Receivables Sale Agreement
Dated as of June 30, 1997
among
World Color Finance, Inc.,
as the Seller,
ABN AMRO Bank N.V.,
as the Agent,
the Liquidity Providers
from time to time party hereto,
ABN AMRO Bank N.V.,
as the Enhancer,
and
Windmill Funding Corporation
-------------------------------------------------------------------------------
Table of Contents
Page
Article I Purchases from Seller and Settlements....................... 1
Section 1.1. Sales.................................................. 1
Section 1.2. Interim Liquidations................................... 3
Section 1.3. Selection of Discount Rates and Tranche Periods........ 3
Section 1.4. Fees and Other Costs and Expenses...................... 4
Section 1.5. Maintenance of Sold Interest........................... 5
Section 1.6. Reduction in Commitments............................... 5
Section 1.7. Optional Repurchases................................... 6
Section 1.8. Assignment of Originator Purchase Agreement............ 6
Section 1.9. Extension of Liquidity Termination Date................ 6
Article II Sales to and from Windmill; Allocations..................... 7
Section 2.1. Required Purchases from Windmill....................... 7
Section 2.2. Purchases by Windmill.................................. 8
Section 2.3. Allocations and Distributions.......................... 9
Article III Administration and Collections.............................. 10
Section 3.1. Appointment of Collection Agent........................ 10
Section 3.2. Duties of Collection Agent............................. 11
Section 3.3. Reports................................................ 12
Section 3.4. Lock-Box Arrangements.................................. 12
Section 3.5. Enforcement Rights..................................... 12
Section 3.6. Collection Agent Fee................................... 13
Section 3.7. Responsibilities of the Seller......................... 13
Section 3.8. Actions by Seller...................................... 13
Article IV Representations and Warranties.............................. 14
Section 4.1. Representations and Warranties......................... 14
Article V Covenants................................................... 16
-2-
Section 5.1. Covenants of the Seller............................... 16
Article VI Indemnification............................................ 20
Section 6.1. Indemnities by the Seller................... 20
Section 6.2. Increased Cost and Reduced Return........... 21
Section 6.3. Other Costs and Expenses.................... 22
Section 6.4. Withholding Taxes........................... 22
Section 6.5. Payments and Allocations.................... 23
Article VII Conditions Precedent....................................... 23
Section 7.1. Conditions to Closing....................... 23
Section 7.2. Conditions to Each Purchase................. 24
Article VIII The Agent.................................................. 24
Section 8.1. Appointment and Authorization............... 24
Section 8.2. Delegation of Duties........................ 25
Section 8.3. Exculpatory Provisions...................... 25
Section 8.4. Reliance by Agent........................... 25
Section 8.5. Assumed Payments............................ 25
Section 8.6. Notice of Termination Events................ 26
Section 8.7. Non-Reliance on Agent and Other Purchasers.. 26
Section 8.8. Agent and Affiliates........................ 26
Section 8.9. Indemnification............................. 26
Section 8.10. Successor Agent............................. 27
Article IX Miscellaneous.............................................. 27
Section 9.1. Rating Agency Approval...................... 27
Section 9.2. Termination................................. 27
Section 9.3. Notices..................................... 28
Section 9.4. Payments and Computations................... 28
Section 9.5. Sharing of Recoveries....................... 28
Section 9.6. Right of Setoff............................. 29
Section 9.7. Amendments.................................. 29
Section 9.8. Waivers..................................... 29
Section 9.9. Successors and Assigns; Participations;
Assignments............................. 30
-3-
Section 9.10. Intended Tax Characterization............... 31
Section 9.11. Waiver of Confidentiality................... 31
Section 9.12. Agreement Not to Petition................... 32
Section 9.13. Excess Funds................................ 32
Section 9.14. No Recourse................................. 33
Section 9.15. Headings; Counterparts...................... 33
Section 9.16. Cumulative Rights and Severability.......... 33
Section 9.17. Governing Law; Submission to Jurisdiction... 33
Section 9.18. Waiver of Trial by Jury..................... 33
Section 9.19. Entire Agreement............................ 33
-4-
Schedules Description
Schedule I Definitions
Schedule II Liquidity Providers and Commitments of Committed Purchasers
Exhibits Description
Exhibit A Form of Incremental Purchase Request
Exhibit B Form of Notification of Assignment from Windmill to the Committed
Purchasers
Exhibit C Form of Notification of Assignment to Windmill from the Committed
Purchasers
Exhibit D-1 Form of Periodic Report
Exhibit D-2 Form of Daily Report
Exhibit E Addresses and Names of Seller and Originator
Exhibit F Lock-Boxes and Lock-Box Banks
Exhibit G Form of Lock-Box Letter
Exhibit H Form of Compliance Certificate
Exhibit I Credit and Collection Policy
-5-
Receivables Sale Agreement
Receivables Sale Agreement, dated as of June 30, 1997, among World Color
Finance, Inc., a Delaware corporation, as Seller (the "Seller"), ABN AMRO
Bank N.V., as agent for the Purchasers (the "Agent"), the liquidity providers
party hereto (the "Liquidity Providers"), ABN AMRO Bank N.V., as provider of
the Program LOC (the "Enhancer"), and Windmill Funding Corporation
("Windmill"). Certain capitalized terms used herein, and certain rules of
construction, are defined in Schedule I. The sole initial Liquidity Provider
and the Commitments of all Committed Purchasers are listed on Schedule II.
The parties hereto agree as follows:
Article I
Purchases from Seller and Settlements
Section 1.1. Sales.
(a) The Sold Interest. Subject to the terms and conditions hereof, the
Seller may, from time to time before the Liquidity Termination Date, sell to the
Agent for the benefit of Windmill, or to the Agent for the ratable benefit of
the Committed Purchasers an undivided percentage ownership interest in the
Receivables and all related Collections. Any such purchase (a "Purchase") shall
be made by each relevant Purchaser remitting funds to the Seller, through the
Agent, pursuant to Section 1.1(c) or by the Collection Agent remitting
Collections to the Seller pursuant to Section 1.1(d). The aggregate percentage
ownership interest of a Purchaser in the Receivables and related Collections
(its "Purchase Interest") shall equal at any time the following quotient:
I + R
---------------
ER
where:
-6-
I = the outstanding Investment of such Purchaser at such time;
R = the Reserve for such Purchaser at such time; and
ER = the Eligible Receivables Balance at such time.
Except during a Liquidation Period for a Purchaser, such Purchaser's Purchase
Interest will change whenever its Investment, its Reserve or the Eligible
Receivables Balance changes. During a Liquidation Period for a Purchaser its
Purchase Interest shall remain constant (based on its Purchase Interest as of
the commencement of such Liquidation Period), except for redeterminations to
reflect Investment acquired from or transferred to another Purchaser under
Article II. The sum of all Purchasers' Purchase Interests at any time is
referred to herein as the "Sold Interest", which at any time is the aggregate
percentage ownership interest then held by the Purchasers in the Receivables and
Collections. All Purchase Interests shall be held by the Agent on behalf of the
Purchasers in accordance with the terms of this Agreement.
(b) Windmill Purchase Option and Other Purchasers' Commitments. Subject
to Section 1.1(d) concerning Reinvestment Purchases, at no time will Windmill
have any obligation to make a Purchase. Each Liquidity Provider and the
Enhancer (together the "Committed Purchasers" and each a "Committed Purchaser")
severally hereby agrees, subject to Section 7.2 and the other terms and
conditions hereof, to make Purchases before the Liquidity Termination Date,
based on its Ratable Share of each Purchase requested by the Seller which is not
made by Windmill, to the extent its Investment would not thereby exceed its
Commitment, the Aggregate Investment would not thereby exceed the Purchase
Limit, and the Matured Aggregate Investment would not thereby exceed the
Aggregate Commitments. Each Purchaser's first Purchase and each additional
Purchase by such Purchaser not made from Collections pursuant to Section 1.1(d)
-7-
is referred to herein as an "Incremental Purchase". Each Purchase made by a
Purchaser with the proceeds of Collections in which it has a Purchase Interest,
which does not increase the outstanding Investment of such Purchaser, is
referred to herein as a "Reinvestment Purchase".
(c) Incremental Purchases. Except as provided below, in order to request
an Incremental Purchase from a Purchaser, the Seller must provide to the Agent
an irrevocable written request (including by telecopier or other facsimile
communication) substantially in the form of Exhibit A, by 10:00 a.m. (Chicago
time) three Business Days before the requested date (the "Purchase Date") of
such Purchase, specifying whether the Purchase is requested from Windmill or
from the Committed Purchasers, the requested Purchase Date (which must be a
Business Day) and the requested amount (the "Purchase Amount") of such Purchase,
which must be (except as provided below) in a minimum amount of $1,000,000 and
multiples thereof (or, an amount equal to the Maximum Incremental Purchase
Amount). Notwithstanding the foregoing, in the event that Windmill ceases to
make Reinvestment Purchases as described in Section 1.1(d), the Seller shall be
deemed to make a request for an Incremental Purchase from the Committed
Purchasers in an amount equal to the amount of Collections applied on any date
pursuant to Section 2.3(a) to reduce Windmill's Investment and, subject to
Section 7.2 hereof, the Committed Purchasers shall fund such Incremental
Purchase without request or further notice from Windmill. The Agent shall
promptly notify the contents of any such request to each Purchaser from which
the Purchase is requested. If the Purchase is requested from Windmill and
Windmill determines, in its sole discretion, to make the requested Purchase,
Windmill shall transfer to the Agent's Account the amount of such Incremental
Purchase on the requested Purchase Date. If the Incremental Purchase is
requested from the Committed Purchasers, subject to Section 7.2 and the other
terms and conditions hereof, each Committed Purchaser shall transfer its Ratable
Share of the requested Purchase Amount into the Agent's Account by no later than
12:00 noon (Chicago time) on the Purchase Date. The Agent shall transfer to the
Seller Account the proceeds of any Incremental Purchase delivered into the
Agent's Account.
-8-
(d) Reinvestment Purchases. Unless Windmill has provided to the Agent,
the Seller, and the Collection Agent a notice still in effect that it no longer
wishes to make Reinvestment Purchases (in which case Windmill's Reinvestment
Purchases, but not those of the Committed Purchasers, shall cease), at any time
before the Liquidity Termination Date when no Interim Liquidation is in effect,
on each day that any Collections are received by the Collection Agent a
Purchaser's Purchase Interest in such Collections shall automatically be used to
make a Reinvestment Purchase by such Purchaser, but only to the extent such
Reinvestment Purchase would not cause the Purchaser's Investment to increase
above the amount of such Investment at the start of the day plus any Incremental
Purchases made by the Purchaser on that day. Windmill may revoke any notice
provided under the first sentence of this Section 1.1(d) by notifying the Agent,
the Seller, and the Collection Agent that it will make Reinvestment Purchases.
(e) Security Interest. To secure all of the Seller's obligations under
the Transaction Documents, the Seller hereby grants to the Agent (for the
benefit of the Purchasers) a security interest in all of the Seller's rights in
the Receivables, the Collections, and the Lock- Box Accounts.
Section 1.2. Interim Liquidations. (a) Optional. The Seller may at any
time direct that Reinvestment Purchases cease and that an Interim Liquidation
commence for all Purchasers by giving the Agent and the Collection Agent at
least three Business Days' written (including telecopy or other facsimile
communication) notice specifying the date on which the Interim Liquidation shall
commence and, if desired, when such Interim Liquidation shall cease before the
Liquidity Termination Date (identified as a specific date or as when the
Aggregate Investment is reduced to a specified amount). If the Seller does not
so specify the date on which an Interim Liquidation shall cease, it may cause
such Interim Liquidation to cease at any time before the Liquidity Termination
Date, subject to Section 1.2(b) below, by notifying the Agent and the Collection
Agent in writing (including by telecopy or other facsimile communication) at
-9-
least three Business Days before the date on which it desires such Interim
Liquidation to cease.
(b) Mandatory. If at any time before the Liquidity Termination Date any
condition in Section 7.2 is not fulfilled, the Seller shall immediately notify
the Agent and the Collection Agent, whereupon Reinvestment Purchases shall cease
and an Interim Liquidation shall commence, which shall only cease upon the
Seller confirming to the Agent that the conditions in Section 7.2 are fulfilled.
Section 1.3. Selection of Discount Rates and Tranche Periods. (a) All
Investment shall be allocated to one or more Tranches reflecting the Discount
Rates at which such Investment accrues Discount and the Tranche Periods for
which such Discount Rates apply. In each request for an Incremental Purchase
and two Business Days before the expiration of any Tranche Period applicable to
any Purchaser's Investment, the Seller may request the Discount Rate(s) and
Tranche Period(s) to be applicable to such Investment. All Investment (i) of
Windmill shall accrue Discount at the CP Rate and (ii) of the Committed
Purchasers may accrue Discount at the Eurodollar Rate, the Prime Rate (in the
case of the Liquidity Providers) or the Base Rate (in the case of the Enhancer),
in all cases as established for each Tranche Period applicable to such
Investment. Each Tranche shall be in the minimum amount of $1,000,000 and in
multiples thereof or, in the case of Discount accruing at the Prime Rate or the
Base Rate, in any amount of Investment that otherwise has not been allocated to
another Tranche Period. Any Investment of the Committed Purchasers not
allocated to a Tranche Period shall accrue Discount at the Prime Rate. During
the pendency of a Termination Event, the Agent may reallocate any outstanding
Investment of the Committed Purchasers to a Prime Tranche. All Discount accrued
during a Tranche Period shall be payable by the Seller on the last day of such
Tranche Period or, for a Eurodollar Tranche with a Tranche Period of more than
three months, 90 days after the commencement, and on the last day, of such
Tranche Period.
(b) If, by the time required in Section 1.3(a), the Seller fails to select
a Tranche Period for any Investment of Windmill, the Agent may, in its sole
-10-
discretion, select such Tranche Period; provided that any such Tranche Period
shall be between 25 and 45 days in length. If, by the time required in
Section 1.3(a), the Seller fails to select a Discount Rate or Tranche Period for
any Investment of the Committed Purchasers, such amount of Investment shall
automatically accrue Discount at the Prime Rate (in the case of the Liquidity
Providers) and the Base Rate (in the case of the Enhancer) for a three Business
Day Tranche Period. Any Investment purchased from Windmill pursuant to
Section 2.1 shall have an initial Prime Tranche Period of three Business Days.
(c) If the Agent or any Committed Purchaser determines in good faith
(i) that maintenance of any Eurodollar Tranche would violate any applicable law
or regulation or (ii) that deposits of a type and maturity appropriate to match
fund any of such Purchaser's Eurodollar Tranches are not available, then the
Agent, upon the direction of such Purchaser, shall suspend the availability of,
and terminate any outstanding, Eurodollar Tranche so affected. All Investment
allocated to any such terminated Eurodollar Tranche shall be reallocated to a
Prime Tranche.
Section 1.4. Fees and Other Costs and Expenses. (a) The Seller shall pay
to the Agent (i) for the ratable benefit of the Liquidity Providers, such
amounts as agreed to with the Liquidity Providers and the Agent in the Pricing
Letter, and (ii) for the account of the Enhancer and the Agent, such amounts as
agreed to with the Enhancer and the Agent in the Fee Letter.
