EXHIBIT 10.5
EXECUTION COPY
Receivables Purchase Agreement
dated as of June 30, 1997
between
WORLD COLOR PRESS, INC.
and
WORLD COLOR FINANCE, INC.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS................................. 1
SECTION 1.1. Defined Terms............................................ 1
ARTICLE II
PURCHASES AND SALES............................ 5
SECTION 2.1. Sales and Purchases of Receivables....................... 5
SECTION 2.2. Purchase Price........................................... 6
SECTION 2.3. Payments and Computations................................ 7
SECTION 2.4. Rights of the Purchaser....................................7
SECTION 2.5. Consent to Assignment of this Agreement.................. 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES....................... 7
SECTION 3.1. Representations and Warranties of the Seller............. 7
SECTION 3.2. Representations and Warranties of the Purchaser.......... 9
ARTICLE IV
CONDITIONS PRECEDENT............................. 10
SECTION 4.1. Conditions to Closing.................................... 10
ARTICLE V
COVENANTS.................................. 10
SECTION 5.1. Affirmative Covenants of Seller.......................... 10
ARTICLE VI
TERMINATION................................ 14
SECTION 6.1. Termination.............................................. 14
ARTICLE VII
INDEMNIFICATION............................... 15
SECTION 7.1. Indemnities by the Seller................................ 15
SECTION 7.2. Indemnities by the Purchaser............................. 15
SECTION 7.3. Indemnification Procedures............................... 15
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ARTICLE VIII
MISCELLANEOUS............................... 16
SECTION 8.1. Waivers and Amendments................................... 16
SECTION 8.2. Notices.................................................. 16
SECTION 8.3. GOVERNING LAW; SUBMISSION TO
JURISDICTION; INTEGRATION;
SERVICE OF PROCESS...................................... 17
SECTION 8.4. Severability and Counterparts............................ 18
SECTION 8.5. Successors and Assigns................................... 18
SECTION 8.6. Waiver of Confidentiality................................ 18
SECTION 8.7. Characterization of the Transactions
Contemplated by the Agreement........................... 18
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EXHIBITS
Exhibit A - Form of Contribution Agreement
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RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of June 30, 1997 (this
"Agreement"), is by and among World Color Press, Inc., a Delaware
corporation, as the seller (the "Seller"), and World Color Finance, Inc., a
Delaware corporation, as the purchaser (the "Purchaser").
R E C I T A L S
WHEREAS, the Seller desires to sell, and the Purchaser desires to
purchase, all of the Seller's right, title and interest in, to and under its
accounts receivable and related rights.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual benefits to be derived
under this Agreement and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Seller and the Purchaser
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Adverse Claim" means, for any asset or property of any Person, a
lien, security interest, charge, mortgage, pledge, hypothecation, assignment or
encumbrance, or any other right or claim, in, of or on any such asset or
property in favor of any other Person.
"Agent" shall have the meaning given to it in the RSA.
"Business Day" means any day excluding Saturday, Sunday, and any day
on which banks in New York, New York or Greenwich, Connecticut are authorized or
required by law to be closed.
"Closing Date" means the first Business Day on which all of the
conditions set forth in Section 4.1 of this Agreement have been satisfied.
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"Collection Agent" means, with respect to any date, the Seller or
such other Person appointed to administer and collect the Receivables
pursuant to Section 3.1(b) of the RSA.
"Collections" means, with respect to any Receivable, all amounts
paid on or with respect to such Receivable (including, without limitation,
any proceeds from collateral securing, or any guaranty of, such Receivable).
"Contract" means any agreement or invoice generated in the ordinary
course of business of the Seller or any Selling Subsidiary pursuant to which
an Obligor shall be obligated to pay for services rendered to, or merchandise
sold to, such Obligor by the Seller or any Selling Subsidiary.
"Contributed Receivables" means all of the Receivables assigned and
transferred by the Seller to the Purchaser as a capital contribution pursuant
to a Contribution Agreement.
"Contribution Agreement" means any agreement between the Seller and
the Purchaser pursuant to which the Seller makes a capital contribution to
the Purchaser of all of the Seller's right, title and interest in, to and
under the Receivables described in such agreement, which agreement shall be
substantially in the form of Exhibit A to this Agreement, as amended,
supplemented or otherwise modified by the Seller and the Purchaser from time
to time.
"Credit and Collection Policies" means the credit and collection
policies and practices relating to the Receivables and the Contracts of the
Seller and the Selling Subsidiaries.
"Eligible Receivable" shall have the meaning given to it in the RSA.
"Excluded Receivable" shall have the meaning given to it in the RSA.
"Enhancer" shall have the meaning given to it in the RSA.
"Government Authority" means any (i) federal, state, municipal or
other governmental entity, board, bureau, agency or instrumentality, (ii)
administrative or regulatory authority (including any central bank or similar
authority), or (iii) court, judicial authority or arbitrator, in each case,
whether foreign or domestic.
"Indemnified Amounts" means damages, losses, claims, liabilities,
costs and expenses (including, without limitation, reasonable attorneys' fees
and disbursements).
