally accepted accounting principles consistently
applied, and since December 31, 1998 there has been no material adverse
change in the business, operations, property or financial or other
condition or operations of the Seller, the Servicer, the Guarantor or
any Originator, the ability of the Seller, the Servicer, the Guarantor
or any Originator to perform its obligations under the Agreement or the
other Transaction Documents or the collectibility of the Pool
Receivables, or which affects the legality, validity or enforceability
of the Agreement or the other Transaction Documents.
(f) No Proceedings. There is no pending, threatened action
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or proceeding affecting the Servicer or any of its Affiliates before any
Governmental Authority or arbitrator which could materially adversely
affect the business, operations, property, financial or other condition
or operations of the Servicer or any of its Affiliates, the ability of
the Servicer to perform its obligations under the Agreement or the other
Transaction Documents or the collectibility of the Pool Receivables, or
which affects or purports to affect the legality, validity or
enforceability of the Agreement or the other Transaction Documents.
(g) Use of Proceeds. No proceeds of any purchase or
---------------
reinvestment will be used to acquire more than 5% of any class of any
security in any transaction which is subject to Sections 13 and 14 of
the Exchange Act, except for a nonhostile, invited Acquisition of a
Person (approved by the board of directors (or other body exercising
similar authority) of such Person, which does not violate any laws,
rules or regulations applicable thereto or any other provision of the
Transaction Documents.
(h) Quality of Title. The Seller is the legal and beneficial
----------------
owner of the Pool Receivables and Related Security
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free and clear of any Adverse Claim; upon each purchase or reinvestment,
the Administrator, for the benefit of the Securitization Parties, shall
acquire a valid and enforceable perfected undivided percentage ownership
interest, to the extent of the Purchased Interest, in each Pool
Receivable then existing or thereafter arising and in the Related
Security and Collections and other proceeds, with respect thereto, free
and clear of any Adverse Claim; the Agreement creates a security
interest in favor of the Securitization Parties in the items described
in Section 1.2(d), and the Securitization Parties have a first
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priority perfected security interest in such items, free and clear of
any Adverse Claims. No effective financing statement or other
instrument similar in effect covering any Contract Document or any Pool
Receivable or the Related Security or Collections with respect thereto
or any Lock-Box Account or the Collection Account is on file in any
recording office, except those filed in favor of the Administrator
relating to the Agreement or in favor of the Seller relating to the
Purchase and Sale Agreement and except those which are both
(i) indirectly covering any Pool Receivable or the Related Security as
proceeds which will be released or terminated within 60 days after the
Effective Date and (ii) listed on Annex E to the Receivables Purchase
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Agreement.
(i) Accuracy of Information. Each Seller Report certificate,
-----------------------
exhibit, financial statement, document, book, record, report or other
information furnished or to be furnished at any time by or on behalf of
the Servicer to the Seller or the Administrator in connection with the
Agreement is or will be accurate in all material respects as of its date
or as of the date so furnished, and no such item contains or will
contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they
were made, not misleading.
(j) Offices. The principal place of business and chief
-------
executive office (as such terms are used in the UCC) of the Servicer
and the office where the Servicer keeps its records concerning the
Receivables are located at the addresses referred to in Section 5.3(b).
--------------
(k) Governmental Authority. The Servicer is not in violation
----------------------
of any order of any court, arbitrator or Governmental Authority which
could have a Material Adverse Effect.
(l) Lock-Box Banks and Collection Account Bank. The names
------------------------------------------
and addresses of all the Lock-Box Banks and Collection Account Bank,
together with the account numbers of the related Lock-Box Accounts or
Collection Account, as applicable, are specified in Schedule I to the
----------
Receivables Purchase Agreement (or at such other Lock-Box Banks or
Collection Account Bank, as
-12-
applicable, and/or with such other Lock-Box Accounts or Collection
Account, as applicable, as have been notified to the Administrator in
accordance with the Agreement) and the Collection Account is subject to
the Collection Account Agreement and all Lock-Box Accounts subject to
Lock-Box Agreements, duly executed by the parties thereto (in the case
of certain Lock-Box Banks, within 30 days after the date hereof).
(m) Federal Reserve Regulations. No proceeds of any purchase
---------------------------
or reinvestment will be used for any purpose that violates any
applicable law, rule or regulation, including, without limitation,
Regulations T, U and X of the Federal Reserve Board.
(n) Eligible Receivables. Each Pool Receivable included as
--------------------
an Eligible Receivable in the calculation of the Net Receivables Pool
Balance, is an Eligible Receivable.
(o) No Termination Event. No event has occurred and is
--------------------
continuing, or would result from a purchase or reinvestment by any
Purchaser under the Receivables Purchase Agreement or from the
application of the proceeds therefrom, which constitutes a Termination
Event.
(p) Accounting as Sales. The Seller and each Originator have
-------------------
accounted for each sale of undivided percentage ownership interests in
the Pool Receivables in its books and financial statements as a sale,
consistent with generally accepted accounting principles.
(q) Compliance with Credit and Collection Policy. The
--------------------------------------------
Servicer has complied in all material respects with the Credit and
Collection Policy in effect at the time with regard to the collection of
Pool Receivables.
(r) Compliance with Transaction Documents. The Servicer has
-------------------------------------
complied in all material respects with all of the terms, covenants and
agreements contained in this Agreement and the other Transaction
Documents to which the Servicer is a party.
(s) Taxes. Each of the Servicer and the Seller has filed all
-----
federal and other 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.
(t) Bulk Sales Act. No transaction contemplated by this
--------------
Agreement or any other Transaction Document requires compliance with, or
will be subject to avoidance under, any bulk sales act or similar law.