(b) If the amount of Investment allocated to any Eurodollar Tranche is
reduced before the last day of its Tranche Period, or if a requested Incremental
Purchase at the Eurodollar Rate does not take place on its scheduled Purchase
Date, the Seller shall pay the Early Payment Fee to each Purchaser that had its
Investment so reduced or scheduled Purchase not made.
(c) Investment shall be payable solely from Collections and from amounts
payable under Sections 1.5, 1.7 and 6.1 (to the extent amounts paid under
Section 6.1 indemnify against reductions in or non-payment of Receivables). The
-11-
Seller shall pay, as a full recourse obligation, all other amounts payable
hereunder, including, without limitation, all Discount, fees described in
clauses (a) and (b) above and amounts payable under Article VI.
Section 1.5. Maintenance of Sold Interest; Deemed Collection. (a)
General. If at any time before the Liquidity Termination Date the sum of 100%
plus the Reserve Percentage multiplied by the Aggregate Investment (or, if a
Termination Event exists, the Matured Aggregate Investment) exceeds the product
of the Sold Interest (or, if less, 100%) multiplied by the Eligible Receivables
Balance, then the Seller shall immediately pay to the Agent an amount equal to
such excess for application to reduce the Investments of the Purchasers ratably
in accordance with the Matured Value of their respective Investments, applied
first to Prime Tranches and second to the other Tranches with the shortest
remaining maturities unless otherwise specified by the Seller. Any amount so
applied to reduce Windmill's Investment shall be deposited in the Special
Transaction Subaccount.
(b) Deemed Collections. If on any day the outstanding balance of an
Eligible Receivable is reduced or cancelled as a result of any defective or
rejected goods or services, any cash discount or adjustment (including as a
result of the application of any special refund or other discounts or any
reconciliation), any setoff or credit (whether such claim or credit arises out
of the same, a related, or an unrelated transaction), the Seller shall be deemed
to have received on such day a Collection on such Receivable in the amount of
such reduction or cancellation. If on any day any representation contained in
Section 4.1(e) or 4.1(j) with respect to an Eligible Receivable is not true or
is not satisfied, the Seller shall be deemed to have received on such day a
Collection in the amount of the outstanding balance of such Receivable. All
such Collections deemed received by the Seller under this Section 1.5(b) shall
be remitted by the Seller to the Collection Agent in accordance with
Section 5.1(i).
(c) Adjustment to Sold Interest. At any time before the Liquidity
Termination Date that the Seller is deemed to have received any Collection under
-12-
Section 1.5(b) ("Deemed Collections") that derive from a Receivable that is
otherwise reported as an Eligible Receivable, so long as no Liquidation Period
then exists, the Seller may satisfy its obligation to deliver such amount to the
Collection Agent by instead notifying the Collection Agent that the Sold
Interest should be recalculated by decreasing the Eligible Receivables Balance
by the amount of such Deemed Collections, so long as such adjustment does not
cause the Sold Interest to exceed 100%.
(d) Payment Assumption. Unless an Obligor otherwise specifies or another
application is required by contract or law, any payment received by the Seller
from any Obligor shall be applied as a Collection of Receivables of such Obligor
(starting with the oldest such Receivable) and remitted to the Collection Agent
as such.
Section 1.6. Reduction in Commitments. The Seller may, upon five days'
notice to the Agent, reduce the Aggregate Commitment in increments of
$1,000,000, so long as the Aggregate Commitment at all times equals at least the
outstanding Matured Aggregate Investment. Each such reduction in the Aggregate
Commitment shall reduce the Commitment of each Committed Purchaser in accordance
with its Ratable Share and shall ratably reduce the Purchase Limit so that the
Aggregate Commitment remains at least 102% of the Purchase Limit.
Section 1.7. Optional Repurchases. At any time that the Aggregate
Investment is less than 10% of the Aggregate Commitment in effect on the date
hereof, the Seller may, upon five days' notice to the Agent, repurchase the
entire Sold Interest from the Purchasers at a price equal to the outstanding
Matured Aggregate Investment and all other amounts then owed hereunder.
Section 1.8. Assignment of Originator Purchase Agreement. The Seller
hereby assigns and otherwise transfers to the Agent (for the benefit of the
Agent, each Purchaser and any other Person to whom any amount is owed
hereunder), all of the Seller's right, title and interest in, to and under the
Originator Purchase Agreement. The Seller shall execute, file and record all
-13-
financing statements, continuation statements and other documents requested
by the Agent which are required to perfect or protect such assignment. This
assignment includes (a) all monies due and to become due to the Seller from
the Originator under or in connection with the Originator Purchase Agreement
(including fees, expenses, costs, indemnities and damages for the breach of
any obligation or representation related to either such agreement) and (b)
all rights, remedies, powers, privileges and claims of the Seller against the
Originator under or in connection with the Originator Purchase Agreement.
All provisions of the Originator Purchase Agreement shall inure to the
benefit of, and may be relied upon by, the Agent, each Purchaser and each
such other Person. At any time that a Termination Event has occurred and is
continuing, the Agent shall have the sole right to enforce the Seller's
rights and remedies under the Originator Purchase Agreement to the same
extent as the Seller could absent this assignment, but without any obligation
on the part of the Agent, any Purchaser or any other such Person to perform
any of the obligations of the Seller under the Originator Purchase Agreement
(or any of the promissory notes executed thereunder). All amounts
distributed to the Seller under the Purchase Agreement from Receivables sold
to the Seller thereunder shall constitute Collections hereunder and shall be
applied in accordance herewith.
Section 1.9. Extension of Liquidity Termination Date. The Seller may
advise the Liquidity Providers and the Enhancer in writing of its desire to
extend the Liquidity Termination Date for an additional 364 days, provided
(i) such request is made not more than 90 days prior to, and not less than 60
days prior to, the Liquidity Termination Date, (ii) not more than one such
request for the extension of the Liquidity Termination Date may be made in
any one calendar year and (iii) in no event shall the Liquidity Termination
Date be extended beyond June 30, 2002. In the event that the Liquidity
Providers and the Enhancer are agreeable to such extension, the Agent shall
so notify the Seller in writing (it being understood that the Liquidity
Providers and the Enhancer may accept or decline such a request in their sole
discretion and on such terms as they may elect) and the Seller and the
Liquidity Providers and the Enhancer shall enter into such documents as the
Liquidity Providers and the
-14-
Enhancer may deem necessary or appropriate to reflect such extension, and all
reasonable costs and expenses incurred by the Liquidity Providers and the
Enhancer in connection therewith (including reasonable attorneys' fees) shall be
paid by the Seller. The Liquidity Providers or the Enhancer shall be deemed to
have refused to grant the requested extension in the event they shall fail to so
notify the Seller of their agreement to such an extension.
Article II
Sales to and from Windmill; Allocations
Section 2.1. Required Purchases from Windmill. (a) Windmill may, at any
time, and on the earlier of the Windmill Termination Date and 10 Business Days
following the Agent and Windmill learning of a continuing Termination Event,
Windmill shall, sell to the Committed Purchasers and the Committed Purchasers
shall purchase any percentage designated by Windmill of Windmill's Investment
and its related Windmill Settlement (each, a "Put"). If the Put occurs due to
the Windmill Termination Date or a Termination Event, the designated percentage
shall be 100% or such lesser percentage as is necessary to obtain the maximum
available Purchase Price from each Committed Purchaser. Immediately upon notice
of a Put from Windmill to the Agent, the Agent shall deliver to each Committed
Purchaser a notification of assignment in substantially the form of Exhibit B,
and each Committed Purchaser shall purchase from Windmill its Purchase
Percentage of Windmill's Investment and related Windmill Settlement by
transferring to the Agent's Account an amount equal to such Purchaser's Purchase
Price by not later than 1:00 p.m. (Chicago time) on the date such funds are
requested; provided, however, that the Enhancer may exchange for part or all of
the Purchase Price payable by it an equal amount of the Program Unreimbursed
Draw Amount.
(b) If a Liquidity Provider fails to transfer to the Agent its full
Purchase Price when required by Section 2.1(a) (the aggregate amount not made
available to the Agent by each such Liquidity Provider being the "Unpaid
Amount"), then, upon notice from the Agent by not later than 1:15 p.m. (Chicago
-15-
time), each Liquidity Provider not owing an Unpaid Amount shall transfer to
the Agent's Account, by not later than 1:45 p.m. (Chicago time), an amount
equal to the lesser of such Liquidity Provider's proportionate share (based
on its Commitment divided by the Commitments of all Liquidity Providers that
have not so failed to pay their full Purchase Price) of the Unpaid Amount and
its Unused Commitment. If the Agent does not then receive the Unpaid Amount
in full, upon notice from the Agent by not later than 2:00 p.m. (Chicago
time) on such day, each Liquidity Provider that has not failed to fund any
part of its obligations on such day under this Section 2.1 shall pay to the
Agent, by not later than 2:30 p.m. (Chicago time), its proportionate share
(determined as described above) of the amount of such remaining deficiency up
to the amount of its Unused Commitment. Any Liquidity Provider that fails to
make a payment under this Section 2.1 on the date of a Put shall pay on
demand to each other Liquidity Provider that makes a payment under this
subsection (b) the amount paid by it to cover such failure, together with
interest thereon, for each day from the date such payment was made until the
date such other Liquidity Provider has been paid such amount in full, at a
rate per annum equal to the Federal Funds Rate plus two percent (2%) per
annum. In addition, without prejudice to any other rights Windmill may have
under applicable law, any Liquidity Provider that has failed to transfer to
the Agent under Section 2.1(a) its full Purchase Price shall pay on demand to
Windmill the difference between such unpaid Purchase Price and the amount
paid by other Liquidity Providers or the Agent to cover such failure,
together with interest thereon, for each day from the date such Purchase
Price was due until the date paid, at a rate per annum equal to the Federal
Funds Rate plus two percent (2%) per annum.
(c) Any portion of Windmill's Investment and related Windmill
Settlement purchased by a Committed Purchaser (including any purchased under
Section 2.1(b) in fulfillment of another Liquidity Provider's obligation
unless such purchase is reimbursed in full, with interest, by such other
Liquidity Provider under Section 2.1(b)) shall be considered part of such
Purchaser's Investment and related Windmill Settlement from the date of the
relevant Put. Each such sale by Windmill to a Committed Purchaser shall be
-16-
without recourse, representation or warranty except for the representation
and warranty that such Investment and related amounts are being sold by
Windmill free and clear of any Adverse Claim created or granted by Windmill.
Immediately upon any purchase by the Committed Purchasers of any portion of
Windmill's Investment, the Seller shall have the option of reimbursing the
Agent, for the account of the appropriate Purchasers, the amount of any
amounts described in clause (b) of the definition of Purchase Price on the
date of such Purchase by such Purchaser. Until used to pay CP Notes, all
proceeds of any Purchase pursuant to this Section shall be invested in
Permitted Investments. All earnings on such Permitted Investments shall be
promptly remitted to the Seller.
(d) The proceeds from each Put received by Windmill (other than amounts
described in clauses (b)(ii) and (iii) of the definition of Purchase Price),
shall be transferred into the Special Transaction Subaccount and used solely
to pay that portion of the outstanding commercial paper of Windmill issued to
fund or maintain the Investment of Windmill so transferred.
(e) The obligation of each Committed Purchaser to make any purchase
from Windmill pursuant to this Section 2.1 shall be several, not joint, and
shall be absolute and unconditional; provided, however, that no Committed
Purchaser shall have any obligation to make such a purchase at a time that
(i) Windmill shall have voluntarily commenced any proceeding or filed any
petition under any bankruptcy, insolvency or similar law seeking the
dissolution, liquidation or reorganization of Windmill or (ii) involuntary
proceedings or an involuntary petition shall have been commenced or filed
against Windmill under any bankruptcy, insolvency or similar law seeking the
dissolution, liquidation or reorganization of Windmill and such proceeding or
petition shall not have been dismissed or stayed for a period of thirty (30)
days, or any of the actions sought in such proceeding or petition (including
the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, Windmill or for any
substantial part of Windmill's property) shall occur.
-17-
Section 2.2. Purchases by Windmill. If the Seller requests an
increase in Windmill's Investment when any Committed Purchaser has any
outstanding Investment, Windmill shall determine the amount, if any, by which
it desires to increase its Investment (the "Desired Increase") and shall so
notify the Agent. If Windmill has a Desired Increase, the Agent shall deliver
to the Committed Purchasers a notification of assignment in substantially the
form of Exhibit C and, before purchasing any additional Investment from the
Seller, Windmill shall purchase in full the Investment of the Committed
Purchasers, at a purchase price equal to such Investment plus accrued and
unpaid Discount thereon. If the Desired Increase is less than the sum of the
total Investment of the Committed Purchasers and accrued Discount, Windmill
shall purchase a ratable portion of each Liquidity Provider's Investment and
only after all such Investment and accrued Discount thereon is purchased may
Windmill purchase Investment of the Enhancer and Discount thereon. As a
condition to any such sale of Investment by Committed Purchasers to Windmill,
the Seller must pay the Early Payment Fee if any then owed to such Committed
Purchasers. Any sale from any Committed Purchaser to Windmill pursuant to
this Section 2.2 shall be without recourse, representation or warranty except
for the representation and warranty that the Investment sold by such
Purchaser is free and clear of any Adverse Claim created or granted by such
Purchaser and that such Purchaser has not suffered any Bankruptcy Event.
Section 2.3. Allocations and Distributions.
(a) Windmill Termination and Non-Reinvestment Periods. Before the
Liquidity Termination Date unless an Interim Liquidation is in effect, on
each day during a period that Windmill is not making Reinvestment Purchases
(as established under Section 1.1(d)) and at all times on and after the
Windmill Termination Date, the Collection Agent (i) shall set aside and hold
solely for the benefit of Windmill (or deliver to the Agent, if so instructed
pursuant to Section 3.2(a)) Windmill's Purchase Interest in all Collections
received on such day and (ii) shall distribute on the last day of each CP
Tranche Period (for the benefit of Windmill) the amounts so set aside (A) to
-18-
the Agent, up to the amount of Windmill's Investment allocated to such
Tranche Period and, to the extent not already paid in full, all Discount
thereon and all other amounts then due from the Seller in connection with
such Investment and Tranche Period, and (B) to the Seller, any such amounts
remaining after distribution of all amounts payable under clause (A). The
Sold Interest, and each Purchaser's Purchase Interest, shall be recalculated
to give effect to any application of any portion of the Sold Interest in
Collections to pay Discount or other amounts (except Investment) under this
Section 2.3(a), and the Seller shall comply with Section 1.5(a) after such
recalculation.
(b) Liquidity Termination Date and Interim Liquidations. On each day
on and after the Liquidity Termination Date, and during any Interim
Liquidation, the Collection Agent shall set aside and hold solely for the
account of the Agent, for the benefit of the Purchasers, (or deliver to the
Agent, if so instructed pursuant to Section 3.2(a)) the Sold Interest in all
Collections received on such day and such Collections shall be allocated as
follows:
(i) first, only so long as (A) the sum of the Matured Value of
the Windmill Investment, the Matured Value of the Liquidity Provider
Investment, and the Enhancer Investment is less than (B) the product of
the Sold Interest (or, if less, 100%) multiplied by the Reserve Adjusted
Eligible Receivables Balance, to the payment of all Discount then due
and not paid to the Enhancer;
(ii) second, to Windmill and to the Liquidity Providers (ratably,
based on the Matured Value of their Investments) until all Investment of,
and Discount due but not already paid to, the Liquidity Providers and
Windmill has been paid in full;
(iii) third, to the Enhancer until all Investment of, and Discount
due but not already paid to, the Enhancer has been paid in full;
-19-
(iv) fourth, to the Purchasers until all other amounts owed to the
Purchasers have been paid in full;
(v) fifth, to the Agent until all amounts owed to the Agent have
been paid in full;
(vi) sixth, to any other Person to whom any amounts are owed under
the Transaction Documents until all such amounts have been paid in full;
and
(vii) seventh, to the Seller (or as otherwise required by
applicable law).
