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EXECUTION COPY
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Exhibit 10.18.2
Second Amended and Restated
RECEIVABLES PURCHASE AGREEMENT
Dated as of November 20, 2002
Among
CADMUS RECEIVABLES CORP.
as Seller
and
CADMUS COMMUNICATIONS CORPORATION
as Master Servicer
and
BLUE RIDGE ASSET FUNDING CORPORATION
as Purchaser
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as the Agent
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TABLE OF CONTENTS
Page
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ARTICLE I. PURCHASES AND REINVESTMENTS .............................................................. 5
Section 1.1 Commitments to Purchase; Limits on Purchaser's Obligations ........................... 5
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Section 1.2 Purchase Procedures; Assignment of the Purchaser's Interests ......................... 5
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Section 1.3 Reinvestments of Certain Collections; Payment of Remaining Collections ............... 6
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Section 1.4 Asset Interest ....................................................................... 8
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ARTICLE II. COMPUTATIONAL RULES ..................................................................... 9
Section 2.1 Selection of Asset Tranches .......................................................... 9
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Section 2.2 Computation of Invested Amount and Purchaser's Tranche Investment .................... 9
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Section 2.3 Computation of Concentration Limits and Unpaid Balance ............................... 10
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Section 2.4 Computation of Earned Discount ....................................................... 10
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Section 2.5 Estimates of Earned Discount Rate, Fees, etc ......................................... 10
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ARTICLE III. SETTLEMENTS ............................................................................ 11
Section 3.1 Settlement Procedures ................................................................ 11
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Section 3.2 Deemed Collections; Reduction of Invested Amount, Etc ................................ 13
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Section 3.3 Payments and Computations, Etc ....................................................... 15
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Section 3.4 Treatment of Collections and Deemed Collections ...................................... 16
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ARTICLE IV. FEES AND YIELD PROTECTION ............................................................... 16
Section 4.1 Fees ................................................................................. 16
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Section 4.2 Yield Protection. .................................................................... 16
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Section 4.3 Funding Losses ....................................................................... 18
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ARTICLE V. CONDITIONS OF PURCHASES .................................................................. 19
Section 5.1 Conditions Precedent to Initial Purchase ............................................. 19
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Section 5.2 Conditions Precedent to All Purchases and Reinvestments .............................. 21
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ARTICLE VI. REPRESENTATIONS AND WARRANTIES .......................................................... 22
Section 6.1 Representations and Warranties of the Seller Parties ................................. 22
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ARTICLE VII. GENERAL COVENANTS OF THE SELLER PARTIES ................................................ 27
Section 7.1 Affirmative Covenants of the Seller Parties .......................................... 27
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Section 7.2 Reporting Requirements of the Seller Parties ......................................... 29
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Section 7.3 Negative Covenants of the Seller Parties ............................................. 31
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Section 7.4 Separate Corporate Existence of the Seller. .......................................... 33
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ARTICLE VIII. ADMINISTRATION AND COLLECTION ......................................................... 37
Section 8.1 Designation of Master Servicer ....................................................... 37
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Section 8.2 Duties of Master Servicer ............................................................ 38
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Section 8.3 Servicer Advances .................................................................... 39
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Section 8.4 Servicer Defaults .................................................................... 40
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Section 8.5 Rights of the Agent .................................................................. 41
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Section 8.6 Responsibilities of the Seller Parties ............................................... 42
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Section 8.7 Further Action Evidencing Purchases and Reinvestments ................................ 42
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Section 8.8 Application of Collections ........................................................... 44
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ARTICLE IX. SECURITY INTEREST ....................................................................... 44
Section 9.1 Grant of Security Interest ........................................................... 44
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Section 9.2 Further Assurances ................................................................... 44
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Section 9.3 Remedies ............................................................................. 44
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ARTICLE X. LIQUIDATION EVENTS ....................................................................... 44
Section 10.1 Liquidation Events ................................................................... 44
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Section 10.2 Remedies ............................................................................. 46
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ARTICLE XI. THE AGENT ............................................................................... 46
Section 11.1 Authorization and Action ............................................................. 46
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Section 11.2 Agent's Reliance, Etc. ............................................................... 47
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Section 11.3 Wachovia and Affiliates .............................................................. 47
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ARTICLE XII. ASSIGNMENT OF THE PURCHASER'S INTEREST ................................................. 47
Section 12.1 Restrictions on Assignments .......................................................... 47
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Section 12.2 Rights of Assignee ................................................................... 48
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Section 12.3 Terms and Evidence of Assignment ..................................................... 48
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Section 12.4 Rights of Collateral Agent ........................................................... 48
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ARTICLE XIII. INDEMNIFICATION ....................................................................... 49
Section 13.1 Indemnities by the Seller ............................................................ 49
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Section 13.2 Indemnities by Master Servicer ....................................................... 51
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ARTICLE XIV. MISCELLANEOUS .......................................................................... 51
Section 14.1 Amendments, Etc ...................................................................... 52
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Section 14.2 Notices, Etc. ........................................................................ 52
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Section 14.3 No Waiver; Remedies .................................................................. 52
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Section 14.4 Binding Effect; Survival ............................................................. 52
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Section 14.5 Costs, Expenses and Taxes ............................................................ 53
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Section 14.6 No Proceedings ....................................................................... 53
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Section 14.7 Confidentiality of the Seller Information ............................................ 54
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Section 14.8 Confidentiality of Program Information. .............................................. 56
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Section 14.9 Captions and Cross References. ....................................................... 57
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Section 14.10 Integration. ........................................................................ 58
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Section 14.11 Governing Law ....................................................................... 58
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Section 14.12 Waiver Of Jury Trial ................................................................ 58
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Section 14.13 Consent To Jurisdiction; Waiver Of Immunities ....................................... 58
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Section 14.14 Execution in Counterparts ........................................................... 59
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Section 14.15 No Recourse Against Other Parties ................................................... 59
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APPENDIX
Appendix A Definitions
SCHEDULES
SCHEDULE 6.1(i) Description of Material Adverse Changes
SCHEDULE 6.1(n) List Of Offices Of the Master Servicer And the Seller Where
Records Are Kept
SCHEDULE 6.1(o) List of Lock-Box Banks
SCHEDULE 14.2 Notice Addresses
SCHEDULE A Initial Originators and Servicers
SCHEDULE B Fiscal Periods
EXHIBITS
EXHIBIT 1.2(a) Form of Purchase Request
EXHIBIT 3.1(a-1) Form of Settlement Report
EXHIBIT 3.1(a-2) Form of Interim Settlement Report
EXHIBIT 5.1(h) Form of Opinion of Special Counsel for the Seller Parties
EXHIBIT A-1 Form of Lock-Box Agreement
EXHIBIT B Form of Certificate of Financial Officer
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SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
Dated as of November 20, 2002
THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, is by and
among:
(1) CADMUS RECEIVABLES CORP., a Virginia corporation (together with
its successors and permitted assigns, the "Seller"),
(2) CADMUS COMMUNICATIONS CORPORATION, a Virginia corporation
(together with its successors, "Cadmus"), as Master Servicer hereunder (in
such capacity, together with any successor Master Servicer appointed
pursuant to Section 8.1, the "Master Servicer"; Cadmus, in its capacity as
the Master Servicer, together with the Seller, each a "Seller Party" and
collectively the "Seller Parties"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation
(together with its successors and assigns, the "Purchaser"), and
(4) WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association ("Wachovia"), as agent for the Secured Parties (as defined
below) (in such capacity, together with any successors thereto in such
capacity, the "Agent"),
and amends and restated in its entirety that certain Amended and Restated
Receivables Purchase Agreement dated as of January 2, 2001 by and among the
parties, as amended from time to time (the "Existing Agreement"). Unless
otherwise indicated, capitalized terms used in this Agreement are defined in
Appendix A.
Background
1. The Seller is a wholly-owned direct subsidiary of Cadmus.
2. Cadmus, through the Originators and its other Subsidiaries, is
engaged in the business of providing high-end, integrated graphic
communications services to its customers.
3. Each of the Originators, Cadmus and the Seller have entered into
the Sale Agreement pursuant to which each Originator has transferred, and
hereafter will transfer, to the Seller all of its right, title and interest
in and to the Pool Receivables and certain related property.
4. The Seller has requested the Purchaser, and the Purchaser has
agreed, subject to the terms and conditions contained in this Agreement, to
purchase from the Seller from time to time an undivided percentage
interest, referred to herein as the Asset Interest, in Pool Receivables and
related property.
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5. The Seller and the Purchaser also desire that, subject to the
terms and conditions of this Agreement, certain of the daily Collections in
respect of the Asset Interest be reinvested in Pool Receivables, which
reinvestment shall constitute part of the Asset Interest.
6. Wachovia has been requested, and is willing, to act as the Agent
under this Agreement.
7. The parties wish to amend and restate the Existing Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I.
PURCHASES AND REINVESTMENTS
Section 1.1 Commitments to Purchase; Limits on Purchaser's Obligations.
Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article V), from time to time during the
Revolving Period, the Seller may request that the Purchaser purchase from the
Seller ownership interests in Pool Receivables and Related Assets, and the
Purchaser shall make such purchase (each being a "Purchase"); provided that no
Purchase shall be made by the Purchaser if, after giving effect thereto, based
upon the Settlement Report delivered on the most recent Reporting Date pursuant
to clause (a) of the definition of Reporting Date either (a) the Invested Amount
would exceed $45,000,000 (as adjusted pursuant to Section 3.2(b)) (the "Purchase
Limit"), or (b) the Asset Interest, expressed as a percentage of Net Pool
Balance, would exceed 100%; and provided, further that (i) each Purchase made
pursuant to this Section 1.1 shall have a purchase price equal to at least
$10,000, (ii) Purchases made pursuant to this Section 1.1 shall occur on
Settlement Dates and on up to two (2) additional Business Days in any Settlement
Period, and (iii) the number of Purchases pursuant to this Section 1.1 and
Aggregate Reductions pursuant to Section 3.2(b) shall not exceed, in the
aggregate, three (3) in any Settlement Period (or two (2) in any Settlement
Period in which at least one of such Purchases or one of such Aggregate
Reductions does not occur on the applicable Settlement Date).
Section 1.2 Purchase Procedures; Assignment of the Purchaser's Interests.
(a) Purchase Request. Each Purchase from the Seller by the Purchaser shall
be made on irrevocable notice from the Seller to the Agent (on behalf of the
Purchaser) received by the Agent not later than 12:00 noon (New York City time)
two Business Days prior to the date of such proposed Purchase. Each such notice
of a proposed Purchase shall be substantially in the form of Exhibit 1.2(a) and
shall specify, among other items, the desired amount and date of such Purchase.
The Agent shall promptly upon receipt notify the Purchaser of any such notice.
(b) Funding of Purchase. On the date of each Purchase, the Purchaser
shall, upon satisfaction of the applicable conditions set forth in Article V,
make available to the Seller the
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amount of its Purchase in same day funds by wire transfer to an account
designated in writing by the Seller.
(c) Assignment of Asset Interest. The Seller hereby sells, assigns and
transfers to the Purchaser, effective on and as of the date of each Purchase and
each Reinvestment by the Purchaser hereunder, the Asset Interest in the Pool
Receivables and Related Assets.
Section 1.3 Reinvestments of Certain Collections; Payment of Remaining
Collections.
(a) On the close of business on each day during the period from the date
of the first Purchase to the Termination Date, the Master Servicer will, out of
all Collections received on such day from Pool Receivables and Related Assets:
(i) determine the portion of the Collections attributable to the
Asset Interest by multiplying (A) the amount of such Collections times (B)
the Purchaser's Share;
(ii) out of the portion of such Collections allocated to the Asset
Interest pursuant to clause (i), identify and hold in trust for the
Purchaser an amount equal to the sum of the estimated amount (based on the
rate information provided by the Agent pursuant to Section 2.5) of Earned
Discount and CP Costs accrued in respect of each Asset Tranche, all other
amounts due to the Purchaser or the Agent hereunder and the Purchaser's
Share of the Servicer's Fee (in each case, accrued through such day) and
not so previously accounted for; and
(iii) apply the Collections allocated to the Asset Interest pursuant
to clause (i) and not required to be identified and held in trust pursuant
to clause (ii) to the purchase from the Seller of ownership interests in
Pool Receivables and Related Assets (each such purchase being a
"Reinvestment"); provided that:
(A) if (I) the then Asset Interest would exceed 100% or (II)
the Invested Amount would exceed the Purchase Limit, then the Master
Servicer shall not reinvest to the extent of such excess, but shall
identify and hold in trust for the benefit of the Purchaser, a portion
of such Collections which, together with other Collections previously
so identified and then so held, shall equal the amount necessary to
reduce the Invested Amount to the Purchase Limit and the Asset
Interest to 100%; and
(B) if any of the conditions precedent to Reinvestment in
clause (a), (b) and (d) of Section 5.2, subject to the proviso set
forth in Section 5.2, are not satisfied, then the Master Servicer
shall not reinvest any of such remaining Collections, but shall
identify them and hold them in trust for the benefit of the Purchaser;
(iv) out of the portion of Collections not allocated to the Asset
Interest pursuant to clause (i), pay to the Master Servicer the Seller's
Share of the Servicer's Fee accrued through such day and not previously
paid; and
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(v) pay to the Seller (A) the remaining portion of Collections not
allocated to the Asset Interest pursuant to clause (i) net of the amount
paid to the Master Servicer pursuant to clause (iv) and (B) the Collections
applied to Reinvestment pursuant to clause (iii).
(b) Unreinvested Collections. The Master Servicer shall identify and hold
in trust for the benefit of the Purchaser all Collections allocated to the Asset
Interest pursuant to clause (i) of Section 1.3(a) which, pursuant to clause
(iii) of Section 1.3(a), may not be reinvested in the Pool Receivables and
Related Assets, provided that unless otherwise requested by the Agent after a
Liquidation Event, such Collections need not be held in a segregated account.
If, prior to the date when such Collections are required to be paid to the Agent
for the benefit of the Purchaser pursuant to Section 1.3(c)(iv), (1) the amount
of Collections so identified exceeds the greater of (x) the amount, if any,
necessary to reduce the Invested Amount to the Purchase Limit and (y) the Asset
Interest to 100%, and (2) the conditions precedent to Reinvestment set forth in
clauses (a), (b) and (d) of Section 5.2, subject to the proviso set forth in
Section 5.2, are satisfied, then the Master Servicer shall apply such
Collections (or, if less, a portion of such Collections equal to the amount of
such excess) to the making of a Reinvestment.
(c) Payment of Amounts. Unless a Lock-Box Notice has been given and
alternate instructions have been given by the Agent pursuant thereto:
(i) The Master Servicer shall pay all amounts identified pursuant to
Section 1.3(a)(ii) in respect of Earned Discount on an Asset Tranche funded
by a Liquidity Funding to the Agent, on the Purchaser's behalf, on the last
day of the then current Yield Period for an Asset Tranche, as provided in
Section 3.1.
(ii) The Master Servicer shall pay all amounts of Collections
identified pursuant to Section 1.3(a)(ii) in respect of CP Costs on any
Asset Tranche funded by Commercial Paper Notes to the Agent, on the
Purchaser's behalf, on the Settlement Date following the last day of the
then current CP Accrual Period for such Asset Tranche, as provided in
Section 3.1.
(iii) The Master Servicer shall pay all amounts of Collections
identified pursuant to Section 1.3(a)(ii) and not applied pursuant to
clauses (i) or (ii) above to the Agent, on the Purchaser's behalf, on each
Settlement Date for each Settlement Period, as provided in Section 3.1.
(iv) The Master Servicer shall pay all other amounts identified and
held in trust for the benefit of the Purchaser pursuant to Section 1.3(a)
to the Agent for the account of the Purchaser (A) on the last day of the
then current Yield Period for any Asset Tranche funded by a Liquidity
Funding, as notified pursuant to Section 3.1(b), in an amount not exceeding
the Purchaser's Tranche Investment of such Asset Tranche, and (B) on the
last day of the then current CP Accrual Period for any Asset Tranche funded
by Commercial Paper Notes, as notified pursuant to Section 3.1(b), in an
amount not exceeding the Purchaser's Tranche Investment of such Asset
Tranche; provided, however, no payment
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shall be made under clause (B) above unless the Purchaser's Tranche
Investments of all Asset Tranches, if any, funded by Liquidity Fundings
shall have been reduced to zero.
(d) Funds Under Sale Agreement. Upon the written request of the Agent, on
the Purchaser's behalf, given at any time when (i) based on the most recent
Settlement Report, the Asset Interest would exceed 100% or the Invested Amount
would exceed the Purchase Limit, or (ii) a Liquidation Event or Unmatured
Liquidation Event shall have occurred and be continuing, the Seller shall hold
all funds that under the Sale Agreement would be applied to repay principal of
the Seller Notes owing to the Originators. The Seller may make withdrawals of
such funds only for the purposes of (i) at any time, purchasing Receivables from
any Originator in accordance with the Sale Agreement; (ii) on the Settlement
Date for any Settlement Period, making payments in accordance with the last
sentence of Section 3.1(c)(ii), and (iii) on the Settlement Date for any
Settlement Period, if, on the basis of the most recent Settlement Report, and
after giving effect to any payment made to the Master Servicer on such date
pursuant to the last sentence of Section 3.1(c)(ii), the Invested Amount does
not exceed the Purchase Limit and the Asset Interest does not exceed 100%, and
provided that no Liquidation Event or Unmatured Liquidation Event shall have
occurred and be continuing, repaying principal of the Seller Notes in accordance
with this Agreement and the Sale Agreement.
(e) If, on any day any payment is required to be made pursuant to any of
the provisions of Section 1.3(c), the Seller does not have sufficient funds
available to make any such payment, the Master Servicer may make a Servicer
Advance in an amount necessary for the payment, subject to the restrictions set
forth in Section 8.3.
(f) Notwithstanding anything herein to the contrary, the Master Servicer
may recover any Servicer Advance that it has made in respect of any Receivable
or related Contract from amounts received in respect of such Receivable or
related Contract. If the Master Servicer has previously made a Servicer Advance
which it later determines to be nonrecoverable, the Master Servicer may,
following delivery of an officer's certificate to the Agent detailing the Master
Servicer's determination that such Servicer Advance is nonrecoverable, recover
the amount of such Servicer Advance from Collections. Any amount so recovered by
the Master Servicer shall not be a Collection for purposes of this Section 1.3.
Section 1.4 Asset Interest.
(a) Components of Asset Interest. On any date the Asset Interest will
represent the Purchaser's undivided percentage ownership interest in all then
outstanding Pool Receivables and all Related Assets with respect to such Pool
Receivables as at such date.
(b) Computation of Asset Interest. On any date, the Asset Interest will be
equal to a percentage equivalent of the following fraction:
IA + RR
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NPB
where:
IA = Invested Amount as of the time of such computation;
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RR = the then Required Reserve; and
NPB = the then Net Pool Balance
provided, however, that the Asset Interest during the Liquidation Period shall
equal 100% and shall at no time exceed 100%.
(c) Frequency of Computation. The Asset Interest shall be computed (i) as
provided in Section 3.1, as of the Cut-Off Date for each Settlement Period, and
(ii) on the Settlement Date following each Reporting Date, after giving effect
to the payments made pursuant to Section 3.1. In addition, at any time, the
Agent, on the Purchaser's behalf, may require the Master Servicer to provide a
Settlement Report, based on the information then available to the Master
Servicer, for purposes of computing the Asset Interest or the Purchase Limit as
of any other date, and the Master Servicer agrees to do so within five (5) (or
three (3), if a Liquidation Event has occurred and is continuing) Business Days
of its receipt of the Agent's request.
ARTICLE II.
COMPUTATIONAL RULES
Section 2.1 Selection of Asset Tranches.
The Agent shall, from time to time for purposes of computing Earned
Discount on that portion of the Asset Interest funded with Liquidity Fundings,
divide the Asset Interest into Asset Tranches; in doing so, the Agent shall,
prior to the occurrence of a Liquidation Event, consult with the Seller. The
applicable Earned Discount Rate may be different for each Asset Tranche funded
by a Liquidity Funding. The total Invested Amount shall be allocated to the
Asset Tranches by the Agent, on the Purchaser's behalf, to reflect the funding
sources for the Asset Interest such that the total amount of the Purchaser's
Tranche Investments of such Asset Tranches shall equal the Invested Amount, so
that:
(a) there will be a single Asset Tranche with a Purchaser's Tranche
Investment equal to the excess of the Invested Amount over the aggregate
amount allocated at such time pursuant to clause (b) below, which Asset
Tranche shall reflect the portion of the Asset Interest funded by
Commercial Paper Notes; and
(b) there will be one or more Asset Tranches, selected by the Agent,
on the Purchaser's behalf, reflecting the portion or portions of the Asset
Interest funded by outstanding Liquidity Fundings.
Section 2.2 Computation of Invested Amount and Purchaser's Tranche
Investment.
In making any determination of the Invested Amount and any Purchaser's
Tranche Investment, the following rules shall apply:
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(a) the Invested Amount shall not be considered reduced by any allocation,
setting aside or distribution of any portion of Collections unless such
Collections shall have been actually delivered hereunder to the Agent, on the
Purchaser's behalf;
(b) the Invested Amount shall not be considered reduced by any
distribution of any portion of Collections if at any time such distribution is
rescinded or must otherwise be returned for any reason; and
(c) if there is any reduction in the Invested Amount, there shall be a
corresponding reduction in the Purchaser's Tranche Investment with respect to
one or more Asset Tranches selected by the Agent, on the Purchaser's behalf, in
its discretion.
Section 2.3 Computation of Concentration Limits and Unpaid Balance.
The Obligor Concentration Limits and the aggregate Unpaid Balance of
Pool Receivables of any Obligor and its Affiliated Obligors (if any) shall be
calculated as if such Obligor and its Affiliated Obligors were one Obligor.
Section 2.4 Computation of Earned Discount.
In making any determination of Earned Discount, the following rules
shall apply:
(a) the Agent, on the Purchaser's behalf, shall determine the Earned
Discount accruing with respect to each Asset Tranche funded with a Liquidity
Funding for each Yield Period, in accordance with the definition of Earned
Discount;
(b) no provision of this Agreement shall require the payment or permit the
collection of Earned Discount in excess of the maximum permitted by applicable
law; and
(c) the Earned Discount for any Asset Tranche shall not be considered paid
by any distribution if at any time such distribution is rescinded or must
otherwise be returned for any reason.
It is the intent of the Purchaser to fund the Asset Interest by the issuance of
Commercial Paper Notes. If the Purchaser is unable, or determines that it is
undesirable, to issue Commercial Paper Notes to fund the Asset Interest, or is
unable to repay such Commercial Paper Notes upon the maturity thereof, the
Purchaser will draw on Liquidity Fundings to fund the Asset Interest to the
extent Liquidity Fundings are available. If the Purchaser funds or refinances
its investment in an Asset Tranche through a Liquidity Funding, in lieu of
paying CP Costs on the Invested Amount thereof, the Seller will pay Earned
Discount thereon at a Bank Rate selected in accordance with this Agreement.
Nothing herein shall be deemed to constitute a commitment of the Purchaser to
issue Commercial Paper Notes.
Section 2.5 Estimates of Earned Discount Rate, Fees, etc.
For purposes of determining the amounts required to be identified and
held in trust by Master Servicer pursuant to Section 1.3, the Agent, on the
Purchaser's behalf, shall
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notify the Master Servicer (and, if Cadmus is not the Master Servicer, the
Seller) from time to time of the Purchaser's Tranche Investment of each Asset
Tranche, the Earned Discount Rate applicable to each Asset Tranche funded by a
Liquidity Funding and the rates at which fees and other amounts are accruing
hereunder. It is understood and agreed that (i) the CP Costs for any Asset
Tranche funded through the issuance of Commercial Paper Notes are determined in
arrears and may change from one applicable CP Accrual Period to the next, (ii)
the Earned Discount Rate for any Asset Tranche funded through a Liquidity
Funding may change from one applicable Yield Period to the next, (iii) the Bank
Rate used to calculate the Earned Discount Rate may change from time to time
during an applicable Yield Period, (iv) certain rate information provided by the
Agent to the Master Servicer shall be based upon the Agent's good faith
estimate, (v) the amount of Earned Discount actually accrued with respect to an
Asset Tranche funded through a Liquidity Funding during any Yield Period may
exceed, or be less than, the amount identified with respect thereto by Master
Servicer, and (vi) the amount of fees or other amounts payable by the Seller
hereunder which have accrued hereunder with respect to any Settlement Period may
exceed, or be less than, the amount identified with respect thereto by the
Master Servicer. Failure to identify and hold in trust any amount so accrued
shall not relieve the Master Servicer of its obligation to remit Collections to
the Agent, for the benefit of the Purchaser, with respect to such accrued
amount, as and to the extent provided in Section 3.1.