-13-
(u) Investment Company Act. The Servicer is not, and is not
----------------------
controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," or a
"subsidiary company" of a "holding company," or an affiliate of a
"holding company," or a "subsidiary company" of a "holding company,"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(v) Pension Plans. During the preceding twelve months, no
-------------
steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan which has given
rise to a lien under Section 302(f) of ERISA. No condition exists or
event or transaction has occurred with respect to any Pension Plan which
could result in the incurrence by the Servicer of any material
liability, fine or penalty. The Servicer has no material unaccrued
liability with respect to any post-retirement benefit under a "welfare
plan" as defined in Section 3(1) of ERISA, other than liability for
continuation coverage described in Part 6 of title I of ERISA.
(w) Year 2000 Compliance. Any reprogramming required to
--------------------
permit the proper functioning, in and following the year 2000, of the
computer application systems used to conduct, operate and manage the
business, assets and operations of the Servicer, as so reprogrammed,
will be completed September 30, 1999, unless failure to complete such
reprogramming could not reasonably be expected to have a Material
Adverse Effect. With respect to any computer hardware, the Servicer:
(i) has initiated a review and assessment of all areas within the
Servicer's business and operations, (ii) has developed a plan and
timeline for addressing any problems which would cause it not to be Year
2000 Compliant on a timely basis, (iii) to date, has implemented such
plan in accordance with such timetable and (iv) believes, based upon the
foregoing, that the Servicer will be Year 2000 Compliant prior to
January 1, 2000. There are no additional costs to the Servicer relating
to becoming Year 2000 Compliant that will result in a Termination Event
or have a Material Adverse Effect. The computer and management
information systems used to conduct, operate and manage the business,
assets and operations of the Servicer are and with ordinary course
upgrading and maintenance (and with any additions to accommodate
growth), will continue for the term of this Agreement to be, sufficient
to permit the Servicer to conduct its business without having a Material
Adverse Effect.
(x) Separate Existence. The Facts and Assumptions are true
------------------
and correct.
SECTION 5.2. (a) Liability of Servicer; Indemnities. The
----------------------------------
Servicer shall be liable in accordance herewith only to the
-14-
extent of the obligations specifically undertaken by the Servicer under
this Agreement:
(i) The Servicer shall indemnify, defend and hold
harmless each Indemnified Party from and against any taxes that
may at any time be asserted against such Indemnified Party with
respect to the transactions contemplated herein, including,
without limitation, any sales, gross receipts, general
corporation, tangible personal property, privilege or license
taxes (other than any overall income taxes or franchise taxes
imposed on such Indemnified Party by the jurisdiction under the
laws of which such Indemnified Party is organized or qualified
(or should be qualified) to do business or any political
subdivision thereof) and costs and expenses in defending
against the same to the extent, directly or indirectly,
resulting from any action or omission of the Servicer in
connection with the Pool Receivables or relating to the
Transaction Documents.
(ii) The Servicer shall indemnify, defend and hold
harmless each Indemnified Party from and against any and all
costs, expenses, losses, claims, damages and liabilities to the
extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon such Indemnified
Party through, the willful misconduct or negligence of the
Servicer in the acceptance or performance of its duties under
this Agreement or any other Transaction Document to which the
Servicer is a party or by reason of reckless disregard of its
obligations and duties under this Agreement or any other
Transaction Document to which the Servicer is a party.
(iii) The Servicer shall indemnify, defend and hold
harmless each Indemnified Party from and against all costs,
expenses, losses, claims, damages and liabilities arising out
of or incurred in connection with the acceptance or performance
of the duties by Servicer, including any action by such
Indemnified Party at the direction of the Servicer taken
pursuant to Section 3.1, herein contained, except to the extent
that such cost, expense, loss, claim, damage or liability: (a)
shall be due to the willful misconduct or gross negligence of
such Indemnified Party; (b) relates to any tax other than the
taxes with respect to which either the Seller or the Servicer
shall be required to indemnify such Indemnified Party; or (c)
shall arise out of or be incurred in connection with the
acceptance or performance by such Indemnified Party
-15-
of the duties of successor Servicer hereunder unless such cost,
expense, loss, claim, damage or liability was caused by the act
or omission of the predecessor Servicer.
