Indemnity Agreement
This Indemnity Agreement (the "Indemnity Agreement"), dated as of June 30,
1997, made by and between World Color Press, Inc. (the "Originator") and the
Agent (as defined below) for the benefit of the Beneficiaries (as defined
below);
W i t n e s s e t h:
Whereas, World Color Finance, Inc. (the "Seller") has entered into a
Receivables Sale Agreement dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Receivables Sale
Agreement") by and among the Seller, ABN AMRO Bank N.V. as provider of the
program letter of credit (the "Program LOC Provider"), the liquidity providers
from time to time party thereto (the "Liquidity Providers"), Windmill Funding
Corporation ("Windmill" and, together with the Liquidity Providers and the
Program LOC Provider, the "Purchasers") and ABN AMRO Bank N.V., as agent for the
Purchasers (in such capacity, the "Agent") (terms used herein and not otherwise
defined herein having the respective meanings ascribed thereto in the
Receivables Sale Agreement);
Whereas, the Originator directly or indirectly owns all equity interests in
the Seller; and
Whereas, in order to induce the Agent and the Purchasers to enter into the
Receivables Sale Agreement and in consideration therefor, the Originator is
willing to make certain representations, warranties and covenants as hereinafter
set forth and to indemnify the Agent for the benefit of the Agent on its own
behalf, the Purchasers and any other Person to whom any amounts are owed by the
Seller under the Receivables Sale Agreement (collectively, the "Beneficiaries")
against certain liabilities as hereinafter described;
Now, Therefore, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
Article I
Indemnification
Section 1.1. Indemnities. Without limiting any other rights that any
Beneficiary may otherwise have hereunder or under applicable law, the Originator
shall pay, and shall indemnify on an after-Tax basis each Beneficiary for, any
and all damages, losses, claims, liabilities, penalties, Taxes, costs and
expenses (collectively, the "Indemnified Losses") arising out of or otherwise
relating to any Transaction Document, the transactions contemplated thereby or
the acquisition of any portion of the Sold Interest, excluding only Indemnified
Losses (the "Excluded Losses") to the extent (a) a final judgment of a court of
competent jurisdiction holds such Indemnified Losses resulted from gross
negligence or willful misconduct of the Beneficiary seeking indemnification,
(b) such Indemnified Losses due to or result from the credit risk of an Obligor
and for which reimbursement would constitute recourse for uncollectible
Receivables, (c) such Indemnified Losses include Taxes on, or measured by, the
overall net income of the Agent, any Purchaser or any Beneficiary computed in
accordance with the Intended Tax Characterization, or (d) such Indemnified
Losses would constitute recourse to the Originator for Discount payable by the
Seller under the Receivables Sale Agreement or fees under Section 1.4 of the
Receivables Sale Agreement or under the Fee Letter or Pricing Letter; provided,
however, that nothing contained in this sentence shall limit the liability of
the Originator or limit the recourse of any Beneficiary to the Originator for
any amounts otherwise specifically provided to be paid by the Originator
hereunder. Without limiting the foregoing indemnification, the Originator shall
indemnify each Beneficiary for Indemnified Losses relating to or resulting from:
(a) any representation or warranty made by the Originator, the Seller
or the Collection Agent (or any employee or agent of the Originator, the
Seller or the Collection Agent) under or in connection with any of the
Transaction Documents, any Periodic Report or any other information or
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report delivered by the Originator, the Seller or the Collection Agent
pursuant thereto having been false or incorrect in any material respect
when made or deemed made;
(b) the failure by the Originator, the Seller or the Collection Agent
to comply with any applicable law, rule or regulation related to any
Receivable, or the nonconformity of any Receivable with any such applicable
law, rule or regulation;
(c) the failure of the Seller to vest and maintain vested in the
Agent, for the benefit of the Purchasers, a perfected ownership or security
interest in the Sold Interest and the property conveyed pursuant to
Section 1.1(e) and Section 1.8 of the Sale Agreement, free and clear of any
Adverse Claim;
(d) any commingling of funds to which the Agent or any Purchaser is
entitled under the Receivables Sale Agreement with any other funds;
(e) any failure of a Lock-Box Bank to comply with the terms of the
applicable Lock-Box Letter;
(e) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
in which the Purchasers have a Sold Interest, or any other claim resulting
from the sale or lease of goods or the rendering of services related to
such Receivable or the furnishing or failure to furnish any such goods or
services or other similar reason not arising from the financial ability of
any Obligor to pay undisputed indebtedness;
(f) any failure of the Originator, the Seller or any Affiliate of
either thereof to perform its duties or obligations in accordance with the
provisions of any Transaction Document to which such Person is a party;
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(g) any action taken by the Agent as attorney-in-fact for the Seller
pursuant to Section 3.5(b) of the Sale Agreement; or
(h) any environmental liability claim, product liability claim or
personal injury or property damage suit or other similar or related claim
or action of whatever sort arising out of or in connection with any
Receivable or any other suit, claim action of whatever sort relating to any
of the Transaction Documents.