ARTICLE III.
SETTLEMENTS
Section 3.1 Settlement Procedures.
The parties hereto will take the following actions with respect to
each Settlement Period:
(a) Settlement Report. On the Reporting Date, the Master Servicer shall
deliver to the Agent, on the Purchaser's behalf, a report in the form of Exhibit
3.1(a-1) or, in the case of a Reporting Date pursuant to clause (b) of the
definition of the Reporting Date, in the form of Exhibit 3.1(a-2) (each, a
"Settlement Report").
(b) Earned Discount and CP Costs; Other Amounts Due.
(i) (A) On or before 12:00 noon (Atlanta, Georgia time) two (2)
Business Days before the last day of each Yield Period, the Agent shall
notify the Master Servicer of the amount of Earned Discount accrued with
respect to any Asset Tranche corresponding to such Yield Period, and (B) on
or before 12:00 noon (Atlanta, Georgia time) five (5) Business Days before
each Reporting Date, the Agent shall notify the Master Servicer of the
amount of CP Costs accrued during the CP Accrual Period then most recently
ended with respect to any Asset Tranche funded with Commercial Paper Notes
during all or any portion of such CP Accrual Period.
(ii) The Master Servicer shall pay to the Agent for the benefit of the
Purchaser the amount of such Earned Discount before 12:00 noon (Atlanta,
Georgia time) on the
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last day of such Yield Period and the amount of such CP Costs before 12:00
noon (Atlanta, Georgia time) on each Settlement Date.
(iii) On or before 12:00 noon (Atlanta, Georgia time) on the Business
Day before each Reporting Date, the Agent, on the Purchaser's behalf, shall
notify the Master Servicer of all Broken Funding Costs, fees and other
amounts accrued and payable by the Seller under this Agreement during the
prior calendar month (other than amounts described in clause (c) below).
The Master Servicer shall pay to the Agent, for the benefit of the
Purchaser, the amount of such Broken Funding Costs, fees and other amounts
on the Settlement Date for such month. Such payments shall be made out of
amounts identified pursuant to Section 1.3 for such payment; provided,
however, that to the extent that Collections attributable to the Asset
Interest during such Settlement Period are not sufficient to make such
payment, the shortfall shall be paid from amounts paid to the Seller
pursuant to Section 1.3(a)(v) and, if such amounts are not sufficient to
fully cover such shortfall, the Master Servicer may make a Servicer Advance
in the amount of such remaining shortfall in accordance with, and subject
to the provisions of Section 8.3.
(c) Asset Interest Computations.
(i) On the Reporting Date for each Settlement Period, the Master
Servicer shall compute, as of the related Cut-Off Date and based upon the
assumptions in the next sentence, (A) the Asset Interest, (B) the amount of
the reduction or increase (if any) in the Invested Amount and the
percentage interest represented by the Asset Interest since the immediately
preceding Cut-Off Date, (C) the excess (if any) of the Asset Interest over
100%, and (D) the excess (if any) of the Invested Amount over the Purchase
Limit. Such calculations shall be based upon the assumptions that (x) the
information in the Settlement Report is correct, and (y) Collections
identified pursuant to Section 1.3(b) will be paid to the Agent, for the
benefit of the Purchaser, on the Settlement Date for such Settlement
Period.
(ii) If, according to the computations made pursuant to clause (i)
above, either (x) the Asset Interest exceeds 100% or (y) the Invested
Amount exceeds the Purchase Limit, then on the Settlement Date for such
Settlement Period, the Master Servicer shall pay to the Agent, for the
benefit of the Purchaser, (to the extent of Collections during the related
Settlement Period attributable to all Asset Tranches and not previously
paid to the Agent and from other funds of the Seller) the amount necessary
to reduce the Invested Amount to the Purchase Limit and the Asset Interest
to 100%, subject, however, to the proviso to Section 1.3(c)(iv). Such
payment shall be made out of amounts identified pursuant to Section 1.3 for
such purpose and, to the extent such amounts were not so identified, the
Seller hereby agrees to pay such amounts to the Master Servicer to the
extent of Collections applied to Reinvestment under Section 1.3 during the
relevant Settlement Period.
(iii) In addition to the payments described in clause (ii) above,
during the Liquidation Period, the Master Servicer shall pay to the Agent,
for the benefit of the Purchaser, all amounts identified pursuant to
Section 1.3 (A) on the last day of the current
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Yield Period for any Asset Tranche funded by a Liquidity Funding, in an
amount not exceeding the Purchaser's Tranche Investment of such Asset
Tranche, and (B) after reduction to zero of the Purchaser's Tranche
Investments of the Asset Tranches, if any, funded by Liquidity Fundings, on
the last day of the each CP Accrual Period, in an amount not exceeding the
Purchaser's Tranche Investment of the Asset Tranche funded by Commercial
Paper Notes.
(d) Order of Application. Upon receipt by the Agent, on the Purchaser's
behalf, of funds distributed pursuant to this Section 3.1, the Agent shall apply
them to the items specified in the subclauses below, in the order of priority of
such subclauses:
(i) to accrued Earned Discount , CP Costs and Broken Funding Costs,
plus any previously accrued Earned Discount, CP Costs and Broken Funding
Costs not paid ;
(ii) to the Purchaser's Share of the accrued and unpaid Servicer's
Fee (if the Master Servicer is not Cadmus or its Affiliate);
(iii) to the Usage Fee and the Unused Fee accrued during such
Settlement Period, plus any previously accrued Usage Fee and Unused Fee not
paid on a prior Settlement Date;
(iv) to the reduction of Invested Amount, to the extent such
reduction is required under Section 3.1(c);
(v) to other accrued and unpaid amounts owing to the Purchaser or
the Agent hereunder (except Earned Discount on any Asset Tranche funded by
a Liquidity Funding which has accrued but is not yet overdue under Section
1.3(c)); and
(vi) to the Purchaser's Share of the accrued and unpaid Servicer's
Fee (if the Master Servicer is Cadmus or its Affiliate);
(e) Non-Distribution of Servicer's Fee. The Agent hereby consents (which
consent may be revoked at any time after the occurrence and during the
continuance of a Liquidation Event), to the retention by the Master Servicer of
the amounts (if any) identified pursuant to Section 1.3 in respect of the
Servicer's Fee, in which case no distribution shall be made in respect of the
Purchaser's Share of the Servicer's Fee pursuant to clause (d) above.
(f) Delayed Payment. If on any day described in this Section 3.1 (or in
Section 1.3(c)), because Collections during the relevant CP Accrual Period or
Yield Period were less than the aggregate amounts payable, the Master Servicer
shall not make any payment otherwise required, the next available Collections in
respect of the Asset Interest shall be applied to such payment, and no
Reinvestment shall be permitted hereunder until such amount payable has been
paid in full.
Section 3.2 Deemed Collections; Reduction of Invested Amount, Etc.
(a) Deemed Collections. If on any day
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(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective, rejected or returned
merchandise or services, any cash discount, or any other adjustment by
any Seller Party or any Affiliate thereof, or as a result of any
tariff or other governmental or regulatory action, or
(B) reduced or canceled as a result of a setoff in respect of any
claim by the Obligor thereof (whether such claim arises out of the
same or a related or an unrelated transaction), or
(C) reduced on account of the obligation of any Seller Party or
any Affiliate thereof to pay to the related Obligor any rebate or
refund, or
(D) less than the amount included in calculating the Net Pool
Balance for purposes of any Settlement Report (for any reason other
than such Receivable becoming a Defaulted Receivable), or
(ii) any of the representations or warranties of the Seller set forth
in Section 6.1(l) or (p) were not true when made with respect to any Pool
Receivable, or any of the representations or warranties of the Seller set
forth in Section 6.1(l) are no longer true with respect to any Pool
Receivable, or any Pool Receivable is repurchased by the applicable
Originator pursuant to the Sale Agreement,
then, on such day, the Seller shall be deemed to have received a Collection of
such Pool Receivable
(I) in the case of clause (i) above, in the amount of such reduction
or cancellation or the difference between the actual Unpaid Balance and the
amount included in calculating such Net Pool Balance, as applicable; and
(II) in the case of clause (ii) above, in the amount of the Unpaid
Balance of such Pool Receivable.
Collections deemed received by the Seller under this Section 3.2(a) are herein
referred to as "Deemed Collections." The Purchaser shall, with respect to any
Pool Receivable as to which the full Deemed Collection due under clause II above
has been received by the Purchaser, upon receipt of such Deemed Collection by
the Purchaser, reconvey to the Seller, without recourse, representation or
warranty by the Purchaser, all of the Purchaser's right, title and interest in
such Pool Receivable. Such Pool Receivable shall be released from any Lien
thereon created hereby and the Seller shall be deemed to reconvey to the related
Originator, without recourse, representation or warranty by the Seller, all of
the Seller's right, title and interest in such Pool Receivable.
(b) Seller's Optional Reduction of Invested Amount. The Seller may at any
time elect to reduce the Invested Amount as follows:
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(i) the Seller shall provide the Agent, on the Purchaser's behalf,
with prior written notice in conformity with the Required Notice Period (a
"Reduction Notice") of any proposed reduction of the aggregate Invested
Amount. Such Reduction Notice shall designate (i) the date (the "Proposed
Reduction Date") upon which any such reduction of aggregate Invested Amount
shall occur (which date shall give effect to the applicable Required Notice
Period), and (ii) the amount of aggregate Invested Amount to be reduced
which shall be applied ratably to all Asset Tranches in accordance with the
respective Invested Amounts thereof (the "Aggregate Reduction"). Only one
(1) Reduction Notice shall be outstanding at any time.
(ii) on the Proposed Reduction Date, the Master Servicer shall
refrain from reinvesting Collections pursuant to Section 1.3 until the
amount thereof not so reinvested shall equal the desired amount of
Aggregate Reduction, and
(iii) the Master Servicer shall hold such Collections in trust for the
Purchaser, pending payment to the Agent, as provided in Section 1.3;
provided that:
(A) the amount of any such Aggregate Reduction shall be in (1)
an amount of at least $10,000 or (2) an amount equal to the remaining
Invested Amount,
(B) the Seller shall use reasonable efforts to attempt to choose
an Aggregate Reduction amount, and the date of commencement thereof,
so that such reduction shall commence and conclude in the same
Settlement Period,
(C) unless the Invested Amount will be reduced to zero, after
giving effect to such Aggregate Reduction, the Invested Amount will be
at least $25,000,000,
(D) Aggregate Reductions made pursuant to this Section 3.2(b)
shall occur on Settlement Dates and on up to two (2) additional
Business Days in any Settlement Period, and
(E) the number of Purchases pursuant to Section 1.1 and
Aggregate Reductions pursuant to this Section 3.2(b) shall not exceed,
in the aggregate, three (3) in any Settlement Period (or two (2) in
any Settlement Period in which at least one of such Purchases or one
of such Aggregate Reductions does not occur on the applicable
Settlement Date).
Section 3.3 Payments and Computations, Etc.
(a) Payments. All amounts to be paid to the Agent or any other Person or
deposited by the Seller or the Master Servicer hereunder (other than amounts
payable under Section 4.2) shall be paid or deposited in accordance with the
terms hereof no later than 12:00 noon (Atlanta, Georgia time) on the day when
due in lawful money of the United States of America in same day
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funds to the Purchaser in care of Wachovia Bank, National Association, ABA
#000000000, Account #8735-098787, for credit: Blue Ridge Asset Funding
Corporation, Reference: Cadmus Receivables Corp., Attention: Xxxxxxx Xxxxxx
(000) 000-0000, or to such other account at the bank named therein or at such
other bank as the Agent on behalf of the Purchaser may designate by written
notice to the Person making such payment.
(b) Late Payments. The Seller or the Master Servicer, as applicable, shall,
to the extent permitted by law, pay to the Person to whom payment is due
interest on all amounts not paid or deposited when due hereunder at 2% per annum
above the Base Rate, payable on demand, provided, however, that such interest
rate shall not at any time exceed the maximum rate permitted by applicable law.
(c) Method of Computation. All computations of interest, CP Costs, Broken
Funding Costs, Earned Discount, Liquidation Fee, any fees payable under Section
4.1 and any other fees payable by the Seller to the Purchaser or the Agent
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day) elapsed.
Section 3.4 Treatment of Collections and Deemed Collections.
The Seller shall forthwith deliver to the Master Servicer all Deemed
Collections, and the Master Servicer shall hold or distribute such Deemed
Collections as Earned Discount, accrued Servicer's Fee, repayment of Invested
Amount, and to other accrued amounts owing hereunder to the same extent as if
such Deemed Collections had actually been received on the date of such delivery
to the Master Servicer. If Collections are then being paid to the Agent, on the
Purchaser's behalf, or its designee, or lock boxes or accounts directly or
indirectly owned or controlled by the Agent, the Master Servicer shall forthwith
cause such Deemed Collections to be paid to the Agent, on the Purchaser's
behalf, or its designee or to such lock boxes or accounts, as applicable, or as
the Agent shall request. So long as the Seller shall hold any Collections
(including Deemed Collections) required to be paid to the Master Servicer, the
Agent or the Collateral Agent, it shall hold such Collections in trust for the
benefit of the Agent, on behalf of the Purchaser, and shall clearly xxxx its
records to reflect such trust; provided that unless the Agent shall have
requested it in writing to do so, the Seller shall not be required to hold such
Collections in a separate deposit account containing only such Collections.
ARTICLE IV.
FEES AND YIELD PROTECTION
Section 4.1 Fees.
The Seller shall pay to the Purchaser certain fees from time to time in
amounts and payable on such dates as are set forth in the Amended and Restated
Fee Letter dated on or about October 23, 2002 (as amended from time to time, the
"Fee Letter") among the Seller, the Master Servicer, the Purchaser and the
Agent.
Section 4.2 Yield Protection.
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(a) If (i) any change in the interpretation of Regulation D or (ii) any
Regulatory Change occurring after November 20, 2002:
(A) shall subject an Affected Party to any tax, duty or other
charge with respect to the Asset Interest or any Asset Tranche owned
by or funded by it, or any obligations or right to make Purchases or
Reinvestments or to provide funding therefor, or shall change the
basis of taxation of payments to the Affected Party of any Invested
Amount, Purchaser's Tranche Investment or Earned Discount owned by,
owed to or funded in whole or in part by it or any other amounts due
under this Agreement in respect of the Asset Interest or any Asset
Tranche owned by or funded by it or its obligations or rights, if any,
to make Purchases or Reinvestments or to provide funding therefor
(except for (1) taxes based on, or measured by, net income, or changes
in the rate of tax on or determined by reference to the overall net
income, of such Affected Party imposed by the United States of
America, or by the jurisdiction in which such Affected Party's
principal executive office is located and, if such Affected Party's
principal executive office is not in the United States of America, by
the jurisdiction where such Affected Party's principal office in the
United States is located or, (2) franchise taxes, taxes on, or in the
nature of, doing business taxes or capital taxes); or
(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal
Reserve Board, but excluding any reserve included in the determination
of Earned Discount), special deposit or similar requirement against
assets of any Affected Party, deposits or obligations with or for the
account of any Affected Party or with or for the account of any
affiliate (or entity deemed by the Federal Reserve Board to be an
affiliate) of any Affected Party, or credit extended by any Affected
Party; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting any Asset Interest
owned or funded in whole or in part by any Affected Party, or its
obligations or rights, if any, to make Purchases or Reinvestments or
to provide funding therefor; or
(E) shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or a successor thereto) assesses,
deposit insurance premiums or similar charges;
and the result of any of the foregoing is or would be
(x) to increase the cost to or to impose a cost on (I) an Affected
Party funding or making or maintaining any Purchases or Reinvestments, any
purchases, reinvestments, or loans or other extensions of credit under the
Liquidity Agreement, or any commitment of such Affected Party with respect
to any of the
17
foregoing, or (II) the Agent for continuing its or the Seller's
relationship with the Purchaser, in each case, in an amount deemed to be
material by such Affected Party,
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement or under the Liquidity Agreement, or
(z) in the reasonable determination of such Affected Party, to reduce
the rate of return on the capital of an Affected Party as a consequence of
its obligations hereunder or arising in connection herewith to a level
below that which such Affected Party could otherwise have achieved,
then, within thirty days after demand by such Affected Party (which demand shall
be accompanied by a certificate setting forth, in reasonable detail, the basis
of such demand and the methodology for calculating, and the calculation of, the
amounts claimed by the Affected Party), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such additional or increased cost or such reduction.
(b) Each Affected Party will promptly notify the Seller and the Agent of
any event of which it has knowledge (including any future event that, in the
judgment of such Affected Party, is reasonably certain to occur) which will
entitle such Affected Party to compensation pursuant to this Section 4.2;
provided, however, no failure to give or delay in giving such notification shall
adversely affect the rights of any Affected Party to such compensation.
(c) In determining any amount provided for or referred to in this Section
4.2, an Affected Party may use any reasonable averaging and attribution methods
(consistent with its ordinary business practices) that it (in its discretion)
shall deem applicable. Any Affected Party when making a claim under this Section
4.2 shall submit to the Seller the certificate (referred to in subsection (a)
above) as to such increased cost or reduced return (including calculation
thereof in reasonable detail), which statement shall, in the absence of
demonstrable error, be conclusive and binding upon the Seller.
(d) The Purchaser shall use reasonable efforts to cause any Affected Party
that makes a claim for payment under this Section 4.2 to take reasonable
measures to minimize the amounts payable by the Seller pursuant to this Section
4.2.
(e) For avoidance of doubt, any interpretation of Accounting Research
Bulletin No. 51 by the Financial Accounting Standards Board shall constitute an
adoption, change, request or directive subject to this Section 4.2.
Section 4.3 Funding Losses.
In the event that any Liquidity Bank shall actually incur any loss or
expense (including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Liquidity Bank to make
any Liquidity Funding or maintain any Liquidity Funding) as a result of (i) any
settlement with respect to the Purchaser's Tranche Investment of any Asset
Tranche funded by a Liquidity Funding being made on any day other
18
than the scheduled last day of an applicable Yield Period with respect thereto
(it being understood that the foregoing shall not apply to any portion of the
Purchasers' Tranche Investment that is accruing Earned Discount calculated by
reference to the Base Rate), or (ii) any Purchase not being made in accordance
with a request therefor under Section 1.2, then, upon written notice from the
Agent to the Seller and the Master Servicer, the Seller shall pay to the Master
Servicer, and the Master Servicer shall pay to the Agent for the account of such
Liquidity Bank, the amount of such loss or expense. Such written notice (which
shall include the methodology for calculating, and the calculation of, the
amount of such loss or expense, in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding upon the Seller and the Master
Servicer.
ARTICLE V.
CONDITIONS OF PURCHASES
Section 5.1 Conditions Precedent to Initial Purchase.
The initial Purchase pursuant to the Existing Agreement was
subject to the following conditions precedent:
(a) the Agent, on the Purchaser's behalf, shall have received, on or
before the date of such initial Purchase, the following each (unless otherwise
indicated) dated such date and in form and substance reasonably satisfactory to
the Agent:
(i) The Sale Agreement, duly executed by the parties thereto;
(ii) A certificate of the Secretary or Assistant Secretary of
each Seller Party certifying the names and true signatures of the
officers authorized on its behalf to sign this Agreement and the other
Transaction Documents to be delivered by it hereunder (on which
certificate the Agent and the Purchaser may conclusively rely until such
time as the Agent, on the Purchaser's behalf, shall receive from such
Seller Party a revised certificate meeting the requirements of this
subsection (ii));
(iii) The Articles or Certificate of Incorporation of each
Seller Party, duly certified by the State Corporation Commission of the
Commonwealth of Virginia, as of a recent date acceptable to Agent on the
Purchaser's behalf, in each case together with a copy of the by-laws of
such Seller Party, duly certified by the Secretary or an Assistant
Secretary of such Seller Party;
(iv) Copies of good standing certificates for each Seller
Party issued by the State Corporation Commission of the Commonwealth of
Virginia and the state where such Seller Party's principal place of
business is located;
(v) Acknowledgment copies (or other evidence of filing
reasonably acceptable to the Agent, on behalf of the Secured Parties,) of
(i) proper financing statements (Form UCC-1), in such form as the Agent,
on behalf of the Secured Parties, may reasonably request, naming each of
the Originators as the debtor and the seller of the Receivables and
Related Assets, the Seller as the secured party and purchaser thereof and
Wachovia,
19
solely in its capacity as Agent for the Secured Parties hereunder, as assignee,
and (ii) financing statements (Form UCC-1), in such form as the Agent, on behalf
of the Secured Parties, may reasonably request, naming the Seller as the debtor
and the seller of an undivided percentage interest in the Pool Receivables and
Related Assets and the Purchaser, as the secured party and purchaser thereof, or
other, similar instruments or documents, as may be necessary or, in the opinion
of the Agent, on behalf of the Secured Parties, desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect the sale by each
Originator to the Seller of, and the Purchaser's, undivided percentage interest
in, the Pool Receivables and Related Assets;
(vi) Search reports provided in writing to the Agent, on the
Purchaser's behalf, (i) listing all effective financing statements that name any
Seller Party as debtor and that are filed in the jurisdictions in which filings
were made pursuant to subsection (v) above and in such other jurisdictions that
the Agent shall reasonably request, together with copies of such financing
statements (none of which (other than any of the financing statements described
in subsection (v) above) shall cover any Receivables or Related Assets, and (ii)
listing all tax liens and judgment liens (if any) filed against any debtor
referred to in clause (i) above in the jurisdictions described therein and
showing no such Liens;
(vii) Evidence that the Seller Notes have been duly executed and
delivered by the Seller;
(viii) Favorable opinions of Xxxx & Valentine, L.L.P., counsel to the
Seller Parties, in substantially the form of Exhibit 5.1(a)(viii);
(ix) A favorable opinion of Xxxx & Valentine, L.L.P., counsel to the
Seller Parties, as to
(x) the existence of a "true sale" of the Receivables from the
Originators to the Seller under the Sale Agreement; and
(y) the inapplicability of the doctrine of substantive
consolidation to the Seller in connection with any bankruptcy proceeding
involving any of the Originators or Cadmus;
(x) A pro forma Settlement Report, prepared as of the Cut-Off Date of
September 30, 1999;
(xi) A report in form and substance satisfactory to the Agent, on the
Purchaser's behalf, from the Initial Due Diligence Auditor as to a
pre-closing due diligence audit by the Initial Due Diligence Auditor
(such report and any amendment, supplement, update or other modification,
the "Due Diligence Report");
(xii) The Liquidity Agreement, in form and substance satisfactory to
the Agent, on the Purchaser's behalf, duly executed by the Purchaser, the
Liquidity Agent and each Liquidity Bank;
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(xiii) Evidence that Cadmus has implemented all operational
changes as set forth in the Letter Agreement;
(xiv) Lock-Box Agreements with respect to each Lock-Box and the
Collection Account;
(xv) [Reserved];
(xvi) With respect to Cadmus and its Consolidated Subsidiaries,
a consolidated balance sheet, income statement and statement of
shareholders' equity as at June 30, 1999 and with respect to the Seller,
a balance sheet as at October 26, 1999, each of the foregoing together
with a certification of the chief financial officer or treasurer in the
form attached hereto as Exhibit B; and
(xvii) such other agreements, instruments, certificates,
approvals, opinions and other documents as the Agent may reasonably
request; and
(b) Cadmus shall have paid (i) the Structuring Fee and (ii) all
Transaction Fees.