(iv) Without limiting the foregoing, the Servicer shall
indemnify, defend and hold harmless each Indemnified Party from
and against any and all costs, expenses, losses, claims,
damages and liabilities relating to or resulting from any of
the following:
(A) the failure of any Receivable included in the
calculation of the Net Receivables Pool Balance as an
Eligible Receivable to be an Eligible Receivable, the
failure of any information contained in a Seller Report
to be true and correct, or the failure of any other
information provided to the Seller or any Securitization
Party with respect to Receivables, Related Security,
Collections or this Agreement to be true and correct;
(B) the failure of any representation or warranty
or statement made or deemed made by the Servicer (or any
of its officers) under or in connection with this
Agreement or any other Transaction Document to have been
true and correct in all respects when made;
(C) the failure by the Servicer to comply with
the Credit and Collection Policy or any applicable law,
rule or regulation with respect to any Pool Receivable,
Related Security or the related Contract Documents to
conform to any such applicable law, rule or regulation;
(D) the failure to vest, and maintain vested, in
the Administrator, for the benefit of the Securitization
Parties, a valid and enforceable (A) perfected undivided
percentage ownership interest, to the extent of the
Purchased Interests, in the Receivables in, or purporting
to be in, the Receivables Pool and the Related Security
and Collections with respect thereto and (B) first
priority perfected security interest in the items
described in Section 1.2(d) of the Receivables Purchase
--------------
Agreement, in each case, free and clear of any Adverse
Claim;
(E) Intentionally Omitted;
-16-
(F) any dispute, claim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the
Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool (including,
without limitation, a defense based on such Receivable or
the related Contract Document not being a legal, valid
and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other
claim resulting from the sale of the goods or services
related to such Receivable or the furnishing or failure
to furnish such goods or services or relating to
collection activities with respect to such Receivable (if
any such collection activities were performed by the
Servicer or any of its Affiliates or by any agent or
independent contractor retained by the Servicer or any of
its Affiliates);
(G) any failure of the Servicer to perform its
duties or obligations in accordance with the provisions
of this Agreement or any other Transaction Document or to
perform its duties or obligations in connection with any
Pool Receivable;
(H) any claim (including, without limitation, any
breach of warranty, product liability or environmental
claim), investigation, litigation or proceeding arising
out of or in connection with any Pool Receivable or
Related Security;
(I) the commingling of Collections of Pool
Receivables at any time with other funds and any lost,
mutilated, destroyed or missing Contract Documents;
(J) any investigation, litigation or proceeding
related to this Agreement or any other Transaction
Document or the use of proceeds of purchases or
reinvestments or the ownership of the Purchased Interests
or in connection with any Pool Receivable or Related
Security;
(K) any reduction in Capital as a result of the
distribution of Collections pursuant to Section 1.4(d),
--------------
in the event that all or a portion of such distributions
shall thereafter be rescinded or otherwise must be
returned for any
-17-
reason related to the servicing of the Pool Receivables
by the Servicer;
(L) as at the date of any purchase or
reinvestment the aggregate of the Purchased Interests of
all Purchasers exceeds 100% after giving effect to any
purchase or reinvestment by any Purchaser under the
Receivables Purchase Agreement;
(M) the failure of the Servicer to perform its
duties or obligations in accordance with the provisions
of the Transaction Documents or any claim relating to the
collection activities with respect to the Pool
Receivables; or
(N) the enforcement of any Transaction Document
against the Servicer by the Seller or any Securitization
Party.
(b) For purposes of this Section 5.2, in the event of the
termination of the rights and obligations of Mail-Well (or any successor
thereto pursuant to Section 5.3(l)) as Servicer pursuant to Section 6.2,
or a resignation by such Servicer pursuant to Section 6.1, such Servicer
shall be deemed to be the Servicer pending appointment of a successor
Servicer (other than the Issuer) pursuant to Section 6.3.
(c) Indemnification under this Section 5.2 shall survive
termination of this Agreement and the resignation or removal of the
Servicer and shall include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation.
SECTION 5.3. Covenants of Servicer.
---------------------
Until the Final Pay Out Date:
(a) Compliance with Laws, Etc. The Servicer shall comply in
--------------------------
all material respects with all applicable laws, rules, regulations and
orders, and preserve and maintain its corporate existence, rights,
franchises, qualifications, and privileges except to the extent that the
failure so to comply with such laws, rules and regulations or the
failure so to preserve and maintain such existence, rights, franchises,
qualifications, and privileges would not have a Material Adverse Effect.
(b) Offices, Records and Books of Account; Etc. The Servicer
-------------------------------------------
(i) shall keep its principal place of business and chief executive
office (as such terms are used in the UCC) at the address of the Seller
set forth under its name on the signature
-18-
page to the Receivables Purchase Agreement and the office where it keeps
its records concerning the Pool Receivables and the Contract Documents
at such address or at one of the locations specified in Schedule III to
the Receivables Purchase Agreement or, upon at least 60 days' prior
written notice of a proposed change to the Seller and the Administrator,
at any other address or locations in jurisdictions where all actions
reasonably requested by the Seller and the Administrator to protect and
perfect the interest of the Issuer in the Pool Receivables and related
items (including, without limitation, the items described in
Section 1.2(d) of the Receivables Purchase Agreement) have been taken
--------------
and completed and (ii) shall provide the Seller and the Administrator
with at least 60 days' written notice prior to making any change in the
Servicer's name or making any other change in the Servicer's identity or
corporate structure (including, without limitation, a merger) which
could render any UCC financing statement filed in connection with this
Agreement "seriously misleading" as such term is used in the UCC; each
notice to the Seller or the Administrator pursuant to this sentence
shall set forth the applicable change and the effective date thereof.
The Servicer also will maintain and implement administrative and
operating procedures (including, without limitation, an ability to
recreate records evidencing Pool Receivables in the event of the
destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and disks and other
information reasonably necessary or advisable for the collection of all
Pool Receivables (including, without limitation, records adequate to
permit the daily identification of each Pool Receivable and all
Collections of and adjustments to each existing Pool Receivable).
(c) Performance and Compliance with Receivables and Credit and
-----------------------------------------------------------
Collection Policy. The Servicer shall, at its expense, timely and
-----------------
fully perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Pool Receivables,
and timely and fully comply in all material respects with the Credit and
Collection Policy with regard to each Pool Receivable.
(d) Ownership Interest, Etc. The Servicer shall, at its
------------------------
expense, take all action necessary or desirable to establish and
maintain (i) a valid and enforceable perfected undivided ownership
interest in favor of the Administrator, for the benefit of the
Securitization Parties, to the extent of the Purchased Interests, in the
Pool Receivables and the Related Security and Collections and other
proceeds with respect thereto, and (ii) a first priority perfected
security interest in favor of the Administrator, for the benefit of the
Securitization Parties, in the items described in Section 1.2(d) of
--------------
the Receivables Purchase Agreement, in each case free and clear of any
Adverse Claim, including, without limitation, taking such action to
perfect,
-19-
protect or more fully evidence the interests of the Securitization
Parties under the Agreement as the Securitization Parties may request.