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"Indemnified Party" means each Person that is entitled to be
indemnified against Indemnified Amounts pursuant to Article VII of this
Agreement.
"Indemnifying Party" means any Person that is obligated to indemnify
any other Person against Indemnified Amounts pursuant to Article VII of this
Agreement.
"Indemnity Agreement" means the Indemnity Agreement, dated as of the
date of the RSA, entered into between the Seller and the Agent.
"Intercompany Purchase Agreement" means any Intercompany Receivables
Purchase Agreement entered into by and between the Seller and any of the
Selling Subsidiaries on or after the date of this Agreement.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree, or
award of any Official Body.
"Lock-Box Account" shall have the meaning given to it in the RSA.
"Liquidity Providers" shall have the meaning given to it in the RSA.
"Lock-Box Agreement" means each agreement entered into by the
Seller and a Lock-Box Bank with respect to a Lock-Box Account.
"Lock-Box Bank" shall have the meaning given to it in the RSA.
"Obligor" means, with respect to any Receivable, each Person
obligated to pay such Receivable and each guarantor of such obligation.
"Official Body" means any federal, state or local government or
political subdivision or any agency, authority, bureau, central bank
commission, department or instrumentality of any such government or political
subdivision, or any court, tribunal, grand jury, or arbitrator, in each case
whether foreign or domestic.
"Outstanding Balance" means, with respect to any Receivable at any
time, the then outstanding principal amount thereof (excluding any accrued
and unpaid finance charges and interest related thereto).
"Person" means an individual, corporation, association, joint
venture, trust, unincorporated organization, Governmental Authority or other
entity of any kind.
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"Purchaser Indemnified Parties" shall have the meaning given to it
in Section 7.1 of this Agreement.
"Purchase Price" means, with respect to each sale and assignment of
Receivables to the Purchaser by the Seller pursuant to Section 2.1 of this
Agreement, the amount payable by the Purchaser to the Seller in consideration
of such sale and assignment, which amount shall be equal to (i) 98.5% of
aggregate Outstanding Balance of the Receivables included in such sale and
assignment, or (ii) such other amount as may be agreed to by the Seller and
the Purchaser.
"Purchaser" means World Color Finance, Inc., a Delaware corporation.
"Receivable" means each obligation of any Person to pay for
merchandise sold or services rendered by the Seller (or a Selling Subsidiary
if such obligation was sold to the Seller) to such Person, and includes all
of the Seller's rights in and to (i) the payment of any interest or finance
charges with respect to such obligation, (ii) the merchandise (including
returned goods) and Contracts relating to such obligation, (iii) all security
interests, guarantees and property securing or supporting payment of such
obligation, (iv) all Records relating to or evidencing such obligation, and
(v) all proceeds of the foregoing (including, without limitation, all
Collections on such obligation).
"Records" means, with respect to each Receivable, all Contracts,
books, records and other documents or information (including computer
programs, tapes, disks, software, and related property and rights) related to
or evidencing such Receivable.
"RSA" means the Receivables Sale Agreement, dated as of June 30,
1997, by and among the Purchaser, ABN AMRO Bank, N.V., as provider of the
program letter of credit, the liquidity providers from time to time party
thereto, Windmill Funding Corporation, and ABN AMRO Bank, N.V., as agent, as
may be amended, supplemented and modified from time to time.
"Revolving Subordinated Note" means the revolving promissory note
issued by the Purchaser to the Seller to finance any part of the Purchase
Price for Sold Receivables that is not paid to the Seller in cash, as such
promissory note may be amended, supplemented or modified by the Seller and
the Purchaser from time to time.
"Seller" means World Color Press, Inc., a Delaware corporation.
"Seller Indemnified Parties" shall have the meaning given to it in
Section 7.2 of this Agreement.
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"Selling Subsidiaries" means each of the following subsidiaries of
the Seller: (i) The ▇▇▇▇▇▇ Companies, Inc., a District of Columbia
corporation, (ii) ▇▇▇▇▇▇ Lithotech, Inc., a Florida corporation, (iii) Image
Technologies, Inc., a Florida corporation, (iv) The ▇▇▇▇▇▇ Company, Inc., an
Illinois corporation, (v) Northeast Graphics Inc., a Delaware corporation,
(vi) RAI, Inc., a Wisconsin corporation, (vii) KRI, Inc., a Delaware
corporation, (viii) ▇▇▇▇ Communications Company, a Kentucky corporation, (ix)
Central Florida Press, L.C., a Florida limited liability company, (x) World
Color Book Services, Inc., a Delaware corporation, and (xi) such other wholly
owned subsidiaries of the Seller, if any, that are agreed by the Seller and
the Purchaser from time to time after the date of this Agreement.
"Sold Receivables" means all of Receivables sold to the Purchaser by
the Seller pursuant to Section 2.1 of this Agreement.
"Termination Date" means the earliest of (a) the Business Day
designated by the Seller or the Purchaser with no less than thirty (30) days
prior notice to the other, (b) the Termination Date (as defined in the RSA),
and (c) such other date as is agreed to by the Seller and the Purchaser.