Section 5.2 Conditions Precedent to All Purchases and Reinvestments.
Each Purchase (including the initial Purchase) and each
Reinvestment shall be subject to the further conditions precedent that on the
date of such Purchase or Reinvestment the following statements shall be true
(and the Seller, by accepting the amount of such Purchase or by receiving the
proceeds of such Reinvestment, and each other Seller Party, upon such acceptance
or receipt by the Seller, shall be deemed to have certified that):
(a) the representations and warranties contained in Section 6.1 are
correct in all material respects on and as of such day as though made on and as
of such day and shall be deemed to have been made on such day;
(b) no event has occurred and is continuing, or would result from
such Purchase or Reinvestment, that constitutes a Liquidation Event or Unmatured
Liquidation Event;
(c) after giving effect to each proposed Purchase or Reinvestment,
the Invested Amount will not exceed the Purchase Limit and the Asset Interest
will not exceed 100%;
(d) the Termination Date shall not have occurred;
(e) in the case of a Purchase, the Agent shall have timely received
an appropriate notice of the proposed Purchase in accordance with Section
1.2(a); and
(f) the Agent shall have received such other agreements, instruments,
certificates, approvals, opinions and other documents as the Agent may
reasonably request.
provided, however, the absence of the occurrence and continuance of an Unmatured
Liquidation Event shall not be a condition precedent to any Reinvestment or any
Purchase on any day which
21
does not cause the Invested Amount, after giving effect to such Reinvestment or
Purchase, to exceed the Invested Amount as of the opening of business on such
day.
Section 5.3 Conditions Precedent to This Second Amended and Restated
Receivables Purchase Agreement
This Agreement shall become effective as of the date (the "Amendment
Effective Date") on which each of the following conditions precedent have been
satisfied:
(a) the Agent shall have received the Fee Letter duly executed by the
parties thereto;
(b) the representations and warranties contained in Section 6.1 shall
be true and correct in all material respects on and as of such day as though
made on and as of such day and shall be deemed to have been made on such day;
(c) no event shall have occurred and be continuing, that constitutes
a Liquidation Event or Unmatured Liquidation Event;
(d) the Invested Amount shall not exceed the Purchase Limit and the
Asset Interest shall not exceed 100%;
(e) the Agent shall have received acknowledgement copies (or other
evidence of filing reasonably acceptable to the Agent, on behalf of the Secured
Parties) of amendments to financing statements (Form UCC-3), in such form as the
Agent, on behalf of the Secured Parties, may reasonably request, naming the
Seller as the debtor and the seller of an undivided percentage interest in the
Collateral.
(f) The Agent shall have received such other agreements, instruments,
certificates, approvals, opinions and other documents as the Agent may
reasonably request.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties of the Seller Parties.
Each Seller Party represents and warrants as to itself, except
when specifically provided, in which case, the specified Seller Party represents
and warrants as follows:
(a) Organization and Good Standing; Ownership. Each Seller Party's
jurisdiction of organization is correctly set forth in the preamble to this
Agreement. Each Seller Party is duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Virginia and
is a "registered organization" as defined in the UCC in effect in such
jurisdiction, with power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted. The Seller had at all relevant times, and now has, all necessary
corporate power and authority to acquire and own the Pool Receivables and
Related Assets.
22
(b) Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals, except where the failure to be so qualified or have such licenses or
approvals would not have a Material Adverse Effect.
(c) Power and Authority; Due Authorization. It (i) has all necessary
corporate power and authority (A) to execute and deliver this Agreement and the
other Transaction Documents to which it is a party, (B) to carry out the terms
of the Transaction Documents to which it is a party, (C) in the case of the
Master Servicer, to service the Receivables and the Related Assets in accordance
with this Agreement and the Sale Agreement, and (D) in the case of the Seller,
to sell and assign the Asset Interest on the terms and conditions herein
provided, and (ii) has duly authorized by all necessary corporate action the
execution, delivery and performance of this Agreement and the other Transaction
Documents and, in the case of the Seller, the sales and assignments described in
clause (i)(D) above.
(d) Valid Sale; Binding Obligations. (i) This Agreement constitutes a
valid sale, transfer, and assignment of the Asset Interest to the Purchaser,
enforceable against creditors of, and purchasers from, the Seller, and (ii) this
Agreement and each other Transaction Document signed by such Seller Party
constitutes, a legal, valid and binding obligation of such Seller Party,
enforceable against such Seller Party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws from time to time in effect affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance by it of
this Agreement and the other Transaction Documents to which it is a party and
the consummation by it of the transactions contemplated hereby and thereby do
not (i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a default
under, its articles or certificate of incorporation or by-laws, or any material
indenture, loan agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument to which it is a party or by which it or
any of its properties is bound, (ii) result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such material
indenture, loan agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument, other than this Agreement and the other
Transaction Documents, or (iii) violate any law or any order, rule, or
regulation applicable to it of any court or of any federal or state regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over it or any of its properties; except where any such conflict,
breach, default, Lien or violation would not have a Material Adverse Effect.
(f) No Proceedings. There are no proceedings or investigations
against or affecting it which are pending, or, to its knowledge, threatened,
before any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
any other Transaction Document, (ii) seeking to prevent the sale and assignment
of the Receivables under the Sale Agreement or of the Asset Interest under this
23
Agreement or the consummation of any of the other transactions contemplated by
this Agreement or any other Transaction Document, or (iii) that would have a
Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby requires compliance
with any bulk sales act or similar law.
(h) Government Approvals. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by it of this
Agreement and each other Transaction Document to which it is a party, except,
(i) in the case of the Seller, for (A) the filing of the UCC financing
statements referred to in Article V, and (B) the filing of any UCC continuation
statements and amendments from time to time required in relation to any UCC
financing statements filed in connection with this Agreement, as provided in
Section 8.7, all of which, at the time required in Article V or Section 8.7, as
applicable, shall have been duly made and shall be in full force and effect; and
(ii) such authorizations, approvals, actions, notices and filings the failure of
which to obtain or make would not have a Material Adverse Effect.
(i) Financial Condition. (w) The consolidated balance sheet of the Master
Servicer and its Consolidated Subsidiaries as at June 30, 2002, and the related
statements of income, shareholders' equity and cash flows for the Fiscal Year
then ended, reported on by Ernst & Young LLP, independent certified public
accountants, copies of which have been furnished to the Agent, fairly present,
in conformity with GAAP, the consolidated financial condition of the Master
Servicer and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such period stated, and
there are no material liabilities or unusual forward obligations that are not
set forth therein, (x) since June 30, 2002 there has been no material adverse
change in any such financial condition, business or operations except as
described in Schedule 6.1(i), (y) the balance sheet of the Seller as at June 30,
2002, certified by the chief financial officer or treasurer of the Seller by
means of a Certificate of Financial Officer in the form attached hereto as
Exhibit B, copies of which have been furnished to the Agent, fairly presents in
all material respects the financial condition, assets and liabilities of the
Seller as at such date, all in accordance with GAAP consistently applied, and
(z) since June 30, 2002, there has been no material adverse change in the
Seller's financial condition, business or operations.
(j) Material Adverse Effect: Since June 30, 2002 there has been no event,
act, condition, circumstance or occurrence which would have a Material Adverse
Effect.
(k) Federal Regulations. No part of any funds obtained by the Seller
hereunder has been used (x) to acquire any equity security of a class that is
registered pursuant to Section 12 of the Exchange Act or (y) for "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect or for any purpose which violates the
provisions of any Regulations of the Federal Reserve Board. If requested by the
Agent at any time, the Seller will furnish to the Agent a statement in
conformity with the requirements of FR Form U-1 referred to in Regulation U.
24
(l) Good Title. The Seller owns and has good and marketable title to the
Collateral free and clear of any Lien, except as created by the Transaction
Documents.
(m) Accurate Reports. No Settlement Report (if prepared by such Seller
Party, or to the extent information therein was supplied by such Seller Party)
or other information, exhibit, financial statement, document, book, record or
report furnished, in each case in writing, by or on behalf of such Seller Party
to the Agent or the Purchaser pursuant to this Agreement was inaccurate in any
material respect as of the date it was dated or (except as otherwise disclosed
to the Agent or Purchaser at such time) as of the date so furnished, or
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not materially
misleading in light of the circumstances made or presented.
(n) Offices. The principal places of business and chief executive offices
of the Master Servicer and the Seller are located at the respective addresses
set forth on Schedule 14.2, and the offices where the Master Servicer and the
Seller keep all their books, records and documents evidencing Pool Receivables,
the related Contracts and all purchase orders and other agreements related to
such Pool Receivables are located at the addresses specified in Schedule 6.1(n)
(or at such other locations, notified to the Agent, on the Purchaser's behalf,
in accordance with Section 7.1(f), in jurisdictions where all action required by
Section 8.7 has been taken and completed).
(o) Lock-Boxes and Collection Account. The names and addresses of all the
Lock-Box Banks, together with the related account numbers of the accounts of the
Originators, the Master Servicer or the Seller at such Lock-Box Banks, are
specified in Schedule 6.1(o) (or have been notified to and approved by the
Agent, on the Purchaser's behalf, in accordance with Section 7.3(d)). All funds
in the Lock-Boxes and the Collection Account result from Collections on the
Receivables and other amounts received with respect thereto.
(p) Eligible Receivables. Each Receivable included in the Net Pool Balance
as an Eligible Receivable on the date of any Purchase, Reinvestment or
computation of Net Pool Balance shall be an Eligible Receivable on such date.
(q) [Reserved].
(r) Perfection:
(i) This Agreement creates a valid and continuing security interest
(as defined in the UCC) in the Collateral in favor of Agent for the benefit of
the Secured Parties, which security interest is prior to all other Liens and is
enforceable as such as against creditors and purchasers from the Seller.
(ii) There have been duly filed financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect (A) the Seller's ownership interest in each
Receivable, its Collections and the Related Assets and (B) the Agent's (on
behalf of the Secured Parties) security interest in the Collateral.
25
(iii) Other than the security interest granted to Agent for the benefit
of the Secured Parties pursuant to this Agreement, the Seller has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Collateral.
(iv) The Seller's jurisdiction of organization is a jurisdiction whose
law generally requires information concerning the existence of a nonpossessory
security interest to be made generally available in a filing, record or
registration system as a condition or result of such a security interest's
obtaining priority over the rights of a lien creditor with respect to
collateral.
(v) The Seller has not authorized the filing of and is not aware of
any financing statements against the Seller that include a description of
collateral covering the Collateral other than any financing statement relating
to the security interest granted to Agent for the benefit of Secured Parties
hereunder or that has been terminated. The Seller is not aware of any judgment
or tax lien filings against the Seller.
(vi) Each Receivable is an "account", "instrument", "general
intangible" or "chattel paper" as defined in the UCC.
(s) Compliance with Credit and Collection Policy. With respect to each Pool
Receivable, it has complied in all material respects with the Credit and
Collection Policy.
(t) Payments to Originators. With respect to each Receivable transferred to
the Seller by the Originators pursuant to the Sale Agreement, the Seller has
given reasonably equivalent value to each Originator in consideration for the
Receivables originated by it and the Related Assets with respect thereto and
such transfer was not made for or on account of antecedent debt.
(u) Names. In the past five years, the Seller has not used any corporate
names, trade names or assumed names other than the name in which it has executed
this Agreement.
(v) Ownership of the Seller. Cadmus owns, directly or indirectly, 100% of
the issued and outstanding capital stock of the Seller, free and clear of any
Lien except as contemplated by the Conditional Waiver. Such capital stock is
validly issued, fully paid and nonassessable, and there are no options, warrants
or other rights to acquire securities of the Seller.
(w) Investment Company. The Seller is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended from time to time,
or any successor statute.
(x) Taxes. It has filed all material tax returns and reports required by
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except to the extent any failure to file such returns
or reports or pay such taxes or charges would not result in a Material Adverse
Effect.
(y) Compliance with Laws. It is in compliance with all applicable laws,
including, without limitation, all Environmental Laws, except where any failure
to comply with any such laws would not, alone or in the aggregate, have a
Material Adverse Effect.
26
ARTICLE VII.
GENERAL COVENANTS OF THE SELLER PARTIES
Section 7.1 Affirmative Covenants of the Seller Parties.
From the Amendment Closing Date until the Final Payout Date, unless the
Agent shall otherwise consent in writing:
(a) Compliance With Laws, Etc. Each Seller Party will comply in all
material respects with all applicable laws, rules, regulations and orders,
including those with respect to the Pool Receivables and related Contracts,
except where the failure to so comply would not individually or in the aggregate
have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Each Seller Party will preserve
and maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification would have a Material Adverse Effect.
(c) Audits. Each Seller Party will (i) at any time and from time to time
upon not less than five (5) Business Days' notice (unless a Liquidation Event
has occurred and is continuing (or the Agent, on the Purchaser's behalf,
believes in good faith that a Liquidation Event has occurred and is continuing),
in which case no such notice shall be required) during regular business hours,
permit the Agent, on the Purchaser's behalf, or any of its agents or
representatives, (A) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in the possession or under the control of such Seller Party relating to Pool
Receivables, including, without limitation, the related Contracts and purchase
orders and other agreements, and (B) to visit the offices and properties of such
Seller Party for the purpose of examining such materials described in clause
(i)(A) next above, and to discuss matters relating to Pool Receivables or such
Seller Party's performance hereunder with any of the officers or employees of
such Seller Party having knowledge of such matters; (ii) permit the Agent or any
of its agents or representatives, upon not less than five (5) Business Days'
notice from the Agent (unless a Liquidation Event has occurred and is continuing
(or the Agent believes in good faith that a Liquidation Event has occurred and
is continuing) in which case no such notice shall be required), to meet with the
independent auditors of such Seller Party, to review such auditors' work papers
and otherwise to review with such auditors the books and records of such Seller
Party with respect to the Pool Receivables and Related Assets; and (iii) without
limiting the provisions of clause (i) or (ii) next above, from time to time, at
the expense of such Seller Party, permit certified public accountants or other
auditors acceptable to the Agent to conduct a review of such Seller Party's
books and records with respect to the Pool Receivables and Related Assets;
provided, that, so long as no Liquidation Event has occurred and is continuing,
(x) such examinations, visits, meetings and reviews shall not be done more than
two (2) times in any one calendar year and (y) the Seller Parties shall only be
responsible for the costs and expenses of one such review in any one calendar
year.
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(d) Keeping of Records and Books of Account. The Master Servicer will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Pool Receivables
in the event of the destruction of the originals thereof), and keep and
maintain, all documents, books, records and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including,
without limitation, records adequate to permit the daily identification of
outstanding Unpaid Balances by Obligor and related debit and credit details of
the Pool Receivables).
(e) Performance and Compliance with Receivables and Contracts. Each Seller
Party will, at its expense, timely and fully perform and comply with all
material provisions, covenants and other promises, if any, required to be
observed by it under the Contracts related to the Pool Receivables and all
agreements related to such Pool Receivables, except where a failure to do so
would not have a Material Adverse Effect.
(f) Location of Records. Each Seller Party will keep its chief place of
business and chief executive office, and the offices where it keeps its records
concerning the Pool Receivables, all related Contracts and all agreements
related to such Pool Receivables (and all original documents relating thereto),
at the address(es) of the applicable Servicer and the Seller referred to in
Section 6.1(n) or, upon 30 days' prior written notice to the Agent, at such
other locations in jurisdictions where all action required by Section 8.7 shall
have been taken and completed.
(g) Credit and Collection Policies. Each Seller Party will comply in all
material respects with the Credit and Collection Policy in regard to each Pool
Receivable and the related Contract.
(h) Sale Agreement. The Seller will perform and comply in all material
respects with all of its covenants and agreements set forth in the Sale
Agreement, and will enforce the performance by each Originator of its
obligations under the Sale Agreement.
(i) Collection Bank Agreement. The Seller and the Master Servicer shall
instruct all Obligors to remit all Collections to the Lock-Boxes and each
Lock-Box Bank to deposit all Collections to the Collection Account. The Seller
will not give any contrary or conflicting instructions, and will, upon the
request of the Master Servicer or the Agent, confirm such instructions by the
Master Servicer or take such other action as may be reasonably required to give
effect to such instructions.
(j) [Reserved]
(k) Accurate Reports. All reports, information, financial statements,
documents, books, records or other material furnished by or on behalf of a
Seller Party to the Agent or the Purchaser, in each case in writing, shall be
true, complete and accurate in all material respects as of the date so furnished
and shall not contain any material misstatement of fact and shall not omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances made or presented.
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(l) Letter Agreement. Each Seller Party has implemented all required
operational changes as set forth in the Letter Agreement.
(m) Servicing Agreements. Each Seller Party will use reasonable efforts to
secure not later than March 20, 2003, any license or approval which may be
required for the Agent's use of any program used by the Master Servicer in the
servicing of the Receivables.
Section 7.2 Reporting Requirements of the Seller Parties.
From the Amendment Closing Date until the Final Payout Date, unless the
Agent, on the Purchaser's behalf, shall otherwise consent in writing:
(a) Quarterly Financial Statements - The Master Servicer. The Master
Servicer will furnish to the Agent, on the Purchaser's behalf, as soon as
available and in any event within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year, copies of the consolidated and
consolidating balance sheet of the Master Servicer and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter, the related consolidated and
consolidating statement of income and the related consolidated statement of cash
flows for such Fiscal Quarter and for the portion of the Fiscal Year ended at
the end of such Fiscal Quarter, setting forth in each case in comparative form
the figures for the corresponding Fiscal Quarter and the corresponding portion
of the previous Fiscal Year, together with a Certificate of Financial Officer in
the form attached hereto as Exhibit B executed by its chief financial officer or
treasurer.
(b) Annual Financial Statements - The Master Servicer. The Master Servicer
will furnish to the Agent, as soon as available and in any event within 90 days
after the end of each Fiscal Year, a consolidated and consolidating balance
sheet of the Master Servicer and its Consolidated Subsidiaries as of the end of
such Fiscal Year, the related consolidated and consolidating statements of
income and shareholders' equity and the related consolidated statement of cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all certified by Ernst & Young LLP or
other independent public accountants of recognized national standing, with such
certification to be free of exceptions and qualifications not acceptable to the
Agent;
(c) Quarterly Financial Statements-Seller. The Seller will furnish to the
Agent, as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of the Seller, copies of
the financial statements of the Seller, consisting of at least a balance sheet
as at the close of such quarter and a statement of earnings for such quarter and
for the period from the beginning of the fiscal year to the close of such
quarter, together with a Certificate of Financial Officer in the form attached
hereto as Exhibit B executed by the chief financial officer or treasurer of the
Seller;
(d) Annual Financial Statements-Seller. The Seller will furnish to the
Agent, as soon as available and in any event within 90 days after the end of
each fiscal year of the Seller, copies of the financial statements of the
Seller, consisting of at least a balance sheet of the Seller for such year and a
statement of earnings, setting forth in each case in comparative form
29
corresponding figures from the preceding fiscal year, together with a
Certificate of Financial Officer in the form attached hereto as Exhibit B
executed by the chief financial officer or treasurer of the Seller;
(e) Reports to Holders and Exchanges. In addition to the reports required
by subsections (a), (b), (c) and (d) next above, promptly upon the Agent's
request, the Master Servicer will furnish to the Agent, on the Purchaser's
behalf, copies of any reports specified in such request which the Master
Servicer sends to any of its securityholders, and any reports or registration
statements that the Master Servicer files with the Securities and Exchange
Commission or any national securities exchange other than registration
statements relating to employee benefit plans and to registrations of securities
for selling securities;
(f) ERISA. If and when any Seller Party or any member of the Controlled
Group (i) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for termination of such Plan under Title IV of ERISA,
or knows that the plan administrator of any Plan has given or is required to
give such notice of any such reportable event, such Seller Party will promptly
deliver to the Agent a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, such Seller Party shall promptly
deliver to the Agent a copy of such notice; or (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to
administer any Plan, such Seller Party shall promptly deliver to the Agent a
copy of such notice;
(g) Liquidation Events, Etc. As soon as possible and in any event within
five (5) Business Days after obtaining knowledge of the occurrence of any
Liquidation Event or any Unmatured Liquidation Event, each Seller Party will
furnish to the Agent, on the Purchaser's behalf, a written statement of the
chief financial officer, treasurer or chief accounting officer of such Seller
Party setting forth details of such event and the action that such Seller Party
will take with respect thereto;
(h) Litigation. As soon as possible and in any event within ten Business
Days of any Seller Party's knowledge thereof, such Seller Party will furnish to
the Agent, on the Purchaser's behalf, notice of (i) any litigation,
investigation or proceeding which may exist at any time which would have a
Material Adverse Effect and (ii) any development in previously disclosed
litigation which development would have a Material Adverse Effect;
(i) Audit of Pool Receivables. As soon as available and in any event by the
end of each fiscal year of the Seller, the Seller will furnish to the Agent, on
the Purchaser's behalf, an audit report, prepared by a Person reasonably
acceptable to the Agent (unless a Liquidation Event has occurred, in which case
such audit report shall be prepared by a nationally recognized accounting firm
or other Person acceptable to the Agent), as of the end of such fiscal year,
substantially in the form of the report delivered pursuant to Section 5.1(a)(xi)
and covering such other matters as the Agent may reasonably request in order to
protect the interests of the Agent or Purchaser under or as contemplated by this
Agreement;
30
(j) Change in Credit and Collection Policy. Prior to its effective date,
each Seller Party will furnish to the Agent, on the Purchaser's behalf, notice
of (i) any material change in the character of such Seller Party's business, and
(ii) any material change in the Credit and Collection Policy;
(k) [Reserved].
(l) Deliveries to Investors. Each Seller Party will deliver to the Agent
for distribution to each of the Investors simultaneously with the delivery of
each set of annual and quarterly financial statements referred to in paragraphs
(a), (b), (c) and (d) above, a statement of the chief executive officer,
treasurer, chief financial officer or chief technology officer of such Seller
Party stating that no Unmatured Liquidation Event or Liquidation Event has
occurred and is continuing or, if an Unmatured Liquidation Event or Liquidation
Event has occurred and is continuing, a statement setting forth the details
thereof and the action which the Seller Parties are taking or propose to take
with respect thereto.
(m) Other. Promptly, from time to time, each Seller Party will furnish to
the Agent, on the Purchaser's behalf, such other information, documents, records
or reports respecting the Receivables or the condition or operations, financial
or otherwise, of such Seller Party as the Agent may from time to time reasonably
request in order to protect the interests of the Agent or Purchaser under or as
contemplated by this Agreement.
Section 7.3 Negative Covenants of the Seller Parties.
From the Amendment Closing Date until the Final Payout Date, without
the prior written consent of the Agent:
(a) Sales, Liens, Etc. (i) The Seller will not, except as otherwise
provided herein and in the other Transaction Documents, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Lien upon or with respect to, any Pool Receivable or any Related
Asset, or any interest therein, or any account to which any Collections of any
Pool Receivable are sent, or any right to receive income or proceeds from or in
respect of any of the foregoing, and (ii) the Master Servicer will not assert
any interest in the Receivables, except as Master Servicer.
(b) Extension or Amendment of Receivables. No Seller Party will, except as
otherwise permitted in Section 8.2(c), extend, amend or otherwise modify the
terms of any Pool Receivable, or amend, modify or waive any material term or
condition of any Contract related thereto in any way that adversely affects the
collectibility of any Pool Receivable or the Purchaser's rights therein.
(c) Change in Business or Credit and Collection Policy. No Seller Party
will make or permit to be made any change in the character of its business or in
the Credit and Collection Policy, which change would, in either case, impair the
collectibility of any significant portion of the Pool Receivables or otherwise
adversely affect the interests or remedies of the Purchaser under this Agreement
or any other Transaction Document.