Unless an Interim Liquidation has ended by such date (in which case Reinvestment
Purchases shall resume to the extent provided in Section 1.1(d)), on the last
day of each Tranche Period (unless otherwise instructed by the Agent pursuant to
Section 3.2(a)), the Collection Agent shall deposit into the Agent's Account,
from such set aside Collections, all amounts allocated to such Tranche Period
and all Tranche Periods that ended before such date, due in accordance with the
priorities in clauses (i) - (iii) above. No distributions shall be made to pay
amounts under clauses (iv) - (vii) until sufficient Collections have been set
aside to pay all amounts described in clauses (i) - (iii) that may become
payable for all outstanding Tranche Periods. All distributions by the Agent
shall be made ratably within each priority level in accordance with the
respective amounts then due each Person included in such level unless otherwise
agreed by the Agent and all Purchasers. As provided in Section 1.4(c) all
Discount and other amounts payable hereunder other than Investment are payable
by the Seller.
(c) Reinvestment Periods. During any period other than a period
described in Section 2.3(a) or 2.3(b), the Collection Agent shall set aside
and hold from Collections amounts sufficient to pay Discount for all Tranche
Periods then outstanding and shall distribute such amounts to the appropriate
Purchasers on the last day of each such Tranche Period to the extent not
otherwise paid by the Seller pursuant to Section 1.3(a) on any such date. If
-20-
any part of the Sold Interest in any Collections is applied to pay any such
amounts pursuant to this Section 2.3(c), the Seller shall pay to the
Collection Agent the amount so applied for distribution as part of the Sold
Interest in Collections.
Article III
Administration and Collections
Section 3.1. Appointment of Collection Agent. (a) The servicing,
administering and collecting of the Receivables shall be conducted by a Person
(the "Collection Agent") designated to so act on behalf of the Purchasers under
this Article III. The Seller is hereby designated as, and agrees to perform the
duties and obligations of, the Collection Agent. The Seller acknowledges that
the Agent and each Purchaser have relied on the Seller's agreement to act as
Collection Agent (and the agreement of any of the sub-collection agents to so
act) in making the decision to execute and deliver this Agreement and agrees
that it will not voluntarily resign as Collection Agent nor permit any
sub-collection agent to voluntarily resign as a sub-collection agent. At any
time after the occurrence and during the continuance of a Termination Event, the
Agent may designate a new Collection Agent to succeed the Seller (or any
successor Collection Agent).
(b) The Seller may, and if requested by the Agent shall, delegate its
duties and obligations as Collection Agent to the Originator or other Affiliate
of the Seller (acting as a sub-collection agent). Notwithstanding such
delegation, the Seller shall remain primarily liable for the performance of the
duties and obligations so delegated, and the Agent and each Purchaser shall have
the right to look solely to the Seller for such performance. The Agent may at
any time after the occurrence and during the continuance of a Termination Event
remove or replace any sub-collection agent.
(c) If replaced, the Collection Agent agrees it will terminate, and will
cause each existing sub-collection agent to terminate, its collection activities
in a manner requested by the Agent to facilitate the transition to a new
-21-
Collection Agent. The Collection Agent shall cooperate with and assist any new
Collection Agent (including providing access to, and transferring, all Records
and allowing the new Collection Agent to use all licenses, hardware or software
necessary or desirable to collect the Receivables).
Section 3.2. Duties of Collection Agent. (a) The Collection Agent
shall take, or cause to be taken, all action reasonably necessary or
advisable to collect each Eligible Receivable in accordance with this
Agreement, the Credit and Collection Policy and all applicable laws, rules
and regulations using the skill and attention the Collection Agent exercises
in collecting other receivables or obligations owed solely to it. The
Collection Agent shall, in accordance herewith, set aside all Collections to
which a Purchaser is entitled. After the occurrence and during the
continuance on of a Termination Event, if so instructed by the Agent, the
Collection Agent shall transfer to the Agent the amount of Collections to
which the Agent and the Purchasers are entitled by the Business Day following
receipt. Each party hereto hereby appoints the Collection Agent to enforce
such Person's rights and interests in the Receivables, but (notwithstanding
any other provision in any Transaction Document) the Agent shall at all times
have the sole right to direct the Collection Agent to commence or settle any
legal action to enforce collection of any Eligible Receivable.
(b) If no Termination Event has occurred and is continuing and the
Collection Agent determines that such action is appropriate in order to maximize
the Collections, the Collection Agent may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
outstanding balance of any Receivable. Any such extension or adjustment shall
not alter the status of a Receivable as a Defaulted Receivable or Delinquent
Receivable or limit any rights of the Agent or the Purchasers hereunder. If a
Termination Event has occurred and is continuing, the Collection Agent may make
such extensions or adjustments only with the prior consent of the Agent.
-22-
(c) The Collection Agent shall turn over to the Seller (i) any
percentage of Collections in excess of the Sold Interest, less the Collection
Agent Fee and (ii) subject to Section 1.5(d), the collections and records for
any indebtedness owed to the Seller that is not a Receivable. The Collection
Agent shall have no obligation to remit any such funds or records to the
Seller until the Collection Agent receives evidence (satisfactory to the
Agent) that the Seller is entitled to such items. The Collection Agent has
no obligations concerning indebtedness that is not a Receivable other than to
deliver the collections and records for such indebtedness to the Seller when
required by this Section 3.2(c).
Section 3.3. Reports. (a) On or before the tenth Business Day of each
month the Collection Agent shall deliver to the Agent a report reflecting
information as of the close of business of the Collection Agent for the
immediately preceding calendar month or such other preceding period as is
requested (each a "Periodic Report"), containing the information described on
Exhibit D-1 (with such modifications or additional information as reasonably
requested by the Agent or the Instructing Group).
(b) On each Business Day, the Collection Agent shall deliver to the Agent
a report reflecting information as of the close of business of the Collection
Agent for that day, containing information described on Exhibit D-2 (with such
modifications or additional information as reasonably requested by the Agent or
the Instructing Group).
Section 3.4. Lock-Box Arrangements. The Agent is hereby authorized to
give notice at any time after the occurrence and during the continuance of a
Termination Event to any or all Lock-Box Banks that the Agent is exercising its
rights under the Lock-Box Letters and to take all actions permitted under the
Lock-Box Letters. The Seller agrees to take any reasonable action requested by
the Agent to facilitate the foregoing. After the Agent takes any such action
under the Lock-Box Letters, the Seller shall immediately deliver to the Agent
any Collections received by the Seller. If the Agent takes control of any
-23-
Lock-Box Account, the Agent shall distribute Collections it receives in
accordance herewith and shall deliver to the Collection Agent, for distribution
under Section 3.2, all other amounts it receives from such Lock-Box Account.
Section 3.5. Enforcement Rights. (a) The Agent may, at any time after
the occurrence and during the continuance of a Termination Event, direct the
Obligors and the Lock-Box Banks to make all payments on the Receivables directly
to the Agent or its designee. The Agent may, and the Seller shall at the
Agent's request after the occurrence and during the continuance of a Termination
Event, withhold the identity of the Purchasers from the Obligors and Lock-Box
Banks. Upon the Agent's request after the occurrence and during the continuance
of a Termination Event, the Seller (at the Seller's expense) shall (i) give
notice to each Obligor of the Agent's ownership of the Sold Interest and direct
that payments on Receivables be made directly to the Agent or its designee,
(ii) assemble for the Agent all Records and collateral security for the
Receivables and transfer to the Agent (or its designee), or license to the Agent
(or its designee) the use of, all software useful to collect the Receivables and
(iii) segregate in a manner acceptable to the Agent all Collections the Seller
receives and, promptly upon receipt, remit such Collections in the form
received, duly endorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(b) The Seller hereby irrevocably appoints the Agent as its
attorney-in-fact coupled with an interest, with full power of substitution
and with full authority in the place of the Seller, to take any and all steps
deemed desirable by the Agent, in the name and on behalf of the Seller to,
after the occurrence and during the continuance of an Event of Default, (i)
collect any amounts due under any Eligible Receivable, including endorsing
the name of the Seller on checks and other instruments representing
Collections and enforcing such Receivables, and (ii) exercise any and all of
the Seller's rights and remedies under the Originator Purchase Agreement.
The Agent's powers under this Section 3.5(b) shall not subject the Agent to
any liability if any action taken by it proves to be inadequate or invalid,
nor shall such powers confer any obligation whatsoever upon the Agent.
-24-
(c) Neither the Agent nor any Purchaser shall have any obligation to
take or consent to any action to realize upon any Receivable or to enforce
any rights or remedies related thereto.
Section 3.6. Collection Agent Fee. On or before the tenth Business
Day of each calendar month, the Seller shall pay to the Collection Agent a
fee for the immediately preceding calendar month as compensation for its
services (the "Collection Agent Fee") equal to (a) at all times the Seller or
an Affiliate of the Seller is the Collection Agent, 0.05% of the aggregate
Collections during the preceding calendar month or such other amount as is
acceptable to the Seller and the Collection Agent from time to time, the
receipt and sufficiency of which is hereby acknowledged, and (b) at all times
any other Person is the Collection Agent, a reasonable amount agreed upon by
the Agent and the new Collection Agent on an arm's-length basis reflecting
rates and terms prevailing in the market at such time. The Collection Agent
may only apply to payment of the Collection Agent Fee the portion of the
Collections in excess of the Sold Interest or Collections that fund
Reinvestment Purchases. The Agent may, with the consent of the Instructing
Group, pay the Collection Agent Fee to the Collection Agent from the Sold
Interest in Collections. The Seller shall be obligated to reimburse any such
payment to the extent required by Section 1.5 or 2.3.
Section 3.7. Responsibilities of the Seller. The Seller shall pay or
cause to be paid when due all Taxes payable in connection with the Receivables
or their creation or satisfaction. The Seller shall perform all of its
obligations under agreements related to the Receivables to the same extent as if
interests in the Receivables had not been transferred hereunder. The Agent's or
any Purchaser's exercise of any rights hereunder shall not relieve the Seller
from such obligations. Neither the Agent nor any Purchaser shall have any
obligation to perform any obligation of the Seller or any other obligation or
liability in connection with the Receivables.
Section 3.8. Actions by Seller. If any goods related to a Receivable are
repossessed, the Seller, to the extent consistent with its current practices
-25-
agrees to resell, or to have such goods resold, in a commercially reasonable
manner for the account of the Agent and remit, or have remitted, to the Agent
the Purchasers' share in the gross sale proceeds thereof net of any
out-of-pocket expenses and any equity of redemption of the Obligor thereon.
Any such moneys collected by the Seller or the Originator or other Affiliate
of the Seller pursuant to this Section 3.8 shall be segregated and treated as
a Collection.
Article IV
Representations and Warranties
Section 4.1. Representations and Warranties. The Seller represents and
warrants to the Agent and each Purchaser that:
(a) Corporate Existence and Power. Each of the Seller and the
Originator 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, any
Transaction Document, (ii) its business or financial condition, (iii)
the interests of the Agent or any Purchaser under any Transaction
Document or (iv) the enforceability or collectibility of any Eligible
Receivable.
(b) Corporate Authorization and No Contravention. The execution,
delivery and performance by the Seller and the Originator of each
Transaction Document to which it is a party (i) are within its corporate
powers, (ii) have been duly authorized by all necessary corporate
action, (iii) do 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
-26-
property is subject and (iv) will not result in any Adverse Claim on any
Eligible Receivable or Collection or give cause for the acceleration of
any indebtedness of the Seller or the Originator.
(c) No Consent Required. No approval, authorization or other action
by, or filings with, any Governmental Authority or other Person is
required in connection with the execution, delivery and performance by
the Seller or the Originator of any Transaction Document or any
transaction contemplated thereby.
(d) Binding Effect. Each Transaction Document to which the Seller or
the Originator is a party constitutes the legal, valid and binding
obligation of such Person enforceable against that Person in accordance
with its terms, except as limited by bankruptcy, insolvency, or other
similar laws of general application relating to or affecting the
enforcement of creditors' rights generally and subject to general
principles of equity.
(e) Perfection of Ownership Interest. Immediately preceding its sale
of Receivables to the Seller, the Originator was the owner of, and
effectively sold, such Receivables to the Seller, free and clear of any
Adverse Claim (other than any Permitted Liens). The Seller owns the
Receivables free of any Adverse Claim (other than any Permitted Liens)
other than the interests of the Agent or the Purchasers (through the
Agent) therein that are created hereby, and the Agent or each Purchaser
shall at all times have a valid undivided percentage interest, which
shall be a first priority perfected security interest for purposes of
Article 9 of the applicable Uniform Commercial Code, in any Eligible
Receivable and Collections with respect thereto.
(f) Accuracy of Information. All written information furnished by
the Seller, the Originator or any Affiliate of any such Person to the
Agent or any Purchaser in connection with any Transaction Document, or any
transaction contemplated thereby, is true and accurate in all material
-27-
respects (and is not incomplete by omitting any information necessary to
prevent such information from being materially misleading).
(g) No Actions, Suits. There are no actions, suits or other
proceedings (including matters relating to environmental liability)
pending or threatened against or affecting the Seller or the Originator,
or any of their respective properties, that (i) (individually or in the
aggregate), are reasonably likely to have a material adverse effect on
the financial condition of the Seller or the Originator or any
Subsidiary or on the collectibility of any Eligible Receivable or (ii)
involve any Transaction Document or any transaction contemplated
thereby. None of the Seller or the Originator is 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 (i) the financial
condition of the Seller or the Originator and its Subsidiaries taken as
a whole or (ii) the collectibility of any Eligible Receivable.
(h) No Material Adverse Effect. Since the last day of the most recent
fiscal year of the Originator, there has been no material adverse change
in the business, operations, properties, assets or condition or
prospects (financial or otherwise) of the Originator and its
Subsidiaries, taken as a whole, or other event that has caused or
evidences, in any case or in the aggregate, a Material Adverse Effect.
(i) Accuracy of Exhibits; Lock-Box Arrangements. All information on
Exhibits E and F (listing offices and names of the Seller and the
Originator and where they maintain Records; and Lock Boxes) is true and
complete in all material respects, subject to any changes permitted by,
and notified to the Agent in accordance with, Article V. The Seller has
delivered a copy of all Lock-Box Agreements to the Agent. The Seller
has not granted any interest in any Lock-Box or Lock-Box Account to any
Person other than the Agent.
-28-
(j) Sales by the Originator. Each sale by the Originator to the
Seller of an interest in Receivables and their Collections has been made
in accordance with the terms of the Purchase Agreement, including the
payment by the Seller to the Originator of the purchase price described
in the Purchase Agreement. Each such sale has been made for "reasonably
equivalent value" (as such term is used in Section 548 of the Bankruptcy
Code) and not for or on account of "antecedent debt" (as such term is
used in Section 547 of the Bankruptcy Code) owed by the Originator to
the Seller.