"Termination Event" shall have the meaning given to it in the RSA.
"Transferred Receivables" means all of the Sold Receivables and all
of the Contributed Receivables.
ARTICLE II
PURCHASES AND SALES
SECTION 2.1. Sales and Purchases of Receivables. Upon the terms and
subject to the conditions set forth in this Agreement, on the Closing Date
and each subsequent Business Day prior to the Termination Date, the Seller
shall sell and assign to the Purchaser, and the Purchaser shall purchase, all
of the Seller's right, title and interest in, to and under all of the
outstanding Receivables that have not been sold and assigned to the Purchaser
on or prior to such day pursuant to either this Agreement or a Contribution
Agreement; provided, however, that notwithstanding any such sale and
assignment, the Purchaser shall not assume, and shall not have, any
obligation or liability under or with respect to any Contract. The Seller
shall, and the Seller shall cause each of the Selling Subsidiaries to, (i)
remain responsible for all of its obligations under the Contracts, and (ii)
observe and perform all of the conditions and obligations to be observed and
performed by it under the Contracts in accordance with the terms of such
Contracts.
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SECTION 2.2. Purchase Price.(a) The Purchase Price for each sale and
assignment of Receivables by the Seller to the Purchaser pursuant to Section
2.1 of this Agreement shall be payable to the Seller within five Business
Days of the date of such sale and assignment. At the election of the
Purchaser, all or any part of the Purchase Price payable to the Seller with
respect to any sale and assignment of Receivables to the Purchaser may be
paid by borrowings under the Revolving Subordinated Note rather than cash;
provided, however, that (i) unless otherwise agreed to by the Seller, on the
Closing Date, the Purchaser shall pay the Seller in cash an amount not less
than seventy-five percent (75%) of the Purchase Price payable for the
Receivables sold and assigned to the Purchaser on the Closing Date, and (ii)
after the Closing Date, the Purchaser shall not be permitted to increase its
borrowings under the Revolving Subordinated Note without the prior written
consent of the Seller if immediately prior to, or immediately after giving
effect to, such increase the stockholders' equity of the Purchaser (as
determined in accordance with generally accepted accounting practices) would
be less than five percent (5%) of the aggregate amount then payable under the
Revolving Subordinated Note.
(b) The Purchaser may prepay all or any part of the amounts
outstanding under the Revolving Subordinated Note at any time without premium
or penalty.
(c) Unless otherwise agreed to by the Seller and the Purchaser, all
Collections on the Sold Receivables shall be applied to reduce the amounts
then payable to the Seller pursuant to the terms of this Agreement
(including, without limitation, all amounts then payable under the Revolving
Subordinated Note) until all such amounts have been paid in full. If the
aggregate amount of cash received by the Seller from the Purchaser pursuant
to this Agreement and the Collection Agent pursuant to the RSA on any day
exceeds the aggregate amount then payable to the Seller pursuant to this
Agreement (including, without limitation, all amounts payable under the
Revolving Subordinated Note), the Seller shall promptly transfer such excess
amount to the Purchaser.
(d) The Seller, or the Collection Agent on behalf of the Seller,
shall make and maintain all appropriate recordkeeping entries to reflect (i)
all amounts payable by the Purchaser to the Seller pursuant to this Agreement
on each day (including, without limitation, all amounts then payable under
the Revolving Subordinated Note), and (ii) all payments received by the
Seller on each day from (1) the Purchaser pursuant to this Agreement, and (2)
the Collection Agent pursuant to the RSA.
SECTION 2.3. Payments and Computations. All amounts to be paid or
deposited by either party to this Agreement to the other party pursuant to
the terms of this Agreement shall be paid or deposited to or in account
designated by, or on behalf of, the party entitled to receive such amounts no
later than 1:00 p.m. (New York City time) on the day when due in immediately
available funds. The Seller and the Purchaser shall pay interest on all
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amounts not paid or deposited when due under this Agreement at a rate equal
to 2% per annum plus the rate then payable on the Revolving Subordinated
Note. All computations of discount, interest and all per annum fees under
this Agreement shall be made on the basis of a year of 360 days for the
actual number of days (including the first but excluding the last day)
elapsed.
SECTION 2.4. Rights of the Purchaser. The Purchaser, or the Collection
Agent on behalf of the Purchaser, shall be entitled to: (i) receive all
Collections on the Transferred Receivables; (ii) endorse all drafts, checks
and other forms of payment on account of the Transferred Receivables and to
settle, adjust and forgive any amounts payable with respect to the
Transferred Receivables; and (iii) exercise all other rights and incidences
of ownership of the Transferred Receivables.