31
(d) Change in Payment Instructions to Obligors. No Seller Party will add or
terminate any bank as a Lock-Box Bank from those listed in Schedule 6.1(o), or
make any change in its instructions to Obligors regarding payments to be made to
the Seller or Master Servicer or payments to be made to any Lock-Box Bank
(except for a change in instructions solely for the purpose of directing
Obligors to make such payments to another existing Lock-Box Bank), unless (i)
the Agent shall have received prior written notice of such addition, termination
or change and (ii) if a Liquidation Event has occurred, the Agent shall have
received duly executed copies of Lock-Box Agreements with each new Lock-Box
Bank.
(e) Deposits to the Collection Account. No Seller Party will deposit or
otherwise credit, or cause or permit to be so deposited or credited, to the
Collection Account, any cash or cash proceeds other than Collections of Pool
Receivables and other amounts received with respect thereto.
(f) Changes to Other Documents. The Seller will not enter into any
amendment or modification of, or supplement to, the Sale Agreement or the
Seller's certificate of incorporation.
(g) Restricted Payments by the Seller. The Seller will not (i) purchase or
redeem any shares of the capital stock of the Seller, (ii) declare or pay any
dividends thereon (other than stock dividends), (iii) make any distribution to
stockholders or set aside any funds for any such purpose, or (iv) pay any
principal amount of the Seller Notes, except that the Seller may declare or pay
any dividends and pay all or a portion of such principal amounts on the
Settlement Date for any Settlement Period, after making any payment required to
be made by the Seller on such Settlement Date in accordance with the last
sentence of Section 3.1(c)(ii) and Section 3.1(c)(iii) if after giving effect to
such payment the Invested Amount does not exceed the Purchase Limit and the
Asset Interest does not exceed 100% and the Seller's net worth (determined in
accordance with GAAP) is not less than 3% of the Purchase Limit.
(h) Seller Indebtedness. The Seller will not incur or permit to exist any
Indebtedness or liability on account of deposits or advances or for borrowed
money or for the deferred purchase price of any property or services, except (A)
indebtedness of the Seller to the Originators incurred in accordance with the
Sale Agreement, (B) current accounts payable arising under or permitted by the
Transaction Documents and not overdue and tax liabilities not overdue, and (C)
other current accounts payable arising in the ordinary course of business and
not overdue, in an aggregate amount at any time outstanding not to exceed
$10,700.
(i) Negative Pledges. No Seller Party will enter into or assume any
agreement (other than this Agreement and the other Transaction Documents)
prohibiting the creation or assumption of any Lien upon any Pool Receivables or
Related Assets, whether now owned or hereafter acquired, except as contemplated
by the Transaction Documents, or otherwise prohibiting or restricting any
transaction contemplated hereby or by the other Transaction Documents.
(j) Change of Name. The Seller will not change its name, any trade name or
corporate structure, or commence the use of any new trade name unless it has
given the Agent at least 30 days prior written notice thereof and has taken all
steps necessary to continue the
32
perfection of the Purchaser's interest, including the filing of amendments to
the UCC financing statements filed pursuant to Section 5.1(a)(v).
(k) Liens. The Seller will not create, incur, assume or permit to exist any
Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except as provided
in the Transaction Documents. The Master Servicer will not create, incur or
permit to exist any Lien (other than as contemplated by the Transaction
Documents) on any of the Receivables or Related Assets.
(l) Consolidations, Mergers and Sales of Assets. The Master Servicer will
not, nor will it permit any Significant Subsidiary to, consolidate or merge with
or into, or sell, lease or otherwise transfer all or any substantial part of its
assets (including, without limitation, any of its Subsidiaries) to, any other
Person, or discontinue or eliminate any business line or segment, provided that
(a) the Master Servicer or a Subsidiary may merge with another Person if (i)
such Person was organized under the laws of the United States of America or one
of its states, (ii) the Master Servicer or such Subsidiary, as the case may be,
is the corporation surviving such merger and (iii) immediately after giving
effect to such merger, no Unmatured Liquidation Event or Liquidation Event shall
have occurred and be continuing, (b) Subsidiaries of the Master Servicer may
merge with the Master Servicer or one another, provided the conditions set forth
in clauses (i) and (iii) above are satisfied, and in the case of a merger with
the Master Servicer, the Master Servicer is the corporation surviving such
merger, (c) the foregoing limitation on the sale, lease or other transfer of
assets (including, without limitation, the sale or transfer of a Subsidiary) and
on the discontinuance or elimination of a business line or segment shall not
prohibit, during any Fiscal Quarter, a sale or transfer of assets (including,
without limitation, the sale or transfer of a Subsidiary) or the discontinuance
or elimination of a business line or segment (in a single transaction or in a
series of related transactions) unless the aggregate assets to be sold or
transferred or utilized in a business line or segment to be so discontinued,
when combined with all other assets sold or transferred, and all other assets
utilized in all other business lines or segments discontinued, during such
Fiscal Quarter and the immediately preceding three Fiscal Quarters (excluding
however, for purposes of this clause (c) sales, contributions, or other
transfers of Receivables pursuant to the Sale Agreement) either (x) contributed
more than 5% of Consolidated EBITDA during the 4 consecutive Fiscal Quarters
immediately preceding such Fiscal Quarter, or (y) constituted more than 5% of
Consolidated Total Assets at the end of such Fiscal Quarter, and (d) the Master
Servicer and its Subsidiaries may sell, contribute and make other transfers as
contemplated by the Transaction Documents.
Section 7.4 Separate Corporate Existence of the Seller.
Each Seller Party hereby acknowledges that Purchaser and the Agent are
entering into the transactions contemplated hereby in reliance upon Seller's
identity as a legal entity separate from the Master Servicer and its other
Affiliates. Therefore, each Seller Party shall take all steps specifically
required by this Agreement or reasonably required by the Agent to continue
Seller's identity as a separate legal entity and to make it apparent to third
Persons that the Seller is an entity with assets and liabilities distinct from
those of its Affiliates, and is not a division of
33
Cadmus or any other Person. Without limiting the foregoing, each Seller Party
will take such actions as shall be required in order that:
(i) The Seller will be a limited purpose corporation whose primary
activities are restricted in its Articles of Incorporation to purchasing or
otherwise acquiring from the Originators, owning, holding, granting
security interests, or selling interests, in Receivables in the Receivables
Pool and Related Assets, entering into agreements for the selling and
servicing of the Receivables Pool, and conducting such other activities as
it deems necessary or appropriate to carry out its primary activities;
(ii) The Seller shall have a board of Directors of at least three (3)
members and not less than one member of the Seller's Board of Directors
(the "Independent Director") shall be an individual who is not, has not
been at any time during the preceding five (5) years: (i) a creditor,
supplier, director, officer, employee, family member, manager, or
contractor of Cadmus, any Originator or any of their respective
Subsidiaries or Affiliates (other than Seller), (ii) a direct, indirect or
beneficial owner, excluding de minimus ownership interests, (at the time of
such individual's appointment as an Independent Director) of any of the
outstanding common shares of Seller, Cadmus, any Originator, or any of
their respective Subsidiaries or Affiliates, having general voting rights,
or (iii) a person who controls (whether directly, indirectly or otherwise)
Cadmus, any Originator or any of their respective Subsidiaries or
Affiliates (other than Seller) or any creditor, supplier, employees,
officer, director, associate, material supplier or material customer of
Cadmus, any Originator or their respective Subsidiaries or Affiliates
(other than Seller). The certificate of incorporation of the Seller shall
provide that (a) at least one member of the Seller's Board of Directors
shall be an Independent Director, (b) the Seller's Board of Directors shall
not approve, or take any action to cause the filing of, a voluntary
bankruptcy petition with respect to the Seller unless the Independent
Director shall approve the taking of such action in writing prior to the
taking of such action and (c) the provisions requiring an independent
director and the provision described in clauses (a) and (b) of this
paragraph (ii) cannot be amended without the prior written consent of the
Independent Director;
(iii) The Independent Director shall not at any time serve as a
trustee in bankruptcy for the Seller or any Affiliate thereof;
(iv) The Seller shall maintain a sufficient number of employees in
light of its contemplated business operations and compensate all employees,
consultants and agents directly, from its own funds for services provided
to the Seller by such employees, consultants and agents. Subject to the
first sentence of this clause (iv), the Seller will not engage any agents
other than its attorneys, auditors and other professionals, and a Master
Servicer and any other agent contemplated by the Transaction Documents for
the Receivables Pool, which the Master Servicer will be fully compensated
for its services by payment of the Servicer's Fee, and certain
organizational expenses in connection with the formation of the Seller;
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(v) The Seller will contract with the Master Servicer to perform
for the Seller all operations required on a daily basis to service the
Receivables Pool. The Seller will pay the Master Servicer the Servicer's
Fee pursuant hereto. The Seller will not incur any material indirect or
overhead expenses for items shared with Cadmus (or any other Affiliate
thereof) which are not reflected in the Servicer's Fee. To the extent, if
any, that the Seller (or any other Affiliate thereof) share items of
expenses not reflected in the Servicer's Fee, for legal, auditing and other
professional services and directors' fees, such expenses will be allocated
fairly and reasonably on the basis of actual use or the value of services
rendered, and otherwise on a basis reasonably related to the actual use or
the value of services rendered, it being understood that Cadmus shall pay
all expenses relating to the preparation, negotiation, execution and
delivery of the Transaction Documents, including, without limitation,
legal, rating agency and other fees;
(vi) The Seller's operating expenses will not be paid by any other
Seller Party or other Affiliate of the Seller and all of its liabilities
will be paid out of its own funds;
(vii) The Seller will have its own stationery, invoices and checks;
(viii) The books of account, financial reports and corporate records
of the Seller will be maintained separately from any other Person;
(ix) Any financial statements of any Seller Party or Affiliate
thereof which are consolidated to include the Seller will contain detailed
notes clearly stating that (A) all of the Seller's assets are owned by the
Seller, and (B) the Seller is a separate corporate entity with its own
separate creditors that will be entitled to be satisfied out of the
Seller's assets prior to any value in the Seller becoming available to the
Seller's equity holders; and the accounting records and the published
financial statements of each Originator will clearly show that, for
accounting purposes, the Pool Receivables and Related Assets have been sold
by such Originator to the Seller;
(x) The Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of the Master
Servicer and the other Affiliates;
(xi) The Seller will observe all corporate formalities required by
its Certificate of Incorporation. Each Affiliate of the Seller will
strictly observe corporate formalities in its dealings with the Seller,
and, except as permitted pursuant to this Agreement with respect to
Collections, funds or other assets of the Seller will not be commingled
with those of any other Person;
(xii) No Affiliate of the Seller will maintain joint bank accounts
with the Seller or other depository accounts with the Seller to which any
such Affiliate (other than in its capacity as the Master Servicer hereunder
or under the Sale Agreement) has independent access, provided that prior to
the occurrence of a Liquidation Event, Cadmus, in its capacity as Master
Servicer and subject to the obligations of the Master Servicer hereunder,
may manage Collections deposited into the Collection Account pursuant to
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centralized cash management procedures, including depositing Collections
into general accounts of Cadmus;
(xiii) No Affiliate of the Seller shall, directly or indirectly, name
the Seller or enter into any agreement to name the Seller as a direct or
contingent beneficiary or loss payee on any insurance policy covering the
property of any Affiliate of the Seller;
(xiv) Each Affiliate of the Seller will maintain arm's length
relationships with the Seller, and each Affiliate of the Seller that
renders or otherwise furnishes services or merchandise to the Seller will
be compensated by the Seller at market rates for such services or
merchandise;
(xv) No Affiliate of the Seller will be, nor will it hold itself
out to be, responsible for the debts of the Seller or the decisions or
actions in respect of the daily business and affairs of the Seller. Cadmus
and the Seller will immediately correct any known misrepresentation with
respect to the foregoing and they will not operate or purport to operate as
an integrated single economic unit with respect to each other or in their
dealing with any other entity. The Seller will not (i) guarantee or become
obligated for the debts of any other person or hold out its credit as being
available to satisfy the obligations of others, (ii) acquire obligations or
securities of its shareholders or Affiliates or (iii) pledge its assets for
the benefit of any other Person or make loans or advances to any other
Person;
(xvi) The Seller will keep correct and complete books and records of
account and minutes of the meetings and other proceedings of its
stockholder and board of directors, as applicable, and the resolutions,
agreements and other instruments of the Seller will be continuously
maintained as official records by the Seller;
(xvii) The Seller, on the one hand, and each of the Originators, on
the other hand, will conduct its business solely in its own corporate name
and in such a separate manner so as not to mislead others with whom they
are dealing and will correct any known misunderstanding regarding such
Person's separate identity; and
(xviii) The Seller will maintain adequate capital in light of its
contemplated business operations.
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ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Master Servicer.
(a) Cadmus as Initial Master Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person designated
as Master Servicer hereunder from time to time in accordance with this Section
8.1. Until the Agent, on the Purchaser's behalf, gives to Cadmus a Successor
Notice (as defined in Section 8.1(b)), Cadmus is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Master Servicer
pursuant to the terms hereof. Each of the Originators named in the Sale
Agreement, agrees to act as subservicer for the purpose of performing certain
duties and obligations with respect to all Receivables purchased by the Seller
from such Originator pursuant to the terms of the Sale Agreement. In so acting
as subservicer, each of such Originators shall comply with, and agrees to be
bound by, all of the terms and provisions of this Agreement applicable to such
Originator in the performance of its duties as subservicer; provided, however,
that each such Originator (i) shall cease to act as subservicer upon the Agent's
delivery of a Successor Notice to Cadmus (with a copy to each such Originator),
(ii) shall not be entitled to receive any Servicer's Fee provided for herein,
and (iii) shall not be bound by, or be deemed to have made, any of the
representations, warranties or covenants in Articles V and VI applicable to the
"Seller Parties," except as expressly provided in the Sale Agreement.
(b) Successor Notice; Servicer Transfer Events. Upon Cadmus' receipt of a
notice from the Agent of the Agent's designation, on the Purchaser's behalf, of
a new Master Servicer (a "Successor Notice"), Cadmus agrees that it will
terminate its activities as Master Servicer hereunder in a manner that the Agent
believes will facilitate the transition of the performance of such activities to
the new Master Servicer, and the Agent (or its designee) shall assume each and
all of Cadmus' obligations to service and administer such Receivables, on the
terms and subject to the conditions herein set forth, and Cadmus shall use its
best efforts to assist the Agent (or its designee) in assuming such obligations.
Without limiting the foregoing, Cadmus agrees, at its expense, to take all
actions necessary to provide the new Master Servicer with access to all computer
software necessary or useful in collecting or billing Receivables, solely for
use in collecting and billing Receivables. The Agent agrees not to give Cadmus a
Successor Notice until after the occurrence and during the continuance of any
Liquidation Event (any such event being herein called a "Servicer Transfer
Event"), in which case such Successor Notice may be given at any time in the
Agent's discretion. If Cadmus disputes the occurrence of a Servicer Transfer
Event, Cadmus may take appropriate action to resolve such dispute; provided that
Cadmus must terminate its activities hereunder as Master Servicer and allow the
newly designated Master Servicer to perform such activities on the date provided
by the Agent as described above, notwithstanding the commencement or
continuation of any proceeding to resolve the aforementioned dispute, if the
Agent, on the Purchaser's behalf, reasonably determines, in good faith, that
such termination is necessary or advisable to protect the Purchaser's interests
hereunder.
(c) Subcontracts. The Master Servicer may, with the prior consent of the
Agent, subcontract with any other Person for servicing, administering or
collecting the Pool Receivables,
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provided that the Master Servicer shall remain liable for the performance of the
duties and obligations of the Master Servicer pursuant to the terms hereof and
such subservicing arrangement may be terminated at the Agent's request, on the
Purchaser's behalf, at anytime after a Successor Notice has been given.
Section 8.2 Duties of Master Servicer.
(a) Appointment; Duties in General. Each of the Seller, the Purchaser and
the Agent hereby appoints as its agent the Master Servicer, as from time to time
designated pursuant to Section 8.1, to enforce its rights and interests in and
under the Pool Receivables and the Related Security. The Master Servicer shall
take or cause to be taken all such actions as may be necessary or advisable to
collect each Pool Receivable from time to time, all in accordance with
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy.
(b) Allocation of Collections; Segregation. The Master Servicer shall
identify and hold in trust for the account of the Seller and Purchaser their
respective allocable shares of the Collections of Pool Receivables in accordance
with Section 1.3 but shall not be required (unless otherwise requested by the
Agent, on the Purchaser's behalf, after the occurrence and during the
continuance of a Liquidation Event) to segregate the funds constituting such
portions of such Collections prior to the remittance thereof in accordance with
said Section. If instructed by the Agent, on the Purchaser's behalf, after the
occurrence and during the continuance of a Liquidation Event, the Master
Servicer shall segregate and deposit into the Collection Account, the
Purchaser's share of Collections of Pool Receivables, on the second Business Day
following receipt by the Master Servicer of such Collections in immediately
available funds.
(c) Modification of Receivables. So long as no Liquidation Event and no
Unmatured Liquidation Event shall have occurred and be continuing, Cadmus, while
it is Master Servicer, may, in accordance with the Credit and Collection Policy,
(i) extend the maturity or adjust the Unpaid Balance of any Defaulted Receivable
as Cadmus may reasonably determine to be appropriate to maximize Collections
thereof, and (ii) adjust the Unpaid Balance of any Receivable to reflect the
reductions or cancellations described in the first sentence of Section 3.2(a).
(d) Documents and Records. Each Seller Party shall deliver to the Master
Servicer, and the Master Servicer shall hold in trust for the Seller and the
Purchaser in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or disks)
that evidence or relate to Pool Receivables.
(e) Certain Duties to the Seller. The Master Servicer shall, as soon as
practicable following receipt, turn over to the Seller (i) that portion of
Collections of Pool Receivables representing its undivided percentage interest
therein, less the Seller's Share of the Servicer's Fee, and, in the event that
neither Cadmus nor any other Seller Party or Affiliate thereof is the Master
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of the
Master Servicer of servicing, collecting and administering the Pool Receivables
to the extent not covered by the Servicer's Fee received by it, and (ii) the
Collections of any Receivable which is not a
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Pool Receivable. The Master Servicer, if other than Cadmus or any other Seller
Party or Affiliate thereof, shall, as soon as practicable upon demand, deliver
to the Seller all documents, instruments and records in its possession that
evidence or relate to Receivables of the Seller other than Pool Receivables, and
copies of documents, instruments and records in its possession that evidence or
relate to Pool Receivables.
(f) Termination. The Master Servicer's authorization under this Agreement
shall terminate upon the Final Payout Date.
(g) Power of Attorney. The Seller hereby grants to the Master Servicer an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of the Seller all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by the Seller or transmitted or received
by the Purchaser (whether or not from the Seller) in connection with any
Receivable.
(h) Rebill of Receivables. The Master Servicer may, prior to the Rebill
Termination Date, rebill one or more Pool Receivables due to one or more errors
in the original invoice or to reflect a discount given to the Obligor thereof
(each such Receivable being a "Rebilled Receivable"); provided, however, that
(i) for purposes of calculating the age of any such Rebilled Receivable, such
Rebilled Receivable shall be deemed to have been originated on the date of the
invoice of the related original receivable (each such Receivable being an
"Original Receivable"), (ii) no Pool Receivable may be rebilled after the
occurrence of the Rebill Termination Date and (c) if any such Pool Receivable is
so rebilled as a result of a discount given to the Obligor thereof, no such
rebill shall occur unless and until the related Originator has complied with the
provisions of Section 3.5 of the Sale Agreement and the Seller has complied with
the provisions of Section 3.2(a) hereof.
Section 8.3 Servicer Advances.
For each Settlement Period, if the Master Servicer determines that any
payment (or portion thereof) which was due and payable pursuant to a Contract in
the Receivables Pool during such Settlement Period was not received prior to the
end of such Settlement Period, the Master Servicer may make an advance in an
amount up to the amount of such delinquent payment (or portion thereof); in
addition, if on any day there are not sufficient funds on deposit in the
Collection Account to pay accrued Earned Discount or CP Costs on any Asset
Interest the Settlement Period of which ends on such day, the Master Servicer
may make an advance in the amount necessary to pay such Earned Discount or CP
Costs (in either case, any such advance, a "Servicer Advance"). Notwithstanding
the preceding sentence, the Master Servicer need not make a Servicer Advance
with respect to any Contract if, the Master Servicer determines (such
determination to be conclusive and binding) in good faith that such Servicer
Advance will not ultimately be recoverable from future collections on, or the
liquidation of, the Receivables Pool. The Master Servicer will deposit any
Servicer Advances into the Collection Account on or prior to 12:00 p.m.
(Atlanta, Georgia time) on the date necessary to make any payment required to be
made under Section 3.1. All Servicer Advances shall be made by wire transfer in
immediately available funds.
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Section 8.4 Servicer Defaults.
If any of the following events shall occur and be continuing, it shall
constitute a servicer default (each such event, a "Servicer Default"):
(a) any failure by the Master Servicer to make any payment, transfer or
deposit as required by this Agreement including, without limitation, delivery of
any Settlement Report and, such failure shall remain unremedied for two (2)
Business Days after the earliest to occur of (A) written notice thereof shall
have been given by the Agent to the Master Servicer or (B) a Senior Officer of
the Master Servicer shall have actual knowledge thereof or should have had
knowledge thereof if such Senior Officer had exercised reasonable care in the
performance of his or her duties;
(b) any failure on the part of the Master Servicer duly to observe or
perform any term, covenant or agreement of the Master Servicer set forth in this
Agreement or the Sale Agreement or to give instructions or notice to the Agent
as required by the Transaction Documents, which failure continues unremedied for
a period of five (5) days after the first to occur of (i) the date on which
written notice of such failure requiring the same to be remedied shall have been
given to the Master Servicer by the Agent and (ii) the date on which a Senior
Officer of the Master Servicer shall have actual knowledge thereof or should
have had knowledge thereof if such Senior Officer had exercised reasonable care
in the performance of his or her duties;
(c) any representation, warranty or certification made by the Master
Servicer (or any of its officers) in this Agreement or in any certificate
delivered pursuant to this Agreement shall prove to have been false or incorrect
in any material respect when made; provided that the materiality qualification
in the preceding clause shall not be applicable with respect to any
representation or warranty which itself contains a materiality qualification;
(d) An Event of Bankruptcy shall have occurred and remain continuing with
respect to the Master Servicer;
(e) any Change in Control with respect to the Master Servicer shall occur;
(f) any change by the Master Servicer in the Credit and Collection Policy
which shall materially adversely affect the collectibility of the Receivables
without the prior written consent of the Agent;
(g) [Reserved];
(h) Any default under any other agreement or instrument relating to the
purchase of receivables in an aggregate amount in excess of $5,000,000 of the
Master Servicer, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default (i) is to permit the termination of the commitment of
any party to such agreement or instrument to purchase receivables or the right
of the Master Servicer to reinvest in receivables the principal amount paid by
any party to such agreement or instrument for its interest in receivables or
(ii) is to terminate such commitment or right;
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(i) [Reserved]; or
(j) An Event of Default (as defined in the Credit Agreement) shall have
occurred.
Notwithstanding anything herein to the contrary, so long as any such Servicer
Default shall not have been remedied, the Agent, by written notice to the Master
Servicer (a "Termination Notice"), may terminate all of the rights and
obligations of the Master Servicer as Master Servicer under this Agreement and
appoint a successor Master Servicer satisfactory to the Agent (in the Agent's
sole discretion).
Section 8.5 Rights of the Agent.
(a) Notice to Obligors. At any time following the occurrence of a
Liquidation Event, the Agent may notify the Obligors of Pool Receivables, or any
of them, of the ownership of the Asset Interest by the Purchaser; provided,
however, that the Agent may not begin to so notify the Obligors of Pool
Receivables after such Liquidation Event has been waived or otherwise cured.