Article V
Covenants
Section 5.1. Covenants of the Seller. The Seller hereby covenants and
agrees to comply with the following covenants and agreements, unless the Agent
(with the consent of the Instructing Group) shall otherwise consent:
(a) Financial Reporting. The Seller will maintain a system of accounting
established and administered in accordance with GAAP and will furnish to the
Agent and each Purchaser:
(i) Annual Financial Statements. Within 90 days after each fiscal
year of the Originator copies of (A) its annual audited financial
statements (including a consolidated balance sheet, consolidated
statement of income and stockholders equity and statement of cash flows,
with related footnotes) certified by independent certified public
accountants and prepared on a consolidated basis in conformity with
GAAP, and (B) for the Seller the annual balance sheet for such Person
(and, additionally for the Seller, an annual profit and loss statement)
certified by an officer thereof, in each case prepared on a consolidated
basis in conformity with GAAP as of the close of such fiscal year for
the year then ended;
(ii) Quarterly Financial Statements. Within 45 days after each
(except the last) fiscal quarter of each fiscal year of the Originator,
-29-
copies of (A) its unaudited financial statements (including at least a
consolidated balance sheet as of the close of such quarter and
statements of income certified by an officer and prepared in a manner
consistent with the financial statements described in part (A) of clause
(i) of this Section 5.l(a) and (B) for the Seller, the quarterly balance
sheet for such Person (and, additionally for the Seller, a statement of
income) for the period from the beginning of such fiscal year to the
close of such quarter, in each case certified by an officer thereof and
prepared in a manner consistent with part (B) of clause (i) of Section
5.1(a);
(iii) Officer's Certificate. Each time financial statements are
furnished pursuant to clause (i) or (ii) of Section 5.1(a), a compliance
certificate (in substantially the form of Exhibit H) signed by an
officer, dated the date of such financial statements, and containing a
computation of each of the financial ratios and restrictions contained
herein;
(iv) Public Reports. Promptly upon becoming available, a copy of
each report or proxy statement filed by the Originator with the
Securities Exchange Commission or any securities exchange; and
(v) Other Information. With reasonable promptness, such other
information (including non-financial information) as may be reasonably
requested by the Agent or any Purchaser (with a copy of such request to
the Agent).
(b) Notices. Within five Business Days an executive officer of the Seller
obtaining knowledge of any of the following, the Seller will notify the Agent
and provide a description of:
(i) Potential Termination Events. The occurrence of any Potential
Termination Event;
-30-
(ii) Representations and Warranties. The failure of any
representation or warranty herein to be true (when made) in any material
respect;
(iii) Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding reasonably likely to be materially
adverse to the Seller, the Originator or the collectibility or quality
of any Eligible Receivable;
(iv) Judgments. The entry of any judgment or decree against the
Seller or the Originator if the aggregate amount of all judgments then
outstanding against the Seller and against the Originator exceeds Five
Million Dollars ($5,000,000); or
(v) Changes in Business. Any change in, or proposed change in,
the character of the Seller's or the Originator's business that is
reasonably likely to materially impair the collectibility or quality of
any Eligible Receivable.
If the Agent receives such a notice, the Agent shall promptly give notice
thereof to each Purchaser and, until Windmill has no Investment after the
Windmill Termination Date, to each CP Dealer and each Rating Agency.
(c) Conduct of Business. The Seller will 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 to the extent
failure to perform such actions or maintain such authority is reasonably likely
to have a material adverse effect on the financial condition or operations of
the Seller or on the collectibility or quality of any Eligible Receivable.
(d) Compliance with Laws. The Seller will comply with all laws,
regulations, judgments and other directions or orders imposed by any
Governmental Authority to which such Person or any Receivable or Collection
may be subject to the extent failure to comply with the same is reasonably
-31-
likely to have a material adverse effect on the financial condition or
operations of the Seller or on the collectibility or quality of any
Receivables in which the Purchasers have a Sold Interest.
(e) Furnishing Information and Inspection of Records. The Seller will
furnish to the Agent and the Purchasers such information concerning the
Receivables as the Agent or a Purchaser reasonably requests. The Seller will,
and will cause the Originator to, permit, at any time during regular business
hours, the Agent (or any representatives thereof) (i) to examine and make copies
of all Records, (ii) to visit the offices and properties of the Seller for the
purpose of examining the Records and (iii) to discuss matters relating hereto
with any of the Seller's or the Originator's officers, directors, employees or
independent public accountants having knowledge of such matters. The Agent may
(at Seller's expense, not to exceed $5,000 per year) conduct one internal audit
each calendar year of the Records or make test verifications of the Receivables
and Collections and (at the expense of the Agent) conduct additional internal
audits or, no more than once in each calendar year, have an independent public
accounting firm conduct audits of the Records or make test verifications of the
Receivables and Collections.
(f) Keeping Records. (i) The Seller will have and maintain (A)
administrative and operating procedures (including an ability to recreate
Records if originals are destroyed), (B) adequate facilities, personnel and
equipment and (C) all Records and other information necessary for collecting
the Receivables (including Records adequate to permit the identification of
each new Receivable and all Collections of, and adjustments to, each existing
Receivable). The Seller will give the Agent prior notice of any material
change in such administrative and operating procedures.
(ii) The Seller will, (A) at all times from and after the date
hereof, upon the request of the Agent, clearly and conspicuously xxxx
its computer and master data processing books and records with a legend
-32-
describing the Agent's and the Purchasers' interest therein and (B) upon
the request of the Agent, so xxxx each contract relating to a Receivable
and deliver to the Agent all such contracts (including all multiple
originals of such contracts), with any appropriate endorsement or
assignment, or segregate (from all other receivables then owned or being
serviced by the Seller) the Receivables and all contracts relating to
each Receivable and hold in trust and safely keep such contracts so
legended in separate filing cabinets or other suitable containers at
such locations as the Agent may specify.
(g) Perfection. (i) The Seller will at its expense, promptly execute
and deliver all instruments and documents and take all action necessary or
reasonably requested by the Agent (including the execution and filing of
financing or continuation statements, amendments thereto or assignments
thereof) to enable the Agent to exercise and enforce all its rights hereunder
and to vest and maintain vested in the Agent a valid, first priority
perfected security interest in the Receivables, the Collections, the Purchase
Agreement, and proceeds thereof free and clear of any Adverse Claim (and a
perfected ownership interest in the Receivables and Collections to the extent
of the Sold Interest). The Agent will be permitted to sign and file any
continuation statements, amendments thereto and assignments thereof without
the Seller's signature.
(ii) The Seller will only change its name, identity or corporate
structure or relocate its chief executive office or the Records
following ten (10) days advance notice to the Agent and the delivery to
the Agent of all financing statements, instruments and other documents
(including direction letters) requested by the Agent.
(iii) The Seller will at all times maintain its chief executive
offices within a jurisdiction in the USA in which Article 9 of the UCC
is in effect. If the Seller or the Originator moves its chief executive
office to a location that imposes Taxes, fees or other charges to
perfect the Agent's and the Purchasers' interests hereunder or the
Seller's interests under the Purchase Agreement, the Seller will pay all
-33-
such amounts and any other costs and expenses incurred in order to
maintain the enforceability of the Transaction Documents, the Sold
Interest and the interests of the Agent and the Purchasers in the
Receivables and Collections.
(h) Performance of Duties. The Seller will perform, and will cause the
Collection Agent (if an Affiliate) to perform, its respective duties or
obligations in accordance with the provisions of each of the Transaction
Documents. The Seller (at its expense) will (i) fully and timely perform in
all material respects all agreements required to be observed by it in
connection with each Eligible Receivable and (ii) comply in all material
respects with the Credit and Collection Policy.
(i) Payments on Receivables, Accounts. The Seller will at all times
instruct all Obligors to deliver payments on the Receivables to a Lock-Box
Account. If any such payments or other Collections are received by the Seller,
it shall hold such payments in trust for the benefit of the Agent and the
Purchasers and promptly (but in any event within two Business Days after
receipt) remit such funds into a Lock-Box Account. The Seller will cause each
Lock-Box Bank to comply with the terms of each applicable Lock-Box Letter. The
Seller will use its best efforts not to permit any funds other than Collections
to be deposited into any Lock-Box Account. If such funds are nevertheless
deposited into any Lock-Box Account, the Seller will promptly identify such
funds for segregation. The Seller will not, and will not permit any Collection
Agent or other Person to, commingle Collections with any other funds. The
Seller shall only add, and shall only permit the Originator to add, a Lock-Box
Bank, Lock-Box, or Lock-Box Account to those listed on Exhibit F if the Agent
has received notice of such addition, a copy of any new Lock-Box Agreement and
an executed and acknowledged copy of a Lock-Box Letter substantially in the form
of Exhibit G (with such changes as are acceptable to the Agent) from any new
Lock-Box Bank. The Seller shall only terminate a Lock-Box Bank or Lock-Box, or
close a Lock-Box Account, upon 30 days advance notice to the Agent.
-34-
(j) Sales and Adverse Claims Relating to Receivables. Except as otherwise
provided herein, the Seller will not (by operation of law or otherwise) dispose
of or otherwise transfer, or create or suffer to exist any Adverse Claim upon,
any inventory or goods (other than Permitted Liens).
(k) Extension or Amendment of Receivables. Except as otherwise permitted
in Section 3.2(b) and then subject to Section 1.5, the Seller will not extend,
amend, rescind or cancel any Eligible Receivable.
(l) Change in Business or Credit and Collection Policy. The Seller will
not make any material change in the character of its business or in the Credit
and Collection Policy.
(m) Accounting for Sale. Except as provided in Section 9.10, the Seller
will not account for, or otherwise treat, the transactions contemplated hereby
other than as a sale of Receivables or inconsistent with the Agent's or the
Purchaser's interest in any Eligible Receivable.
Article VI
Indemnification
Section 6.1. Indemnities by the Seller. Except to the extent
compensated for as a Deemed Collection pursuant to Section 1.5(b), without
limiting any other rights any such Person may have hereunder or under
applicable law, the Seller hereby indemnifies and holds harmless, on an
after-Tax basis, the Agent and each Purchaser and their respective officers,
directors, agents and employees (each an "Indemnified Party") from and
against any and all damages, losses, claims, liabilities, penalties, Taxes,
costs and expenses (including attorneys' fees and court costs) (all of the
foregoing collectively, the "Indemnified Losses") at any time imposed on or
incurred by any Indemnified Party arising out of or otherwise relating to any
Transaction Document, the transactions contemplated thereby or the
acquisition of any portion of the Sold Interest, or any action taken or
omitted by any of the Indemnified Parties (including any action taken by the
Agent as attorney-in-fact for the Seller pursuant to Section 3.5(b)), whether
-35-
arising by reason of the acts to be performed by the Seller hereunder or
otherwise, excluding only Indemnified 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 Indemnified Party
seeking indemnification, (b) such Indemnified Losses relate to, or result
from, to the credit risk of the Obligor and for which reimbursement would
constitute recourse to the Seller or the Collection Agent for uncollectible
Receivables or (c) such Indemnified Losses include Taxes on, or measured by,
the overall net income of the Agent, any Purchaser or such Indemnified Party
computed in accordance with the Intended Tax Characterization; provided,
however, that nothing contained in this sentence shall limit the liability of
the Seller or the Collection Agent or limit the recourse of the Agent and
each Purchaser to the Seller or the Collection Agent for any amounts
otherwise specifically provided to be paid by the Seller or the Collection
Agent hereunder. Without limiting the foregoing indemnification, but subject
to the limitations set forth in clauses (a), (b) and (c) of the previous
sentence, the Seller shall indemnify each Indemnified Party for Indemnified
Losses relating to or resulting from:
(i) any representation or warranty made by the Seller, the
Originator or the Collection Agent (or any employee or agent of the
Seller, the Originator or the Collection Agent) under or in connection
with this Agreement, any Periodic Report or any other information or
report delivered by the Seller, the Originator or the Collection Agent
pursuant hereto, which shall have been false or incorrect in any
material respect when made or deemed made;
(ii) the failure by the Seller, the Originator 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;
(iii) the failure of the Seller to vest and maintain vested in the
Purchasers or the Agent, for the benefit of the Purchasers, a perfected
-36-
ownership or security interest in the Sold Interest and the property
conveyed pursuant to Section 1.1(e) and Section 1.8, free and clear of
any Adverse Claim;
(iv) any commingling of funds to which the Agent or any Purchaser
is entitled hereunder with any other funds;
(v) any failure of a Lock-Box Bank to comply with the terms of the
applicable Lock-Box Letter;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Eligible
Receivable, 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 claim or defense not arising from the financial inability of any
Obligor to pay undisputed indebtedness;
(vii) any failure of the Seller or the Originator, or any Affiliate
of any thereof, to perform its duties or obligations in accordance with
the provisions of this Agreement or any other Transaction Document to
which such Person is a party (as a Collection Agent or otherwise);
(viii) any action taken by the Agent as attorney-in-fact for the
Seller pursuant to Section 3.5(b); or
(ix) any environmental liability claim, products 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 or action of whatever sort
relating to any of the Transaction Documents.
Section 6.2. Increased Cost and Reduced Return. By way of
clarification, and not of limitation, of Section 6.1, if the adoption after
the date hereof of any applicable law, rule or regulation, or any change
therein after the date hereof, or any change after the date hereof in the
-37-
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by
any Windmill Funding Source, the Agent or any Purchaser (collectively, the
"Funding Parties") with any request or directive issued after the date hereof
(whether or not having the force of law) of any such Governmental Authority
(a "Regulatory Change") (a) subjects any Funding Party to any charge or
withholding on or in connection with a Funding Agreement or this Agreement
(collectively, the "Funding Documents") or any Receivable, (b) changes the
basis of taxation of payments to any of the Funding Parties of any amounts
payable under any of the Funding Documents (except for changes in the rate of
Tax on the overall net income of such Funding Party), (c) imposes, modifies
or deems applicable any reserve, assessment, insurance charge, special
deposit or similar requirement against assets of, deposits with or for the
account of, or any credit extended by, any of the Funding Parties, (d) has
the effect of reducing the rate of return on such Funding Party's capital to
a level below that which such Funding Party could have achieved but for such
adoption, change or compliance (taking into consideration such Funding
Party's policies concerning capital adequacy) or (e) imposes any other
condition, and the result of any of the foregoing is (x) to impose a cost on,
or increase the cost to, any Funding Party of its commitment under any
Funding Document or of purchasing, maintaining or funding any interest
acquired under any Funding Document, (y) to reduce the amount of any sum
received or receivable by, or to reduce the rate of return of, any Funding
Party under any Funding Document or (z) to require any payment calculated by
reference to the amount of interests held or amounts received by it
hereunder, then, upon demand by the Agent, the Seller shall pay to the Agent
for the account of the Person such additional amounts as will compensate the
Agent or such Purchaser (or, in the case of Windmill, will enable Windmill to
compensate any Windmill Funding Source) for such increased cost or reduction.