SECTION 2.5. Consent to Assignment of this Agreement. The Agent, on
behalf of the Purchasers (as defined in the RSA), is intended to be a third
party beneficiary of this Agreement. The Seller hereby consents to the
assignment by the Purchaser to Agent, for the benefit of the Purchasers (as
defined in RSA), of all of the Purchaser's right and title to and interest in
this Agreement with respect to the Sold Receivables (other than the Excluded
Receivables) as security for the Purchaser's obligations under the RSA. The
Seller consents to the Purchaser's agreement that, following a Termination
Event, the Agent shall have the sole right to enforce the Purchaser's rights
and remedies under this Agreement with respect to all of the Sold Receivables
other than the Excluded Receivables (including, without limitation, all of
the Purchaser's rights to enforce the Seller's rights and remedies under the
Contracts); provided, however, that under no circumstances shall the Agent
have any obligation to perform any of the Purchaser's obligations under this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Seller. The Seller
represents and warrants to the Purchaser that:
(a) Corporate Existence and Power. The Seller is a corporation
duly organized, validly existing, and in good standing under the laws of its
state of incorporation and has all corporate power and authority and all
governmental licenses, authorizations, consents, and approvals required to
carry on its business in each jurisdiction in which its business is now
conducted, except where failure to obtain such license, authorization,
consent or approval is not reasonably likely to have a material adverse
effect on (i) its ability to perform its obligations under, or the
enforceability of, this Agreement, (ii) its business or
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financial condition, (iii) the interests of the Purchaser under this
Agreement, or (iv) the enforceability or collectibility of any Transferred
Receivable that is an Eligible Receivable.
(b) Corporate Authorization and No Contravention. The execution,
delivery, and performance by the Seller of this Agreement (i) is within its
corporate powers, (ii) has been duly authorized by all necessary corporate
action, (iii) does not contravene or constitute a default under (A) any
applicable law, rule or regulation, (B) its charter or by-laws, or (C) any
agreement, order or other instrument to which it is a party or its property
is subject, and (iv) will not result in any Adverse Claim on any Transferred
Receivable that is an Eligible Receivable.
(c) No Consent Required. No approval, authorization or other
action by, filings with, or notices to, any Governmental Authority or other
Person is required to be obtained or made by the Seller in connection with
the execution, delivery and performance by the Seller of this Agreement or
any transaction contemplated by this Agreement.
(d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Seller enforceable against the Seller in
accordance with its terms, except as limited by (i) bankruptcy, insolvency,
or other similar laws relating to or affecting the enforcement of creditors'
rights, and (ii) general principles of equity.
(e) Good Title. Immediately prior to each sale and assignment of
Transferred Receivables to the Purchaser pursuant to Section 2.1 of this
Agreement, the Seller will have undivided good title to, and be the sole
legal and beneficial owner of, all such Transferred Receivables free and
clear of all Adverse Claims. All of the Transferred Receivables will be
transferred by the Seller to the Purchaser free and clear of all Adverse
Claims. The Purchaser's ownership interest in the Transferred Receivables
shall at all times be duly perfected by all required filings, notices and
registrations under all applicable laws.
(f) No Actions, Suits. There are no actions, suits or other
proceedings pending or threatened against or affecting the Seller, or any of
its properties, that (i) if adversely determined (individually or in the
aggregate), are reasonably likely to have a material adverse effect on the
financial condition of the Seller or on the collectibility of any Transferred
Receivable that is an Eligible Receivable, or (ii) involve this Agreement or
any transaction contemplated by this Agreement. The Seller is not in default
of any contractual obligation or in violation of any order, rule or
regulation of any Governmental Authority, which default or violation is
reasonably likely to have a material adverse effect upon (a) the financial
condition of the Seller, or (b) the collectibility of any Transferred
Receivable that is an Eligible Receivable.
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SECTION 3.2. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants to the Seller that:
(a) Corporate Existence and Power. The Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of its
state of incorporation and has all corporate power and authority and all
governmental licenses, authorizations, consents, and approvals required to
carry on its business in each jurisdiction in which its business is now
conducted, except where failure to obtain such license, authorization,
consent or approval is not reasonably likely to have a material adverse
effect on its ability to perform its obligations under, or the enforceability
of, this Agreement or the Revolving Subordinated Note.
(b) Corporate Authorization and No Contravention. The execution,
delivery, and performance by the Purchaser of this Agreement (i) is within
its corporate powers, (ii) has been duly authorized by all necessary
corporate action, and (iii) does not contravene or constitute a default under
(A) any applicable law, rule or regulation, (B) its charter or by-laws, or
(C) any agreement, order or other instrument to which it is a party or its
property is subject.
(c) No Consent Required. No approval, authorization or other
action by, filings with, or notices to, any Governmental Authority or other
Person is required to be obtained or made by the Purchaser in connection with
the execution, delivery and performance by the Purchaser of this Agreement or
any transaction contemplated by this Agreement.
(d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as limited by (i) bankruptcy, insolvency,
or other similar laws relating to or affecting the enforcement of creditors'
rights, and (ii) general principles of equity.
(e) No Actions, Suits. There are no actions, suits or other
proceedings pending or threatened against or affecting the Purchaser or any
of its properties.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. This Agreement shall become
effective on the first date on which all conditions in this Section 4.1 are
satisfied:
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(a) all of the conditions precedent to the effectiveness of the RSA
shall have been satisfied or waived; and
(b) an executed copy of the Revolving Subordinated Note shall have
been delivered by the Purchaser to the Seller.