(b) Notice to Lock-Box Banks. At any time following the occurrence and
during the continuance of an Unmatured Liquidation Event or Liquidation Event,
the Agent is hereby authorized to give notice to the Lock-Box Banks, as provided
in the Lock-Box Agreements, of the transfer to the Agent of dominion and control
over the lock-boxes and related accounts to which the Obligors of Pool
Receivables make payments. The Seller and the Master Servicer hereby transfer to
the Agent, effective when the Agent shall give notice to the Lock-Box Banks as
provided in the Lock-Box Agreements, the exclusive dominion and control over
such lock-boxes and accounts, and shall take any further action that the Agent
may reasonably request to effect such transfer.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Master Servicer other than Cadmus pursuant to Section 8.1:
(i) The Agent may direct the Obligors of Pool Receivables, or any of
them, to pay all amounts payable under any Pool Receivable directly to the
Agent or its designee.
(ii) Any Seller Party shall, at the Agent's request and at such Seller
Party's expense, give notice of the Purchaser's ownership and security
interests in the Pool Receivables to each Obligor of Pool Receivables and
direct that payments be made directly to the Agent or its designee.
(iii) Each Seller Party shall, at the Agent's request, (A) assemble all
of the documents, instruments and other records (including, without
limitation, computer programs, tapes and disks) which evidence the Pool
Receivables, and the related Contracts and Related Security, or which are
otherwise necessary or desirable to collect such Pool Receivables, and make
the same available to the successor Master Servicer at a place selected by
the Agent, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections of Pool
Receivables in a manner acceptable to the Agent and promptly upon receipt,
remit all such cash, checks and
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instruments, duly endorsed or with duly executed instruments of transfer,
to the successor Master Servicer.
(iv) Each Seller Party and Purchaser hereby authorizes the Agent, on
the Purchaser's behalf, and grants to the Agent an irrevocable power of
attorney (which shall terminate on the Final Payout Date), to take any and
all steps in such Seller Party's name and on behalf of the Seller Parties
and the Purchaser which are necessary or desirable, in the determination of
the Agent, to collect all amounts due under any and all Pool Receivables,
including, without limitation, endorsing any Seller Party's name on checks
and other instruments representing Collections and enforcing such Pool
Receivables and the related Contracts.
Section 8.6 Responsibilities of the Seller Parties.
Anything herein to the contrary notwithstanding:
(a) Contracts. Each Seller Party shall remain responsible for performing
all of its obligations (if any) under the Contracts related to the Pool
Receivables and under the related agreements to the same extent as if the Asset
Interest had not been sold hereunder, and the exercise by the Agent or its
designee of its rights hereunder shall not relieve any Seller Party from such
obligations.
(b) Limitation of Liability. The Agent and Purchaser shall not have any
obligation or liability with respect to any Pool Receivables, Contracts related
thereto or any other related agreements, nor shall any of them be obligated to
perform any of the obligations of any Seller Party or any Originator thereunder.
Section 8.7 Further Action Evidencing Purchases and Reinvestments.
(a) Further Assurances. Each Seller Party agrees that from time to time, at
its expense, it will promptly execute and deliver all further instruments and
documents, and take all further action that the Agent or its designee may
reasonably request in order to perfect, protect or more fully evidence the
Purchases hereunder and the resulting Asset Interest, or to enable Purchaser or
the Agent or its designee to exercise or enforce any of their respective rights
hereunder or under any Transaction Document in respect thereof. Without limiting
the generality of the foregoing, each Seller Party will:
(i) upon the request of the Agent, execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and
such other instruments or notices, as may be necessary or appropriate, in
accordance with the terms of this Agreement;
(ii) upon the request of the Agent after the occurrence and during the
continuance of a Liquidation Event, xxxx conspicuously each Contract
evidencing each Pool Receivable with a legend, acceptable to the Agent,
evidencing that the Asset Interest has been sold in accordance with this
Agreement; and
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(iii) xxxx its master data processing records evidencing such Pool
Receivables and related Contracts with a legend, acceptable to the Agent,
evidencing that the Asset Interest has been sold in accordance with this
Agreement.
(b) Additional Financing Statements; Performance by Agent (i) Each Seller
Party irrevocably authorizes the Agent at any time and from time to time in the
sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to
act on behalf of such Seller Party (A) to authorize on behalf of the Seller as
debtor and to file financing statements describing the Collateral necessary or
desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the interest of the Agent, for the benefit of the
Secured Parties, in the Collateral and (B) to file a carbon, photographic or
other reproduction of this Agreement or any financing statement describing the
Collateral with respect to the Collateral as a financing statement in such
offices as the Agent or in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Agent's security
interest in the Collateral, for the benefit of the Secured Parties. This
appointment is coupled with an interest and is irrevocable; (ii) (A) Each of the
Seller Parties hereby authorizes the Agent to file financing statements
describing the Collateral and other filing or recording documents with respect
to the Collateral (including any amendments thereto, or continuation or
termination statements thereof), without the signature or other authorization of
the Seller Party, in such form and in such offices as the Agent reasonably
determines appropriate to perfect or maintain the perfection of the security
interest of the Agent hereunder, (B) each of the Seller Parties acknowledges and
agrees that it is not authorized to, and will not, file financing statements or
other filing or recording documents with respect to the Collateral (including
any amendments thereto, or continuation or termination statements thereof),
without the express prior written approval by the Agent, consenting to the form
and substance of such filing or recording document, and (C) each of the Seller
Parties approves, authorizes and ratifies any filings or recordings describing
the Collateral made by or on behalf of the Agent in connection with the
perfection of the security interests in favor of the Seller or the Agent; and
(iii) The reasonable expenses of the Agent or its designee incurred in
connection with this Section 8.7 shall be payable by the Seller Parties as
provided in Section 14.5.
(c) Continuation Statements; Opinion. Without limiting the generality of
subsection (a), the Seller will, not earlier than six (6) months and not later
than three (3) months prior to the fifth anniversary of the date of filing of
the financing statements referred to in Section 5.1(a)(v) or any other financing
statement filed pursuant to this Agreement or in connection with any Purchase
hereunder, if the Final Payout Date shall not have occurred:
(i) if necessary, execute and deliver and file or cause to be filed
an appropriate continuation statement with respect to such financing
statement; and
(ii) deliver or cause to be delivered to the Agent an opinion of the
counsel for the Seller Parties, in form and substance reasonably
satisfactory to the Agent, confirming and updating the opinion delivered
pursuant to Section 5.1(a)(viii) to the effect that the Asset Interest
hereunder continues to be a valid and perfected ownership or security
interest, subject to no other Liens of record except as provided herein or
otherwise permitted hereunder.
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Section 8.8 Application of Collections.
Any payment by an Obligor in respect of any indebtedness owed by it to
any Originator or the Seller shall, except as otherwise specified by such
Obligor or required by the underlying Contract or law, be applied, first, as a
Collection of any Pool Receivable or Receivables then outstanding of such
Obligor in the order of the age of such Pool Receivables, starting with the
oldest of such Pool Receivables and, second, to any other indebtedness of such
Obligor.
ARTICLE IX.
SECURITY INTEREST
Section 9.1 Grant of Security Interest.
To secure all obligations of the Seller arising in connection with
this Agreement and each other Transaction Document, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or contingent,
including, without limitation, all Indemnified Amounts, payments on account of
Collections received or deemed to be received and fees, in each case pro rata
according to the respective amounts thereof, the Seller hereby assigns and
pledges to the Agent for the benefit of the Secured Parties and its successors
and assigns, for the benefit of the Secured Parties, and hereby grants to the
Agent, for the benefit of the Secured Parties, a security interest in, all of
the Seller's right, title and interest now or hereafter existing in, to all
assets of the Seller including, without limitation, all of the Seller's right,
title, and interest now or hereafter existing in (a) all the Pool Receivables
and Related Assets (and including specifically any undivided interest therein
retained by the Seller hereunder), (b) the Sale Agreement and the other
Transaction Documents and (c) all proceeds of any of the foregoing
(collectively, the "Collateral").
Section 9.2 Further Assurances.
The provisions of Section 8.7 shall apply to the security interest
granted under Section 9.1 as well as to the Purchases, Reinvestments and all the
Asset Interests hereunder.
Section 9.3 Remedies.
Upon the occurrence of a Liquidation Event, the Purchaser shall have,
with respect to the collateral granted pursuant to Section 9.1, and in addition
to all other rights and remedies available to the Purchaser or the Agent under
this Agreement and the other Transaction Documents or other applicable law, all
the rights and remedies of a secured party upon default under the UCC; provided,
however, the Purchaser shall not exercise any such rights and remedies under the
UCC after such Liquidation Event has been waived or otherwise cured.
ARTICLE X.
LIQUIDATION EVENTS
Section 10.1 Liquidation Events.
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The following events shall be "Liquidation Events" hereunder:
(a) The Seller (i) shall fail to perform or observe any term, covenant
or agreement that is an obligation of the Seller hereunder (other than clause
(ii) below), and such failure shall remain unremedied for thirty (30) days after
the earliest to occur of (A) written notice thereof shall have been given by the
Agent to the Seller or (B) a Senior Officer of the Seller shall have actual
knowledge thereof or should have had knowledge thereof if such Senior Officer
had exercised reasonable care in the performance of his or her duties, or (ii)
shall fail to make any payment or deposit to be made by it hereunder when due
which failure shall continue for two (2) Business Days; or
(b) Any representation or warranty made or deemed to be made by the
Seller (or any of its officers) under this Agreement or any other Transaction
Document or other information or report delivered pursuant hereto and thereto
shall prove to have been false or incorrect in any material respect when made;
provided that the materiality qualification in the preceding clause shall not be
applicable with respect to any representation or warranty which itself contains
a materiality qualification; or
(c) The Seller shall (1) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness when the aggregate
unpaid principal amount is in excess of $10,000, when and as the same shall
become due and payable (after expiration of any applicable grace period) or (2)
fail to observe or perform any other term, covenant, condition or agreement
(after expiration of any applicable grace period) contained in any agreement or
instrument evidencing or governing any such Indebtedness the effect of which
default or other event or condition is to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity; or
(d) An Event of Bankruptcy shall have occurred and remain continuing
with respect to the Seller; or
(e) The Purchaser or its successor shall become an "investment
company" within the meaning of the Investment Company Act of 1940; or
(f) At any Cut-Off Date, the average of the Dilution Ratio for the
immediately preceding three months exceeds 2.40%; or
(g) The Default Trigger Ratio at any Cut-Off Date exceeds 19.5%; or
(h) At any Cut-Off Date, the average of the Delinquency Ratio for the
immediately preceding three months exceeds 4.25%; or
(i) On any Settlement Date, after giving effect to the payments made
under Section 3.1(c), (i) the Asset Interest exceeds 100% or (ii) the Invested
Amount exceeds the Purchase Limit and such situation remains unremedied for two
(2) Business Days; or
(j) A Servicer Default shall have occurred; or
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(k) The Seller or Cadmus is subject to a Change in Control which has
not received the prior written consent of the Agent; or
(l) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the
Receivables or Related Assets and such lien shall not have been released within
seven (7) days, or the Pension Benefit Guaranty Corporation shall, or indicate
its intention to, file notice of a lien pursuant to Section 4068 of the Employee
Retirement Income Security Act of 1974 with regard to any of the Receivables or
Related Assets; or
(m) Any Originator shall make any change in the policies as to the
origination of the Receivables which materially adversely affects the credit
quality of the Receivables in the Receivables Pool without the prior written
consent of the Agent; or
(n) The Purchaser, for any reason, ceases to maintain a valid,
perfected first priority interest in the Pool Receivables and the Related
Assets; or
(o) A final judgment or judgments shall be rendered against the Seller
for the payment of money with respect to which an aggregate amount in excess of
$10,000 is not covered by insurance and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to levy upon
assets or properties of the Seller to enforce any such judgment.
Section 10.2 Remedies.
(a) Optional Liquidation. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsection (d) of Section 10.1),
the Agent shall, at the request, or may with the consent, of the Purchaser, by
notice to the Seller declare the Funding Termination Date to have occurred and
the Liquidation Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a Liquidation Event
described in subsection (d) of Section 10.1, the Funding Termination Date shall
occur and the Liquidation Period shall commence automatically.
(c) Additional Remedies. Upon any Funding Termination Date pursuant to
this Section 10.2, no Purchases or Reinvestments thereafter will be made, and
the Agent, the Purchaser and Wachovia shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all other rights and
remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE XI.
THE AGENT
Section 11.1 Authorization and Action.
Pursuant to agreements entered into with the Agent, the Purchaser has
appointed and authorized the Agent (or its designees) to take such action as
agent on its behalf and to
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exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
Section 11.2 Agent's Reliance, Etc.
The Agent and its directors, officers, agents or employees shall not
be liable for any action taken or omitted to be taken by it or them in good
faith under or in connection with the Transaction Documents (including, without
limitation, the servicing, administering or collecting of Pool Receivables as
Master Servicer pursuant to Section 8.1), except for its or their own breach of
the terms of the applicable terms of the Transaction Documents or its or their
own gross negligence or willful misconduct. Without limiting the generality of
the foregoing, the Agent: (a) may consult with legal counsel (including counsel
for the Seller), independent certified public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no warranty or representation to the Purchaser
or any other holder of any interest in Pool Receivables and shall not be
responsible to the Purchaser or any such other holder for any statements,
warranties or representations made by any Seller Party in or in connection with
any Transaction Document; (c) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any Transaction Document on the part of any Seller Party or to inspect the
property (including the books and records) of any Seller Party; (d) shall not be
responsible to the Purchaser or any other holder of any interest in Pool
Receivables for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Transaction Document; and (e) shall
incur no liability under or in respect of this Agreement by acting upon any
notice (including notice by telephone where permitted herein), consent,
certificate or other instrument or writing (which may be by facsimile or telex)
in good faith believed by it to be genuine and signed or sent by the proper
party or parties.
Section 11.3 Wachovia and Affiliates.
Wachovia and any of its Affiliates may generally engage in any kind of
business with any Seller Party or any obligor, any of their respective
Affiliates and any Person who may do business with or own securities of any
Seller Party or any Obligor or any of their respective Affiliates, all as if
Wachovia was not the Agent, and without any duty to account therefor to the
Purchaser or any other holder of an interest in Pool Receivables, but in any
event subject to Section 14.7.
ARTICLE XII.
ASSIGNMENT OF THE PURCHASER'S INTEREST
Section 12.1 Restrictions on Assignments.
(a) Except as provided in Section 8.1(a), no Seller Party may assign its
rights, or delegate its duties hereunder or any interest herein without the
prior written consent of the Agent. The Purchaser may not assign its rights
hereunder (although it may delegate its duties hereunder as expressly indicated
herein) or the Asset Interest (or any portion thereof) to any Person without
47
the prior written consent of the Seller, which consent shall not be unreasonably
withheld; provided, however, that
(i) the Purchaser may assign all of its rights and interests in the
Transaction Documents, together with all its interest in the Asset
Interest, to any Liquidity Bank, Wachovia, or any Affiliate thereof, or to
any "bankruptcy remote" special purpose entity, the business of which is
administered by Wachovia or any Affiliate thereof (which assignee shall
then be subject to this Article XII);
(ii) the Purchaser may assign and grant a security interest in all of
its rights in the Transaction Documents, together with all of its rights
and interest in the Asset Interest, to the Collateral Agent, to secure the
Purchaser's obligations under or in connection with the Commercial Paper
Notes, the Liquidity Agreement, and certain other obligations of the
Purchaser incurred in connection with the funding of the Purchases and
Reinvestments hereunder, which assignment and grant of a security interest
(and any subsequent assignment by the Collateral Agent) shall not be
considered an "assignment" for purposes of Section 12.1(b) or, prior to the
enforcement of such security interest, for purposes of any other provision
of this Agreement (other than Section 12.3); and
(iii) the Master Servicer may delegate its duties provided herein to
any Originator who agrees to act as a Servicer hereunder and assumes in
writing the obligations of the Master Servicer hereunder with respect to
that portion of the Pool Receivables originated by such Originator.
Notwithstanding any delegation pursuant to this clause (iii), the Master
Servicer shall remain responsible for all of its obligations hereunder.
(b) The Seller agrees to advise the Agent within five Business Days after
notice to the Seller of any proposed assignment by the Purchaser of the Asset
Interest (or any portion thereof), not otherwise permitted under subsection (a),
of the Seller's consent or non-consent to such assignment, and if it does not
consent, the reasons therefor. If the Seller does not consent to such
assignment, the Purchaser may immediately or at any time thereafter assign such
Asset Interest (or portion thereof) to any Person or Persons permitted under
clause (i) of Section 12.1(a).
Section 12.2 Rights of Assignee.
Upon the assignment by the Purchaser in accordance with this Article
XII, the assignee receiving such assignment shall have all of the rights of the
Purchaser with respect to the Transaction Documents and the Asset Interest (or
such portion thereof as has been assigned).
Section 12.3 Terms and Evidence of Assignment.
Any assignment of the Asset Interest (or any portion thereof) to any
Person which is otherwise permitted under this Article XII shall be upon such
terms and conditions as the Purchaser and the assignee may mutually agree, and
may be evidenced by such instrument(s) or document(s) as may be satisfactory to
the Purchaser, the Agent and the assignee.
Section 12.4 Rights of Collateral Agent.
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The Seller hereby agrees that, upon notice to the Seller, the
Collateral Agent or the Liquidity Banks may exercise all the rights of the Agent
and Purchaser hereunder, with respect to the Asset Interest (or any portions
thereof), and Collections with respect thereto, which are owned by the
Purchaser, and all other rights and interests of the Purchaser in, to or under
this Agreement or any other Transaction Document. Without limiting the
foregoing, upon such notice or at any time thereafter (but subject to any
conditions applicable to the exercise of such rights by the Agent), the
Collateral Agent or the Liquidity Banks may request the Master Servicer to
segregate the Purchaser's allocable share of Collections from the Seller's
allocable share, may give a Successor Notice pursuant to and in accordance with
Section 8.1(b), may give or require the Agent to give notice to the Lock-Box
Banks as referred to in Section 8.3(b) and may direct the Obligors of Pool
Receivables to make payments in respect thereof directly to an account
designated by them, in each case, to the same extent as the Agent might have
done.
ARTICLE XIII.
INDEMNIFICATION
Section 13.1 Indemnities by the Seller.
(a) General Indemnity. Without limiting any other rights which any such
Person may have hereunder or under applicable law, the Seller hereby agrees to
indemnify each of Wachovia, both individually and as the Agent, the Purchaser,
the Liquidity Banks, the Liquidity Agent, each of their respective Affiliates,
and all successors, transferees, participants and assigns and all officers,
directors, shareholders, controlling persons, employees and agents of any of the
foregoing (each an "Indemnified Party"), forthwith on demand, from and against
any and all damages, losses, claims, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (all of the foregoing
being collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them arising out of or relating to the Transaction Documents
or the ownership or funding of the Asset Interest or in respect of any
Receivable or any Contract, excluding, however, (a) Indemnified Amounts to the
extent determined by a court of competent jurisdiction to have resulted from
gross negligence or willful misconduct on the part of such Indemnified Party or
(b) recourse (except as otherwise specifically provided in this Agreement) for
nonpayment due to a credit problem of the applicable Obligor. Without limiting
the foregoing (but subject to the specified exclusions), the Seller shall
indemnify each Indemnified Party for Indemnified Amounts arising out of or
relating to:
(i) the transfer by any Seller Party of any interest in any
Receivable other than the transfer of Receivables and related property by
the Originators to the Seller pursuant to the Sale Agreement, the transfer
of the Asset Interest to the Purchaser pursuant to this Agreement and the
grant of a security interest to the Purchaser pursuant to Section 9.1;
(ii) any representation or warranty made by any Seller Party (or any
of its officers) under or in connection with any Transaction Document, any
Settlement Report or any other information or report delivered by or on
behalf of any Seller Party pursuant hereto, which shall have been false,
incorrect or misleading in any material respect when made or deemed made or
delivered, as the case may be;
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(iii) the failure by any Seller Party to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or the related
Contract, or the nonconformity of any Pool Receivable or the related
Contract with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in the Purchaser an
undivided percentage ownership interest, to the extent of the Asset
Interest, in the Receivables in, or purporting to be in, the Receivables
Pool, free and clear of any Lien, other than a Lien arising solely as a
result of an act of the Purchaser or the Agent, whether existing at the
time of any Purchase or Reinvestment of such Asset Interest or at any time
thereafter;
(v) the failure of any Seller Party to file, or any delay in
filing, financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool, whether at the time of any Purchase or Reinvestment or at any time
thereafter;
(vi) any dispute, claim, offset or defense (other than nonpayment
due to any credit problem of the applicable Obligor) of the Obligor to the
payment of any Receivable in, or purporting to be in, the Receivables Pool
(including, without limitation, a defense based on such Receivables or the
related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or services related to
such Receivable or the furnishing or failure to furnish such merchandise or
services;
(vii) any matter described in clause (i) or (ii) of Section 3.2(a);
(viii) any failure of any Seller Party, as Master Servicer or
otherwise, to perform its duties or obligations in accordance with the
provisions of Article III or Article VIII;
(ix) any products liability claim arising out of or in connection
with merchandise or services that are the subject of any Pool Receivable;
(x) any claim of breach by any Seller Party of any related Contract
with respect to any Pool Receivable; or
(xi) any tax or governmental fee or charge (but not including taxes
upon or measured by net income), all interest and penalties thereon or with
respect thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against the same,
which may arise by reason of the purchase or ownership of the Asset
Interest, or any other interest in the Pool Receivables or in any goods
which secure any such Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from any Seller Party under
Section 13.1(a)(xi), such Indemnified Party shall give prompt and timely notice
of such attempt to the Seller and the Seller shall have
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the right, at its expense, to participate in any proceedings resisting or
objecting to the imposition or collection of any such tax, governmental fee or
charge. Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes (including any
deduction) and the receipt of the indemnity provided hereunder or of any refund
of any such tax previously indemnified hereunder, including the effect of such
tax, deduction or refund on the amount of tax measured by net income or profits
which is or was payable by the Indemnified Party.
(c) Contribution. If for any reason the indemnification provided above in
this Section 13.1 (and subject to the exceptions set forth therein) is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Seller shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Seller on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
Section 13.2 Indemnities by Master Servicer.
Without limiting any other rights which any Indemnified Party may have
hereunder or under applicable law, the Master Servicer hereby agrees to
indemnify each of the Indemnified Parties forthwith on demand, from and against
any and all Indemnified Amounts awarded against or incurred by any of them
arising out of or relating to the Master Servicer's performance of, or failure
to perform, any of its obligations under or in connection with any Transaction
Document, or any representation or warranty made by Master Servicer (or any of
its officers) under or in connection with any Transaction Document, any
Settlement Report or any other information or report delivered by or on behalf
of Master Servicer, which shall have been false, incorrect or misleading in any
material respect when made or deemed made or delivered, as the case may be, or
the failure of the Master Servicer to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
awarded any Indemnified Amounts (a) to the extent determined by a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Party or (b) recourse for nonpayment
due to any credit problem of the applicable Obligor.
If for any reason the indemnification provided above in this Section
13.2 (and subject to the exceptions set forth therein) is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Master Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party on the one hand and the Master Servicer on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.
ARTICLE XIV.
MISCELLANEOUS
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Section 14.1 Amendments, Etc.
No amendment or waiver of any provision of this Agreement nor consent
to any departure by any Seller Party therefrom shall in any event be effective
unless the same shall be in writing and signed by (a) each Seller Party, the
Agent and the Purchaser (with respect to an amendment), or (b) the Agent and the
Purchaser (with respect to a waiver or consent by them) or any Seller Party
(with respect to a waiver or consent by it), as the case may be, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. The parties acknowledge that, before entering
into such an amendment or granting such a waiver or consent, the Purchaser may
also be required to obtain the approval of some or all of the Liquidity Banks or
to obtain confirmation from certain rating agencies that such amendment, waiver
or consent will not result in a withdrawal or reduction of the ratings of the
Commercial Paper Notes.
Section 14.2 Notices, Etc.
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by express mail or
courier or by certified mail, postage prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth on Schedule
14.2 or at such other address or facsimile number as shall be designated by such
party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered or sent by
express mail or courier or if sent by certified mail, when received, and (b) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means.
Section 14.3 No Waiver; Remedies.