Section 1.2. Payments and Allocations. If any Beneficiary seeks
compensation pursuant to this Article I, such Person shall deliver to the
Originator and the Agent a certificate setting forth in reasonable detail the
amount due to such Person, a description of the circumstance giving rise thereto
and the basis of the calculations of such amount, which certificate shall be
conclusive absent manifest error so long as such determinations and any
allocations are made on a reasonable basis. The Originator shall pay to the
Agent (for the account of such Person) such amount shown as due on any such
certificate.
Article II
Extent and Waivers
Section 2.1. Indemnity Absolute. The obligations of the Originator under
this Indemnity Agreement constitute a present and continuing obligation, shall
be absolute and unconditional, shall not be subject to any counterclaim, setoff,
deduction or defense based upon any claim that the Originator or any Obligor may
have against the Seller or any other Person and, shall remain in full force and
effect without regard to, and shall not be released, discharged or in any way
affected or impaired by, any thing, event, happening, matter, circumstance or
condition whatsoever (whether or not the Originator shall have any knowledge or
notice thereof or consent thereto). The liability of the Originator under this
Indemnity Agreement shall be absolute, unconditional, present and continuing
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until all Investment and amounts payable by the Seller under the Transaction
Documents have been paid in full, irrespective of:
(a) any attempt to collect from the Seller amounts due from the
Seller under the Transaction Documents;
(b) any lack of validity or enforceability of any or all of the
Transaction Documents, or any provision thereof, or any other agreement or
instrument relating thereto or any assignment or transfer of any of the
foregoing or any failure or omission to enforce or agreement not to
enforce, or the stay or enjoining by order of court, by operation of law or
otherwise, of the exercise or nonexercise of any right, power, privilege or
remedy under or with respect to the foregoing;
(c) any amendment, or waiver, renewal, extension or release of or
any consent to departure from or other action or inaction with respect to
any or all of the Transaction Documents or any other agreement or
instrument relating thereto;
(d) any new conveyance of, or any exchange, release or nonperfection
of, any collateral or security interest conveyed to any of the
Beneficiaries in connection with the transactions contemplated by the
Receivables Sale Agreement, acceptance by any of the Beneficiaries of
partial payment from the Seller of its obligations under the Transaction
Documents, or any release or amendment or waiver of or consent to departure
from any guaranty or security for all or any of the Investment held, or
obligations owed, under the Transaction Documents;
(e) any merger or consolidation of the Seller into or with any other
Person, or any other change in the Seller whatsoever, or any sale, lease or
transfer of any or all of the assets of the Seller to any other Person;
(f) any sale, transfer or other disposition by the Originator of any
stock of the Seller;
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(g) any bankruptcy, insolvency, reorganization, arrangement,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to the Seller, or any action taken with respect to any or all of
the Transaction Documents, including this Indemnity Agreement, by any
trustee or receiver, or by any court, in any such proceeding; or
(h) any absence of any notice to, or knowledge by, the Originator of
the existence or occurrence of any of the matters or events set forth in
the foregoing subdivisions (a) through (g); or
(i) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Originator from its obligations under
the Transaction Documents, including the obligations of the Originator
hereunder.
Section 2.2. Waiver. To the fullest extent permitted by applicable law,
the Originator hereby waives promptness, diligence, all setoffs, counterclaims,
presentments, protests and notice of acceptance and any other notice with
respect to any of its obligations hereunder and any requirement of the
Beneficiaries (or any of them) to protect, secure, perfect or insure any
security interest or lien or any property subject to the Receivables Sale
Agreement or to exhaust any right or take any action against the Seller or any
other Person or entity or any collateral. To the fullest extent permitted by
applicable law, the Originator waives all principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms of this
Indemnity Agreement and any legal or equitable discharge of its obligations
hereunder and the benefit of any statute of limitations affecting its liability
hereunder or the enforcement hereof.