(e) Sales, Liens, Etc. The Servicer shall not sell, assign
------------------
(by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Adverse Claim upon or with respect to, any or all of
its right, title or interest in, to or under, any item described in
Section 1.2(d) of the Receivables Purchase Agreement (including, without
limitation, the Servicer's obligation to preserve the Seller's undivided
interest in any Pool Receivable, Related Security, or Collections, or
upon or with respect to any account to which any Collections of any Pool
Receivables are sent), or assign any right to receive income in respect
of any items contemplated by this paragraph (e).
-------------
(f) Extension or Amendment of Receivables. Except as
-------------------------------------
provided in the Agreement and the other Transaction Documents, the
Servicer shall not extend the maturity or adjust the Outstanding
Principal Balance or otherwise amend, modify or waive the terms of any
Pool Receivable.
(g) Change in Business or Credit and Collection Policy. The
--------------------------------------------------
Servicer shall not make any material change in the character of its
business or in the Credit and Collection Policy, or any change in the
Credit and Collection Policy that would adversely affect the
collectibility or enforceability of any Pool Receivable or the ability
of the Servicer to perform its obligations, if any, under any Pool
Receivable or under the Agreement or the other Transaction Documents to
which it is a party, without the prior written consent of the Seller and
the Administrator.
(h) Audits. The Servicer shall, from time to time during
------
regular business hours as reasonably requested by the Seller or the
Administrator, permit the Seller and the Administrator, or their agents
or representatives, (i) to examine and make copies of and abstracts from
all books, records and documents (including, without limitation,
computer tapes and disks) in the possession or under the control of the
Servicer relating to Receivables and the Related Security, and (ii) to
visit the offices and properties of the Servicer for the purpose of
examining such materials described in clause (i) above, and to discuss
matters relating to Pool Receivables and the Related Security with any
of the officers, employees, agents or contractors of the Servicer having
knowledge of such matters, and shall permit and cooperate with an annual
(or more frequently if reasonably required by the Seller or the
Administrator) audit (conducted at the Servicer's expense) of the
Servicer and its servicing activities by the Seller and the
Administrator and the independent accountants selected thereby.
-20-
(i) Lock-Box Accounts and Collection Account. (i) The
----------------------------------------
Servicer shall not add or terminate any bank as a Lock-Box Bank or any
account as a Lock-Box Account from those listed in Schedule I to the
Receivables Purchase Agreement, or make any change in its instructions
to Obligors regarding payments to be made to the Seller or payments made
to any Lock-Box Account (or related post office box), unless the Seller
and the Administrator shall have consented thereto in writing and the
Seller and the Administrator shall have received copies of all
agreements and documents (including, without limitation, Lock-Box
Agreements) that it may request in connection therewith.
(ii) The Servicer (on behalf of the Seller) shall (A) instruct
all Obligors to make payments of all Receivables to one or more Lock-
Box Accounts or to post office boxes to which only Lock-Box Banks
have access (and shall instruct the Lock-Box Banks to cause all items
and amounts relating to such Pool Receivables received in such post
office boxes to be removed and deposited into a Lock-Box Account on a
daily basis), and (B) deposit, or cause to be deposited, any
Collections of Pool Receivables (other than those described in clause
(b) of the definition thereof) received by it into Lock-Box Accounts
not later than two Business Days after receipt thereof. The Servicer
shall at all times maintain the Lock-Box Accounts. Each Lock-Box
Account shall at all times be subject to a Lock-Box Agreement.
(iii) The Servicer shall not add or terminate any bank as a
Collection Account Bank or any account as a Collection Account from
those listed in Schedule I to the Agreement, unless the Seller and
----------
the Administrator shall have consented thereto in writing and the
Seller and the Administrator shall have received copies of all
agreements and documents (including without limitation, Collection
Account Agreements) that it may request in connection therewith.
(iv) Each Collection Account shall at all times be subject to
a Collection Agreement. The Seller will not deposit or otherwise
credit, or cause or permit to be so deposited or credited, to any
Collection Account cash or cash proceeds other than Collections.
(j) Marking of Records. At its expense, the Servicer (on
------------------
behalf of the Seller) shall ▇▇▇▇ (a) the master data processing records
and storage cabinets relating to Pool Receivables, including with a
legend evidencing that the undivided percentage ownership interests in
such Pool Receivables have been sold in accordance with the Receivables
Purchase Agreement and (b) at the request of the Seller or the
-21-
Administrator, each Pool Receivable with a legend, in form reasonably
satisfactory to the Seller and the Administrator, to the effect that
such Pool Receivable (or an undivided interest thereon) has been sold in
accordance with the Receivables Purchase Agreement.
(k) Separate Corporate Existence of the Seller. The Servicer
------------------------------------------
hereby acknowledges that the Seller and the Securitization Parties are
entering into the transactions contemplated by the Transaction Documents
in reliance upon the Seller's identity as a legal entity separate from
the Servicer, the Guarantor and each Originator. Therefore, from and
after the date hereof, the Servicer shall take all steps to continue the
Seller's identity as such a separate legal entity and to make it
apparent to third Persons that the Seller is an entity with assets and
liabilities distinct from those of the Servicer, the Guarantor, any
Originator or any other Person, and not a division of the Servicer, the
Guarantor, any Originator or any other Person. Without limiting the
generality of the foregoing, the Servicer shall not cause, or take any
action, or omit to take any action, that would cause the Seller to
violate any of the provisions contained in paragraph (k) of Exhibit IV
to the RPA or would be inconsistent with the Facts and Assumptions.