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Seller. At all times from the
date of this Agreement until the first date after the Termination Date on
which all amounts due and owing with respect to the Transferred Receivables
have been paid in full or written-off in accordance with the Credit and
Collection Policies, unless the Purchaser shall give its prior consent (which
consent shall not be unreasonably withheld or delayed), the Seller hereby
agrees as follows:
(a) Conduct of Business. The Seller will, and will cause each
Selling Subsidiary to, perform all actions necessary to remain duly
incorporated, validly existing and in good standing in its jurisdiction of
incorporation and to maintain all requisite authority to conduct its business
in each jurisdiction in which it conducts business.
(b) Compliance with Laws. The Seller will, and will cause each
Selling Subsidiary to, comply with all laws, regulations, judgments and other
directions or orders imposed by any Governmental Authority to which it may be
subject other than those which are not likely to have a material adverse
effect on the Transferred Receivables.
(c) Furnishing Information and Inspection of Records. The Seller
will, and will cause each Selling Subsidiary to, from time to time furnish to
the Purchaser such information concerning the Transferred Receivables as, and
promptly after, the Purchaser reasonably requests such information. The
Seller will, and will cause each Selling Subsidiary to, permit, at any time
during regular business hours, the Purchaser (or any representatives thereof)
to: (i) examine and make copies of any or all of the Records relating to or
evidencing the Transferred Receivables, (ii) visit the offices and properties
of the Seller and the Selling Subsidiaries for the purpose of examining any
or all of the Records relating to or evidencing the Transferred Receivables,
and (iii) discuss matters relating to this Agreement and/or the Transferred
Receivables with any of the officers, directors, employees or independent
public accountants of the Seller and/or the Selling Subsidiaries who have
knowledge of such matters.
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(d) Keeping Records. The Seller will, and will cause each Selling
Subsidiary to, have and maintain (i) administrative and operating procedures
(including an ability to recreate Records relating to or evidencing
Transferred Receivables if originals are destroyed), (ii) adequate
facilities, personnel and equipment, and (iii) all Records and other
information necessary for collecting the Transferred Receivables (including
Records adequate to permit the identification of each Transferred Receivable
and all Collections on, and all adjustments to, each Transferred Receivable).
The Seller will, and will cause each Selling Subsidiary to, clearly and
conspicuously ▇▇▇▇ its computer and master data processing books and records
with a legend describing the Purchaser's ownership interest in the
Transferred Receivables at all times after the date of this Agreement.
(e) Perfection. (i) The Seller will, and will cause each Selling
Subsidiary to, promptly execute and deliver all instruments and documents and
take all action necessary or reasonably requested by the Purchaser (including
the execution and filing of financing or continuation statements, amendments
thereto or assignments thereof) to enable the Purchaser to (1) exercise and
enforce all of its rights under this Agreement, and (2) vest and maintain
vested in the Purchaser a valid, first priority perfected ownership interest
in the Transferred Receivables free and clear of all Adverse Claims. The
Seller hereby agrees, and will cause each Selling Subsidiary to agree, that
the Purchaser will be permitted to sign and file any continuation statements,
amendments thereto and assignments thereof with respect to the Transferred
Receivables without the signature of the Seller or any Selling Subsidiary.
(ii) The Seller will not, and will not permit any Selling
Subsidiary to, change its name, identity or corporate structure or relocate
its chief executive office or the Records relating to or evidencing the
Transferred Receivables unless it has (1) given at least ten (10) days
advance notice to the Purchaser, and (2) delivered to the Purchaser of all
financing statements, instruments and other documents (including direction
letters) required to maintain the Purchaser's ownership interest in the
Transferred Receivables or otherwise reasonably requested by the Purchaser.
(iii) The Seller will, and will cause each Selling
Subsidiary to, maintain its chief executive officers within a jurisdiction in
the United States of America at all times after the date of this Agreement.
If the Seller or any Selling Subsidiary moves its chief executive office to a
location that imposes taxes, fees or other charges to perfect the Purchaser's
ownership interests in the Transferred Receivables, the Seller will pay all
such amounts and any other costs and expenses incurred in order to maintain
the enforceability of (1) this Agreement, each Intercompany Purchase
Agreement and the Indemnity Agreement, and (2) the Transferred Receivables or
the Purchaser's ownership interests in the Transferred Receivables.
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(f) Performance of Duties. The Seller will perform all of its
duties and obligations under this Agreement, all of the Intercompany Purchase
Agreements and the Indemnity Agreement, and the Seller will cause each of the
Selling Subsidiaries to perform all of its duties and obligations under the
Intercompany Purchase Agreements. The Seller will, and will cause each
Selling Subsidiary to, (i) fully and timely perform in all material respects
all of the obligations required to be performed by it in connection with each
Transferred Receivable, and (ii) comply in all material respects with its
Credit and Collection Policy. If requested by the Purchaser, the Seller
shall perform the duties of the Collection Agent in accordance with Article
III of the RSA, and, if requested, will cause each Selling Subsidiary to act
as a sub-collection agent in accordance with Article III of the RSA. In the
event that any Person other than the Seller is appointed as the Collection
Agent at any time, the Seller shall, upon the request of the Purchaser,
promptly deliver all Records relating to or evidencing the Transferred
Receivables to such Collection Agent (or its designee) at the location
designated by the Purchaser or such Collection Agent; provided, however, that
any such Collection Agent shall provide the Seller with reasonable access to
such Records.