Section 6.3. Other Costs and Expenses. Also by way of clarification,
and not of limitation, of Section 6.1, the Seller shall pay to the Agent on
demand all reasonable costs and expenses in connection with (a) the
-38-
preparation, execution, delivery and administration (including amendments of
any provision) of the Transaction Documents, (b) the sale of the Sold
Interest, (c) the perfection of the Agent's rights in the Receivables and
Collections, (d) the enforcement by the Agent or the Purchasers of the
obligations of the Seller under the Transaction Documents or of any Obligor
under an Eligible Receivable and (e) the maintenance by the Agent of the
Lock-Boxes and Lock-Box Accounts, including reasonable fees, costs and
expenses of legal counsel for the Agent and Windmill relating to any of the
foregoing or to advising the Agent, Windmill and any Windmill Funding Source
about its rights and remedies under any Transaction Document and all
reasonable costs and expenses (including counsel fees and expenses) of the
Agent and each Purchaser in connection with the enforcement of the
Transaction Documents and in connection with the administration of the
Transaction Documents following the occurrence and continuance of a
Termination Event. The Seller shall reimburse the Agent and Windmill for the
cost of the Agent's or Windmill's auditors (which may be employees of such
Person) auditing the books, records and procedures of the Seller. The Seller
shall reimburse Windmill on demand for all other reasonable out-of-pocket
costs and expenses incurred by Windmill or any shareholder of Windmill in
connection with the Transaction Documents or the transactions contemplated
thereby.
Section 6.4. Withholding Taxes. (a) All payments made by the Seller
hereunder shall be made without withholding for or on account of any present or
future taxes (other than overall net income taxes on the recipient). If any
such withholding is so required, the Seller shall make the withholding, pay the
amount withheld to the appropriate authority before penalties attach thereto or
interest accrues thereon and pay such additional amount as may be necessary to
ensure that the net amount actually received by each Purchaser and the Agent
free and clear of such taxes (including such taxes on such additional amount) is
equal to the amount that Purchaser or the Agent (as the case may be) would have
received had such withholding not been made. If the Agent or any Purchaser pays
any such taxes, penalties or interest the Seller shall reimburse the Agent or
-39-
such Purchaser for that payment on demand. If the Seller pays any such taxes,
penalties or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Purchaser or Agent on whose account
such withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment.
(b) Before the first date on which any amount is payable hereunder for the
account of any Purchaser not incorporated under the laws of the USA such
Purchaser shall deliver to the Seller and the Agent each two (2) duly completed
copies of United States Internal Revenue Service Form 1001 or 4224 (or successor
applicable form) certifying that such Purchaser is entitled to receive payments
hereunder without deduction or withholding of any United States federal income
taxes. Each such Purchaser shall replace or update such forms when necessary to
maintain any applicable exemption and as requested by the Agent or the Seller.
Section 6.5. Payments and Allocations. If any Person seeks compensation
pursuant to this Article VI, such Person shall deliver to the Seller and the
Agent a certificate setting forth 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 as long
as such determinations and calculations are made on a reasonable basis. The
Seller shall pay to the Agent (for the account of such Person) the amount shown
as due on any such certificate within 10 Business Days after receipt of the
notice.
Article VII
Conditions Precedent
Section 7.1. Conditions to Closing. This Agreement shall become
effective on the first date all conditions in this Section 7.1 are satisfied.
On or before such date, the Seller shall deliver to the Agent the following
documents in form, substance and quantity acceptable to the Agent:
(a) A certificate of the Secretary of the Seller and the
Originator certifying (i) the resolutions of the Seller's board of
-40-
directors approving each Transaction Document to which it is a party,
(ii) the name, signature, and authority of each officer who executes on
the Seller's or the Originator's behalf a Transaction Document (on which
certificate the Agent and each Purchaser may conclusively rely until a
revised certificate is received), (iii) the Seller's and the
Originator's certificate or articles of incorporation certified by the
Secretary of State of its state of incorporation, (iv) a copy of the
Seller's and the Originator's by-laws and (v) good standing certificates
issued by the Secretaries of State of each jurisdiction of incorporation
of each of the Seller and the Originator.
(b) All instruments and other documents required, or deemed
desirable by the Agent, to perfect the Agent's first priority interest
in the Receivables and Collections in all appropriate jurisdictions.
(c) UCC search reports from all jurisdictions the Agent requests.
(d) Executed copies of (i) all consents and authorizations
necessary in connection with the Transaction Documents (ii) all Lock-Box
Letters, (iii) a Periodic Report covering the month ended May 25, 1997
and (iv) each Transaction Document.
(e) Favorable opinions of counsel to the Seller and the Originator
covering such matters as Windmill or the Agent may request.
(f) Such other approvals, opinions or documents as the Agent or
Windmill may request.
Section 7.2. Conditions to Each Purchase. The obligation of each
Committed Purchaser to make any Purchase, and the right of the Seller to request
or accept any Purchase, are subject to the conditions (and each Purchase shall
evidence the Seller's representation and warranty that clauses (a) - (e) of this
-41-
Section 7.2 have been satisfied) that on the date of such Purchase before and
after giving effect to the Purchase:
(a) no Potential Termination Event shall then exist or shall occur
as a result of the Purchase;
(b) the Liquidity Termination Date has not occurred;
(c) after giving effect to the application of the proceeds of such
Purchase, (x) the outstanding Matured Aggregate Investment would not
exceed the Aggregate Commitment and (y) the outstanding Aggregate
Investment would not exceed the Purchase Limit;
(d) to the extent such Purchase is an Incremental Purchase (other
than pursuant to the second sentence of Section 1.1(b)), the
representation in Section 4.1(h), and with respect to all Purchases, the
representations and warranties in all other subsections of Section 4.1
are true and correct in all material respects on and as of such date
(except to the extent such representations and warranties relate solely
to an earlier date and then as of such earlier date); and
(e) the Seller and the Originator are in full compliance with the
Transaction Documents (including all covenants and agreements in Article
V).
Nothing in this Section 7.2 limits the obligations (including those in
Section 2.1) of each Committed Purchaser to Windmill.
Article VIII
The Agent
Section 8.1. Appointment and Authorization. Each Purchaser hereby
irrevocably designates and appoints ABN AMRO Bank N.V. as the "Agent"
hereunder and authorizes the Agent to take such actions and to exercise such
powers as are delegated to the Agent hereby and to exercise such other powers
as are reasonably incidental thereto. The Agent shall hold, in its name, for
-42-
the benefit of each Purchaser, the Purchase Interest of the Purchaser. The
Agent shall not have any duties other than those expressly set forth herein
or any fiduciary relationship with any Purchaser, and no implied obligations
or liabilities shall be read into this Agreement, or otherwise exist, against
the Agent. The Agent does not assume, nor shall it be deemed to have
assumed, any obligation to, or relationship of trust or agency with, the
Seller. Notwithstanding any provision of this Agreement or any other
Transaction Document, in no event shall the Agent ever be required to take
any action which exposes the Agent to personal liability or which is contrary
to the provision of any Transaction Document or applicable law.
Section 8.2. Delegation of Duties. The Agent may execute any of its
duties through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
Section 8.3. Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken
or omitted (i) with the consent or at the direction of the Instructing Group
or (ii) in the absence of such Persons gross negligence or willful
misconduct. The Agent shall not be responsible to any Purchaser or other
Person for any recitals, representations, warranties or other statements made
by the Seller, any World Color Press Entity or any of their Affiliates, (ii)
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any Transaction Document, (iii) any failure of the Seller, any
World Color Press Entity or any of their Affiliates to perform any obligation
or (iv) the satisfaction of any condition specified in Article VII. The
Agent shall not have any obligation to any Purchaser to ascertain or inquire
about the observance or performance of any agreement contained in any
Transaction Document or to inspect the properties, books or records of the
Seller, any World Color Press Entity or any of their Affiliates.
-43-
Section 8.4. Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document,
other writing or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person and upon advice and
statements of legal counsel (including counsel to the Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under any
Transaction Document unless it shall first receive such advice or concurrence
of the Purchasers, and assurance of its indemnification, as it deems
appropriate.
Section 8.5. Assumed Payments. Unless the Agent shall have received
notice from the applicable Purchaser before the date of any Put or of any
Incremental Purchase that such Purchaser will not make available to the Agent
the amount it is scheduled to remit as part of such Put or Incremental
Purchase, the Agent may assume such Purchaser has made such amount available
to the Agent when due (an "Assumed Payment") and, in reliance upon such
assumption, the Agent may (but shall have no obligation to) make available
such amount to the appropriate Person. If and to the extent that any
Purchaser shall not have made its Assumed Payment available to the Agent,
such Purchaser (and the Seller in the case of any Incremental Purchase)
hereby agrees to pay the Agent forthwith on demand such unpaid portion of
such Assumed Payment up to the amount of funds actually paid by the Agent,
together with interest thereon for each day from the date of such payment by
the Agent until the date the requisite amount is repaid to the Agent, at a
rate per annum equal to the Federal Funds Rate plus 2%.
Section 8.6. Notice of Termination Events. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Potential
Termination Event unless the Agent has received notice from any Purchaser or
the Seller stating that a Potential Termination Event has occurred hereunder
and describing such Potential Termination Event. The Agent shall take such
action concerning a Potential Termination Event as may be directed by the
Instructing Group (or, if required for such action, all of the Purchasers),
but until the Agent receives such directions, the Agent may (but shall not be
-44-
obligated to) take such action, or refrain from taking such action, as the
Agent deems advisable and in the best interests of the Purchasers.
Section 8.7. Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of the Seller or any
World Color Press Entity, shall be deemed to constitute any representation or
warranty by the Agent. Each Purchaser represents and warrants to the Agent
that, independently and without reliance upon the Agent or any other
Purchaser and based on such documents and information as it has deemed
appropriate, it has made and will continue to make its own appraisal of and
investigation into the business, operations, property, prospects, financial
and other conditions and creditworthiness of the Seller, the World Color
Press Entities, and the Receivables and its own decision to enter into this
Agreement and to take, or omit, action under any Transaction Document. The
Agent shall deliver each month to any Purchaser that so requests a copy of
the Periodic Report(s) received covering the preceding calendar month.
Except for items specifically required to be delivered hereunder, the Agent
shall not have any duty or responsibility to provide any Purchaser with any
information concerning the Seller, any World Color Press Entity or any of
their Affiliates that comes into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
Section 8.8. Agent and Affiliates. The Agent and its Affiliates may
extend credit to, accept deposits from and generally engage in any kind of
business with the Seller, any World Color Press Entity or any of their
Affiliates and, in its roles as a Liquidity Provider and the Enhancer, ABN
AMRO may exercise or refrain from exercising its rights and powers as if it
were not the Agent. The parties acknowledge that ABN AMRO acts as agent for
Windmill and subagent for Windmill's management company in various
-45-
capacities, as well as providing credit facilities and other support for
Windmill not contained in the Transaction Documents.
Section 8.9. Indemnification. Each Committed Purchaser shall
indemnify and hold harmless the Agent and its officers, directors, employees,
representatives and agents (to the extent not reimbursed by the Seller or the
Originator and without limiting the obligation of the Seller or the
Originator to do so), ratably in accordance with its Ratable Share from and
against any and all liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses and disbursements of any kind
whatsoever (including in connection with any investigative or threatened
proceeding, whether or not the Agent or such Person shall be designated a
party thereto) that may at any time be imposed on, incurred by or asserted
against the Agent or such Person as a result of, or related to, any of the
transactions contemplated by the Transaction Documents or the execution,
delivery or performance of the Transaction Documents or any other document
furnished in connection therewith (but excluding any such liabilities,
obligations, losses, damages, penalties, judgments, settlements, costs,
expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Agent or such Person as finally determined by a
court of competent jurisdiction).
Section 8.10. Successor Agent. The Agent may, upon at least five (5)
days written notice to the Seller and each Purchaser, resign as Agent. Such
resignation shall not become effective until a successor agent is appointed
by an Instructing Group and has accepted such appointment. Upon such
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall succeed to and become vested with all the rights and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations under the Transaction Documents. After any
retiring Agent's resignation hereunder, the provisions of Article VI and this
Article VIII shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Agent.
-46-
Article IX
Miscellaneous
Section 9.1. Rating Agency Approval. To the extent required by the
Program Documents, unless otherwise expressly stated in this Agreement, no
(a) material amendment, waiver, supplement or other modification of this
Agreement or (b) assignment, termination, resignation or removal under this
Agreement, shall be effective unless a written statement is obtained from
each of the Rating Agencies that the rating of the indebtedness for borrowed
money issued or sold by Windmill will not be downgraded or withdrawn or
suspended as a result of such amendment, waiver, supplement, modification,
assignment, termination, resignation or removal. Windmill shall provide each
CP Dealer and each Rating Agency with at least ten (10) Business Days prior
notice (or such shorter notice as to which such CP Dealer or Rating Agency
may from time to time agree either verbally or in writing) of each amendment,
waiver, supplement or other modification to this Agreement and each
assignment, termination, resignation or removal under this Agreement and
shall provide a copy of the form of any proposed material amendment, waiver,
supplement or other modification.
Section 9.2. Termination. Windmill shall cease to be a party hereto
when the Windmill Termination Date has occurred, Windmill holds no Investment
and all amounts payable to it hereunder have been indefeasibly paid in full.
This Agreement shall terminate following the Liquidity Termination Date when
no Investment is held by a Purchaser and all other amounts payable hereunder
have been paid in full, but the rights and remedies of the Agent and each
Purchaser concerning any representation, warranty or covenant made, or deemed
to be made, by the Seller and under Article VI and Section 8.9 shall survive
such termination.
Section 9.3. 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
-47-
received at the address specified by such Person. Each party hereto,
however, authorizes the Agent to act on telephone notices of Purchases, Puts,
and Discount Rate and Tranche Period selections from any person the Agent in
good faith believes to be acting on behalf of the relevant party and, at the
Agent's option, to tape record any such telephone conversation. Each party
hereto agrees to deliver promptly to the Agent a confirmation of each
telephone notice given or received by such party (signed by an authorized
officer of such party), but the absence of such confirmation shall not affect
the validity of the telephone notice. The Agent's records of all such
conversations shall be deemed correct and, if the confirmation of a
conversation differs in any material respect from the action taken by the
Agent, the records of the Agent shall govern absent manifest error. 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 9.4. Payments and Computations. Notwithstanding anything
herein to the contrary, any amounts to be paid or transferred by the Seller
or the Collection Agent to, or for the benefit of, any Purchaser or any other
Person shall be paid or transferred to the Agent (for the benefit of such
Purchaser or other Person). The Agent shall promptly (and, if reasonably
practicable, on the day it receives such amounts) forward each such amount to
the Person entitled thereto and such Person shall apply the amount in
accordance herewith. All amounts to be paid or deposited hereunder shall be
paid or transferred on the day when due in immediately available Dollars
(and, if due from the Seller or Collection Agent, by 1:00 p.m. (Chicago
time), with amounts received after such time being deemed paid on the
Business Day following such receipt). The Seller hereby authorizes the Agent
to debit the Seller Account for application to any amounts owed by the Seller
hereunder. The Seller shall, to the extent permitted by law, pay to the
Agent upon demand, for the account of the applicable Person, interest on all
amounts not paid or transferred by the Seller or the Collection Agent when
due hereunder at a rate equal to the Prime Rate plus 2%, calculated from the
-48-
date any such amount became due until the date paid in full. Any payment or
other transfer of funds scheduled to be made on a day that is not a Business
Day shall be made on the next Business Day, and any Discount Rate or interest
rate accruing on such amount to be paid or transferred shall continue to
accrue to such next Business Day. All computations of interest, fees, and
Discount shall be calculated for the actual days elapsed based on a 360 day
year.