Section 2.3. Subrogation. The Originator agrees that it shall not assert
any rights (direct or indirect) of subrogation, contribution, reimbursement,
indemnification, or other rights of payment or recovery from the Seller for any
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payments made by the Originator hereunder until all Investment and amounts owing
under the Transaction Documents have been paid in full.
Section 2.4. Reinstatement. The obligations of the Originator under this
Indemnity Agreement shall continue to be effective or shall be reinstated, as
the case may be, if at any time any payment made by the Originator hereunder or
by the Seller with respect to any coextensive obligations that it has under the
Transaction Documents is rescinded or must otherwise be returned to any Person
upon the insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation or reorganization of the Seller or any guarantor or for any other
reason, all as though such payment had not been made or performance had not
occurred, as applicable.
Article III
Representations and Warranties
Section 3.1. Representations and Warranties of the Originator. The
Originator represents and warrants to the Agent and each other Beneficiary as
follows:
(a) Receivables Sale Agreement. Each representation and warranty
with respect to it and the Receivables or collections set forth in the
Receivables Sale Agreement is true and correct on the date hereof and on
the date each Purchase is made under the Receivables Sale Agreement.
(b) Licenses, Registrations, and Compliance with Laws. To the best
of Originator's knowledge, each of Originator and the World Color Entities
has all permits, governmental licenses, registrations, and approvals
material to carrying out its businesses as presently conducted and as
required by law or the rules and regulations of any Governmental Authority
having jurisdiction over Originator or the World Color Entities. There is
no material violation or material failure of compliance or allegation or
notice of such violation or failure of compliance on the part of the
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Originator or any of the World Color Entities with any of the foregoing
permits, licenses, registrations, approvals, rules or regulations.
Section 3.2. Representations and Warranties of the Agent. The Agent
represents and warrants on behalf of the Beneficiaries that it is entering into
this Agreement based on the separate credit of the Originator and that it does
not expect the assets or liabilities of the Originator and the Seller to be
substantively consolidated in any bankruptcy or similar proceeding.
Article IV
Covenants of the Originator
Section 4.1. Affirmative Covenants. The Originator hereby covenants,
undertakes and agrees that at all times from the date hereof, unless the Agent,
with the consent of the Instructing Group, shall otherwise consent in writing:
(a) Financial Reporting. The Originator shall provide the Seller
with the annual and quarterly financial statements of the Originator and
any certificate of an officer of the Originator required to be delivered by
the Seller pursuant to Section 5.1(a) of the Receivables Sale Agreement and
the Originator shall deliver such financial statements and certificates
directly to the Agent and each Purchaser if the Seller fails to comply with
its obligation to do so.
(b) Notices. The Originator will notify the Agent in writing of any
of the following immediately upon any officer of the Originator learning of
the occurrence thereof, describing the same and, if applicable, the steps
being taken by the Persons affected with respect thereto:
(i) Representations and Warranties. The failure of any
representation or warranty made by the Originator in any Transaction
Document to be true (when made or deemed made) in any material respect.
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(ii) Changes in Business. Any change in, or proposed change in, the
character of the Originator's business that is reasonably likely to
materially impair the collectibility of any material amount of the
Receivables.
Section 4.2. Receivables Purchase Agreement Covenants. The Originator
agrees, for the benefit of the Agent and the Purchasers, to comply with each
covenant set forth in Section 5.1(c), (d), (e), (f), (g), (h), (i), (k) or (l)
of the Purchase Agreement as if such covenants were set forth in their entirety
herein and as if all references therein to Seller where references to the
Originator.
Article V
Miscellaneous
Section 5.1. No Waiver; Remedies. No failure or delay on the part of the
Agent for the benefit of the Beneficiaries in exercising any power, right or
remedy under this Indemnity Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any such power, right or remedy preclude
any other or further exercise thereof or the exercise of any other power, right
or remedy. The rights and remedies provided in this Indemnity Agreement are
cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Indemnity Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
Section 5.2. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Indemnity Agreement nor consent to any departure
by the Originator therefrom shall in any event be effective unless the same
shall be in writing and signed by the Originator and the Agent and consented to
by the Instructing Group and, with respect to Article I hereof, all of the
Liquidity Providers. Any amendment, supplement, modification or waiver of this
Indemnity Agreement entered into in accordance with this Section 5.2 shall apply
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to each of the Beneficiaries equally and shall be binding upon the Originator,
each Beneficiary and the Agent.