(l) Mergers, Acquisitions, Sales, etc. Any Person (a) into
---------------------------------
which the Servicer may be merged or consolidated, (b) which may result
from any merger or consolidation to which the Servicer shall be a party
(if the Servicer is not the surviving entity), or (c) which may succeed
to the properties and assets of the Servicer substantially as a whole,
shall be the successor to the Servicer under this Agreement without
further action on the part of any of the parties to this Agreement;
provided, however, that the Servicer shall not be a party to any
-------- -------
merger, consolidation or Acquisition with or of another Person (or
substantially all of its properties or assets) unless (i) immediately
after giving effect to such transaction, no Termination Event, and no
Unmatured Termination Event shall have happened and be continuing, (ii)
the Servicer shall have delivered to the Seller and the Administrator
(for the benefit of each Securitization Party) an officer's certificate
(and, if the Servicer is not the surviving entity, an Opinion of
Counsel) stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 5.3(l), and (iii) the
Servicer shall have delivered to the Seller and the Administrator (for
the benefit of each Securitization Party) an officer's certificate (and,
if the Servicer is not the surviving entity, an Opinion of Counsel)
either (A) stating that all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Seller and
each Securitization Party in the Pool Receivables, and reciting the
details of such
-22-
filings, or (B) stating that no such action shall be necessary to
preserve and protect such interest. Notwithstanding anything herein to
the contrary, the Servicer shall not consummate any transaction of a
type referred to in clauses (a), (b) or (c) above without the prior
written consent of the Administrator (except if the Servicer is merging
or consolidating with an Originator) and unless at or prior thereto the
foregoing agreement of assumption shall have been executed and the
conditions described in clauses (i), (ii) and (iii) shall have been met
to the reasonable satisfaction of the Administrator.
(m) ERISA Matters. The Servicer shall notify the Seller and
-------------
the Administrator as soon as is practicable and in any event not later
than two Business Days after (i) the institution of any steps by the
Servicer or any other Person to terminate any Pension Plan which could
have a Material Adverse Effect, (ii) the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give
rise to a lien under section 302(f) of ERISA, (iii) the taking of any
action with respect to a Pension Plan which could result in the
requirement that the Servicer furnish a bond or other security to the
PBGC or such Pension Plan or (iv) the occurrence of any event with
respect to any Pension Plan which could have a Material Adverse Effect,
or any material increase in the contingent liability of the Servicer
with respect to any post-retirement "welfare plan" (as defined in
Section 3(1) of ERISA) benefit.
(n) Reporting Requirements. The Servicer will provide to
----------------------
the Seller and the Administrator (in multiple copies, if requested by
the Administrator) the following:
(i) as soon as available and in any event within 45
days after the end of the first three quarters of each fiscal
year (beginning with the quarter ended June 30, 1999) of Mail-
Well, Inc., balance sheets of Mail-Well, Inc. and its
subsidiaries as of the end of such quarter and statements of
income and retained earnings thereof for the period commencing
at the beginning of such previous fiscal year and ending with
the end of such quarter, certified by the treasurer or
assistant treasurer thereof (as applicable);
(ii) as soon as available and in any event within 90
days after the end of each fiscal year (beginning with the year
ended December 31, 1999) of Mail-Well, Inc., a copy of the
annual report for such year for Mail-Well, Inc. and its
subsidiaries containing financial statements for such year
audited by nationally-recognized independent certified public
accountants;
-23-
(iii) as soon as possible and in any event within five
days after the occurrence of each Purchase and Sale Termination
Event or event which, with the giving of notice or lapse of
time, or both, would constitute a Purchase and Sale Termination
Event, a statement of the treasurer or assistant treasurer of
the Servicer setting forth details of such Purchase and Sale
Termination Event or event and the action that the Servicer has
taken and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof,
copies of all reports that may be material to the transactions
contemplated hereby that the Servicer sends to any of its
security holders, and copies of all reports and registration
statements that the Servicer or any subsidiary files with the
Securities and Exchange Commission or any national securities
exchange;
(v) promptly after the filing by the Servicer or
receiving notice or knowledge thereof, copies of all reports
and notices that the Servicer or any Affiliate files under
ERISA with the Internal Revenue Service or the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or that
the Servicer or any Affiliate receives from any of the
foregoing or from any multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA) to which the Servicer or any
Affiliate is or was, within the preceding five years, a
contributing employer, in each case in respect of the
assessment of withdrawal liability or an event or condition
which could result in the imposition of liability on the
Servicer and/or any such Affiliate in excess of $500,000 or
which, in the aggregate, could have a Material Adverse Effect;
(vi) at least 60 days prior to any change in the
Servicer's name or any other change requiring the amendment of
UCC financing statements, a notice setting forth such changes
and the effective date thereof;
(vii) such other information respecting the Receivables
or the condition or operations, financial or otherwise, of the
Servicer or any of its Affiliates as the Seller or the
Administrator may from time to time reasonably request;
(viii) promptly after the Servicer obtains knowledge
thereof, notice of any (a) litigation, investigation or
proceeding which may exist at any time
-24-
between the Servicer and any Governmental Authority which, if
not cured or if adversely determined, as the case may be, could
have a Material Adverse Effect; or (b) litigation or proceeding
affecting (i) the Servicer which could have a Material Adverse
Effect which is not covered by insurance or in which injunctive
or similar relief is sought or (c) litigation or proceedings
relating to any Transaction Document;
(ix) promptly after the occurrence thereof, notice of
a material adverse change in the business, operations, property
or financial or other condition of the Servicer.
(o) Year 2000 Compliance. The Servicer shall promptly
--------------------
notify the Seller and the Administrator in the event the Servicer
becomes aware that any of its computer applications (including those of
its suppliers or vendors) that is material to its business and
operations will not be Year 2000 Compliant on a timely basis, except to
the extent that any such failure to comply could not reasonably be
expected to have a Material Adverse Effect on the Servicer and could not
reasonably be expected to cause a Termination Event.