(g) Payments on Receivables. The Seller will, and will cause each
Selling Subsidiary to, at all times instruct all Obligors to deliver all
Collections on the Transferred Receivables to a Lock-Box Account. If any
Collections on the Transferred Receivables are received by the Seller or any
Selling Subsidiary, the Seller shall, and shall cause each such Selling
Subsidiary to, hold such Collections in trust for the benefit of the
Purchaser and promptly (but in any event within two Business Days after
receipt) deposit such Collections into a Lock-Box Account. The Seller shall
use its reasonable best efforts to prevent any funds other than Collections
on Transferred Receivables from being deposited into any Lock-Box Account;
provided, however, that if any funds other than such Collections are
nevertheless deposited into any Lock-Box Account, the Seller will identify
and remit such funds to the owner of such funds as soon as practicable. Any
payment by an Obligor to the Seller shall, except as otherwise instructed by
the Purchaser, be remitted to the Collection Agent as a Collection on the
Transferred Receivables of such Obligor (starting with the oldest such
Transferred Receivable) to the extent of any amounts then due and payable
thereunder before being applied to any other Receivable or other indebtedness
of such Obligor.
(h) Extension or Amendment of Receivables. Except as permitted by
the Credit and Collection Policies, the Seller shall not, and shall not
permit any Selling Subsidiary to, amend or otherwise modify the terms of any
Transferred Receivable, or otherwise amend, modify or waive any term or
condition of any Contract related to or evidencing such Transferred
Receivable.
(i) Change in Business or Credit and Collection Policy. The Seller
will not, and will not permit any Selling Subsidiary to, make any material
change in the character of
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its business or its Credit and Collection Policy that would impair the
collectibility or enforceability of any Transferred Receivable that is an
Eligible Receivable.
(j) Adverse Claims. The Seller shall not, and shall not permit any
Selling Subsidiary to, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim on or
against any of the Transferred Receivables.
(k) Separateness Covenants. The Seller shall do all things
necessary and appropriate to maintain its existence separate and apart from
the Purchaser, including, without limitation:
(i) practicing and adhering to corporate formalities, such
as maintaining appropriate books and records;
(ii) other than pursuant to the Indemnity Agreement,
refraining from (1) guaranteeing or otherwise becoming liable for any
obligations of the Purchaser, (2) having obligations guaranteed by the
Purchaser, and (3) holding itself out as responsible for debts of the
Purchaser or for decisions or actions with respect to the affairs of
the Purchaser;
(iii) maintaining all of its deposit and other bank accounts
and all of its assets separate from those of the Purchaser;
(iv) maintaining all of its financial records separate and
apart from those of the Purchaser and ensuring that any consolidated
financial statements or other public information contain appropriate
disclosures concerning the Purchaser's separate existence;
(v) reimbursing the Purchaser out of the Seller's own funds
for any services provided to the Seller by employees, officers,
consultants, and agents of the Purchaser;
(vi) maintaining office space separate and apart from that
of the Purchaser or allocating fairly and reasonably any overhead for
shared office space;
(vii) accounting for and managing all of its liabilities
separately from the Purchaser (including, without limitation, payment
directly by the Seller of all payroll, accounting and other
administrative expenses and taxes);
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(viii) allocating, on an arm's-length basis, all corporate
operating services, leases and expenses shared between the Seller and
the Purchaser (including, without limitation, those associated with
the services of shared consultants and agents and shared computer
equipment and software);
(ix) refraining from filing or otherwise initiating or
supporting the filing of a motion in any bankruptcy or other
insolvency proceeding involving the Purchaser to substantively
consolidate the assets and liabilities of the Seller or any Selling
Subsidiary with the assets and liabilities of the Purchaser;
(x) maintaining adequate capitalization in light of its
business and purpose;
(xi) refraining from commingling assets with those of the
Purchaser;
(xii) refraining from acquiring obligations or securities of
the Purchaser (other than the Revolving Subordinated Note) and
refraining from loaning any funds to the Purchaser;
(xiii) using separate stationery, invoices, and checks from
the Purchaser; and
(xiv) correcting any known misunderstanding regarding the
separate identity of the Purchaser.