Section 5.3. Waiver of Confidentiality. The Originator hereby consents
to the disclosure of any nonpublic information relating to the Originator or the
Transaction Documents obtain in connection with the transactions contemplated by
the Transaction Documents among the Agent and the Purchasers and by the Agent or
the Purchasers to (i) any officers, directors, members, managers, employees or
outside accountants, auditors or attorneys thereof, (ii) any prospective or
actual assignee or participant, (iii) any rating agency, surety, guarantor or
credit or liquidity enhancer to the Agent or any Purchaser, (iv) any entity
organized to purchase, or make loans secured by, financial assets for which ABN
AMRO provides managerial services or acts as an administrative agent,
(v) Windmill's administrator, management company, referral agents, issuing
agents or depositaries or CP Dealers and (vi) Governmental Authorities with
appropriate jurisdiction, in each case only to the extent necessary in
connection with the services provided by, or the requirements of, such Person;
provided, that prior to any such disclosure, the Person receiving such
information shall agree in writing to keep such information confidential.
Section 5.4. Agreement Not to Petition. The Originator agrees, for the
benefit of the holders of the privately or publicly placed indebtedness for
borrowed money of Windmill, not, prior to the date which is one (1) year and one
(1) day after the payment in full of all such indebtedness, to acquiesce,
petition or otherwise, directly or indirectly, invoke, or cause Windmill to
invoke, the process of any Governmental Authority for the purpose of (a)
commencing or sustaining a case against Windmill under any federal or state
bankruptcy, insolvency or similar law (including the Federal Bankruptcy Code),
(b) appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official for Windmill, or any substantial part of
its property, or (c) ordering the winding up or liquidation of the affairs of
Windmill.
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Section 5.5. No Recourse. The obligations of Windmill, its management
company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.6. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address or number specified by such Person. The number of days for any
advance notice required hereunder may be waived (orally or in writing) by the
Person receiving such notice and, in the case of notices to the Agent, the
consent of each Person to which the Agent is required to forward such notice.
Section 5.7. Governing Law; Submission to Jurisdiction; Integration.
This Indemnity Agreement shall be governed by and construed in accordance with
the internal laws (and not the law of conflicts) of the State of Illinois. The
Originator hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois state
court sitting in Chicago for purposes of all legal proceedings arising out of or
relating to this Indemnity Agreement or the transactions contemplated hereby.
The Originator hereby irrevocably waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum. Nothing in this Section 5.7 shall affect the right of the
Agent or any Beneficiary to bring any action or proceeding against the
Originator or its property in the courts of other jurisdictions. This Indemnity
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Agreement contains the final and complete integration of all prior expressions
by the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.
Section 5.8. Severability; Counterparts. This Indemnity Agreement may be
executed in any number of counterparts and by 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. Any provisions of this Indemnity Agreement which 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 hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.9. Assignment. This Indemnity Agreement shall be binding upon
the Originator, its successors and assigns, and inure to the benefit of and be
enforceable by the Agent for the benefit of the Beneficiaries and their
respective successors and assigns; provided, however, that the obligations of
the Originator hereunder may not be assigned, transferred or delegated without
the prior written consent of the Agent and the Instructing Group and any such
purported assignment, transfer or delegation absent such consent shall be void.
Section 5.10. Survival of Warranties. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Indemnity Agreement, any investigation at any time made by the Agent or the
Beneficiaries or on their behalf, and the execution and delivery of each of the
Transaction Documents. The rights and remedies of the Agent on behalf of each
Beneficiary with respect to the representations and warranties made herein and
the indemnification provisions hereof shall be continuing and shall survive any
termination of the Receivables Sale Agreement or any of the other Transaction
Documents.
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Section 5.11. Further Assurances. At any time or from time to time upon
the request of the Agent, the Originator shall execute and deliver such further
documents and do such other acts and things as the Agent may reasonably request
in order to effect fully the purposes of this Indemnity Agreement.
Section 5.12. Headings. Article and Section headings used herein are for
convenience and reference only, are not part of this Indemnity Agreement and are
not to affect the construction of, or to be taken into consideration in
interpreting, this Indemnity Agreement.
Section 5.13. No Claims. The Originator shall not have any claim against
the Seller as a result of any payment made by the Originator under this
Agreement.
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In Witness Whereof, the parties hereto have caused this Indemnity Agreement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
ABN AMRO Bank N.V., as Agent
By:_______________________________
Title:____________________________
By:_________________________________
Title:___________________________
Address: Structured Finance,
Asset Securitization
Suite 725
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Attention: Purchaser Agent-Windmill
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World Color Press, Inc.
By:_________________________________
Title:______________________________
Address: The Mill
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Telephone: _______________________
Telecopy: ____________________________
With a copy to:
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