(p) Delivery of Credit and Collection Policy. The Servicer
----------------------------------------
shall deliver to the Seller and the Administrator a document that sets
forth the Credit and Collection Policy, which document shall be
reasonably satisfactory, in form and substance, to the Seller and the
Administrator.
ARTICLE VI
Servicer Termination
--------------------
SECTION 6.1. Mail-Well Not to Resign as Servicer. Except as
-----------------------------------
a result of the operation of Section 5.3(l), Mail-Well shall not resign
from the obligations and duties hereby imposed on it as Servicer under
this Agreement and the other Transaction Documents to which the Servicer
is a party except upon determination that the performance of its duties
under this Agreement and the other Transaction Documents to which the
Servicer is a party shall no longer be permissible under applicable law.
Notice of any such determination permitting the resignation of Mail-Well
shall be communicated to the Seller, the Administrator and the other
Securitization Parties at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced
by an Opinion of Counsel to such effect delivered to the Seller, the
Administrator and the other Securitization Parties
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concurrently with or promptly after such notice. Except where
resignation occurs by reason of a legal prohibition, no such
registration shall become effective until a successor Servicer shall
have assumed the responsibilities and obligations of the Servicer in
accordance with Section 6.3.
SECTION 6.2. Servicer Termination. Following the occurrence
--------------------
of a Termination Event, the Administrator may, by written notice to the
Servicer (a "Servicer Termination"), terminate all of the rights and
--------------------
obligations of the Servicer (or such sub-servicers) under this Agreement
and the other Transaction Documents. On or after the receipt by the
Servicer of a Servicer Termination, all authority and power of the
Servicer (or such sub-servicers) under this Agreement, whether with
respect to the Pool Receivables, the Contract Documents or otherwise,
shall, without further action, pass to and be vested in the
Administrator or such successor Servicer as may be appointed under
Section 6.3 pursuant to and under this Section 6.2; and the
Administrator is hereby authorized and empowered to execute and deliver,
on behalf of the predecessor Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all
other acts or things necessary or appropriate to effect the purposes of
such notice of termination, whether to complete the transfer and
endorsement of the Pool Receivables and related documents, or otherwise.
The predecessor Servicer shall cooperate (and cause each sub-servicer to
cooperate) with the successor Servicer and the Administrator and the
other Securitization Parties in effecting the termination of the
responsibilities and rights of the predecessor Servicer (or such sub-
servicers) under this Agreement and the other Transaction Documents,
including the transfer to the successor Servicer for administration by
it of all cash amounts that shall at the time be held by the predecessor
Servicer for deposit, or shall thereafter be received with respect to a
Pool Receivable. All reasonable costs and expenses (including
attorneys' fees and disbursements) incurred in connection with
transferring the Contract Documents to the successor Servicer and
amending this Agreement to reflect such succession as Servicer pursuant
to this Section 6.2 shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses.
SECTION 6.3. Appointment of Successor. (a) Upon the
------------------------
Servicer's receipt of notice of termination pursuant to Section 6.2 or
the Servicer's resignation in accordance with Section 6.1, the
predecessor Servicer shall continue to perform its functions as Servicer
under this Agreement and the other Transaction Documents, in the case of
termination, only until the date specified in such termination notice
or, if no such date is specified in a notice of termination, until
receipt of such notice and, in the case of resignation, until the later
of (x)
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the date 45 days from the delivery to the Administrator and the other
Securitization Parties of written notice of such resignation (or written
confirmation of such notice of resignation) in accordance with the terms
of this Agreement and the other Transaction Documents and (y) the date
upon which the predecessor Servicer shall become unable to act as
Servicer, as specified in the notice of resignation and an accompanying
Opinion of Counsel. In the event of the Servicer's resignation or
termination hereunder, a successor Servicer appointed by the
Administrator will succeed to all the subsequently accruing
responsibilities, duties and liabilities of the Servicer under this
Agreement and will be entitled to similar compensation arrangements.
The successor Servicer shall accept its appointment by a written
assumption in form acceptable to the Administrator.
(b) Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer and shall be
subject to all the responsibilities, duties and liabilities arising
thereafter relating thereto placed on the predecessor Servicer, and
shall be entitled to the Servicing Fee and other fees payable to the
Servicer pursuant to Section 3.8 hereof, and all the rights granted to
the predecessor Servicer, by the terms and provisions of this Agreement
and the other Transaction Documents; provided, however, that the
-------- -------
Administrator and successor Servicer may negotiate any amendments with
respect to the rights and obligations of the Servicer (other than the
Servicing Fee) to this Agreement or other Transaction Documents to the
extent reasonably required by such successor Servicer. No such
appointment shall make the successor Servicer responsible for any
liabilities of the predecessor Servicer incurred prior to such
appointment or for any acts, omissions or misrepresentations of such
predecessor Servicer.
ARTICLE VII
Miscellaneous Provisions
------------------------
SECTION 7.1. Amendment. No amendment or waiver of any
---------
provision of this Agreement or consent to any departure by the Servicer
therefrom shall be effective unless in a writing signed by the Seller
and the Administrator, and, in the case of any amendment other than in
accordance with the proviso in Section 6.3(b), by the Seller and the
--------------
Servicer and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given. No failure on the part of the Seller, the Servicer or the
Administrator to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single
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or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
SECTION 7.2. Protection of Title to Pool Receivables.
---------------------------------------
(a) The Servicer shall maintain accounts and records as to each
Pool Receivable accurately and in sufficient detail to permit (i) the
reader thereof to know at any time the status of such Pool Receivable,
including, without limitation, payments and recoveries made and payments
owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Pool Receivable and the
amounts from time to time deposited in the Lock-Box Account and the
Collection Account in respect of such Pool Receivable.