No failure on the part of the Agent, any Affected Party, any
Indemnified Party, the Purchaser or any other holder of the Asset Interest (or
any portion thereof) to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. Without limiting the
foregoing, each of Wachovia, individually, and as Agent, the Collateral Agent,
and each Liquidity Bank is hereby authorized by the Seller at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand provisional or final) at
any time held and other indebtedness at any time owing by Wachovia, the
Collateral Agent and such Liquidity Bank to or for the credit or the account of
the Seller, now or hereafter existing under this Agreement, to the Agent, any
Affected Party, any Indemnified Party or Purchaser, or their respective
successors and assigns.
Section 14.4 Binding Effect; Survival.
Upon execution and delivery to the Agent of counterparts of this
Agreement by each of the parties hereto, this Agreement shall be binding upon
and inure to the benefit of each
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Seller Party, the Agent, the Purchaser and their respective successors and
assigns, and the provisions of Section 4.2 and Article XIII shall inure to the
benefit of the Affected Parties and the Indemnified Parties, respectively, and
their respective successors and assigns; provided, however, nothing in the
foregoing shall be deemed to authorize any assignment not permitted by Section
12.1. This Agreement shall create and constitute the continuing obligations of
the parties hereto in accordance with its terms, and shall remain in full force
and effect until the Final Payout Date. The rights and remedies with respect to
any breach of any representation and warranty made by the Seller pursuant to
Article VI and the indemnification and payment provisions of Article XIII and
Sections 4.2, 14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and shall
survive any termination of this Agreement.
Section 14.5 Costs, Expenses and Taxes.
In addition to their obligations under Article XIII, the Seller
Parties jointly and severally agree to pay on demand:
(a) all costs and expenses incurred by the Agent, the Collateral Agent,
any Liquidity Bank, the Purchaser and their respective Affiliates in connection
with
(i) the negotiation, preparation, execution and delivery of the
Existing Agreement, the other Transaction Documents (other than this
Agreement) or the Liquidity Agreement, any amendment of or consent or
waiver under any of the Transaction Documents which is requested or
proposed by any Seller Party (whether or not consummated), or the
enforcement by any of the foregoing Persons of, or any actual or claimed
breach of, this Agreement or any of the other Transaction Documents,
including, without limitation, the reasonable fees and expenses of counsel
to any of such Persons incurred in connection with any of the foregoing or
in advising such Persons as to their respective rights and remedies under
any of the Transaction Documents in connection with any of the foregoing,
and
(ii) the administration (including periodic auditing as provided for
herein) of this Agreement and the other Transaction Documents, including,
without limitation, all reasonable out-of-pocket expenses (including
reasonable fees and expenses of independent accountants), incurred in
connection with any review of any Seller Party's books and records either
prior to the execution and delivery hereof or pursuant to Section 7.2(i) or
7.1(c)(iii); and
(b) all stamp and other taxes and fees payable or determined to be payable
in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents (and the Seller Parties, jointly
and severally agree to indemnify each Indemnified Party against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees).
Section 14.6 No Proceedings.
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The Master Servicer hereby agrees that it will not institute against the
Seller, or join any Person in instituting against the Seller, and each Seller
Party, the Master Servicer and Wachovia (individually or as Agent) each hereby
agrees that it will not institute against the Purchaser, or join any other
Person in instituting against the Purchaser, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Event of Bankruptcy)
so long as any Commercial Paper Notes issued by the Purchaser shall be
outstanding or there shall not have elapsed one year plus one day since the last
day on which any such Commercial Paper Notes shall have been outstanding.
Section 14.7 Confidentiality of the Seller Information.
(a) Confidential Seller Information. Each party hereto (other than Seller
Parties) acknowledges that certain of the information provided to such party by
or on behalf of the Seller Parties in connection with this Agreement and the
transactions contemplated hereby is or may be confidential, and each such party
severally agrees that, unless Cadmus shall otherwise agree in writing, and
except as provided in subsection (b), such party will not disclose to any other
person or entity:
(i) any information regarding, or copies of, any nonpublic financial
statements, reports, schedules and other information furnished by any
Seller Party to the Purchaser or the Agent (A) prior to October 26, 1999 in
connection with such party's due diligence relating to the Seller Parties
and the transactions contemplated hereby, or (B) pursuant to Section 3.1,
5.1, 6.1(i), 6.1(i), 7.1(c) or 7.2 or otherwise, or
(ii) any other information regarding any Seller Party or any
Originator which is designated by such Seller Party or Originator to such
party in writing as confidential
(the information referred to in clauses (i) and (ii) above, whether furnished by
any Seller Party, any Originator or any attorney for or other representative
thereof (each a "Seller Information Provider"), is collectively referred to as
the "Seller Information"); provided, however, "Seller Information" shall not
include any information which is or becomes generally available to the general
public or to such party on a nonconfidential basis from a source other than any
Seller Information Provider, or which was known to such party on a
nonconfidential basis prior to its disclosure by any Seller Information
Provider.
(b) Disclosure. Notwithstanding subsection (a), each party may disclose
any Seller Information:
(i) to any of such party's independent attorneys, consultants and
auditors, and to any dealer or placement agent for the Purchaser's
commercial paper, who (A) in the good faith belief of such party, has a
need to know such Seller Information, and (B) are informed by such party of
the confidential nature of the Seller Information and the terms of this
Section 14.7 and has agreed, verbally or otherwise, to be bound by the
provisions of this Section 14.7;
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(ii) to any Liquidity Bank, any actual or potential assignees of, or
participants in, any rights or obligations of the Purchaser, any Liquidity
Bank or the Agent under or in connection with this Agreement who has agreed
to be bound by the provisions of this Section 14.7;
(iii) to any rating agency that maintains a rating for the Purchaser's
commercial paper or is considering the issuance of such a rating, for the
purposes of reviewing the credit of the Purchaser in connection with such
rating;
(iv) to any other party to this Agreement (and any independent
attorneys, consultants and auditors of such party), for the purposes
contemplated hereby,
(v) as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory request or
ruling applicable to such party,
(vi) subject to subsection (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Seller Information, or
(vii) in connection with the enforcement of this Agreement or any
other Transaction Document.
In addition, the Purchaser and the Agent may disclose on a "no name" basis to
any actual or potential investor in Purchaser's Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the Purchaser's
commitment and Invested Amount with respect to the Asset Interest and any other
credit enhancement provided by any Seller Party hereunder), the nature, amount
and status of the Pool Receivables, and the current and/or historical ratios of
losses to liquidations and/or outstanding with respect to the Receivables Pool.
(c) Legal Compulsion. In the event that any party hereto (other than any
Seller Party) or any of its representatives is requested or becomes legally
compelled (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the Seller
Information, such party will (or will cause its representative to):
(i) provide Cadmus with prompt written notice so that (A) Cadmus may
seek a protective order or other appropriate remedy, or (B) Cadmus may, if
it so chooses, agree that such party (or its representatives) may disclose
such Seller Information pursuant to such request or legal compulsion; and
(ii) unless Cadmus agrees that such Seller Information may be
disclosed, make a timely objection to the request or compulsion to provide
such Seller Information on the basis that such Seller Information is
confidential and subject to the agreements contained in this Section 14.7.
55
In the event such protective order or remedy is not obtained, or Cadmus agrees
that such Seller Information may be disclosed, such party will furnish only that
portion of the Seller Information which (in such party's good faith judgment) is
legally required to be furnished and will exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be afforded the Seller
Information.
(d) This Section 14.7 shall survive termination of this Agreement.
Section 14.8 Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges that
Wachovia, individually and in its capacity as Agent, regards the structure of
the transactions contemplated by this Agreement to be proprietary, and each such
party agrees that:
(i) it will not disclose without the prior consent of Wachovia
(other than to the directors, employees, auditors, counsel or affiliates
(collectively, "representatives") of such party, each of whom shall be
informed by such party of the confidential nature of the Program
Information (as defined below) and of the terms of this Section 14.8), (A)
any information regarding the pricing in, or copies of, the Fee Letter, the
Mandate Letter, the Due Diligence Report and the other confidential or
proprietary information with respect to the Agent and the Purchaser and
their respective businesses obtained in connection with the structuring,
negotiating and execution of the transactions contemplated hereby or
thereby, (B) any information regarding the organization, business or
operations of the Purchaser generally or the services performed by Wachovia
as the Agent for the Purchaser, or (C) any information which is furnished
by Wachovia to such party and which is designated by Wachovia to such party
in writing or otherwise as confidential or not otherwise available to the
general public (the information referred to in clauses (A), (B) and (C) is
collectively referred to as the "Program Information"); provided, however,
that such party may disclose any such Program Information (I) to any other
party to this Agreement (and any independent attorneys, consultants and
auditors of any such party) for the purposes contemplated hereby, (II) as
may be required by any municipal, state, federal or other regulatory body
having or claiming to have jurisdiction over such party, including, without
limitation, the Securities and Exchange Commission, (III) in order to
comply with any law, order, regulation, regulatory request or ruling
applicable to such party, (IV) subject to subsection (c), in the event such
party is legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to
disclose any such Program Information, or (V) in financial statements as
required by GAAP;
(ii) it will use the Program Information solely for the purposes of
evaluating, administering and enforcing the transactions contemplated by
this Agreement and making any necessary business judgments with respect
thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to Wachovia, all documents or other written
material received from Wachovia in
56
connection with (a)(i)(B) or (C) above and all copies thereof made by such
party which contain the Program Information.
(b) Availability of Confidential Information. This Section 14.8 shall be
inoperative as to such portions of the Program Information which are or become
generally available to the public or such party on a nonconfidential basis from
a source other than Wachovia or were known to such party on a nonconfidential
basis prior to its disclosure by Wachovia.
(c) Legal Compulsion to Disclose. In the event that any party or anyone to
whom such party or its representatives transmits the Program Information is
requested or becomes legally compelled (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Program Information, such party will:
(i) provide Wachovia with prompt written notice so that Wachovia may
seek a protective order or other appropriate remedy and/or, if it so
chooses, agree that such party may disclose such Program Information
pursuant to such request or legal compulsion; and
(ii) unless Wachovia agrees that such Program Information may be
disclosed, make a timely objection to the request or confirmation to
provide such Program Information on the basis that such Program Information
is confidential and subject to the agreements contained in this Section
14.8.
In the event that such protective order or other remedy is not obtained, or
Wachovia agrees that such Program Information may be disclosed, such party will
furnish only that portion of the Program Information which (in such party's good
faith judgment) is legally required to be furnished and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded the Program Information. In the event any Seller Party is required to
file a copy of this Agreement with the SEC or any other governmental authority,
it will (A) provide Wachovia with prompt written notice of such requirement and
(B) exercise reasonable efforts to obtain reliable assurance that such
governmental authority will give confidential treatment to this Agreement;
provided, however, that this clause (B) shall not apply to the ordinary filing
of material agreements with the SEC.
(d) Survival. This Section 14.8 shall survive termination of this
Agreement.
Section 14.9 Captions and Cross References.
The various captions (including, without limitation, the table of
contents) in this Agreement are provided solely for convenience of reference and
shall not affect the meaning or interpretation of any provision of this
Agreement. Unless otherwise indicated, references in this Agreement to any
Section, Appendix, Schedule or Exhibit are to such Section of or Appendix,
Schedule or Exhibit to this Agreement, as the case may be, and references in any
Section, subsection, or clause to any subsection, clause or subclause are to
such subsection, clause or subclause of such Section, subsection or clause.
57
Section 14.10 Integration.
This Agreement and the other Transaction Documents contain a final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire understanding among
the parties hereto with respect to the subject matter hereof, superseding all
prior oral or written understandings.
Section 14.11 Governing Law.
THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).
Section 14.12 Waiver Of Jury Trial.
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL NOT BE
TRIED BEFORE A JURY.
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities.
EACH SELLER PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED
STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF
ANY NEW YORK STATE COURT, AS APPROPRIATE, IN EITHER CASE SITTING IN NEW YORK
COUNTY, NEW YORK, AS APPROPRIATE IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR
FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE
OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES
58
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS
AGREEMENT.
Section 14.14 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. Delivery of an executed counterpart
of a signature page to this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.
Section 14.15 No Recourse Against Other Parties.
The obligations of the Purchaser under this Agreement are solely the
corporate obligations of the Purchaser. No recourse shall be had for the payment
of any amount owing by the Purchaser under this Agreement or for the payment by
the Purchaser of any fee in respect hereof or any other obligation or claim of
or against the Purchaser arising out of or based upon this Agreement, against
Wachovia or against any employee, officer, director, incorporator or stockholder
of the Purchaser. For purposes of this Section 14.14, the term "Wachovia" shall
mean and include Wachovia Bank, National Association and all affiliates thereof
and any employee, officer, director, incorporator, stockholder or beneficial
owner of any of them; provided, however, that the Purchaser shall not be
considered to be an affiliate of the Bank for purposes of this paragraph. Each
of the Seller, the Master Servicer and the Agent agree that the Purchaser shall
be liable for any claims that such party may have against the Purchaser only to
the extent the Purchaser has excess funds and to the extent such assets are
insufficient to satisfy the obligations of the Purchaser hereunder, the
Purchaser shall have no liability with respect to any amount of such obligations
remaining unpaid and such unpaid amount shall not constitute a claim against the
Purchaser. Any and all claims against the Purchaser or the Agent shall be
subordinate to the claims of the holders of Commercial Paper and the Liquidity
Banks.
Section 14.16 Existing Agreement Superseded.
As of the Amendment Closing Date, this Agreement shall amend and restate
the Existing Agreement. The Existing Agreement shall have no effect whatsoever
from and after the Amendment Closing Date. From and after the Amendment Closing
Date, and except as otherwise expressly provided in this Section 14.16, the
rights and obligations of the parties evidenced by the Existing Agreement shall
be evidenced by this Second Amended and Restated Receivables Purchase Agreement
and other Transaction Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
59
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CADMUS RECEIVABLES CORP., as Seller
By: __________________________________
Name:
Title:
CADMUS COMMUNICATIONS CORPORATION,
as Master Servicer
By: __________________________________
Name:
Title:
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BLUE RIDGE ASSET FUNDING CORPORATION,
as Purchaser
By Wachovia Securities, Inc.,
as Attorney-In-Fact
By: __________________________________
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION
as Agent
By: __________________________________
Name:
Title:
61
APPENDIX A
DEFINITIONS
This is Appendix A to the Second Amended and Restated Receivables
Purchase Agreement dated as of November 20, 2002, among Cadmus Receivables
Corp., as the Seller, Cadmus Communications Corporation, as the Master Servicer,
Blue Ridge Asset Funding Corporation, as the Purchaser, and Wachovia Bank,
National Association., as the Agent (as amended, supplemented or otherwise
modified from time to time, this "Agreement"). Each reference in this Appendix A
to any Section, Appendix or Exhibit refers to such Section of or Appendix or
Exhibit to this Agreement.
(a) Defined Terms. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
below:
"Adjusted Dilution Ratio": The twelve-month rolling average of the
Dilution Ratios.
"Advance Rate": An amount equal to 1.0 minus the Required Reserve
Factor.
"Affected Party": Each of the Purchaser, each Liquidity Bank, any
assignee or participant of the Purchaser or any Liquidity Bank, Wachovia, any
successor to Wachovia, as Agent, or any sub-agent of the Agent.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by, or under common control with, such Person.
"Affiliated Obligor": In relation to any Obligor, an Obligor that is
an Affiliate of such Obligor.
"Agent": As defined in the preamble.
"Agent's Office": The office of the Agent at 000 Xxxxxxxxx Xxxxxx,
XX-0000, Xxxxxxx, Xxxxxxx 00000, Attention: [Xxxxxxxxx Xxxxxx], Asset Backed
Finance, or such other address as shall be designated by the Agent in writing to
the Seller and the Purchaser.
"Aggregate Reduction": As defined in Section 3.2(b).
"Amendment Closing Date": November 20, 2002
"Amendment Effective Date": As defined in Section 5.3.
"Amortization Period": The period following the Funding Termination
Date until the date on which all obligations of the Seller hereunder are paid in
full.
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"Asset Interest": The Purchaser's undivided percentage ownership
interest, determined from time to time as provided in Section 1.4(b), in (i) all
then outstanding Pool Receivables and (ii) all Related Assets.
"Asset Tranche": At any time, a portion of the Asset Interest selected
by the Agent pursuant to Section 2.1.
"Bank Rate": For any Yield Period with respect to any Asset Tranche:
(a) in the case of any Yield Period other than a Yield Period
described in clause (b), an interest rate per annum equal to the sum of (x) the
Bank Rate Spread per annum, plus (y) Eurodollar Rate (Reserve Adjusted) for such
Yield Period;
(b) in the case of
(i) any Yield Period commencing on or after the first day of which
the Purchaser or any Liquidity Bank shall have notified the Agent that (A)
the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Person to fund such Asset
Tranche at the rate described in clause (a), or (B) due to market
conditions affecting the interbank eurodollar market, funds are not
reasonably available to such Person in such market in order to enable it to
fund such Asset Tranche at the rate described in clause (a) (and in the
case of subclause (A) or (B), such Person shall not have subsequently
notified the Agent that such circumstances no longer exist), or
(ii) any Yield Period as to which the Agent does not receive notice
pursuant to Section 1.2(a) or determine, by no later than 12:00 noon
(Atlanta, Georgia time), in each case, on the third Business Day preceding
the first day of such Yield Period, that the related Asset Tranche will be
funded by Liquidity Fundings and not by the issuance of Commercial Paper
Notes,
an interest rate per annum equal to (x) 1.0% per annum, plus (y) the Base Rate
in effect from time to time during such Yield Period; it being understood that,
in the case of paragraph (b)(i) above, such rate shall only apply to the Person
affected by the circumstances described in such paragraph (b)(i).
"Bank Rate Spread": As defined in the Fee Letter.
"Base Rate": For any day, the rate per annum equal to the higher as of
such day of (i) the Prime Rate, or (ii) one-half of one percent above the
Federal Funds Rate. For purposes of determining the Base Rate for any day,
changes in the Prime Rate or the Federal Funds Rate shall be effective on the
date of each such change. The Base Rate is not necessarily intended to be the
lowest rate of interest determined by Wachovia in connection with extensions of
credit.
"Broken Funding Costs": for any Asset Tranche which: (i) has its
Invested Amount reduced without compliance by the Seller with the notice
requirements hereunder or (ii)
63
does not become subject to an Aggregate Reduction following the delivery of any
Reduction Notice or (iii) is assigned by the Purchaser to the Liquidity Banks
under the Liquidity Agreement or terminated prior to the date on which it was
originally scheduled to end; an amount equal to the excess, if any, of (A) the
CP Costs that would have accrued during the remainder of the tranche periods for
Commercial Paper Notes or (as applicable) Earned Discount that would have
accrued during the remainder of the Yield Periods determined by the Agent to
relate to such Asset Tranche (as applicable) subsequent to the date of such
reduction, assignment or termination (or in respect of clause (ii) above, the
date such Aggregate Reduction was designated to occur pursuant to the Reduction
Notice) of the Invested Amount of such Asset Tranche if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been
delivered, over (B) the sum of (x) to the extent all or a portion of such
Invested Amount is allocated to another Asset Tranche, the amount of CP Costs or
Earned Discount actually accrued during the remainder of such period on such
Invested Amount for the new Asset Tranche, and (y) to the extent such Invested
Amount is not allocated to another Asset Tranche, the income, if any, actually
received during the remainder of such period by the holder of such Asset Tranche
from investing the portion of such Invested Amount not so allocated. All Broken
Funding Costs shall be due and payable hereunder upon demand.
"Business Day": (i) with respect to any matters relating to the
Eurodollar Rate, a day on which banks are open for business in New York, New
York, and in Atlanta, Georgia, and on which dealings in Dollars are carried on
in the London interbank market and (ii) for all other purposes, any day (other
than a Saturday or a Sunday or a day on which banking institutions or trust
companies in New York, New York, or Atlanta, Georgia, are authorized or
obligated by law, executive order or governmental decree to be closed) on which
The Depository Trust Company of New York is open for business.
"Cadmus": As defined in the preamble.
"Change in Control":
(a) in relation to Cadmus, (i) the acquisition by any Person or two or
more Persons acting in concert of a beneficial ownership (within the
meaning of Section 13d-3 of the Securities and Exchange Commission under
the Exchange Act) of 20% or more of the outstanding shares of the voting
stock of Cadmus; or (ii) the date on which a majority of the board of
directors of Cadmus consists of individuals who were not either (A)
directors of Cadmus as of the corresponding date of the previous year, (B)
selected or nominated to become directors by the board of directors of
Cadmus of which a majority consisted of individuals described in clause
(A), or (C) selected or nominated to become directors by the board of
directors of Cadmus of which a majority consisted of individuals described
in clause (A) and individuals described in clause (B); and
(b) in relation to the Seller, the failure of Cadmus to own (directly
or through one or more wholly-owned Subsidiaries of Cadmus) 100% of the
issued and outstanding shares of the capital stock (including all warrants,
options, conversion rights, and other rights to purchase or convert into
such stock) of the
64
Seller on a fully diluted basis free and clear of any Lien, except as
contemplated by the Conditional Waiver.
"Code": The Internal Revenue Code of 1986, as the same may be amended
from time to time.
"Collateral": As defined in Section 9.1.
"Collateral Agent": Such Person as may be appointed as collateral
agent from time to time by the Purchaser.
"Collection Account": The segregated account number 6260-049964
maintained at Wachovia in the name of Cadmus, in its capacity as Master
Servicer.
"Collections": With respect to any Receivable, all funds which either
(a) are received by the Seller, the Originators or the Master Servicer from or
on behalf of the related Obligor in payment of any amounts owed (including,
without limitation, purchase prices, finance charges, interest and all other
charges) in respect of such Receivable, or applied to such amounts owed by such
Obligor (including, without limitation, insurance payments that the Seller, the
Originators or the Master Servicer applies in the ordinary course of its
business to amounts owed in respect of such Receivable and net proceeds of sale
or other disposition of repossessed goods or other collateral or property of the
Obligor or any other party directly or indirectly liable for payment of such
Receivable and available to be applied thereon), or (b) are Deemed Collections;
provided that, prior to such time as Cadmus shall cease to be the Master
Servicer, late payment charges, collection fees and extension fees shall not be
deemed to be Collections.
"Commercial Paper Notes": Commercial paper notes issued by the
Purchaser in the United States commercial paper market.
"Conditional Waiver" That certain Conditional Waiver dated June 21,
2001 entered into by the Agent, the Purchaser, the Seller and the Master
Servicer.
"Consolidated EBITDA": As defined in the Credit Agreement.
"Consolidated Total Assets": As defined in the Credit Agreement.
"Contract": A contract between the Seller or any Originator and any
Person, or an invoice sent or to be sent by the Seller or any Originator,
pursuant to or under which a Receivable shall arise or be created, or which
evidences a Receivable. A `related Contract' or similar reference means rights
to payment, collection and enforcement, and other rights under a Contract to the
extent directly related to a Receivable in the Receivables Pool, but not any
other rights under such Contract.
"Controlled Group": All members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with Cadmus, are treated as a single employer under Section 414
of the Code.
65
"CP Accrual Period": Each Settlement Period during which any Asset
Tranche is funded with Commercial Paper Notes.
"CP Costs": for each day, the sum of (i) discount or interest accrued
on Pooled Commercial Paper on such day, plus (ii) any and all accrued
commissions in respect of placement agents and Commercial Paper Note dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase or financing facilities
which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual
of income net of expenses received on such day from investment of collections
received under all receivable purchase or financing facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any investment of Purchaser pursuant to the terms of any
receivable purchase or financing facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if Seller shall request
any Purchase during any period of time determined by the Agent in its sole
discretion to result in incrementally higher CP Costs applicable to such
Purchase, the principal associated with any such Purchase shall, during such
period, be deemed to be funded by Purchaser in a special pool (which may include
capital associated with other receivable purchase or financing facilities) for
purposes of determining such additional CP Costs applicable only to such special
pool and charged each day during such period against such principal.