Section 9.5. Sharing of Recoveries. Each Purchaser agrees that if it
receives any recovery, through set-off, judicial action or otherwise, on any
amount payable or recoverable hereunder in a greater proportion than should
have been received hereunder or otherwise inconsistent with the provisions
hereof, then the recipient of such recovery shall purchase for cash an
interest in amounts owing to the other Purchasers (as return of Investment or
otherwise), without representation or warranty except for the representation
and warranty that such interest is being sold by each such other Purchaser
free and clear of any Adverse Claim created or granted by such other
Purchaser, in the amount necessary to create proportional participation by
the Purchasers in such recovery (as if such recovery were distributed
pursuant to Section 2.3). If all or any portion of such amount is thereafter
recovered from the recipient, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
Section 9.6. Right of Setoff. During a Termination Event, each
Purchaser is hereby authorized (in addition to any other rights it may have)
to setoff, appropriate and apply (without presentment, demand, protest or
other notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by such Purchaser (including by any branches or
agencies of such Purchaser) to, or for the account of, the Seller against
amounts then due and owing by the Seller hereunder.
Section 9.7. Amendments. Except as otherwise expressly provided
herein, no amendment or waiver hereof shall be effective unless signed by the
Seller and the Instructing Group. In addition, no amendment hereof shall,
-49-
without the consent of (a) all the Liquidity Providers, (i) extend the
Liquidity Termination Date or the date of any payment or transfer of
Collections by the Seller to the Collection Agent or by the Collection Agent
to the Agent, (ii) reduce the rate or extend the time of payment of Discount
for any Eurodollar Tranche or Prime Tranche, (iii) reduce the fee payable to
the Liquidity Providers or extend the time of payment of any such fee, (iv)
except as provided herein, release, transfer or modify any Committed
Purchaser's Purchase Interest or change any Commitment, (v) amend the
definition of Required Liquidity Providers, Instructing Group, Termination
Event or Section 1.1(a) and (b), 1.2(b), 1.5, 2.1, 2.3, 7.2 or 9.7, Article
VI, or any provision of Article I of the Indemnity Agreement or any
obligation of an World Color Press Entity thereunder, (vi) consent to the
assignment or transfer by the Seller or the Originator of any interest in the
Receivables other than transfers under the Transaction Documents, or (vii)
amend any defined term relevant to the restrictions in clauses (i) through
(vi) in a manner which would circumvent the intention of such restrictions or
(b) the Agent, amend any provision hereof if the effect thereof is to affect
the indemnities to, or the rights or duties of, the Agent or to reduce any
fee payable for the Agent's own account. Notwithstanding the foregoing, the
amount of any fee or other payment due and payable from the Seller to the
Agent (for its own account), Windmill or the Enhancer may be changed or
otherwise adjusted solely with the consent of the Seller and the party to
which such payment is payable. Any amendment hereof shall apply to each
Purchaser equally and shall be binding upon the Seller, the Purchasers and
the Agent.
Section 9.8. Waivers. No failure or delay of the Agent or any
Purchaser in exercising any power, right, privilege or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right, privilege or remedy preclude any other or further exercise
thereof or the exercise of any other power, right, privilege or remedy. Any
waiver hereof shall be effective only in the specific instance and for the
specific purpose for which such waiver was given. After any waiver, the
Seller, the Purchasers and the Agent shall be restored to their former
position and rights and any Potential Termination Event waived shall be
-50-
deemed to be cured and not continuing, but no such waiver shall extend to (or
impair any right consequent upon) any subsequent or other Potential
Termination Event. Any additional Discount that has accrued after a
Termination Event before the execution of a waiver thereof, solely as a
result of the occurrence of such Termination Event, may be waived by the
Agent at the direction of the Purchaser entitled thereto or, in the case of
Discount owing to the Liquidity Providers, of the Required Liquidity
Providers.
Section 9.9. Successors and Assigns; Participations; Assignments.
(a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns. Except as otherwise provided herein, the Seller may not assign
or transfer any of its rights or delegate any of its duties without the prior
consent of the Agent and the Purchasers.
(b) Participations. Any Purchaser may sell to one or more Persons (each
a "Participant") participating interests in the interests of such Purchaser
hereunder. Such Purchaser shall remain solely responsible for performing its
obligations hereunder, and the Seller and the Agent shall continue to deal
solely and directly with such Purchaser in connection with such Purchaser's
rights and obligations hereunder. Each Participant shall be entitled to the
benefits of Article VI; provided, however, that no Participant shall be
entitled to any amount in excess of what the applicable Purchaser would have
been entitled to receive with respect to the interest transferred to such
Participant had such transfer not taken place. A Purchaser shall not agree
with a Participant to restrict such Purchaser's right to agree to any
amendment hereto, except amendments described in clause (a) of Section 9.7.
(c) Assignments by Liquidity Providers. Any Liquidity Provider may
assign to one or more Persons ("Purchasing Liquidity Providers"), acceptable
to the Agent in its sole discretion, any portion of its Commitment as a
Liquidity Provider and Purchase Interest pursuant to a supplement hereto (a
-51-
"Transfer Supplement") in form satisfactory to the Agent executed by each
such Purchasing Liquidity Provider, such selling Liquidity Provider and the
Agent. Any such assignment by a Liquidity Provider must be for an amount of
at least Five Million Dollars. Each Purchasing Liquidity Provider shall pay
a fee of Three Thousand Dollars to the Agent. Any partial assignment shall
be an assignment of an identical percentage of such selling Liquidity
Provider's Investment and its Commitment as a Liquidity Provider. Upon the
execution and delivery to the Agent of the Transfer Supplement and payment by
the Purchasing Liquidity Provider to the selling Liquidity Provider of the
agreed purchase price, such selling Liquidity Provider shall be released from
its obligations hereunder to the extent of such assignment and such
Purchasing Liquidity Provider shall for all purposes be a Liquidity Provider
party hereto and shall have all the rights and obligations of a Liquidity
Provider hereunder to the same extent as if it were an original party hereto
with a Commitment as a Liquidity Provider, an Investment and any related
Assigned Windmill Settlement described in the Transfer Supplement.
(d) Replaceable Liquidity Providers. If any Liquidity Provider (a
"Replaceable Liquidity Provider") shall (i) petition the Seller for any
amounts under Section 6.2 or (ii) cease to have a short-term debt rating of
"A-1+" by S&P and "P-1" by Xxxxx'x, the Seller or Windmill may designate a
replacement financial institution (a "Replacement Liquidity Provider")
acceptable to the Agent, in its sole reasonable discretion, to which such
Replaceable Liquidity Provider shall, subject to its receipt of an amount
equal to its Investment and accrued Discount and fees thereon (plus, from the
Seller, any Early Payment Fee that would have been payable if such
transferred Investment had been paid on such date) and all amounts payable
under Section 6.2, promptly assign all of its rights, obligations and
Liquidity Provider Commitment hereunder, together with all of its Purchase
Interest, and any related Assigned Windmill Settlement, to the Replacement
Liquidity Provider in accordance with Section 9.9(c).
-52-
(e) Assignment by Windmill. Each party hereto agrees and consents (i)
to Windmill's assignment, participation, grant of security interests in or
other transfers of any portion of, or any of its beneficial interest in, the
Windmill Purchase Interest and the Windmill Settlement and (ii) to the
complete assignment by Windmill of all of its rights and obligations
hereunder to ABN AMRO or any other Person, and upon such assignment Windmill
shall be released from all obligations and duties hereunder; provided,
however, that Windmill may not, without the prior consent of the Required
Liquidity Providers and the Enhancer, transfer any of its rights under
Section 2.1 to cause the Liquidity Providers or the Enhancer to purchase the
Windmill Purchase Interest and the Windmill Settlement unless the assignee
(i) is a corporation whose principal business is the purchase of assets
similar to the Receivables, (ii) has ABN AMRO as its administrative agent and
(iii) issues commercial paper with credit ratings substantially comparable to
the Ratings. Windmill shall promptly notify each party hereto of any such
assignment. Upon such an assignment of any portion of Windmill's Purchase
Interest and the Windmill Settlement, the assignee shall have all of the
rights of Windmill hereunder relate to such Windmill Purchase Interest and
Windmill Settlement.
(f) Opinions of Counsel. If required by the Agent or to maintain the
Ratings, each Transfer Supplement must be accompanied by an opinion of
counsel of the assignee as to such matters as the Agent may reasonably
request.
Section 9.10. Intended Tax Characterization. It is the intention of
the parties hereto that, for the purposes of all Taxes, the transactions
contemplated hereby shall be treated as a loan by the Purchasers (through the
Agent) to the Seller that is secured by the Receivables (the "Intended Tax
Characterization"). The parties hereto agree to report and otherwise to act
for the purposes of all Taxes in a manner consistent with the Intended Tax
Characterization. As provided in Section 5.1(g), the Seller hereby grants to
the Agent, for the ratable benefit of the Purchasers, a security interest in
all Receivables and Collections to secure the payment of all amounts other
-53-
than Investment owing hereunder and (to the extent of the Sold Interest) to
secure the repayment of all Investment.
Section 9.11. Waiver of Confidentiality. The Seller hereby consents to
the disclosure of any nonpublic information relating to the Seller, or 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; provided that prior to any such
disclosure pursuant to clauses (i) through (v) of this Section 9.11, the
Person receiving such information shall agree in writing to keep such
information confidential.
Section 9.12. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness
for borrowed money for 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.
Section 9.13. Excess Funds. Other than amounts payable under Section
9.5 and Article 2, Windmill shall be required to make payment of the amounts
required to be paid pursuant hereto only if Windmill has Excess Funds (as
-54-
defined below). If Windmill does not have Excess Funds, the excess of the
amount due hereunder (other than pursuant to Section 9.5 and Article 2) over
the amount paid shall not constitute a "claim" (as defined in Section 101(5)
of the Federal Bankruptcy Code) against Windmill until such time as Windmill
has Excess Funds. If Windmill does not have sufficient Excess Funds to make
any payment due hereunder (other than pursuant to Section 9.5 and Article 2),
then Windmill may pay a lesser amount and make additional payments that in
the aggregate equal the amount of deficiency as soon as possible thereafter.
The term "Excess Funds" means the excess of (a) the aggregate projected value
of Windmill's assets and other property (including cash and cash
equivalents), over (b) the sum of (i) the sum of all scheduled payments of
principal, interest and other amounts payable on publicly or privately placed
indebtedness of Windmill for borrowed money, plus (ii) the sum of all other
liabilities, indebtedness and other obligations of Windmill for borrowed
money or owed to any credit or liquidity provider, together with all unpaid
interest then accrued thereon, plus (iii) all taxes payable by Windmill to
the Internal Revenue Service, plus (iv) all other indebtedness, liabilities
and obligations of Windmill then due and payable, but the amount of any
liability, indebtedness or obligation of Windmill shall not exceed the
projected value of the assets to which recourse for such liability,
indebtedness or obligation is limited. Excess Funds shall be calculated once
each Business Day.
Section 9.14. 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 9.15. Headings; Counterparts. Article and Section Headings in
this Agreement are for reference only and shall not affect the construction
-55-
of this Agreement. This Agreement may be executed by different parties on
any number of counterparts, each of which shall constitute an original and
all of which, taken together, shall constitute one and the same agreement.
Section 9.16. Cumulative Rights and Severability. All rights and
remedies of the Purchasers and Agent hereunder shall be cumulative and
non-exclusive of any rights or remedies such Persons have under law or
otherwise. Any provision hereof that is prohibited or unenforceable in any
jurisdiction shall, in such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and without affecting such provision in any other
jurisdiction.
Section 9.17. Governing Law; Submission to Jurisdiction. This
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
Seller 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, Illinois for purposes of all legal
proceedings arising out of, or relating to, the Transaction Documents or the
transactions contemplated thereby. The Seller hereby irrevocably waives, to
the fullest extent permitted by law, any objection it may now or hereafter
have to the venue of any such proceeding and any claim that any such
proceeding has been brought in an inconvenient forum. Nothing in this
Section 9.17 shall affect the right of the Agent or any Purchaser to bring
any action or proceeding against the Seller or its property in the courts of
other jurisdictions.
Section 9.18. Waiver of Trial by Jury. To the extent permitted by
applicable law, each party hereto irrevocably waives all right of trial by
jury in any action, proceeding or counterclaim arising out of, or in
connection with, any transaction document or any matter arising thereunder.
Section 9.19. Entire Agreement. The Transaction Documents constitute
the entire understanding of the parties thereto concerning the subject matter
-56-
thereof. Any previous or contemporaneous agreements, whether written or
oral, concerning such matters are superseded thereby.
-57-
In Witness Whereof, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date
hereof.
ABN AMRO Bank N.V., as the Agent ABN AMRO Bank N.V., as the
Enhancer
By:________________________________ By:_______________________________
Title:_____________________________ Title:_____________________________
By:________________________________ By:________________________________
Title:_____________________________ Title:_____________________________
Address: Structured Finance, Address: Structured Finance,
Asset Securitization Asset Securitization
000 Xxxxx XxXxxxx Xxxxxx 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000 Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Purchaser Agent- Attention: Enhancer-Windmill
Windmill Telephone: (000) 000-0000
Telephone: (000) 000-0000 Telecopy: (000) 000-0000
Telecopy: (000) 000-0000
ABN AMRO Bank N.V., Windmill Funding Corporation
as a Liquidity Provider
By:________________________________ By:____________________________
Title:_____________________________ Title:_________________________
By: ________________________________ Address: c/o Lord Securities
Title:__________________________ Corporation
Address:________________________ Two Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-58-
Attention: Xxxxxxx Xxxxxx,
Vice President
Attention:____________________
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Telephone:_____________________
Telecopy: _____________________
with a copy to:
World Color Finance, Inc. ABN AMRO Bank N.V.
Address: Structured Finance,
Asset Securitization
000 Xxxxx XxXxxxx Xxxxxx
By: ________________________________ Xxxxxxx, Xxxxxxxx 00000-0000
Title:______________________________ Attention:
_____________________ Administrator -
Address: The Mill Windmill
000 Xxxxxxxxxx Xxxx Telephone: (000) 000-0000
Xxxxxxxxx, Xxxxxxxxxxx 00000 Telecopy: (000) 000-0000
Attention: ____________
Telephone:
Telecopy:
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx Xxxxx
-59-
Schedule I
Definitions
The following terms have the meanings set forth, or referred to, below:
"ABN AMRO" means ABN AMRO Bank N.V. in its individual capacity and not
in its capacity as the Agent.
"Administration Agreement" means the Amended and Restated Administration
Agreement dated as of November 15, 1994, between Lord Securities Corporation and
ABN AMRO, relating to Windmill, as such agreement may be amended from time to
time in accordance with its terms.
"Adverse Claim" means, for any asset or property of a Person, a lien,
security interest, charge, mortgage, pledge, hypothecation, assignment or
encumbrance, or any other right or claim, in, of or on such asset or property in
favor of any other Person, except those in favor of the Agent or a Purchaser.
"Affiliate" means, for any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person. For purposes of this definition, "control" means the power,
directly or indirectly, to either (i) vote ten percent (10%) or more of the
securities having ordinary voting power for the election of directors of a
Person or (ii) cause the direction of the management and policies of a Person.