ARTICLE VI
TERMINATION
SECTION 6.1. Termination. This Agreement shall terminate upon the
Termination Date; provided, however, that the following rights and obligations
shall survive the termination of this Agreement: (i) the indemnification and
payment provisions of Article VII of this Agreement, and (ii) the Purchaser's
obligations under the Revolving Subordinated Note.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1. Indemnities by the Seller. Without limiting any other
rights that the Purchaser may have under this Agreement or under applicable
law, the Seller hereby agrees
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to indemnify the Purchaser, and any permitted assigns and its officers,
directors, agents and employees (collectively, the "Purchaser Indemnified
Parties") from and against any and all Indemnified Amounts awarded against or
incurred by the Purchaser Indemnified Parties in any action or proceeding
between the Seller and any of the Purchaser Indemnified Parties or between
any of the Purchaser Indemnified Parties and any other Person or otherwise,
arising out of or as a result of any breach by the Seller of any of its
representations, warranties and covenants in this Agreement.
SECTION 7.2. Indemnities by the Purchaser. Without limiting any other
rights that the Seller may have under this Agreement or under applicable law,
the Purchaser hereby agrees to indemnify the Seller, and any permitted
assigns and its officers, directors, agents and employees (collectively, the
"Seller Indemnified Parties") from and against any and all Indemnified
Amounts awarded against or incurred by the Seller Indemnified Parties in any
action or proceeding between the Purchaser and any of the Seller Indemnified
Parties or between any of the Indemnified Parties and any other Person or
otherwise, arising out of or as a result of any breach by the Purchaser of
any of its representations, warranties and covenants in this Agreement;
provided, however, that notwithstanding any other provision to the contrary
in this Agreement, until the first day after the Termination Date on which
all amounts due and owing with respect to the Transferred Receivables have
been paid in full or written-off in accordance with the Credit and Collection
Policies, all of the Purchaser's obligations under this Section 7.2 shall be
satisfied by increasing the amount outstanding under the Revolving
Subordinated Note by the aggregate amount of the Indemnified Amounts, if any,
that become payable to the Seller Indemnified Parties.
SECTION 7.3. Indemnification Procedures. In the event that any claim,
action or proceeding for Indemnified Amounts is made or brought against any
Indemnified Party, such Indemnified Party shall promptly notify the
Indemnifying Party in writing; provided, however, that no delay on the part
of such Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any obligation under this Agreement unless (and
then solely to the extent) the Indemnifying Party is prejudiced by such
delay. The Indemnifying Party will have the right to defend such claim or
proceeding with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as the Indemnifying Party notifies the Indemnified
Party that it will assume the defense thereof within twenty (20) days after
notice from the Indemnified Party of such claim, action or proceeding and the
Indemnifying Party reimburses the Indemnified Party for any fees and expenses
incurred by it during such twenty (20) day period; provided, however, that
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of such claim, action or proceeding;
and provided further that the Indemnified Party may retain its own counsel at
the sole cost and expense of the Indemnifying Party if: (i) the employment of
such counsel has been specifically authorized in writing by the Indemnifying
Party; (ii) the Indemnifying Party has failed to assume the defense and
employ counsel within thirty
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(30) days of receiving notice of such claim or proceeding; and (iii) the
named parties to any such action (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by its counsel that there may be one or more
legal defenses available to it that are different from or additional to those
available to the Indemnifying Party (in which case the Indemnifying Party
shall not have the right to assume the defense of such action on behalf of
such Indemnified Party). The Indemnifying Party shall not be liable for any
settlement of any such action effected without the written consent of the
Indemnifying Party; provided, however, if any action is settled with the
written consent of the Indemnifying Party, the Indemnifying Party agrees to
indemnify and hold harmless any Indemnified Party from and against any loss
or liability by reason of such settlement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Waivers and Amendments. No failure or delay on the part of
either party to this Agreement in exercising any of its power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any
other further exercise thereof or the exercise of any other power, right or
remedy. The rights and remedies provided in this Agreement shall be
cumulative and nonexclusive of any rights or remedies provided by law. Any
provision of this Agreement may be amended if, but only if, such amendment is
in writing and is signed by the Seller and the Purchaser.
SECTION 8.2. Notices. Except as provided below, all communications and
notices provided for under this Agreement shall be in writing (including bank
wire, telex, telecopy or electronic facsimile transmission or similar
writing) and shall be given to the other party at its address or telecopy
number set forth below or at such other address or telecopy number as such
party may hereafter specify for the purposes of notice to such party. Each
such notice or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
in this Section 8.2 and confirmation is received, (ii) two (2) Business Days
after the date on which such notice or communication is delivered to a
nationally or internationally recognized overnight courier service, or (iii)
if given by any other means, when received at the address specified in this
Section 8.2.
If to the Seller:
World Color Press, Inc.
The Mill
340 Pemberwick
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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and
If to the Purchaser:
World Color Finance, Inc.
c/o World Color Press, Inc.
The Mill
340 Pemberwick
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SECTION 8.3. GOVERNING LAW; SUBMISSION TO JURISDICTION; INTEGRATION;
SERVICE OF PROCESS. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE SELLER AND
THE PURCHASER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. Each of the Seller and the Purchaser hereby
irrevocably waives, to the fullest extent it may effectively do so, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court, any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum and any
claim based on its immunity from suit. Nothing in this Section 8.3 shall
affect the right of the Purchaser or Seller to bring any action or proceeding
against the other or its property in the courts of other jurisdictions.