Notwithstanding the foregoing, on any day when any Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, the CP Costs
for each Asset Tranche funded through the issuance of Commercial Paper Notes
shall equal the greater of (a) the amount determined for such day pursuant to
the preceding two sentences, and (b) interest on the Invested Amount associated
with such Asset Tranche a rate per annum equal to the Base Rate plus 2% per
annum.
"CP Rate": With respect to any CP Accrual Period, the rate per annum
equivalent to the CP Costs accrued with respect to the Invested Amount allocated
to any Asset Tranche funded with Commercial Paper Notes.
"Credit Agreement": The Credit Agreement dated as of April 1, 1999
among Cadmus, the banks listed therein, Nationsbank, N.A., as Documentation
Agent, First Union National Bank, as Syndication Agent and Wachovia, as Agent,
as the same may be amended from time to time in accordance with the terms
thereof.
"Credit and Collection Policy": Those credit and collection policies
and practices of the Originators relating to Contracts and Receivables as in
effect on the date of this Agreement, as modified without violating Section
7.3(c), but subject to compliance with applicable tariffs or state regulations
in effect from time to time; provided that if a Liquidation Event has occurred,
at the request of the Agent, the Master Servicer shall provide a detailed
written summary of the Credit and Collection Policy.
"Cumulative Sales": For each Settlement Period, the amount of
Receivables originated by the Originators and sold to the Seller pursuant to the
Sale Agreement.
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"Cut-Off Date": The last day of each Settlement Period.
"Days Sales Outstanding" or "DSO": As of any day, an amount equal to
the product of (x) 91, multiplied by (y) the amount obtained by dividing (i) the
aggregate Unpaid Balance of Receivables as of the most recent Cut-Off Date, by
(ii) the aggregate amount of Receivables created during the three Settlement
Periods including and immediately preceding such Cut-Off Date.
"Deemed Collections": As defined in Section 3.2(a).
"Defaulted Receivable": A Pool Receivable (i) for which a payment is
90 or more days past due, (ii) for which collection proceedings have been
commenced, (iii) the Obligor of which has had an Event of Bankruptcy or (iv)
that has been written off or would be written off in accordance with the Credit
and Collection Policy.
"Default Horizon Ratio": As of any Cut-Off Date, the ratio (expressed
as a percentage) of (i) the sum of (A) the Cumulative Sales of the Originators
during the Settlement Period ending on such Cut-Off Date, (B) the Cumulative
Sales of the Originators during the immediately preceding Settlement Period, (C)
the Cumulative Sales of the Originators during the second immediately preceding
Settlement Period, (D) the Cumulative Sales of the Originators during the third
immediately preceding Settlement Period and (E) one half of the Cumulative Sales
of the Originators during the fourth immediately preceding Settlement Period
divided by (ii) the Net Pool Balance as of the most recent Cut-Off Date.
"Default Ratio": At any time, the ratio (expressed as a percentage)
computed as of the Cut-Off Date for the immediately preceding Settlement Period
by dividing (x) the aggregate Unpaid Balance of all Pool Receivables that became
Defaulted Receivables during such immediately preceding Settlement Period by (y)
Cumulative Sales generated during the Settlement Period four months prior to the
most recent Settlement Period.
"Default Trigger Ratio": At any time, the ratio (expressed as a
percentage) computed as of the Cut-Off Date for the immediately preceding
Settlement Period by dividing (x) the aggregate Unpaid Balance of all Pool
Receivables that are Defaulted Receivables on such Cut-Off Date by (y) the
Cumulative Sales generated during the Settlement Period four months prior to the
most recent Settlement Period.
"Delinquency Ratio": At any time, the ratio (expressed as a
percentage) computed as of the Cut-Off Date for the immediately preceding
Settlement Period by dividing (x) the aggregate Unpaid Balance of all Pool
Receivables that are Delinquent Receivables on such Cut-Off Date by (y) the
aggregate Unpaid Balance of Pool Receivables on such Cut-Off Date.
"Delinquent Receivable": A Pool Receivable (a) that is not a Defaulted
Receivable and (b) as to which any payment, or part thereof, remains unpaid for
61-90 days or more from the original due date for such payment.
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"Dilution": The amount of any reduction or cancellation of the Unpaid
Balance of a Pool Receivable as described in Section 3.2(a).
"Dilution Horizon Ratio": As of any date, an amount (expressed as a
percentage) calculated by dividing Cumulative Sales for the immediately
preceding two Settlement Periods by the Unpaid Balance of all Eligible
Receivables as of the most recent Cut-Off Date.
"Dilution Ratio": As of any date, an amount (expressed as a percentage)
equal to a fraction, the numerator of which is the total amount of Dilution
during the previous Settlement Period, and the denominator of which is the
Cumulative Sales generated during the Settlement Period one months prior to the
most recent Settlement Period.
"Dilution Reserve": An amount (expressed as a percentage) equal to the
product of (a) the sum of (i) 2.25 times the Adjusted Dilution Ratio and (ii)
the Dilution Volatility Component and (b) the Dilution Horizon Ratio.
"Dilution Volatility Component": An amount (expressed as a percentage)
equal to the product of (a) the difference between (i) the highest three month
rolling average Dilution Ratio over the past 12 months and (ii) the Adjusted
Dilution Ratio and (b) a fraction, the numerator of which is the highest three
month rolling average Dilution Ratio over the past 12 months and the denominator
of which is the Adjusted Dilution Ratio.
"Downgraded Liquidity Bank": A Liquidity Bank which has been the
subject of a Downgrading Event.
"Downgrading Event": With respect to any Person means the lowering of
the rating with regard to the short-term securities of such Person to below (i)
A-1 by S&P, or (ii) P-1 by Xxxxx'x.
"Due Diligence Report": As defined in Section 5.1(k).
"Earned Discount": For any Yield Period, as applicable, for any Asset
Tranche funded with a Liquidity Funding:
PTI x ER x ED + LF
-------------
360
where:
PTI = the daily average (calculated at the close of business each
day) of the Purchaser's Tranche Investment in such Asset
Tranche during such Yield Period, as applicable,
ER = the Earned Discount Rate for such Yield Period,
ED = the actual number of days elapsed during such Yield Period,
and
68
LF = the Liquidation Fee, if any, during such Yield Period.
"Earned Discount Rate": For any Yield Period for any Asset Tranche
funded by a Liquidity Funding the Bank Rate for such Asset Tranche and such
Yield Period; provided, however, that on any day when any Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, the Earned
Discount Rate for each Asset Tranche (including, without limitation, Asset
Tranches funded through the issuance of Commercial Paper Notes) shall mean a
rate per annum equal to the Base Rate plus 2% per annum.
"Eligible Originator": Any direct or indirect wholly-owned Subsidiary
of Cadmus with respect to which the Agent has received satisfactory opinions of
counsel (i) concerning the existence of a "true sale" of the Receivables and the
proceeds thereof from such Originator to the Seller under the Sale Agreement;
(ii) concerning the inapplicability of the doctrine of substantive consolidation
of the Seller and in connection with any bankruptcy proceeding involving such
Originator, (iii) to the effect that the Seller has obtained a valid and
perfected ownership or security interest in such Originator's Receivables and
the Agent is satisfied that such Originator's Receivables are subject to no
other Liens of record, except as otherwise permitted under the Transaction
Documents and (iv) as to enforceability of the Transaction Documents against
such Originator, corporate matters and such other matters as the Agent may
reasonably request.
"Eligible Receivable": At any time, a Receivable:
(a) which is a Pool Receivable representing goods that have been
shipped or services that have been performed and which arises out of the sale by
the Originators in the ordinary course of its business that has been sold to the
Seller pursuant to the Sale Agreement in a "true sale" transaction;
(b) as to which the perfection of the Purchaser's undivided ownership
interest therein is governed by the laws of a jurisdiction where the Uniform
Commercial Code - Secured Transactions is in force, and which constitutes an
"account" as defined in the Uniform Commercial Code as in effect in such
jurisdiction;
(c) the Obligor of which is (i) a resident of the United States, or any
of its possessions or territories, (ii) not an Affiliate of any Seller Party and
(iii) not a Governmental Authority;
(d) which is not a Defaulted Receivable or owing from an Obligor as to
which more than 50% of the aggregate Unpaid Balance of all Receivables owing
from such Obligor are Defaulted Receivables;
(e) with regard to which the representations and warranties of the
Seller are true and correct;
(f) the sale of an undivided interest in which does not contravene or
conflict with any applicable federal, state or local law or regulation;
69
(g) which is denominated and payable only in U.S. Dollars in the United
States;
(h) which arises under a Contract that has been duly authorized and
executed and that, together with such Receivable, is in full force and effect
and constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms and is
not subject to any dispute, offset, counterclaim or defense whatsoever;
provided, however, that if such dispute, offset, counterclaim or defense affects
only a portion of the Unpaid Balance of such Receivable then such Receivable may
be deemed an Eligible Receivable to the extent of the portion of such Unpaid
Balance which is not so affected, and provided, further, that Receivables of any
Obligor which has any accounts payable by any Originator (thus giving rise to a
potential offset against such Receivables) may be treated as Eligible
Receivables to the extent that the Obligor of such Receivables has agreed
pursuant to a written agreement in form and substance satisfactory to the Agent,
that such Receivables shall not be subject to such offset;
(i) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury, truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and with respect
to which no party to the Contract related thereto is in violation of any such
law, rule or regulation in any material respect if such violation would impair
the collectibility of such Receivable;
(j) which satisfies in all material respects all applicable
requirements of the Credit and Collection Policy;
(k) which, according to the Contract related thereto, is due and
payable within 60 days from the invoice date of such Receivable;
(1) which is not the result of a finance charge; and
(m) the original term of which has not been extended and the Unpaid
Balance of which has not been adjusted more than once.
"Environmental Laws": Any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
petroleum or petroleum products, chemicals or industrial, toxic or hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA": The U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"ERISA Affiliate": Any trade or business (whether or not incorporated)
that is a member of a group of which Cadmus is a member and which is treated as
a single employer under Section 414 of the Code.
"Eurodollar Business Day": A day of the year as defined in clause (i)
of the definition of Business Day.
"Eurodollar Rate": For any Yield Period, the rate per annum determined
on the basis of the offered rate for deposits in Dollars of amounts equal or
comparable to the principal amount of the related Liquidity Funding offered for
a term comparable to such Yield Period, which rate appears on the Telerate Page
3750 effective as of 11:00 A.M., London time, two Eurodollar Business Days prior
to the first day of such Yield Period, provided that if no such offered rates
appear on such page, the Eurodollar Rate for such Yield Period will be the
arithmetic average (rounded upwards, if necessary, to the next higher 1/100th of
1%) of rates quoted by not less than two major banks in New York City, selected
by the Agent, at approximately 10:00 A.M., New York City time, two Eurodollar
Business Days prior to the first day of such Yield Period, for deposits in
Dollars offered by leading European banks for a period comparable to such Yield
Period in an amount comparable to the principal amount of such Liquidity
Funding.
"Eurodollar Rate (Reserve Adjusted)": With respect to any Yield Period
means a rate per annum equal to the quotient obtained (rounded upwards, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
Eurodollar Rate for such Interest Period by (ii) 1.0 minus the Eurodollar
Reserve Percentage.
"Eurodollar Reserve Percentage": With respect to any Yield Period, the
maximum reserve percentage, if any, applicable to the Liquidity Bank under
Regulation D during such Yield Period (or if more than one percentage shall be
applicable, the daily average of such percentages for those days in such Yield
Period during which any such percentage shall be applicable) for determining the
Liquidity Bank's reserve requirement (including any marginal, supplemental or
emergency reserves) with respect to liabilities or assets having a term
comparable to such Yield Period consisting or included in the computation of
"Eurocurrency Liabilities" pursuant to Regulation D. Without limiting the effect
of the foregoing, the Eurodollar Reserve Percentage shall reflect any other
reserves required to be maintained by the Liquidity Bank by reason of any
Regulatory Change against (a) any category of liabilities which includes
deposits by reference to which the "London Interbank Offered Rate" or "LIBOR" is
to be determined or (b) any category of extensions of credit or other assets
which include LIBOR-based credits or assets.
"Event of Bankruptcy": With respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or substantially all of its assets, or any similar action with respect to such
Person under any
71
law relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 60 consecutive days; or
an order for relief in respect of such Person shall be entered in an involuntary
case under the federal bankruptcy laws or other similar laws now or hereafter in
effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall be adjudicated insolvent, or admit in
writing its inability to pay its debts generally as they become due, or, if a
corporation or similar entity, its board of directors shall vote to implement
any of the foregoing.
"Excess Concentration Amount": As of any date, the sum of the amounts
by which the aggregate Unpaid Balance of Receivables of each Obligor exceeds the
Obligor Concentration Limit for such Obligor.
"Exchange Act": The Securities Exchange Act of 1934.
"Existing Agreement": As defined in the preamble.
"Federal Funds Rate": For any day, the rate per annum (rounded upwards,
if necessary, to the next higher 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Domestic Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
determined is not a Domestic Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent on such day on such transactions,
as reasonably determined by the Agent.
"Federal Reserve Board": The Board of Governors of the Federal Reserve
System, or any successor thereto or to the functions thereof.
"Fee Letter": As defined in Section 4.1.
"Final Payout Date": The date following the Termination Date on which
the Invested Amount shall have been reduced to zero and all other amounts
payable by the Seller under the Transaction Documents shall have been paid in
full.
"Fiscal Quarter": A fiscal quarter of Cadmus and its Subsidiaries
ending on the dates specified in Schedule B attached hereto.
72
"Fiscal Year": A fiscal year of Cadmus and its Subsidiaries
ending on June 30 of the applicable year.
"Funding Termination Date": The earliest of the following:
(a) October 22, 2003;
(b) the Agent declares a Funding Termination Date in a
notice to the Seller in accordance with Section 10.2(a); or
(b) in accordance with Section 10.2(b), the Funding
Termination Date occurs automatically.
"GAAP": Generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Authority": Any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, any court or arbitrator and any accounting board or authority
(whether or not part of government) which is responsible for the establishment
or interpretation of national or international accounting principles, in each
case whether foreign or domestic.
"Guarantee": With respect to any person, any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness; provided, however that
the term Guarantee shall not include endorsements for collection or deposit, in
either case, in the ordinary course of business.
"Indebtedness": With respect to any person means at any date,
without duplication, (a) all obligations of such person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services (except trade accounts payable arising in the
ordinary course of business that are not overdue by 90 days or more or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted),
73
(d) all obligations of such Person as lessee under capital leases, (e) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts payable under a banker's acceptance, (f) all redeemable preferred stock
of such Person (in the event such Person is a corporation), (g) all obligations
of such Person to reimburse any bank or other Person in respect of amounts under
a letter of credit or similar instrument, (h) all Indebtedness (as defined in
clauses (a) through (g)) secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person and (i) all Indebtedness (as
defined in clauses (a) through (i)) of others Guaranteed by such Person.
"Indemnified Amounts": As defined in Section 13.1.
"Indemnified Party": As defined in Section 13.1.
"Initial Due Diligence Auditor": Such person designated by
the Agent as the initial due diligence auditor.
"Invested Amount": means at any time with respect to the Asset
Interest an amount equal to (a) the aggregate of the amounts theretofore paid to
the Seller for Purchases pursuant to Section 1.1 and 1.2, less (b) the aggregate
amount of Collections theretofore received and actually distributed to the
Agent, on behalf of the Purchaser, on account of the Invested Amount pursuant to
Section 1.3.
"Investors": The Purchaser and the Liquidity Banks.
"Letter Agreement": The letter of Cadmus dated June 16, 1999
to Wachovia Securities, Inc.
"Lien": A lien, security interest, charge or encumbrance or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person.
"Liquidation Event": As defined in Section 10.1.
"Liquidation Fee": For each Asset Tranche (or portion thereof)
funded through a Liquidity Funding for each day in any Yield Period, the amount,
if any, by which:
(a) the additional Earned Discount (calculated without taking
into account any Liquidation Fee) which would have accrued on the
reductions of the Purchaser's Tranche Investment with respect to such
Asset Tranche during such Yield Period (as so computed) if such
reductions had not been made, exceeds
(b) the income, if any, received by the Purchaser from
investing the proceeds of such reductions of the Purchaser's Tranche
Investment.
"Liquidation Period": The period commencing on the date on
which the conditions precedent to Purchases and Reinvestment set forth in
Section 5.2 are not satisfied (or expressly waived by the Purchaser) and the
Agent shall have notified the Seller and the Master
74
Servicer in writing that the Liquidation Period has commenced, and ending on the
Final Payout Date.
"Liquidity Agent": Wachovia, as agent for the Liquidity Banks
under the Liquidity Agreement, or any successor to Wachovia in such capacity.
"Liquidity Agreement": The Liquidity Asset Purchase Agreement
dated as of October 26, 1999 among Purchaser, Wachovia, as Agent, Wachovia, as
Liquidity Agent, and Wachovia and/or one or more other banks or other financial
institutions, as Liquidity Banks, and any other agreement hereafter entered into
by the Purchaser providing for the making of loans, purchase of assets or other
extensions of credit to the Purchaser secured by a direct or indirect security
interest in the Asset Interest (or any portion thereof), to support all or part
of the Purchaser's payment obligations under the Commercial Paper Notes or to
provide an alternate means of funding Purchaser's investments in accounts
receivable or other financial assets, and under which the amount available from
such extensions of credit is limited to an amount calculated by reference to the
value or eligible unpaid balance of such accounts receivable or other financial
assets or any portion thereof or the level of deal-specific credit enhancement
available with respect thereto, as such Liquidity Agreement or other agreement
may be amended, supplemented or otherwise modified from time to time.
"Liquidity Bank": The commercial lending institutions that are
at any time parties to the Liquidity Agreement as liquidity providers
thereunder.
"Liquidity Funding": A purchase made by the Liquidity Bank (or
simultaneous purchases made by the Liquidity Banks) pursuant to the Liquidity
Agreement.
"Lock-Box": Any post office box, as listed on Schedule 6.1(o),
to which Collections are remitted for retrieval by a Lock-Box Bank and deposited
by such Lock-Box Bank into the Collection Account.
"Lock-Box Agreement": A letter agreement, in substantially the
form of Exhibit A-1, among the Master Servicer, the Originators, the Purchaser,
the Agent, the Seller and any Lock-Box Bank.
"Lock-Box Bank": Any of the banks holding one or more
Lock-Boxes or the Collection Account receiving Collections from Pool
Receivables.
"Lock-Box Notice": A notice, in substantially the form
attached to Exhibit A-1, from the Agent to the Lock-Box Bank.
"Loss Reserve": At any time, means (expressed as a percentage)
the product of (i) two, (ii) the highest rolling three month average Default
Ratio to have occurred during the most recently ended twelve consecutive month
period and (iii) the most recently calculated Default Horizon Ratio.
"Mandate Letter": That certain letter agreement dated February
8, 1999 between Cadmus and Wachovia.
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"Master Servicer": As defined in the preamble.
"Material Adverse Effect": With respect to any event or
circumstance, an effect caused or resulting from such event or circumstance
which has or would reasonably be expected to have a material adverse effect on:
(i) (A) the assets, operations, business or financial
condition of the Seller or (B) the business, assets, operations or
financial condition of Cadmus and its Subsidiaries, taken as a whole;
(ii) the ability of any Seller Party or any Originator to
perform in all material respects its obligations under this Agreement
or any other Transaction Document; or
(iii) the status, existence, perfection, priority or
enforceability of the Secured Parties' interest in the Receivables
Pool.
"Moody's": Xxxxx'x Investors Service, Inc.
"Net Pool Balance": On any date, an amount equal to (i) the
aggregate Unpaid Balance of all Eligible Receivables in the Receivables Pool on
such date, minus (ii) the Excess Concentration Amount on such date.
"Obligor": A Person obligated to make payments with respect to
a Receivable, including any guarantor thereof.
"Obligor Concentration Limit": At any time, in relation to the
aggregate Unpaid Balance of Receivables owed by any single Obligor and its
Affiliated obligors (if any):
(a) for Obligors who have a short term unsecured debt rating
currently assigned to them by either S&P or Moody's, the applicable
concentration limit shall be determined according to the following table (and,
if such Obligor is rated by both agencies and has a split rating, the applicable
rating will be the lower of the two):
Allowable
Moody's % Of Eligible
S&P Rating or Rating Receivables
--------------------------------------------------------
A-1+ P-1 10%
--------------------------------------------------------
A-1 P-1 8%
--------------------------------------------------------
A-2 P-2 6%
--------------------------------------------------------
A-3 P-3 3%; or
--------------------------------------------------------
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(b) for Obligors who do not have a debt rating listed above,
2% of the aggregate Unpaid Balance of Eligible Receivables at such time;
provided, however, that at the Originator's request and in the Agent's sole
discretion, the Agent may permit certain obligors to have an Obligor
Concentration Limit in excess of those described in clauses (a) and (b) above.
"Original Receivable": As defined in Section 8.2(h).
"Originator": Each Person (1) listed as an Originator on
Schedule A hereto, as such Schedule A may be modified from time to time pursuant
to this Agreement, (2) who is an Eligible Originator and (3) who is listed as a
"Seller" under the Sale Agreement (as such agreement may be modified from time
to time) in its capacity as Seller of Receivables under the Sale Agreement.
"Person": An individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.
"Plan": Any pension plan subject to the provisions of Title IV
of ERISA or Section 412 of the Code which is maintained for employees of Cadmus
or any ERISA Affiliate.
"Pool Receivable": A Receivable in the Receivables Pool.
"Pooled Commercial Paper": Commercial Paper Notes of Purchaser
subject to any particular pooling arrangement by Purchaser, but excluding
Commercial Paper Notes issued by Purchaser for a tenor and in an amount
specifically requested by any Person in connection with any agreement effected
by Purchaser.
"Prime Rate": Refers to that interest rate so denominated and
set by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.
"Program Information": As defined in Section 14.8(a)(i).
"Proposed Reduction Date": As defined in Section 3.2(b).
"Purchase": As defined in Section 1.1.
"Purchase Limit": As defined in Section 1.1.
"Purchaser": As defined in the preamble.
"Purchaser's Share": With respect to any amount, on any day,
the lesser of (i) the most recently calculated Asset Interest and (ii) 100%.
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"Purchaser's Tranche Investment": In relation to any Asset
Tranche, the amount of the Invested Amount allocated by the Agent to that Asset
Tranche pursuant to Section 2.1, provided, that at all times the aggregate
amounts allocated to all Asset Tranches shall equal the Invested Amount.
"Qualifying Liquidity Bank": A Liquidity Bank with a rating of
its short-term securities equal to or higher than (i) A-1 by S & P and (ii) P-1
by Moody's.
"Rebilled Receivable": As defined in Section 8.2(h).
"Rebill Termination Date": The earliest to occur of (i) the
Sale Termination Date, (ii) the date on which an Unmatured Liquidation Event
occurs, and (iii) the insolvency or bankruptcy of the Originator of the related
Rebilled Receivable.
"Receivable": Any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising from the sale of goods or rendering of services by any Originator and
includes the right to payment of any interest or finance charges and other
amounts with respect thereto, other than those reconveyed to such Originator
pursuant to Section 3.5 of the Sale Agreement.
"Receivables Pool": At any time all then outstanding
Receivables which have been sold or contributed as capital, or purported to have
been sold or contributed as capital, by any Originator to the Seller, other than
those reconveyed to such Originator pursuant to Section 3.5 of the Sale
Agreement.
"Reduction Notice": As defined in Section 3.2(b).
"Regulation": Any specified Regulation of the Federal Reserve
Board, as the same may be amended or supplemented from time to time.
"Regulatory Change": The adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency.
"Reinvestment": As defined in Section 1.3(a)(iii).
"Related Assets": (a) all rights to, but not any obligations
under, all Related Security related to any Pool Receivables, (b) all rights and
interests of the Seller under the Sale Agreement in relation to any Pool
Receivables, (c) all books and records evidencing or otherwise relating to any
Pool Receivables, (d) all Lock-Boxes and the Collection Account and all cash and
investments therein, to the extent constituting or representing the items in the
following clause (e) and (e) all Collections in respect of, and other proceeds
of, any Pool Receivables or any other Related Assets.
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"Related Security": With respect to any Pool Receivable, all
of the Seller's (in the case of usage in this Agreement or the applicable
Originator's (in the case of usage in the Sale Agreement) right, title and
interest in and to: (a) all Contracts that relate to such Pool Receivable; (b)
all merchandise (including returned merchandise), if any, relating to the sale
which gave rise to such Pool Receivable; (c) all security deposits and other
security interests or liens and property subject thereto from time to time
purporting to secure payment of such Pool Receivable, whether pursuant to the
Contract related to such Pool Receivable or otherwise; (d) all UCC financing
statements covering any collateral securing payment of such Pool Receivable (but
only to the extent of the interest of the Purchaser in the respective Pool
Receivable); (e) all guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Pool
Receivable whether pursuant to the Contract related to such Pool Receivable or
otherwise; and (f) all insurance policies, and all claims thereunder, related to
such Pool Receivable, in each case to the extent directly related to rights to
payment, collection and enforcement, and other rights with respect to such Pool
Receivable. The interest of the Purchaser in any Related Security is only to the
extent of the Purchaser's undivided percentage interest, as more fully described
in the definition of Asset Interest.
"Reportable Event": Any reportable event as defined in Section
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate which is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).
"Reporting Date": (a) The fifteenth day of each month, or, if
such day is not a Business Day, the next succeeding Business Day or (b) such
other day as the Agent may request; provided, however that the Agent shall not
request a Reporting Date to occur more frequently than weekly.
"Required Notice Period": The number of days required notice
set forth below applicable to the Aggregate Reduction indicated below:
Aggregate Reduction Required Notice Period
------------------- ----------------------
less than 25% of the Purchase 2 Business Days
Limit
greater than 25% but less than 5 Business Days
50% of the Purchase Limit
greater than 50% of the 10 Business Days
Purchase Limit
"Required Reserves": On any day, an amount equal to the
product of (a) the Required Reserve Factor and (b)the Net Pool Balance.
"Required Reserve Factor": On any day during the Settlement
Period, an amount equal to the greater of (x) the Required Reserve Factor Floor
and (y) the sum of (i) the Loss Reserve, (ii) the Dilution Reserve, (iii) the
Yield Reserve, and (iv) the Servicing Reserve.
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"Required Reserve Factor Floor": On any day during the
Settlement Period, the amount (expressed as a percentage) equal to the sum of
(i) the product of (a) the Adjusted Dilution Ratio and (b) the Dilution Horizon
Ratio and (ii) the greater of (a) four times the Obligor Concentration Limit
applicable to Obligors which are unrated or noninvestment grade, (b) two times
the Obligor Concentration Limit applicable to Obligors which are A-3/P-3 rated
or (c) one times the Obligor Concentration Limit applicable to Obligors which
are A-2/P-2 rated and (iii) 2%.
"Revolving Period": The period from October 26, 1999until the
Funding Termination Date or such other date consented to in writing by the Agent
on behalf of the Purchaser.
"S&P": Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale Agreement": The Amended and Restated Purchase and Sale
Agreement dated as of May 17, 2000 among the Originators and the Seller, as
purchaser thereunder, as it may be amended, supplemented or otherwise modified
in accordance with Section 7.3(f).
"SEC": The Securities and Exchange Commission.
"Secured Parties": The Purchaser, the Agent, the Liquidity
Banks and their successors and assigns.
"Seller": As defined in the preamble.
"Seller Information": As defined in Section 14.7(a).
"Seller Information Provider": As defined in Section 14.7(a).
"Seller Notes": As defined in the Sale Agreement.
"Seller Party": As defined in the preamble.
"Seller's Share": With respect to amount, on any day, 100%
minus the Purchaser's Share on such day.
"Senior Officer": With respect to any Person, the chief
executive officer, chief financial officer or president of such Person.
"Servicer": Initially, each Servicer identified in Schedule B
to this Agreement, and after any Servicer Transfer Event, the Successor Servicer
with respect to such Servicer.
"Servicer Advance": As defined in Section 8.3.
"Servicer Default. As defined in Section 8.4.
"Servicer Transfer Event": As defined in Section 8.1(b)
80
"Servicer's Fee": For any day in a Settlement Period, an
amount equal to the product of (x) the Servicer's Fee Rate, (y) the aggregate
Unpaid Balance of the Pool Receivables at the close of business on the first day
of such Settlement Period, and (z) 1/360.
"Servicer's Fee Rate": 1.0% per annum.
"Servicing Reserve": On any day, the product of (a) the
Servicer's Fee Rate and (b) a fraction, the numerator of which is the highest
Days Sales Outstanding calculated for each of the most recent 12 monthly periods
and the denominator of which is 360.
"Settlement Date": The second Business Day following each
Reporting Date.
"Settlement Period":
(a) The period beginning on the date of the initial Purchase
to and including the last day of the calendar month in which such date
occurs; and
(b) thereafter each period, beginning on, but excluding the
last day of the immediately preceding Settlement Period to and including
the last day of the next following calendar month;
provided, however, that the last Settlement Period shall end on the Final Payout
Date.
"Settlement Report": As defined in Section 3.1(a).
"Significant Subsidiary": (a) Each Subsidiary that is a member
of the Significant Subsidiary Group and (b) in addition to the Subsidiaries
described in clause (a), each Subsidiary that at any time Guarantees all or any
part of the Subordinated Debt (as defined in the Credit Agreement). As used
herein, "Significant Subsidiary Group" as at any date means one or more
Subsidiaries which account for (or in the case of a recently formed or acquired
Subsidiary would so account for on a pro forma historical basis) at least (i)
90% of Consolidated Total Assets as measured as at the end of the most recently
ended Fiscal Year or (ii) 90% of Consolidated EBITDA for either of the two most
recently ended Fiscal Years. A Subsidiary shall be a "Significant Subsidiary" if
such Subsidiary is included in the group of Subsidiaries, determined in
accordance with the terms of the following sentence, accounting for either: (A)
the Consolidated Total Assets measured under part (i) of the preceding sentence,
but not the Consolidated EBITDA measured under part (ii) of the preceding
sentence or (B) the Consolidated EBITDA measured under part (ii) of the
preceding sentence, but not the Consolidated Total Assets measured under part
(i) of the preceding sentence or (C) the Consolidated EBITDA measured under part
(ii) of the preceding sentence and the Consolidated Total Assets measured under
part (i) of the preceding sentence. The determination of the Significant
Subsidiary or the Significant Subsidiaries comprising the Significant Subsidiary
Group as of any date shall be made on the basis of a group consisting of the
smallest number of Subsidiaries necessary to comprise the Significant Subsidiary
Group as of such date.
"Structuring Fee": The structuring fee described in that
certain fee letter dated October 26, 1999 by and among the Seller, the Purchaser
and the Agent.
81
"Subsidiary": With respect to any Person means (i) a
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned or controlled by such
Person, directly or indirectly through Subsidiaries, and (ii) any partnership,
association, joint venture or other entity in which such Person, directly or
indirectly through Subsidiaries, has more than a 50% equity interest at the
time.
"Successor Notice": As defined in Section 8.1(b).
"Termination Date": The earliest of:
(a) the date of termination (whether by scheduled expiration,
termination on default or otherwise) of the Liquidity Bank's commitments under
the Liquidity Agreement (unless such commitments are renewed, extended or
replaced on or before such date);
(b) the Funding Termination Date;
(c) the date designated by the Seller as the "Termination
Date" on not less than five (5) Business Days' notice to the Agent, provided
that on or prior to such date the Invested Amount has been reduced to zero, all
accrued Earned Discount, CP Costs, Broken Funding Costs and fees have been paid
in full and all other amounts due to the Purchaser and the Agent have been paid
in full;
(d) the date on which any of the following shall occur:
(i) Failure to obtain a Liquidity Agreement in
substitution for the then existing Liquidity Agreement on or before 30
days prior to the expiration of the commitments of the Liquidity Banks
thereunder; or
(ii) A Downgrading Event with respect to a Liquidity
Bank shall have occurred and been continuing for not less than 45 days,
(ii) the Downgraded Liquidity Bank shall not have been replaced by a
Qualifying Liquidity Bank pursuant to a Liquidity Agreement in form and
substance acceptable to the Purchaser and the Agent, and (iii) the
commitment of such Downgraded Liquidity Bank under the Liquidity
Agreement shall not have been funded or collateralized in such a manner
that such Downgrading Event will not result in a reduction or
withdrawal of the credit rating applied to the Commercial Paper Notes
by any of the rating agencies then rating the Commercial Paper Notes;
or
(iii) Purchaser shall become an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
82
"Transaction Documents": This Agreement, the Lock-Box
Agreements, the Sale Agreement, the Fee Letter, the Mandate Letter and
the other documents to be executed and delivered in connection
herewith.
"Transactions Fees": All reasonable expenses of the Agent
incurred in connection with the consummation of this Agreement and each other
Transaction Document, including but not limited to (i) the legal fees of
Xxxxxxxxxx Xxxxxxxx LLP, counsel to the Agent, (ii) expenses incurred in
connection with any due diligence audit and (iii) out-of-pocket expenses of the
Agent.
"UCC": The Uniform Commercial Code, as from time to time in
effect in the applicable jurisdiction or jurisdictions.
"Unmatured Liquidation Event": Any event which with the giving
of notice or lapse of time, or both, would become a Liquidation Event.
"Unpaid Balance": With respect to any Receivable means at any
time the unpaid amount thereof, but excluding all late payment charges,
delinquency charges and extension or collection fees.
"Unused Fee": As defined in the Fee Letter.
"Usage Fee": As defined in the Fee Letter.
"U.S. Dollars": Dollars in lawful money of the United States
of America.
"Wachovia": As defined in the preamble.
"Yield Period": With respect to any Asset Tranche funded by a
Liquidity Funding:
(a) the period commencing on the date of the initial Purchase
of the Asset Interest, the making of such Liquidity Funding or the
creation of such Asset Tranche pursuant to Section 2.1 (whichever is
latest) and ending such number of days thereafter as the Agent shall
select; and
(b) each period commencing on the last day of the immediately
preceding Yield Period for the related Asset Tranche and ending such
number of days thereafter as the Agent shall select;
provided, however, that:
(i) any such Yield Period (other than a Yield Period
consisting of one day) which would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day
(unless the related Asset Tranche shall be accruing Earned Discount at
a rate determined by reference to the Eurodollar Rate (Reserve
Adjusted), in which case if such succeeding Business
83
Day is in a different calendar month, such Yield Period shall instead
be shortened to the next preceding Business Day);
(ii) in the case of Yield Periods of one day for any Asset
Tranche, (A) the initial Yield Period shall be the date such Yield
Period commences as described in clause (a) above; and (B) any
subsequently occurring Yield Period which is one day shall, if the
immediately preceding Yield Period is more than one day, be the last
day of such immediately preceding Yield Period, and if the immediately
preceding Yield Period is one day, shall be the next day following such
immediately preceding Yield Period; and
(iii) in the case of any Yield Period for any Asset Tranche
which commences before the Termination Date and would otherwise end on
a date occurring after such Termination Date, such Yield Period shall
end on such Termination Date and the duration of each such Yield Period
which commences on or after the Termination Date for such Asset Tranche
shall be of such duration as shall be selected by the Agent.
"Yield Reserve": On any day, an amount equal to the product of
(a) 1.5, (b) the Base Rate and (c) by a fraction, the numerator of which is the
12-month high Days Sales Outstanding and the denominator of which is 360.
(b) Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
(c) Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
84
SCHEDULE 6.1(i)
Description Of Material Adverse Changes
Effective July 1, 2002, Cadmus adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
As a result, Cadmus recorded an impairment charge of $56.3 million in the first
quarter of fiscal 2003, which is reflected as a cumulative effect of a change in
accounting principle on the Condensed Consolidated Statements of Income for the
quarter ended September 30, 2002. Additional information and disclosures are
contained in Cadmus' Form 8-K filed on October 24, 2002 and Form 10-Q filed on
November 13, 2002, both of which have been previously provided to the Agent.
On November 4, 2002, Cadmus announced several actions to rationalize capacity
and improve utilization in its special-interest magazine operation, including
the closure of the East Stroudsburg, Pennsylvania facility. Cadmus plans to
record an after-tax charge to net income in the range of $5 million to $8
million, predominantly in the second fiscal quarter of fiscal 2003. Additional
information and disclosures are contained in Cadmus' Form 8-K filed on November
5, 2002 and Form 10-Q filed on November 13, 2002, both of which have been
previously provided to the Agent.
85
SCHEDULE 6.1(n)
List Of Offices Of The Master Servicer And The Seller Where Records Are Kept
MASTER SERVICER:
Cadmus Communications Corporation
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
X.X. Xxx 00000
Xxxxxxxx, XX 00000-0000
SELLER:
Cadmus Receivables Corp.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
86
SCHEDULE 6.1(o)
List of Lock-Box Banks
Lock-Box Bank Collection Account Number Lock-Boxes
------------- ------------------------- ----------
Wachovia Bank, National 6260-049964 Cadmus Journal Services, Inc.
Association X.X. Xxx 000000
000 Xxxxx Xxxx Xxxxxx Xxxxxxxxx, XX 00000-0000
Xxxxxxx-Xxxxx, XX 00000
Xxxx Printing Company
X.X. Xxx 000000
Xxxxxxxxx, XX 00000-0000
Port City Press, Inc.
X.X. Xxx 000000
Xxxxxxxxx, XX 00000-0000
Xxxxxxxx Graphics, Inc.
X.X. Xxx 000000
Xxxxxxxxx, XX 00000-0000
87
SCHEDULE 14.2
Notice Addresses
CADMUS RECEIVABLES CORP.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
XXXXXX COMMUNICATIONS CORPORATION
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
BLUE RIDGE ASSET FUNDING CORPORATION
c/o Wachovia Bank, National Association.
000 X. Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
WACHOVIA BANK, NATIONAL ASSOCIATION
000 Xxxxxxxxx Xxxxxx, X.X.; GA-8047
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxx
88
SCHEDULE A
Initial Originators and Servicers
Originators and Servicers
Cadmus Journal Services, Inc.
Xxxx Printing Company
Port City Press, Inc.
Xxxxxxxx Graphics, Inc.
89
SCHEDULE B
Fiscal Periods
Fiscal Quarter Last Day of Quarter
-------------- -------------------
First Quarter September 30
Second Quarter December 31
Third Quarter March 31
Fourth Quarter June 30
90
EXHIBIT 1.2(a)
Form of Purchase Request
CADMUS RECEIVABLES CORP.
PURCHASE REQUEST
For Purchase On __________________
Wachovia Bank, National Association
000 Xxxxxxxxx Xxxxxx, X.X., XX-000
Xxxxxxx, Xxxxxxx 00000
Attention:
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated
Receivables Purchase Agreement dated as of November 20, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Purchase Agreement")
among Cadmus Receivables Corp., as Seller, Cadmus Communications Corporation, as
initial Master Servicer (and together with Seller, collectively referred to as
the "Seller Parties"), Blue Ridge Asset Funding Corporation, as purchaser (the
"Purchaser"), and Wachovia Bank National Association, as agent for Purchaser
(the "Agent"). Capitalized terms defined in the Purchase Agreement are used
herein with the same meanings.
I. Each of the Seller Parties hereby certifies, represents and warrants to
the Purchaser, and the Agent that on and as of the Purchase Date (as hereinafter
defined):
(a) all applicable conditions precedent set forth in Article
V of the Purchase Agreement have been satisfied;
(b) each of its respective representations and warranties
contained in Section 6.1 of the Purchase Agreement will be true and
correct, in all material respects, as if made on and as of the Purchase
Date;
(c) no event will have occurred and is continuing, or would
result from the requested Purchase, that constitutes a Liquidation
Event or an Unmatured Liquidation Event; and
(d) the Termination Date shall not have occurred.
II. The undersigned, as Seller hereby irrevocably requests that the Agent,
on behalf of the Purchaser, make the following Purchase:
91
(a) Proposed Purchase Date:______________________ (which is a
Business Day)
(b) Purchase Price: $_____________________ (which is at least
$10,000)
III. Please credit the Purchase Price, in immediately available funds, to:
Account Name:___________________________________
Account Number__________________________________
Bank Name and Address:____________________
_______________________
ABA#:_____________________________________
Reference:______________________________________
IN WITNESS WHEREOF, the Seller has caused this Purchase Request to
be executed and delivered as of this ____ day of _________, ______.
CADMUS RECEIVABLES CORP.,
as Seller
By:________________________
Name:
Title:
92
EXHIBIT 3.1(a-1)
Form of Settlement Report
[see attached]
93
EXHIBIT 3.1(a-2)
Form of Interim Settlement Report
[see attached]
94
EXHIBIT 5.1(h)
Form of Opinion of Special Counsel for the Seller Parties
[see attached]
95
EXHIBIT A-1
[FORM OF LOCK-BOX AGREEMENT]
[Date]
[Lock-Box Bank]
Ladies and Gentlemen:
Reference is made to our collection account no. ______
maintained with you (the "Account") pursuant to a lockbox agreement between each
of the undersigned and you, the terms and conditions of which are incorporated
herein by reference (the "Lockbox Agreement"). Pursuant to an Amended and
Restated Purchase and Sale Agreement, dated as of May 17, 2000 as amended,
restated supplemented or otherwise modified from time to time, among Cadmus
Journal Services, Inc. ("Cadmus Journal"), Xxxxxxxx Graphics, Inc. ("Xxxxxxxx
Graphics"), Xxxx Printing Company ("Xxxx") and Port City Press, Inc. ("Port
City"), as sellers, Cadmus Communications Corporation (together, with Cadmus
Journal, Xxxxxxxx Graphics, Xxxx and Port City, the "Lock-Box Parties") and
Cadmus Receivables Corp. ("Cadmus Receivables"), as purchaser, we have sold
and/or may hereafter sell to Cadmus Receivables certain of the accounts, chattel
paper, instruments or general intangibles (collectively, "Receivables") with
respect to which payments are or may hereafter be made to the Account. Pursuant
to a Second Amended and Restated Receivables Purchase Agreement, dated as of
November 20, 2002 (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,
National Association 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, National
Association 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, National Association as Agent
for Blue Ridge". The Agent agrees to execute standard wire
96
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 of the Existing Agreement, the Account shall be
maintained by you for the benefit of, and amounts from time to time therein held
by you for, the Agent (on behalf of Blue Ridge and Cadmus Receivables) on the
terms provided herein. Except as otherwise provided in this letter agreement,
payments to the Account are to be processed in accordance with the standard
procedures currently in effect. All service charges and fees with respect to the
Account shall continue to be payable by us under the arrangements currently in
effect.
By executing this letter agreement, you irrevocably waive and
agree not to assert, claim or endeavor to exercise, irrevocably bar and stop
yourself from asserting, claiming or exercising, and acknowledge that you have
not heretofore received a notice, writ, order or any form of legal process from
any other party asserting, claiming or exercising, any rights of set-off,
banker's lien or other purported form of claim with respect to the Account or
any funds from time to time therein. Except for your right to payment of your
service charges and fees and your right to make deductions for returned items,
you shall have no rights in the Account or funds therein. To the extent you may
ever have such rights, you hereby expressly subordinate all such rights to all
rights of the Agent.
You may terminate this letter agreement by canceling the
Account maintained with you, which cancellation and termination shall become
effective only upon 90 days' prior written notice thereof from you to the Agent.
Incoming mail addressed to the Account received
97
after such cancellation shall be forwarded in accordance with the Agent's
instructions. This letter agreement may also be terminated upon written notice
to you by the Agent stating that the Purchase Agreement is no longer in effect.
Except as otherwise provided in this paragraph, this letter agreement may not be
terminated or amended without the prior written consent of the Agent.
Notwithstanding any other provision of this letter agreement,
it is agreed by the parties hereto that you shall not be liable to Blue Ridge or
the Agent for any action taken by you or any of your directors, officer, agents
or employees in accordance with this letter agreement at the request of the
Agent, except for your or such person's own gross negligence or willful
misconduct.
This letter agreement may be executed by the signatories
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall together constitute but one and the same letter
agreement. This letter agreement shall be governed by and interpreted under the
laws of the State of North Carolina.
Please acknowledge your agreement to the terms set forth in
this letter agreement by signing the six copies of this letter agreement
enclosed herewith in the space provided below and returning each of such signed
copies to the Agent.
Very truly yours,
CADMUS COMMUNICATIONS CORPORATION
By:______________________________
Title:___________________________
Address for notice:
Attention:
Facsimile No.:
CADMUS JOURNAL SERVICES, INC.
By:______________________________
Title:___________________________
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address:
98
XXXXXXXX GRAPHICS, INC.
By:______________________________
Title:___________________________
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address
XXXX PRINTING COMPANY
By:______________________________
Title:___________________________
Address for notice:
Attention:
Facsimile No.:
Lock-Box Address
PORT CITY PRESS, INC.
By:______________________________
Title:___________________________
Address for notice:
Attention:
Facsimile No.:
Xxxx-Xxx Xxxxxxx
00
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, NATIONAL ASSOCIATION
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.:
100
[LOCKBOX BANK]
By: _______________________________
Title: ____________________________
Address for notice:
___________________________________
___________________________________
___________________________________
Attention: ________________________
Facsimile No.: ____________________
101
ANNEX A to
Lock-Box Agreement
[FORM OF NOTICE OF ASSUMPTION OF CONTROL OF ACCOUNT]
[Letterhead of Wachovia]
[Date]
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Re: Cadmus Communications Corporation
Cadmus Journal Services, Inc.
Xxxxxxxx Graphics, Inc.
Xxxx Printing Company
Port City Press, Inc.
Lock-Box Account No.
----------------------------------
Ladies and Gentlemen:
Reference is made to the letter agreement dated _________ (as
amended, supplemented or otherwise modified from time to time, the "Letter
Agreement") among Cadmus Journal Services, Inc., Xxxxxxxx Graphics, Inc., Xxxx
Printing Company, Port City Press, Inc., Cadmus Communications Corporation,
Cadmus Receivables Corp., Blue Ridge Asset Funding Corporation (the
"Purchaser"), Wachovia Bank, National Association, 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, National Association, as Agent
By: ___________________________
Name:
Title:
102
EXHIBIT B
Form of Certificate of Financial Officer
FORM OF CERTIFICATE OF FINANCIAL OFFICER
In accordance with Section 5.1(a)(xvi) of that certain Second
Amended and Restated Receivables Purchase Agreement, dated as of November 20,
2002 (the "Receivables Purchase Agreement"), among Cadmus Receivables Corp., as
seller, Cadmus Communications Corporation., as master servicer, Blue Ridge Asset
Funding Corporation, as purchaser and Wachovia Bank, National Association, as
agent, I, ___________, in my capacity as ____________ of [Cadmus Receivables
Corp.][Cadmus Communications Corporation] , a Virginia corporation (the
"Company") (terms defined in the Receivables Purchase Agreement being used
herein as therein defined), DO HEREBY CERTIFY that:
1. Each of the representations and warranties of the Company
contained in Article VI of the Receivables Purchase Agreement is true and
correct in all material respects on and as of the date hereof as if made on and
as of such date.
2. [Attached hereto as Exhibit A is a true and correct copy of
the Company's consolidated balance sheet, income statement and statement of
shareholders' equity as at June 30, 2002]. [Attached hereto as Exhibit A is a
true and correct copy of the Company's balance sheet as at September 30, 2002.]
Such financial statements fairly present, in conformity with GAAP, the
[consolidated] financial position of the Company [and its Consolidated
Subsidiaries] as of such dates and [its] [their consolidated] results of
operations and cash flows for such periods stated, and there are no material
liabilities or unusual forward obligations that are not set forth therein.
3. No Liquidation Event or Unmatured Liquidation Event has
occurred and is continuing on the date hereof.
4. [Since June 30, 2002 there has been no material adverse
change in the Company's financial condition, business or operations.] [Since
September 30, 2002 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]
103