"Agent" is defined in the first paragraph hereof.
"Agent's Account" means the Agent's account number 651143576750 at ABN
AMRO or such other account designated to the Seller and the Purchasers by the
Agent.
"Aggregate Commitment" means Two Hundred Four Million Dollars
($204,000,000), as such amount may be reduced pursuant to Section 1.6.
-60-
"Aggregate Investment" means the sum of the Investments of all
Purchasers.
"Assigned Windmill Settlement" means, for each Committed Purchaser for
any Put, the product of such Purchaser's Purchased Percentage and the amount
of the Windmill Settlement being transferred pursuant to such Put.
"Bankruptcy Event" means, for any Person, that such Person makes a
general assignment for the benefit of creditors or any proceeding is
instituted by or against such Person seeking to adjudicate it bankrupt or
insolvent, or seeking the liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the appointment of
a receiver, trustee or other similar official for it or any substantial part
of its property (and in the case of any proceeding instituted against such
Person, such proceeding is not dismissed or discharged within 90 days).
"Base Rate" means the sum of (i) the Prime Rate plus (ii) 0.25%.
"Business Day" means any day other than (a) a Saturday, Sunday or other
day on which banks in New York City or Chicago, Illinois are authorized or
required to close, (b) a holiday on the Federal Reserve calendar and, (c)
solely for matters relating to a Eurodollar Tranche, a day on which dealings
in Dollars are not carried on in the London interbank market.
"Charge-Off" means any Receivable that has or should have been written
off by the Seller in the ordinary course of business irrespective of whether
such Receivable is reclassified as a "note receivable" or similar item on the
financial statements of any World Color Press Entity.
"Collection" means any amount paid, or deemed paid, on a Receivable,
including from the proceeds of collateral securing, or any guaranty of, such
-61-
Receivable or by the Seller under Section 1.5(b).
"Collection Agent" is defined in Section 3.1(a).
"Committed Purchasers" is defined in Section 1.1(b).
"Commitment" means, for each Committed Purchaser, the amount set forth
on Schedule II, as adjusted in accordance with Sections 1.6 and 9.9.
"Concentration Limit" means (i) with respect to Defaulted Receivables of
a particular Obligor, an amount not to exceed twenty-five percent (25%) of
the aggregate principal balance of all Receivables of such Obligor and (ii)
with respect to the outstanding balance of all Receivables of the same
Obligor, an amount not to exceed 4% of the Aggregate Investment (or, if
larger, the Special Limit applicable to such Obligor).
"CP Dealer" means, at any time, each Person Windmill then engages as a
placement agent or commercial paper dealer.
"CP Rate" means, for any CP Tranche Period, a rate per annum equal to
the weighted average of the rates at which commercial paper notes having a
term equal to such CP Tranche Period may be sold by any CP Dealer selected by
Windmill, as agreed between each such CP Dealer and Windmill. If such rate
is a discount rate, the CP Rate shall be the rate resulting from Windmill's
converting such discount rate to an interest-bearing equivalent rate. If
Windmill determines that it is not able, or that it is impractical, to issue
commercial paper notes for any period of time, then the CP Rate for any
Tranche Period created during such period of time shall be the Prime Rate.
The CP Rate shall include all costs and expenses to Windmill of issuing the
related commercial paper notes, including all dealer commissions and note
issuance costs in connection therewith.
"Credit Agreement" means that certain Second Amended and Restated Credit
Agreement, dated as of June 6, 1996, among World Color Press, Inc., the
-62-
Lenders party thereto, Bankers Trust Company, as Administrative Agent, BA
Securities, Inc., as Syndication Agent and Citibank, N.A., as Documentation
Agent (as such document is currently in effect and without giving effect to
any amendment or other modification thereto not expressly consented to by the
Agent.
"Credit and Collection Policy" means the Seller's credit and collection
policy and practices relating to Receivables attached hereto as Exhibit I.
"Deemed Collections" is defined in Section 1.5(c).
"Default Ratio" means, for each calendar month, the ratio of (i) the
aggregate outstanding balance of all Defaulted Receivables as of the end of
such month to (ii) the aggregate outstanding balance of all Receivables for
such period.
"Defaulted Receivable" means any Receivable (other than a Charge-Off)
on which any amount is unpaid more than 90 days past its original due date.
"Delinquency Ratio" means, for each calendar month, the ratio of (a) the
aggregate outstanding balance of all Delinquent Receivables as of the end of
such month to (b) the aggregate outstanding balance of all Receivables as of
the end of such month.
"Delinquent Receivable" means any Receivable (other than a Charge-Off or
Defaulted Receivable) on which any amount is unpaid more than 60 days after
the due date thereof.
"Dilution Ratio" means, for each calendar month, the ratio of (a) the
aggregate amount of payments owed by the Seller pursuant to the first
sentence of Section 1.5(b) as of the end of such month (other than amounts
owed because of rebillings of previously billed amounts) to (b) the aggregate
amount of Collections received as of the end of such month.
"Dilution Reserve" means, at any time, the product of (i) the Eligible
Receivables Balance and (ii) the greater of (a) 3% and (b) 2 times the
-63-
highest average Dilution Ratio for any consecutive 3 months during the most
recent 12 month period ended prior to the date on which the Dilution Reserve
is being calculated.
"Discount" means, for any Tranche Period, (a) the product of (i) the
Discount Rate for such Tranche Period, (ii) the total amount of Investment
allocated to the Tranche Period, and (iii) the number of days elapsed during
the Tranche Period divided by (b) for a Eurodollar Tranche and CP Tranche,
360 days and for a Prime Tranche and a Base Rate Tranche, 365 days.
"Discount Rate" means, for any Tranche Period, the CP Rate, the
Eurodollar Rate, the Prime Rate or the Base Rate, as applicable.
"Discount Reserve" means, at any time, (i) the product of (a) 1.5, (b)
the Prime Rate, (c) Aggregate Net Investment and (d) Maximum Receivables
Turnover divided by (ii) 360.
"Dollar" and "$" means lawful currency of the United States of America.
"Early Payment Fee" means, if any Investment of a Purchaser allocated
(or, in the case of a requested Purchase not made by the Committed Purchasers
for any reason other than their default, scheduled to be allocated) to a
Tranche Period for a Eurodollar Tranche is reduced or terminated before the
last day of such Tranche Period (the amount of Investment so reduced or
terminated being referred to as the "Prepaid Amount"), the cost to the
relevant Purchaser of terminating or reducing such Tranche, which for a
Eurodollar Tranche will be determined based on the difference between the
LIBOR applicable to such Tranche and the LIBOR applicable for a period equal
to the remaining maturity of the Tranche on the date the Prepaid Amount is
received.
"Eligible Receivable" means, at any time, any Receivable:
-64-
(i) the Obligor of which (a) is not a Subsidiary of the
Originator and (b) is not a government or a governmental subdivision or
agency;
(ii) which is stated to be due and payable within 90 days after the
invoice therefor; provided, however, that Receivables which are
otherwise Eligible Receivables with an aggregate outstanding balance of
not more than 5% of the Eligible Receivables Balance may be stated to be
due and payable more than 90 days after the invoice thereof and shall
constitute Eligible Receivables;
(iii) which is not a Defaulted Receivable or a Charge-Off;
(iv) which is an "account" or "chattel paper" within the meaning of
Section 9-105 and Section 9-106, respectively of the UCC of all
applicable jurisdictions;
(v) which is denominated and payable only in Dollars;
(vi) which arises under a contract that is in full force and effect
and constitutes the legal, valid and binding obligation of the related
Obligor enforceable against such Obligor in accordance with its terms
subject to no asserted offset, counterclaim or defense asserted in a
writing delivered to the Originator or other Adverse Claim other than a
Permitted Lien;
(vii) which arises under a contract that (A) contains an obligation
to pay a specified sum of money and is subject to no unsatisfied
contingencies, (B) does not require the Obligor under such contract to
consent to the transfer, sale or assignment of the rights and duties of
the Originator under such contract, (C) does not contain a
confidentiality provision that purports to restrict any Purchaser's
exercise of rights under this Agreement, including, without limitation,
the right to review such contract and (D) directs payment to be made to
a Lock-Box Account;
-65-
(viii) which does not, in whole or in part, contravene any law,
rule or regulation applicable thereto (including, without limitation,
those relating to usury, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy);
(ix) which satisfies all applicable requirements of the Credit and
Collection Policy and was generated in the ordinary course of the
Originator's business (or the business of a Subsidiary of the
Originator) from the sale of goods or provision of services to a related
Obligor solely by the Originator (or a Subsidiary of the Originator);
(x) which is an account receivable representing all or part of the
sales price of merchandise, insurance and services within the meaning of
Section 3(c)(5) of the Investment Company Act of 1940; and
(xi) the purchase of which with proceeds of notes would constitute
a "current transaction" within the meaning of Section 3(a)(3) of the
Securities Act of 1933.
"Eligible Receivable Balance" means, at any time, the aggregate
outstanding principal balance of all Eligible Receivables, less the aggregate
outstanding principal balance of Eligible Receivables which exceed the
Concentration Limit.
"Enhancer" is defined in the first paragraph hereof.
"Enhancer Commitment Percentage" means 10%.
"Eurodollar Rate" means, for any Tranche Period for a Eurodollar
Tranche, the sum of (a) LIBOR for such Tranche Period divided by 1 minus the
"Reserve Requirement" and (b)(i) for Investment of a Liquidity Provider, the
amount specified in the Pricing Letter, or, (ii) for Investment of the
Enhancer, the amount specified in the Fee Letter; where "Reserve Requirement"
means, for any Tranche Period for a Eurodollar Tranche, the maximum reserve
-66-
requirement imposed during such Tranche Period on "eurocurrency liabilities"
as currently defined in Regulation D of the Board of Governors of the Federal
Reserve System.
"Excluded Receivable" means the accounts described in a separate letter
agreement between the Seller and the Agent dated the date hereof.
"Face Amount" means the face amount of any Windmill commercial paper
issued on a discount basis or, if not issued on a discount basis, the
principal amount of such note and interest scheduled to accrue thereon to its
stated maturity.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal, for each day during such period, to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York or, if such rate is not
so published for any day which is a Business Day, the average of the
quotations for such transactions received by ABN AMRO as of approximately
10:00 a.m. (Chicago time) on such day from three federal funds brokers of
recognized standing selected by it.
"Fee Letter" means the letter agreement dated as of the date hereof
among the Seller, the Agent, Windmill and the Enhancer.
"Funding Agreement" means any agreement or instrument executed by
Windmill and executed by or in favor of any Windmill Funding Source or
executed by any Windmill Funding Source at the request of Windmill (including
the Program LOC).
"GAAP" means generally accepted accounting principles in the USA,
applied on a consistent basis.
"Governmental Authority" means any (a) Federal, state, municipal or
other governmental entity, board, bureau, agency or instrumentality, (b)
administrative or regulatory authority (including any central bank or similar
-67-
authority) or (c) court, judicial authority or arbitrator, in each case,
whether foreign or domestic.
"Incremental Purchase" is defined in Section 1.1(b).
"Indemnity Agreement" means the Indemnity Agreement, dated as of the date
hereof, between, the Originator and the Agent.
"Instructing Group" means the Required Liquidity Providers, the Enhancer
and, unless the Windmill Termination Date has occurred and Windmill has no
Investment, Windmill.
"Intended Tax Characterization" is defined in Section 9.10.
"Interim Liquidation" means any time before the Liquidity Termination Date
during which no Reinvestment Purchases are made by any Purchaser, as established
pursuant to Section 1.2.
"Investment" means, for each Purchaser, (a) the sum of (i) all
Incremental Purchases by such Purchaser and (ii) the aggregate amount of any
payments or exchanges made by, or on behalf of, such Purchaser to any other
Purchaser under Article II minus (b) all Collections, amounts received from
other Purchasers under Article II, and other amounts received or exchanged
and, in each case, applied by the Agent or such Purchaser to reduce such
Purchaser's Investment. A Purchaser's Investment shall be restored to the
extent any amounts so received or exchanged and applied are rescinded or must
be returned for any reason.
"LIBOR" means, for any Tranche Period for a Eurodollar Tranche or other
time period, the rate per annum (rounded upwards, if necessary, to the next
higher one hundred-thousandth of a percentage point) for deposits in Dollars
for a period equal to such Tranche Period or other period, which appears on
Page 3750 of the Telerate Service (or any successor page or successor service
that displays the British Bankers' Association Interest Settlement Rates for
Dollar deposits) as of 11:00 a.m. (London, England time) two Business Days
before the commencement of such Tranche Period or other period. If for any
Tranche Period for a Eurodollar Tranche no such displayed rate is available
-68-
(or, for any other period, if such displayed rate is not available or the
need to calculate LIBOR is not notified to the Agent at least 3 Business Days
before the commencement of the period for which it is to be determined), the
Agent shall determine such rate based on the rates ABN AMRO is offered
deposits of such duration in the London interbank market.
"Liquidation Period" means, for Windmill only, all times when Windmill
is not making Reinvestment Purchases pursuant to Section 1.1(d) and, for all
Purchasers, all times (x) during an Interim Liquidation and (y) on and after
the Liquidity Termination Date.
"Liquidity Providers" is defined in the first paragraph hereof.
"Liquidity Termination Date" means the earliest of (a) the date of the
occurrence of a Termination Event described in clause (e) of the definition
of Termination Event, (b) the date designated by the Agent to the Seller at
any time after the occurrence of any other Termination Event, (c) the
Business Day designated by the Seller with no less than five (5) Business
Days prior notice to the Agent and (d) the Scheduled Termination Date.
"Lock-Box" means each post office box or bank box listed on Exhibit F,
as revised pursuant to Section 5.1 (i).
"Lock-Box Account" means each account maintained by the Collection
Agent at a Lock-Box Bank for the purpose of receiving or concentrating
Collections.
"Lock-Box Agreement" means each agreement between the Seller and a
Lock-Box Bank concerning a Lock-Box Account.
"Lock-Box Bank" means each bank listed on Exhibit F, as revised pursuant
to Section 5.1(i).
"Lock-Box Letter" means a letter in substantially the form of Exhibit G
(or otherwise acceptable to the Agent) from the Seller to each Lock-Box Bank,
-69-
acknowledged and accepted by such Lock-Box Bank and the Agent.
"Loss Reserve" means, at any time, the product of (i) the Eligible
Receivables Balance and (ii) the greater of (a) 12%, (b) 3 times the highest
average Delinquency Ratio for any consecutive 3 months during the most recent
12 month period which ended prior to the date on which the Loss Reserve is
being calculated and (c) 1.5 times the highest average Default Ratio for any
consecutive 3 months during the most recent 12 month period which ended prior
to the date on which the Loss Reserve is being calculated.
"Loss-to-Liquidation Ratio" means, for each calendar month, the ratio of
the outstanding balance of Receivables that became Charge-Offs during such
month to the aggregate amount of Collections during such month.
"Material Adverse Effect" means a material adverse effect on the
business, operations, properties, assets or condition or prospects (financial
or otherwise) of the Originator and its Subsidiaries, taken as a whole.
"Matured Aggregate Investment" means, at any time, the Matured Value of
Windmill's Investment plus the total Investments of all other Purchasers then
outstanding.
"Matured Value" means, of any Investment, the sum of such Investment and
all unpaid Discount scheduled to become due (whether or not then due) on such
Investment during all Tranche Periods to which any portion of such Investment
has been allocated.
"Maximum Incremental Purchase Amount" means, at any time, the lesser of
(a) the difference between the Purchase Limit and the Aggregate Investment
then outstanding and (b) the difference between the Aggregate Commitment and
the Matured Aggregate Investment then outstanding.
-70-
"Maximum Receivables Turnover" means, for any period for which it is
calculated, (a) the Eligible Receivable Balance at the beginning of such
period divided by (b) the average daily Collections (other than Deemed
Collections) during such period.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Obligor" means, for any Receivable, each Person obligated to pay such
Receivable and each guarantor of such obligation.
"Originator" means World Color Press, Inc.
"Periodic Report" is defined in Section 3.3.
"Permitted Investments" means (a) evidences of indebtedness, maturing
within thirty (30) days after the date of purchase thereof, issued by, or
guaranteed by the full faith and credit of, the federal government of the
USA, (b) repurchase agreements with banking institutions or broker-dealers
registered under the Securities Exchange Act of 1934 which are fully secured
by obligations of the kind specified in clause (a), (c) money market funds
(i) rated not lower than the highest rating category from Moody's and "AAAm"
or "AAAm-g," from S&P or (ii) which are otherwise acceptable to the Rating
Agencies or (d) commercial paper issued by any corporation incorporated under
the laws of the USA and rated at least "A-1+" (or the equivalent) by S&P and
at least "P-1" (or the equivalent) by Moody's.
"Permitted Lien" means (i) any security interests granted to the Lenders
party to the Credit Agreement, (ii) an Adverse Claim created in the ordinary
course of business and (iii) any lien for taxes, assessments, governmental
charges or claims which are not yet due or which are being contested in good
faith and any attachment or judgment lien, as long as the judgment it secures
is, within thirty days after the entry thereof, discharged or execution
thereof stayed pending appeal, or is discharged within thirty days after the
expiration of any such stay.
-71-
"Person" means an individual, partnership, corporation, association,
joint venture, Governmental Authority or other entity of any kind.
"Potential Termination Event" means any Termination Event or any event
or condition that with the lapse of time or giving of notice, or both, would
constitute a Termination Event.
"Pricing Letter" means the letter agreement dated as of the date hereof
among the Liquidity Providers, the Agent and the Seller.
"Prime Rate" means, for any period, the daily average during such period
of (a) the floating commercial loan rate per annum of ABN AMRO (which rate is
a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer by ABN AMRO) announced from time to time as
its prime rate or equivalent for Dollar loans in the USA, changing as and
when said rate changes plus (b) during the pendency of a Termination Event,
1% for Investment of a Liquidity Provider and 2% for Investment of the
Enhancer.
"Program Documents" shall have the meaning set forth in the
Administration Agreement.
"Program LOC" means that certain amended and restated irrevocable
transferable letter of credit No. S550115, dated November 3, 1995, issued by
the Enhancer at the request of Windmill, and each letter of credit issued in
substitution or replacement therefor.
"Program Unreimbursed Draw Amount" means the sum of all draws under the
Program LOC in connection with this Transaction which have not been
reimbursed (whether through the payment of cash or the exchange of assets),
together with all interest thereon and all other amounts, if any, payable in
connection therewith.
"Purchase" is defined in Section 1.1(a).
-72-
"Purchase Agreement" means the Receivables Purchase Agreement dated as of
the date hereof among the Seller and the Originator.
"Purchase Amount" is defined in Section 1.1(c).
"Purchase Date" is defined in Section 1.1(c).
"Purchase Interest" means, for a Purchaser, the percentage ownership
interest in the Receivables and Collections held by such Purchaser,
calculated when and as described in Section 1.1(b).
"Purchase Limit" means $200,000,000.
"Purchase Note" means each revolving promissory note issued by the
Seller to the Originator under the Purchase Agreement.
"Purchase Price" means, for each Committed Purchaser for any Put, such
Purchaser's Purchased Percentage for such Put multiplied by the sum of (a)
(i) for the Enhancer, the amount of Windmill's Investment being transferred
pursuant to such Put (the "Put Investment") and (ii) for each Liquidity
Provider, the lesser of (A), the Put Investment and (B) the sum of (I) the
product of (1) the amount of Windmill Investment being transferred pursuant
to such Put divided by the Windmill Investment (before giving effect to such
Put), (2) Windmill's Purchase Interest at such time, (3) the Reserve Adjusted
Eligible Receivables Balance as most recently calculated, provided, however,
that Collections used to reduce such most recently computed Eligible
Receivables Balance but not yet received by the Agent shall be added back to
the Eligible Receivables Balance, and (II) the amount of Windmill Settlement
being transferred pursuant to such Put plus (b) all unpaid Discount owed to
Windmill (whether or not then due) to the end of each applicable Tranche
Period to which any Investment being Put has been allocated. Windmill shall
calculate the Purchase Price on the date of such Put based on the information
then available to it, and, regardless of whether such information is
complete, such calculation shall be conclusive and binding absent manifest
-73-
error; provided, however, that if such purchase occurs due to the occurrence
of a Termination Event, the Purchase Price shall be determined as of the date
such Termination Event first occurred, adjusted to reflect amounts received
by Windmill. In making any such calculation, Windmill shall be entitled to
rely on information provided to it by the Seller without any obligation to
investigate the accuracy or completeness of such information.
"Purchased Percentage" means, for any Put, for each Committed Purchaser,
its Ratable Share or such lesser percentage as is necessary to prevent the
Purchase Price of such Purchaser from exceeding its Unused Commitment
(unless, in the case of the Enhancer, it elects not to reduce its Purchased
Percentage in whole or in part).
"Purchasers" means the Liquidity Providers, the Enhancer and Windmill.
"Put" is defined in Section 2.l(a).
"Ratable Share" means, for each Committed Purchaser, such Purchaser's
Commitment divided by the Aggregate Commitment. If, however, on the date any
Incremental Purchase or payment for any Put is to be made by the Committed
Purchasers, the Enhancer has outstanding Investment plus Program Unreimbursed
Draw Amount in excess of its Ratable Share of the outstanding Investment and
Program Unreimbursed Draw Amount of all Committed Purchasers, then for
purposes of such Incremental Purchaser or Put the Ratable Share of each
Committed Purchaser shall be replaced with a percentage equal for each
Committed Purchaser to (a) its Commitment minus its Investment and Program
Unreimbursed Draw Amount before such Purchase or Put (its "Existing
Investment") divided by (b) the Aggregate Commitment minus the sum of the
Existing Investments of all Committed Purchasers.
"Rating Agency" means Moody's, S&P and any other rating agency Windmill
chooses to rate its commercial paper notes.
"Ratings" means the ratings by the Rating Agencies of the indebtedness
for borrowed money of Windmill.
-74-
"Receivable" means each obligation of an Obligor to pay for merchandise
sold or services rendered by the Originator (or a Subsidiary of the
Originator if such obligation was sold to the Originator) and includes the
rights to payment of any interest or finance charges and in the merchandise
(including returned goods) and contracts relating to such Receivable, all
security interests, guaranties and property securing or supporting payment of
such Receivable, all Records and all proceeds of the foregoing, excluding
however, all Excluded Receivables. During any Interim Liquidation and on and
after the Liquidity Termination Date, the term "Receivable" shall only
include receivables existing on the date such Interim Liquidation commenced
or Liquidity Termination Date occurred, as applicable. Deemed Collections
shall reduce the outstanding balance of Receivables hereunder, so that any
Receivable that has its outstanding balance deemed collected shall cease to
be a Receivable hereunder after (x) the Collection Agent receives payment of
such Deemed Collections under Section 1.5(b) or (y) if such Deemed Collection
is received before the Liquidity Termination Date, an adjustment to the Sold
Interest permitted by Section 1.5(c) is made.
"Records" means, for any Receivable, all contracts, books, records and
other documents or information (including computer programs, tapes, disks,
software and related property and rights) relating to such Receivable.
"Reinvestment Purchase" is defined in Section 1.1(b).
"Required Liquidity Providers" means Liquidity Providers having
Liquidity Provider Commitments in excess of 66-2/3% of the Commitment of all
Liquidity Providers.
"Reserve" means, at any time, the sum of the Loss Reserve, the Dilution
Reserve and the Discount Reserve.
"Reserve Adjusted Eligible Receivables Balance" means the Reserve
Adjustment Fraction multiplied by the Eligible Receivable Balance.
-75-
"Reserve Adjustment Fraction" means 1 divided by 1.05.
"Reserve Percentage" means, as of any day for which calculated, the
Reserve divided by the Eligible Receivables Balance, expressed as a
percentage.
"Scheduled Termination Date" means June 29, 1998, as such date may be
extended from time to time pursuant to Section 1.9.
"Seller" is defined in the first paragraph hereof.
"Seller Account" means the account designated by the Seller to the Agent
with at least ten (10) days prior notice.
"Sold Interest" is defined in Section 1.1(a).
"Special Limit" means the Obligor limits described in a separate letter
agreement between the Seller and the Agent dated the date hereof.
"Special Transaction Subaccount" means the special transaction
subaccount established for this Agreement pursuant to Windmill's depositary
agreement.
"S&P" means Standard & Poor's Ratings Group.
"Subsidiary" means, with respect to any Person, any other Person of
which at least a majority of the voting stock (or equivalent equity
interests) is owned or controlled by such Person or by one or more other
Subsidiaries of the Seller.
"Taxes" means all taxes, charges, fees, levies or other assessments
(including income, gross receipts, profits, withholding, excise, property,
sales, use, license, occupation and franchise taxes and including any related
interest, penalties or other additions) imposed by any jurisdiction or taxing
authority (whether foreign or domestic).
"Termination Date" means (a) for Windmill, the Windmill Termination
Date, (b) for the Liquidity Providers, the Liquidity Termination Date and (c)
-76-
for the Enhancer, the earlier of (i) the third (3rd) Business Day following
the Liquidity Provider Termination Date and (ii) the Scheduled Termination
Date.
"Termination Event" means the occurrence of any one or more of the
following:
(a) any written representation, warranty, certification or
statement made, or deemed made by the Seller or any World Color Press
Entity in, or pursuant to, any Transaction Document proves to have been
incorrect in any material respect when made or deemed made; or
(b) the Collection Agent, any World Color Press Entity or the
Seller fails to make any payment or other transfer of funds hereunder
when due and such failure continues for 3 Business Days after notice to
the Seller by the Agent thereof; or
(c) the Seller fails to observe or perform any covenant or
agreement contained in Sections 5.1(g) and (j) or the Originator fails
to perform any covenant or agreement in Section 5.1(e) and (j) of the
Receivables Purchase Agreement, as incorporated by reference in Section
4.2 of the Indemnity Agreement; or
(d) the Originator, Seller or the Collection Agent (or any
sub-collection agent) fails to observe or perform any other term,
covenant or agreement in any material respect under any Transaction
Document, and such failure remains unremedied for three Business Days
after notice to the Seller by the Agent thereof; or
(e) the Seller or the Originator suffers a Bankruptcy Event; or
(f) the average Delinquency Ratio for any three consecutive
calendar months exceeds 5.0%, the average Default Ratio for any three
consecutive calendar months exceeds 9.0%, the average Dilution Ratio for
-77-
any three consecutive calendar months exceeds 5.0% or the average
Loss-to Liquidation Ratio for any three consecutive calendar months
exceeds 2.0%; or
(g) (i) the Seller or the Originator thereof disaffirms or
contests the validity or enforceability of any Transaction Document or
(ii) any Transaction Document fails to be the enforceable obligation of
the Seller or any Affiliate party thereto; or
(h) the Originator shall fail to own and control, directly or
indirectly, 100% of the outstanding voting stock of the Seller.
(i) the average Maximum Receivables Turnover for any consecutive 3
month period exceeds 85 days.
(j) Any Default or Event of Default shall occur and be continuing
under Sections 6.6(A) or 6.6(B) of the Credit Agreement.
Notwithstanding the foregoing, a failure of a representation or warranty or
breach of any covenant described in clause (a), (c) or (d) above related to a
Receivable shall not constitute a Termination Event if the Seller has been
deemed to have collected such Receivable pursuant to Section 1.5(b) or, before
the Liquidity Termination Date, has adjusted the Sold Interest as provided in
Section 1.5(c) so that such Receivable is no longer considered to be
outstanding.
"Tranche" means a portion of the Investment of a Windmill or of the
Committed Purchasers allocated to a Tranche Period pursuant to Section 1.3.
A Tranche is a (i) CP Tranche, (ii) Eurodollar Tranche or (iii) Prime Tranche
depending whether Discount accrues during its Tranche Period based on a (i)
CP Rate, (ii) Eurodollar Rate, or (iii) Prime Rate or Base Rate.
"Tranche Period" means a period of days ending on a Business Day
-78-
selected pursuant to Section 1.3, which (i) for a CP Tranche shall not exceed
270 days and (ii) for a Eurodollar Tranche shall not exceed 180 days.
"Transaction Documents" means this Agreement, the Fee Letter, the
Indemnity Agreement, the Pricing Letter, the Purchase Agreement, the Purchase
Note(s), and all other documents, instruments and agreements executed or
furnished in connection herewith and therewith.
"Transfer Supplement" is defined in Section 9.9(c).
"UCC" means, for any state, the Uniform Commercial Code as in effect in
such state.
"USA" means the United States of America (including all states and
political subdivisions thereof).
""Unaccrued Discount" means, for any Committed Purchaser for a Tranche
Period, in connection with any purchase of any Investment pursuant to Section
2.1 during such Tranche Period an amount equal to the difference between the
Discount that would have been payable on such Investment as of the last day
of its Tranche Period on such Investment and the Discount that had accrued on
such Investment prior to the date of such Purchase.
"Unused Commitment" means, for any Committed Purchaser at any time, the
difference between its Commitment and its Investment then outstanding.
"Unused Aggregate Commitment" means, at any time, the difference between
the Aggregate Commitment then in effect and the outstanding Matured Aggregate
Investment.
"Windmill" is defined in the first paragraph hereof.
"Windmill Funding Source" means any insurance company, bank or other
financial institution providing liquidity, back-up purchase or credit support
for Windmill.
-79-
"Windmill Settlement" means the sum of all claims and rights to payment
pursuant to Section 1.5 or 1.7 or any other provision owed to Windmill (or
owed to the Agent or the Collection Agent for the benefit of Windmill) by the
Seller that, if paid, would be applied to reduce Windmill's Investment.
"Windmill Termination Date" means the earliest of (a) the Business Day
designated by the Seller with no less than five (5) Business Days prior
notice to the Agent, (b) the Business Day designated by Windmill at any time
to the Seller, (c) the Liquidity Termination Date and (d) June 29, 2002.
"World Color Press Entity" means the Originator, Northeast Graphics
Inc., Xxxx Communications Company, Xxxxxx Lithotech, Inc., Image
Technologies, Inc., Central Florida Press, L.C., The Xxxxxx Company, Inc.,
RAI, Inc., KRI, Inc. and The Xxxxxx Companies, Inc.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise
inconsistent with the terms of this Agreement, all accounting terms used
herein shall be interpreted, and all accounting determinations hereunder
shall be made, in accordance with GAAP. Amounts to be calculated hereunder
shall be continuously recalculated at the time any information relevant to
such calculation changes.
-80-