(b) The Servicer shall maintain its computer systems so that,
from and after the time of sale of the Pool Receivables to the Seller or
the Administrator, for the benefit of the Securitization Parties, the
Servicer's master computer records (including any back-up archives) that
refer to a Pool Receivable shall indicate clearly that such Pool
Receivable is owned thereby. Indication of such ownership of a Pool
Receivable shall be deleted from or modified on the Servicer's computer
systems when, and only when, the Pool Receivable shall have been paid in
full or repurchased or sold.
(c) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest
in any Pool Receivables to any prospective lender or other transferee,
the Servicer shall give to such prospective lender or other transferee
computer tapes, records or print-outs (including, without limitation,
any restored from back-up archives) that, if they shall refer in any
manner whatsoever to any Pool Receivable, shall indicate clearly that
such Pool Receivable has been sold and is owned by the Administrator,
for the benefit of the Securitization Parties.
(d) Upon request, the Servicer shall furnish to the Seller and
the Administrator, within three Business Days, a list of all Pool
Receivables (by contract number and name of Obligor), together with a
reconciliation of such list to each of the Seller Reports finished
before such request.
SECTION 7.3. GOVERNING LAW AND JURISDICTION. (A) THIS
------------------------------
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE ▇▇▇▇▇ ▇▇ ▇▇▇
-▇▇-
▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ FOR THE SOUTHERN DISTRICT OF NEW YORK AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE SELLER, THE
SERVICER AND THE ADMINISTRATOR CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
OF THE SELLER, THE SERVICER AND THE ADMINISTRATOR IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDINGS IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT
OR ANY DOCUMENT RELATED HERETO. THE SELLER, THE SERVICER AND THE
ADMINISTRATOR EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW
YORK LAW.
SECTION 7.4. Notices, Etc. All notices and other
------------
communications hereunder shall, unless otherwise stated herein, be in
writing (which shall include facsimile communication) and sent or
delivered, to each party hereto, at its address set forth under its name
on the signature pages of the Receivables Purchase Agreement or at such
other address as shall be designated by such party in a written notice
to the other parties hereto. Notices and communications by facsimile
shall be effective when sent and the confirmation of transmission has
been received (and shall be followed by hard copy sent by first class
mail), and notices and communications sent by other means shall be
effective when received.
SECTION 7.5. Severability of Provisions. If any or more of
--------------------------
the covenants, agreements, provisions or terms of this Agreement shall
be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 7.6. Assignment. (a) This Agreement and the rights
----------
and obligations of the Administrator hereunder shall be assignable, in
whole or in part, by the Administrator and its successors and assigns.
Without limiting any other rights that may be available under applicable
law, the rights of the Seller or the Securitization Parties may be
enforced thereby or by their agents.
(b) The Servicer acknowledges that, contemporaneously herewith or
at any time hereafter, the Seller (i) is assigning or will assign to the
Issuer, pursuant to the Receivables Purchase Agreement, one or more
undivided interests in all of the Seller's rights, title and interest
in, to and under the Receivables Pool and Related Security and
Collections with respect thereto and proceeds with respect to the
foregoing, and (ii) is hereby
-29-
assigning to the Administrator, for the benefit of the Securitization
Parties, all of the Seller's right, title and interest in, to and under
this Agreement, including, without limitation, the assignment by the
Seller to the Administrator, for the benefit of the Securitization
Parties, of the right of the Seller, at any time, to enforce this
Agreement against the Servicer and the obligations of the Servicer
hereunder, the right, at any time, in accordance with the terms hereof,
to give or withhold any and all consents, requests, notices, directions,
approvals, demands, extensions or waivers under or with respect to this
Agreement, any other Transaction Document or the obligations in respect
of the Servicer thereunder to the same extent as the Seller may do, and
all of the Seller's rights, remedies, powers and privileges, and all
claims of the Seller against the Servicer, under or with respect to this
Agreement (whether arising pursuant to the terms of this Agreement or
otherwise available at law or in equity), it being understood that such
assignment shall not relieve any party hereto from (or require any of
the Securitization Parties to undertake) the performance of any term,
covenant or agreement on the part of any party hereto to be performed or
observed under or in connection with this Agreement. The Servicer
hereby consents to such assignments. Each of the parties hereto
acknowledges and agrees that the Securitization Parties and the other
Affected Persons are third party beneficiaries of the rights of the
Seller arising hereunder and under the other Transaction Documents to
which the Servicer is a party.
(c) The Servicer hereby agrees to execute all agreements,
instruments and documents, and to take all other action, that the Seller
or the Administrator determines is necessary or reasonably desirable to
evidence its consent described in Section 7.6(b).
--------------
(d) The Servicer hereby acknowledges that its obligations to the
Securitization Parties are and shall be, to the extent permitted by
applicable law or not prohibited by any order of any court or
administrative or regulatory authority, absolute and unconditional under
any and all circumstances and shall be unaffected by any claims, offsets
or other defenses the Servicer may have against any Securitization
Party, and the Servicer agrees that it shall not interpose any such
claims, offsets or defenses as a defense to its performance of its
obligations under this Agreement or any other Transaction Documents to
which it is a party.
SECTION 7.7. Counterparts. For the purpose of facilitating
------------
the execution of this Agreement and for other purposes, this Agreement
may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
-30-
SECTION 7.8. Third Party Beneficiary. The Securitization
-----------------------
Parties (other than the Administrator) shall be a third party
beneficiary entitled to enforce any provisions in its favor hereunder.
-31-
IN WITNESS WHEREOF, the Seller, the Servicer, and the
Administrator, as agent for the Issuer, have caused this Agreement to be
duly executed by their respective officers as of the day and year first
above written.
MAIL-WELL I CORPORATION, as Servicer
By:__________________________________________
Name:________________________________________
Title:_______________________________________
MAIL-WELL TRADE RECEIVABLES CORPORATION,
as Seller
By:__________________________________________
Name:________________________________________
Title:_______________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrator
By:__________________________________________
Name:________________________________________
Title:_______________________________________
-32-
SCHEDULE A
Schedule of Permitted Investments
---------------------------------
"Permitted Investments" are any of the following:
---------------------
(a) negotiable instruments or securities represented by
instruments or securities represented by instruments in bearer or
registered or in book-entry form which evidence:
(i) obligations fully guaranteed by the United
States of America;
(ii) time deposits in, or bankers acceptances
issued by, any depositary institution or trust company
incorporated under the laws of the United States of
America or any State and subject to supervision and
examination by Federal or State banking or depositary
institution authorities; provided, however, that at
-------- -------
the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term
deposits, if any, or long-term unsecured debt obligations
(other than such obligation whose rating is based on
collateral or on the credit of a Person other than such
institution or trust company) of such depositary
institution or trust company shall have a credit rating
from ▇▇▇▇▇'▇ and S&P of at least "P-l" and "A-1,"
respectively, in the case of the certificates of deposit
or short-term deposits, or a rating not lower than one of
the two highest investment categories granted by ▇▇▇▇▇'▇
and by S&P;
(iii) certificates of deposit having, at the time
of investment or contractual commitment to invest
therein, a rating from ▇▇▇▇▇'▇ and S&P of at least "P-1"
and "A-1," respectively; or
(iv) investments in money market funds rated in
the highest investment category or otherwise approved in
writing by the Administrator;
(b) demand deposits in any depositary institution or
trust company referred to in (a) (ii) above;
(c) commercial paper (having original or remaining
maturities of no more than 30 days) having, at the time of investment or
contractual commitment to invest therein, a credit rating from ▇▇▇▇▇'▇
and S&P of at least "P-1" and "A-1," respectively;
A-1
(d) Eurodollar time deposits having a credit rating
from ▇▇▇▇▇'▇ and S&P of at least "P-1" and "A-1," respectively; and
(e) repurchase agreements involving any of the Eligible
Investments described in clauses (a) (1), (a) (iii) and (d) hereof so
long as the other party to the repurchase agreement has at the time of
investment therein, a rating from ▇▇▇▇▇'▇ and S&P of at least "P-1" and
"A-1," respectively.
Exhibit A-1
FIRST AMENDMENT TO
SERVICING AGREEMENT
THIS FIRST AMENDMENT TO SERVICING AGREEMENT, dated as of July
1, 1999 (this "Amendment"), is entered into among MAIL-WELL I
---------
CORPORATION, a Delaware corporation, as initial servicer (the
"Servicer"), MAIL-WELL TRADE RECEIVABLES CORPORATION, a Colorado
--------
corporation, as seller (the "Seller"), and BANK OF AMERICA, NATIONAL
------
ASSOCIATION (f/k/a BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION), as administratoar (the "Administrator").
-------------
RECITALS
1. The Servicer, the Seller and the Administrator are parties
to the Servicing Agreement, dated as of July 1, 1999 (the
"Agreement"); and
---------
2. The parties hereto desire to amend the Agreement as set
forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Certain Defined Terms. Capitalized terms used but not
---------------------
defined herein shall have the meaning set forth in Article I to the
Agreement or in Exhibit I to the Receivables Purchase Agreement.
2. Amendments to the Agreement. The Agreement is hereby
---------------------------
amended as follows:
2.1 Clause (ii)(A) of paragraph (i) in Section 5.3 of
the Agreement is hereby amended by adding the following
proviso, immediately prior to the comma, at the end thereof:
; provided, however, that the Obligors of Receivables
originated by WISCO II, LLC or WISCO III, LLC may be
instructed to make payments directly to the Servicer (or
any sub-servicer), which payments shall be deposited by
the Servicer (or such sub-servicer) into a Lock-Box
Account not later than two Business Days after receipt
thereof.
3. Effect of Amendment. Except as expressly amended and
-------------------
modified by this Amendment, all provisions of the Agreement shall remain
in full force and effect. After this Amendment becomes effective, all
references in the Agreement (or in any other Transaction Document) to
"this Agreement", "hereof", "herein" or words of similar effect
referring to the Agreement shall be deemed to be references to the
Agreement as amended by this Amendment. This Amendment shall
not be deemed, expressly or impliedly, to waive, amend or supplement any
provision of the Agreement other than as set forth herein.
4. Counterparts. This Amendment may be executed in any
------------
number of counterparts and by different parties on separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute but one
and the same instrument.
5. Governing Law. This Amendment shall be governed by, and
-------------
construed in accordance with, the law of the State of New York without
regard to any otherwise applicable principles of conflicts of law.
6. Section Headings. The various headings of this Amendment
----------------
are included for convenience only and shall not affect the meaning or
interpretation of this Amendment, the Agreement or any provision hereof
or thereof.
[signature page on next page]
2
IN WITNESS WHEREOF, the parties have executed this Amendment as
of the date first written above.
MAIL-WELL I CORPORATION,
as initial Servicer
By:______________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President, Treasurer and Tax
MAIL-WELL TRADE RECEIVABLE CORPORATION,
as Seller
By:______________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President, Treasurer and Tax
BANK OF AMERICA, NATIONAL ASSOCIATION
(f/k/a BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION), as Administrator
By:______________________________________
Name:
Title:
3