(b) This Agreement contains the final and complete integration of
all prior expressions by the Seller and the Purchaser with respect to the
subject matter of this Agreement and shall constitute the entire Agreement
among the Seller and the Purchaser with respect to the subject matter of this
Agreement superseding all prior oral or written understandings.
SECTION 8.4. Severability and Counterparts. Any provisions of this
Agreement that are prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
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jurisdiction. This Agreement may be executed in any number of 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.
SECTION 8.5. Successors and Assigns. (a) This Agreement shall be
binding on the Seller and the Purchaser and their successors and assigns;
provided, however, that the Seller may not assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the Purchaser. No provision of this Agreement shall in any manner
restrict the ability of the Purchaser to assign, participate, grant security
interests in, or otherwise transfer, any Transferred Receivable.
(b) The Seller hereby agrees and consents to the complete
assignment by the Purchaser from time to time of all or any part of its
rights, title and interest in and to this Agreement and the Transferred
Receivables (other than the Excluded Receivables) to the Agent for the
benefit of the Purchasers (as defined in the RSA).
SECTION 8.6. Waiver of Confidentiality. The Seller hereby consents to
the disclosure of any nonpublic information with respect to it received by
the Purchaser to any nationally recognized rating agency rating Windmill
Funding Corporation's commercial paper, the Agent, the Liquidity Providers or
the Enhancer in connection with the RSA.
SECTION 8.7. Characterization of the Transactions Contemplated by the
Agreement. It is the intention of the Seller and the Purchaser that (i) the
transactions contemplated by this Agreement constitute an absolute and
irrevocable assignment, transfer and conveyance to the Purchaser of all of
the Seller's right, title and interest in, to and under all of the
Transferred Receivables, free and clear of all Adverse Claims, and (ii) the
Seller has no interest or right whatsoever in any of the Transferred
Receivables. If, however, the transactions contemplated by this Agreement
should nevertheless be deemed a financing, the Seller and the Purchaser
intend that (i) the Seller shall be deemed to have granted to the Purchaser,
and the Seller hereby grants to the Purchaser, a first priority perfected
security interest in all of the Seller's right, title and interest in, to and
under the Transferred Receivables, and (ii) this Agreement shall constitute a
security agreement under applicable law. Notwithstanding any other provision
of this Agreement, regardless of whether the transactions contemplated by
this Agreement are deemed to be a sale or financing, the Seller and the
Purchaser agree that the Purchaser shall not have any recourse against the
Transferor or any of its affiliates as a result of any uncollectible
Transferred Receivable.
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IN WITNESS WHEREOF, the Seller and the Purchaser have executed and
delivered this Receivables Purchase Agreement as of the date first written
above.
WORLD COLOR PRESS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
WORLD COLOR FINANCE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
EXHIBIT A
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of June 30, 1997 (the
"Agreement"), between WORLD COLOR PRESS, INC., a Delaware corporation ("World
Color"), and WORLD COLOR FINANCE, INC., a Delaware corporation ("WCF").
In consideration of the mutual agreements contained in this Agreement,
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used and not
otherwise defined in this Agreement will have the meanings given to them in the
Receivables Purchase Agreement, dated as of June 30, 1997 (the "RPA"), by and
between WCF and World Color.
ARTICLE II
CONTRIBUTION TO WCF
Section 2.01. Capital Contribution to WCF. World Color hereby agrees
to transfer, assign, set over and otherwise convey to WCF all of World Color's
right, title and interest in, to and under:
(a) each outstanding Receivable listed or described on Schedule A
attached to this Agreement, which may include Receivables originated after the
date of this Agreement (collectively, the "Contributed Receivables"),
(b) all amounts payable with respect to the Contributed Receivables,
(c) all Collections received by World Color, WCF or any other Person
with respect to the Contributed Receivables, and
(d) all proceeds of the foregoing.
The property described in clauses (a) through (d) above is
collectively called the "Related Contributed Assets."
Section 2.02. Acceptance by WCF. WCF hereby acknowledges its
acceptance of all right, title and interest in and to the property contributed
to WCF by World Color pursuant to Section 2.01 of this Agreement.
Section 2.03. Absolute Transfer; Assumption of Obligations. World
Color and WCF hereby agree and acknowledge that the contribution of the
Contributed Receivables and Related Contributed Assets to WCF pursuant to
Section 2.01 of this Agreement is an absolute
and irrevocable transfer of such property, and is not intended to be a transfer
for purposes of security. World Color represents and warranties that all of its
representations and warranties in the RPA with respect to the Contributed
Receivables and Related Contributed Assets are true and correct on the date such
Receivables are contributed to WCF.
ARTICLE III
MISCELLANEOUS
Section 3.01. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which shall constitute but one and the same instrument.
Section 3.02. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, World Color and WCF have caused this Agreement to
be duly executed as of the date of this Agreement.
WORLD COLOR PRESS, INC.
By: ------------------------------
Name:
Title:
WORLD COLOR FINANCE, INC.
By: ------------------------------
Name:
Title:
