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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 29, 1997 Commission file number 1-11802
[Graphic]
World Color Press, Inc.
(Exact name of registrant as specified in its charter)
Delaware 37-1167902
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
The Mill, 340 Pemberwick Road 06831
Greenwich, Connecticut (Zip Code)
(Address of principal executive offices)
203-532-4200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
At August 8, 1997, 33,756,531 shares of the registrant's common stock, $.01
par value, were outstanding.
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WORLD COLOR PRESS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 29, 1997
INDEX
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Page
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Part I. Financial Information
Condensed Consolidated Balance Sheets as of June 29, 1997
and December 29, 1996....................................... 3
Condensed Consolidated Statements of Operations for the Six
Months Ended June 29, 1997 and June 30, 1996................ 4
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 29, 1997 and June 30, 1996................ 5
Notes to Condensed Consolidated Financial Statements............ 6-7
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 8-10
Part II. Other Information............................................... 11-12
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WORLD COLOR PRESS, INC.
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 29, 1997 AND DECEMBER 29, 1996
(Dollars in thousands)
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<TABLE>
<CAPTION>
JUNE 29, DECEMBER 29,
1997 1996
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(Unaudited) (Note)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............... $ 22,383 $ 33,182
Accounts receivable--net................ 325,543 311,478
Inventories............................. 158,036 140,160
Deferred income taxes................... 26,560 32,944
Other................................... 30,298 24,843
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Total current assets............. 562,820 542,607
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---------- ---------
Property, plant and equipment, at cost.. 1,458,724 1,346,496
Accumulated depreciation and
amortization........................... (585,469) (528,339)
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Property, plant and equipment--net... 873,255 818,157
Goodwill--net........................... 519,030 423,880
Other................................... 49,100 37,788
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TOTAL ASSETS.............................. $2,004,205 $1,822,432
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses..... $280,390 $ 306,867
Current maturities of long-term debt...... 43,629 8,672
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Total current liabilities.......... 324,019 315,539
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Long-term debt............................ 1,049,053 889,195
Deferred income taxes..................... 88,658 91,555
Other long-term liabilities............... 114,060 111,211
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Total liabilities.................. 1,575,790 1,407,500
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STOCKHOLDERS' EQUITY:
Common stock, $.01 par value--shares
authorized, 100,000,000 at June 29, 1997
and December 29, 1996; shares
outstanding, 33,744,531 at June 29, 1997
and December 29, 1996................... 337 337
Additional paid-in capital................ 583,721 583,721
Accumulated deficit....................... (155,643) (169,126)
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Total stockholders' equity......... 428,415 414,932
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.. $2,004,205 $1,822,432
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</TABLE>
Note: Derived from audited financial statements.
See notes to condensed consolidated financial statements.
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WORLD COLOR PRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE AND SIX MONTHS ENDED JUNE 29, 1997 AND JUNE 30, 1996
(Dollars in thousands, except per share data)
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<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
-------------------------- --------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales................................................ $ 425,647 $ 342,266 $ 883,998 $ 671,377
Cost of sales............................................ 349,595 284,324 732,631 561,149
------------ ------------ ------------ ------------
Gross profit............................................. 76,052 57,942 151,367 110,228
Selling, general and administrative expenses............. 44,260 35,624 87,852 67,928
------------ ------------ ------------ ------------
Operating income......................................... 31,792 22,318 63,515 42,300
Interest expense......................................... 20,447 12,224 40,268 22,308
------------ ------------ ------------ ------------
Income before income taxes............................... 11,345 10,094 23,247 19,992
Income tax provision..................................... 4,765 4,038 9,764 7,997
------------ ------------ ------------ ------------
Net income............................................... $ 6,580 $ 6,056 $ 13,483 $ 11,995
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net income per common and common equivalent share........ $ 0.19 $ 0.17 $ 0.39 $ 0.34
Weighted average common and common equivalent shares
outstanding............................................ 34,557,378 35,084,876 34,516,134 34,964,688
</TABLE>
See notes to condensed consolidated financial statements.
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WORLD COLOR PRESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 29, 1997 AND JUNE 30, 1996
(In thousands)
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<TABLE>
<CAPTION>
SIX MONTHS
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1997 1996
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<S> <C> <C>
OPERATING ACTIVITIES:
Net income.............................................................................. $ 13,483 $ 11,995
Adjustments to reconcile net income to net cash flows provided by (used in) operating
activities:
Depreciation and amortization......................................................... 66,372 43,915
Deferred income tax provision......................................................... 3,487 3,494
Changes in operating assets and liabilities:
Accounts receivable--net........................................................... 20,449 19,466
Inventories........................................................................ (10,819) 15,603
Accounts payable and accrued expenses.............................................. (48,230) (16,633)
Other assets and liabilities--net.................................................. (39,736) (27,041)
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Net cash flows provided by operating activities..................................... 5,006 50,799
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INVESTING ACTIVITIES:
Additions to property, plant and equipment--net......................................... (55,645) (28,844)
Acquisitions of businesses, net of cash acquired........................................ (154,975) (153,498)
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Net cash used in investing activities............................................... (210,620) (182,342)
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FINANCING ACTIVITIES:
Net borrowings on debt.................................................................. 194,815 126,176
Proceeds from issuance of common stock.................................................. -- 8,940
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Net cash provided by financing activities........................................... 194,815 135,116
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.......................................... (10,799) 3,573
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............................................ 33,182 8,902
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CASH AND CASH EQUIVALENTS, END OF PERIOD.................................................. $ 22,383 $ 12,475
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</TABLE>
See notes to condensed consolidated financial statements.
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WORLD COLOR PRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
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1. BASIS OF PRESENTATION
The accompanying condensed consolidated interim financial statements have
been prepared by World Color Press, Inc. (along with its subsidiaries, the
"Company") pursuant to the rules and regulations of the Securities and
Exchange Commission and reflect normal and recurring adjustments, which
are, in the opinion of the Company, considered necessary for a fair
presentation. As permitted by these regulations, these statements do not
include all information required by generally accepted accounting
principles to be included in an annual set of financial statements,
however, the Company believes that the disclosures made are adequate to
make the information presented not misleading. It is suggested that these
condensed consolidated financial statements be read in conjunction with
the consolidated financial statements and the notes thereto included in
the Company's latest Annual Report on Form 10-K.
During the six-month period ended June 29, 1997, the Company acquired a
business whose contribution was not significant to the Company's results
of operations for the periods presented, nor is it expected to have a
material effect on the Company's results on a continuing basis.
Certain reclassifications have been made to prior period amounts to
conform with the current presentation.
2. IMPLEMENTATION OF NEW ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings per
Share, which establishes new standards for computing and presenting net
income per share. The statement is effective for periods ending after
December 15, 1997. Accordingly, the Company will adopt SFAS No. 128 in the
fourth quarter of 1997. If SFAS No. 128 had been implemented for the three
and six months ended June 29, 1997 and June 30, 1996, pro forma basic and
diluted net income per share amounts, as defined in the statement, would not
have been materially different from net income per common and common
equivalent share shown in the accompanying condensed consolidated statements
of operations.
3. INVENTORIES
Inventories are summarized as follows:
JUNE 29, DECEMBER 29,
1997 1996
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Work-in-process............................... $ 81,405 $ 73,747
Raw materials................................. 76,631 66,413
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Total................................... $ 158,036 $ 140,160
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WORLD COLOR PRESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
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4. AMENDMENT TO CREDIT FACILITY
In June 1997, the Company's Second Amended and Restated Credit Agreement
dated as of June 6, 1996, (as amended, the "Credit Agreement") was
amended in conjunction with the securitization transaction described in
Note 5. The effect of this amendment was to provide for an additional
$100,000 in commitments upon the liquidation of indebtedness from the
proceeds of the securitization transaction, after which the aggregate
total commitments of the Credit Agreement were $920,000. These commitments
were comprised of $95,000 in term loan commitments, $250,000 of revolving
loan commitments and $575,000 in acquisition term loan commitments. All
other significant financial provisions of the Credit Agreement remained
substantially unchanged.
5. SUBSEQUENT EVENT
In conjunction with the amended Credit Agreement described in Note 4, on
June 30, 1997, the Company entered into an agreement to sell, on a
revolving basis for a period of up to five years, certain of its
accounts receivable to a wholly-owned subsidiary, which entered into an
agreement to transfer, on a revolving basis, an undivided percentage
ownership interest in a designated pool of accounts receivable to a
maximum of $204,000. These transactions will be reflected as a reduction
of accounts receivable.
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WORLD COLOR PRESS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)
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General
In January 1997, the Company purchased Rand McNally Book Services Group ("Book
Services"), an operating unit of Rand McNally, for approximately $155,000. Book
Services is the third largest producer of hardcover books in the United States
and provides manufacturing and other value-added services to book club, trade,
professional, educational, reference and mail-order publishers. This acquisition
will hereinafter be referred to as the "1997 Acquisition."
In June 1996, the Company acquired from Ringier A.G. all of the issued and
outstanding capital stock of Krueger Acquisition Corporation, including all of
the issued and outstanding capital stock of Ringier Holdings, Inc., Ringier
America, Inc., Krueger Ringier, Inc., Ringier Print U.S., Inc. and W.A. Krueger
Co. Olathe (collectively, "Ringier America"), for approximately $128,000. In
addition, the Company assumed approximately $287,000 of Ringier America's
indebtedness, of which approximately $281,000 was liquidated upon consummation
of the acquisition. Ringier America is a leading diversified commercial printer
whose business includes the printing of catalogs, magazines and mass-market,
racksize books. In addition, the Company acquired certain other businesses in
1996 whose contributions were not significant to the Company's results of
operations for the periods presented, nor are they expected to have a material
effect on the Company's results on a continuing basis. Collectively, Ringier
America and these other acquired companies will hereinafter be referred to as
the "1996 Acquisitions."
Results of Operations
Three Months Ended June 29, 1997 versus Three Months Ended June 30, 1996
Net sales increased $83,381 or 24%, to $425,647 in 1997 from $342,266 in
1996. The increase was due to the inclusion of the sales from the acquisition
of Ringier America and improved base business performance, as well as the
contribution from the 1997 Acquisition. Lower paper prices in the quarter
versus 1996 partially offset the revenue increases.
Gross profit increased $18,110 or 31% to $76,052 in 1997 from $57,942 in
1996, increasing the gross profit margin to 17.9% from 16.9% in 1996. This
improvement is primarily a result of the acquisition of Ringier America and
the 1997 Acquisition, including the benefits of certain cost reduction
initiatives and other synergies resulting from the combination of the
businesses, increased plant utilization and the effect of lower paper prices.
Selling, general and administrative expenses increased $8,636 or 24% to $44,260
in 1997 from $35,624 in 1996. The increase was primarily attributable to the
acquisition of Ringier America and the 1997 Acquisition, including the related
additional amortization expense for goodwill.
Interest expense increased $8,223 or 67% to $20,447 in 1997 from $12,224 in
1996. The increase was attributable to higher average borrowings incurred to
fund acquisitions, capital expenditures and working capital requirements.
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WORLD COLOR PRESS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)
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The effective tax rate, primarily composed of the combined federal and state
statutory rates, was 42% for the second quarter of 1997 compared to 40% for the
comparable period in 1996. The increase was primarily due to the additional
non-deductible amortization expense for goodwill resulting from acquisitions.
Six Months Ended June 29, 1997 versus Six Months Ended June 30,1996
Net sales increased $212,621 or 32%, to $883,998 in 1997 from $671,377 in 1996.
The increase was due to the inclusion of the sales from the 1996 Acquisitions
and improved base business performance as well as the contribution from the 1997
Acquisition. Lower paper prices in the period versus 1996 partially offset the
revenue increases.
Gross profit increased $41,139 or 37% to $151,367 in 1997 from $110,228 in 1996,
increasing the gross profit margin to 17.1% from 16.4% in 1996. This improvement
is a result of the 1996 and 1997 Acquisitions, including the benefits of certain
cost reduction initiatives and other synergies resulting from the combination of
the businesses, increased plant utilization and the effect of lower paper
prices.
Selling, general and administrative expenses increased $19,924 or 29% to $87,852
in 1997 from $67,928 in 1996. The increase was attributable to the 1996 and
1997 Acquisitions, including the related additional amortization expense for
goodwill.
Interest expense increased $17,960 or 81% to $40,268 in 1997 from $22,308 in
1996. The increase was attributable to higher average borrowings incurred to
fund acquisitions as well as capital expenditures and working capital
requirements.
The effective tax rate, primarily composed of the combined federal and state
statutory rates, was 42% for the first six months of 1997 compared to 40% for
the comparable period in 1996. The increase was primarily due to the additional
non-deductible amortization expense for goodwill resulting from acquisitions.
Liquidity and Capital Resources
The Company has historically met its liquidity and capital investment needs with
internally generated funds and external borrowings. Net income plus depreciation
and amortization and deferred income taxes was $83,342 and $59,404 for the six
months ended June 29, 1997 and June 30, 1996, respectively. The Company's
outstanding indebtedness less cash increased $205,614 from December 29, 1996 to
June 29, 1997 due primarily to borrowings incurred to fund acquisitions.
Working capital was $238,801 at June 29, 1997 and $224,245 at June 30, 1996. The
increase of $14,556 or 6% was primarily due to the 1997 Acquisition and the
paydown of accounts payable. In accordance with the Company's ongoing program
to maintain modern, efficient plants and increase productivity, the Company
anticipates that 1997 capital expenditures will be approximately $95,000.
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WORLD COLOR PRESS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)
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The Company's capital expenditures and acquisitions have been funded in part by
borrowings under the Company's Second Amended and Restated Credit Agreement,
dated as of June 6, 1996 (as amended, the "Credit Agreement"). In June 1997,
the Credit Agreement was amended in conjunction with the securitization
transaction described below. The effect of this amendment was to provide
for an additional $100,000 in commitments upon the liquidation of indebtedness
from the proceeds of the securitization transaction, after which the aggregate
total commitments of the Credit Agreement were $920,000. These commitments
were comprised of $95,000 in term loan commitments, $250,000 of revolving
loan commitments and $575,000 in acquisition term loan commitments. All
other significant financial provisions of the Credit Agreement remained
substantially unchanged. Upon completion of the securitization transaction
the Company had undrawn commitments of approximately $190,000 under its
Credit Agreement.
In conjunction with the amended Credit Agreement described above, on June 30,
1997, the Company entered into an agreement to sell, on a revolving basis for
a period of up to five years, certain of its accounts receivable to a
wholly-owned subsidiary, which entered into an agreement to transfer, on a
revolving basis, an undivided percentage ownership interest in a designated
pool of accounts receivable to a maximum of $204,000 (the "Asset
Securitization"). These transactions will be reflected as a reduction of
accounts receivable. Fees associated with the Asset Securitization vary based
on commercial paper rates plus a margin, providing a lower effective rate than
that available under the Company's Credit Agreement.
In July 1997, the Company purchased Johnson & Hardin, a leading printer serving
the commercial and publication markets for approximately $39,000, including
indebtedness.
The Company believes that its liquidity, capital resources and cash flows are
sufficient to fund planned capital expenditures, working capital requirements
and interest and principal payments for the foreseeable future.
Seasonality
Results of operations for this interim period are not necessarily indicative of
results for the full year. The Company's operations are seasonal. Historically,
approximately two-thirds of its operating income has been generated in the
second half of the fiscal year, primarily due to the higher number of magazine
pages, new product launches and back-to-school and holiday catalog promotions.
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WORLD COLOR PRESS, INC.
PART II. OTHER INFORMATION
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Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on May 7, 1997. At that
time, the stockholders of the Company voted to elect nine directors to
serve for the ensuing year. A total of 29,228,452 and 4,516,079 shares were
voted and unvoted, respectively. The following table sets forth certain
information with respect to such election.
<TABLE>
<CAPTION>
Shares Withholding
Nominee Shares Voted For Authority
------- ---------------- ------------------
<S> <C> <C>
Gerald S. Armstrong 28,975,983 252,469
Robert G. Burton 28,975,983 252,469
Mark J. Griffin 28,975,983 252,469
Michael W. Harris 28,975,983 252,469
Henry R. Kravis 28,826,633 401,819
Alexander Navab, Jr. 28,975,883 252,569
Marc L. Reisch 28,975,983 252,469
George R. Roberts 28,826,633 401,819
Scott M. Stuart 28,975,883 252,569
</TABLE>
No other matters were submitted for stockholder vote.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibits required in accordance with Item 601 of Regulation S-K are
incorporated by reference herein as filed with registrant's Annual Report
on Form 10-K for the fiscal year ended December 29, 1996, dated March 27,
1997.
In addition, the Company has filed herewith the following exhibits:
10.1 Limited Waiver, Consent and Second Amendment to Second Amended
and Restated Credit Agreement dated as of June 9, 1997 by and
among World Color Press, Inc., the Lenders party to the Second
Amended and Restated Credit Agreement, as amended, Bankers
Trust Company, as Administrative Agent, and the Guarantors
listed on the signature pages.
10.2 Third Amendment to Second Amended and Restated Credit Agreement
dated as of June 27, 1997 by and among World Color Press, Inc.,
the Lenders party to the Second Amended and Restated Credit
Agreement, as amended, Bankers Trust Company, as
Administrative Agent, and the Guarantors listed on the
signature pages.
10.3 Amended and Restated 1995 Senior Management Stock Option Plan
of World Color Press, Inc.
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WORLD COLOR PRESS, INC.
PART II, OTHER INFORMATION
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10.4 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 to the
agreement, ABN AMRO Bank N.V., as the Enhancer, and the Windmill
Funding Corporation.
10.5 Receivables Purchase Agreement dated as of June 30, 1997 between
World Color Press, Inc. and World Color Finance, Inc.
10.6 Indemnity Agreement dated as of June 30, 1997, made by and between
World Color Press, Inc. and ABN AMRO Bank N.V., as agent.
27.0 Financial Data Schedule for the period ended June 29, 1997 (filed
in electronic form only).
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarterly period ended
June 29, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WORLD COLOR PRESS, INC.
Date: August 13, 1997 By: /s/ THOMAS M. PIERNO
----------------------------------
Thomas M. Pierno
Executive Vice President, Chief
Financial Officer
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EXHIBIT 10.1
EXECUTION
WORLD COLOR PRESS, INC.
LIMITED WAIVER, CONSENT AND SECOND AMENDMENT
TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
This LIMITED WAIVER, CONSENT AND SECOND AMENDMENT TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT (this "Amendment") is dated as of June 9, 1997 and
entered into by and among WORLD COLOR PRESS, INC., a Delaware corporation
("Company"), the Lenders party to the Credit Agreement referred to below on
the date hereof (the "Lenders"), and BANKERS TRUST COMPANY, as
Administrative Agent, and, for purposes of Section 8 hereof, THE SUBSIDIARIES
OF COMPANY LISTED ON THE SIGNATURE PAGES HERETO (each a "Guarantor" and
collectively, the "Guarantors"). All capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement (as defined below).
RECITALS
WHEREAS, Company, the Lenders, BancAmerica Securities, Inc., as
Syndication Agent, Citibank, N.A., as Documentation Agent and Bankers Trust
Company, as Administrative Agent are parties to that certain Second Amended
and Restated Credit Agreement dated as of June 6, 1996, as amended or
modified by that certain First Amendment to Second Amended and Restated
Credit Agreement dated as of June 10, 1996 (as so amended and modified, the
"Credit Agreement");
WHEREAS, Company has informed Administrative Agent and Lenders that
Company plans to form a special purpose corporation or other entity solely
for the purpose of acquiring Receivables Assets from Company and certain of
its other Subsidiaries and engaging in activities related thereto (such
special purpose entity, the "New Receivables SPC") and, together with the
New Receivables SPC and such other Subsidiaries, to enter into a receivables
facility (the "New Receivables Facility") with ABN Amro Bank, N.V. ("ABN
Amro") and Amsterdam Funding Corporation ("Amsterdam Funding") and certain
other parties, as described in the term sheet describing the New Receivables
Facility a copy of which
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will be delivered to Administrative Agent and each Lender prior to the First
Effective Date (as defined herein) (the "New Receivables Facility Term
Sheet").
WHEREAS, the parties hereto wish to (i) waive and modify compliance with
the provisions of subsections 2.1A(ii)(b)(1), 2.4A(ii)(f), 2.4A(iii)(b),
2.4A(iii)(c) and 2.4D of the Credit Agreement to the extent such subsections
require that the Receivables Proceeds from the New Receivables Facility (the
"New Receivables Proceeds") be applied to repay the Tranche C Acquisition
Term Loans and permanently reduce the Tranche B Commitments and Revolving
Loan Commitments in the manner and to the limited extent described herein,
(ii) waive compliance with the provisions of subsections 5.8 and 5.13 of the
Credit Agreement in the manner and to the limited extent described herein,
(iii) amend the applicable interest margin for certain Loans extended
pursuant to the Credit Agreement, (iv) modify certain financial covenants and
(v) make certain other amendments as set forth below.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as
follows:
1. LIMITED WAIVERS
Subject to the terms and conditions set forth herein and in reliance on
the representations and warranties of Company herein contained, Lenders
hereby waive and modify compliance with:
(i) the order of application of the New Receivables Proceeds to the Loans
and Commitments required pursuant to subsections 2.4A(ii)(f), 2.4A(iii)(b)
and 2.4A(iii)(c) of the Credit Agreement solely to the extent necessary such
that (a) the first $55,000,000 of New Receivables Proceeds shall be applied
as follows: (x) $30,000,000 shall be applied to prepay the entire principal
amount of the Existing Term Loans scheduled to be repaid in Fiscal Year 1998
(it being understood that the amortization of the Existing Term Loans shall
be as provided under Scheduled Existing Term Repayment Amount I whether or
not an Additional Subordinated Indebtedness Refinancing occurs after the date
hereof) and (y) $25,000,000 shall be applied to prepay the entire principal
amount of Tranche A Acquisition Term Loans scheduled to be repaid in Fiscal
Year 1998 (it being understood that the amortization of the Tranche A
Acquisition Term Loans
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shall be as provided under Scheduled Tranche A Repayment Amount I whether or
not an Additional Subordinated Indebtedness Refinancing occurs after the date
hereof) and (b) the remaining amount of New Receivables Proceeds up to
$145,000,000 shall be applied as follows: (x) the first $100,000,000 shall be
applied to prepay the principal amount of the Tranche B Acquisition Term
Loans and (y) the remaining portion of such New Receivables Proceeds whenever
received up to $45,000,000 shall be applied to prepay the principal amount of
the Revolving Loans;
(ii) the provisions of subsections 2.1A(ii)(b)(1), 2.4A(ii)(f),
2.4A(iii)(b), 2.4A(iii)(c) and 2.4D of the Credit Agreement to the extent and
only to the extent that such subsections require that the Revolving Loan
Commitments and Tranche B Commitments be reduced in connection with the
application of the remaining $145,000,000 of New Receivables Proceeds
described in clause (i)(b) above; and
(iii) the provisions of subsection 5.8 to the extent that such provisions
require that the New Receivables SPC execute and deliver the Guaranty and a
counterpart to the Security Agreement; provided that Company shall promptly
cause all of the equity and any Intercompany Indebtedness owed by the New
Receivables SPC to the Company or any of its Subsidiaries to be pledged to
Collateral Agent under the Security Agreement as required under subsection
5.8.
2. AMENDMENTS
2.1 Amendments to Section 1: Definitions
A. Subsection 1.1 of the Credit Agreement is hereby amended by amending
the definition of "Consolidated Excess Cash Flow" therein by adding the
following after the words "(except to the extent of any such Consolidated
Capital Expenditures financed during such Fiscal Year from the proceeds of
Indebtedness incurred for such purpose)" in clause (c) thereof:
"minus cash the Company uses to make Acquisitions during such Fiscal
Year (except to the extent that any such Acquisition is made during such
Fiscal Year with the proceeds of Indebtedness incurred for such purpose
or the Cash Proceeds of any Asset Sale)".
3
<PAGE>
B. Subsection 1.1 of the Credit Agreement is hereby amended by amending
and restating the definition of "Receivables Assets" as follows:
"Receivables Assets" means any accounts receivable arising in
connection with the sale of inventory or services of Company or any of
its Subsidiaries in the ordinary course of business and any related
contract rights with respect to such accounts receivable (including,
without limitation, rights with respect to such accounts receivable
under printing contracts and security interests), any books, records and
other documents or information (including computer programs, tapes,
disks, software and related property and rights) with respect to, in
each case, such accounts receivable and any lock boxes or Deposit
Accounts into which only the proceeds of accounts receivable or any
contract rights with respect to accounts receivable are transferred and
any proceeds of the foregoing."
C. Subsection 1.1 of the Credit Agreement is hereby amended by amending
the definition of "Receivables SPC" therein by adding the following after
the word "means" therein, it being understood that the New Receivables SPC
shall be a Subsidiary of the Company that is a Receivables SPC under the Loan
Documents:
"a Subsidiary or".
D. Subsection 1.1 of the Credit Agreement is hereby amended by amending
the definition of "Indebtedness" by adding the following after the words
"Consolidated Total Indebtedness" contained in the proviso therein:
"and subsection 7.2".
E. Subsection 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:
"Cumulative Receivables Proceeds Prepayment Amount" means an amount
equal to (i) the aggregate of all Receivables Proceeds Prepayment
Amounts minus (ii) prepayments that have occurred pursuant to subsection
2.4A(ii)(f) as a result of the increase of the New Receivables Facility
over and above $200,000,000; provided that no Receivables Proceeds
Prepayment Amount calculated with respect to any Acquisition shall be
counted for purposes of clause (i) above to the extent
4
<PAGE>
that, at the time the applicable New Receivables Proceeds are received
and a calculation is required pursuant to the proviso of subsection
2.4A(ii)(f), the Receivables Assets allocable to the business acquired
in such Acquisition are not being transferred to the New Receivables SPC
under the New Receivables Documents."
"New Receivables Agreement" means that certain receivables sale
agreement among New Receivables SPC (as defined in the Second
Amendment), Amsterdam Funding Corporation and certain other parties, as
such agreement may be amended, restated, supplemented or otherwise
modified from time to time.
"New Receivables Documents" means the New Receivables Agreement
together with the documents entered into by Company or any of its
Subsidiaries in connection therewith or pursuant thereto, including,
without limitation, each agreement between Company and one or more of
its Subsidiaries which provides for the transfer of Receivables Assets,
as the same may be amended, restated, supplemented or otherwise modified
from time to time."
"New Receivables Facility" means that certain receivables facility with
Amsterdam Funding Corporation approved by Lenders pursuant to the Second
Amendment in the initial aggregate principal amount of approximately
$200,000,000."
"New Receivables Proceeds" means the Receivables Proceeds received by
the Company or any of its Subsidiaries in connection with the New
Receivables Facility."
"Receivables Proceeds Prepayment Amount" means in connection with any
Acquisition consummated after the effectiveness of the Second Amendment
which the Company directly or indirectly consummates with proceeds of
any Loans, an amount equal to (i) the product of (a) the accounts
receivable of the Target of such Acquisition or the accounts receivable
allocable to the assets of the Target being acquired in such Acquisition
that would qualify as "eligible receivables" under the New Receivables
Agreement as in effect on the date of such Acquisition to the extent
reflected on the consolidated financial statements of Company as of the
time immediately following such Acquisition and (b) a fraction, the
numerator of which equals the amount of
5
<PAGE>
cash consideration financed directly or indirectly with Loans and the
denominator of which equals the aggregate cash consideration paid by the
Company and its Subsidiaries in connection with such Acquisition,
multiplied by (ii) 80%."
"Second Amendment" means that certain Limited Waiver, Consent and
Second Amendment to Second Amended and Restated Credit Agreement dated
as of June 9, 1997 among Company, Lenders, Administrative Agent and the
Subsidiaries of Company listed on the signature pages thereto.
2.2 Amendments to Section 2: Amounts and Terms of Commitments and
Loans; Notes
A. Rate of Interest.
(i) Applicable Margin. Subsection 2.2A(i) is hereby amended by deleting
the table set forth therein in its entirety and substituting the following
therefor, with the understanding that the Applicable Margin with respect to
outstanding Loans will change upon the effectiveness of this subsection
2.2A(i):
<TABLE>
<CAPTION>
APPLICABLE APPLICABLE
LEVERAGE RATIO MARGIN I MARGIN II
---------------------- ----------- -----------
<S> <C> <C>
Less than 2.50:1.00 0.000% 0.000%
2.50:1.00--2.99:1.00 0.000% 0.000%
3.00:1.00--3.49:1.00 0.000% 0.000%
3.50:1.00--3.99:1.00 0.000% 0.000%
4.00:1.00--4.49:1.00 0.000% 0.000%
4.50:1.00 and greater 0.250% 0.125%
</TABLE>
(ii) Applicable Eurodollar Rate Margin. Subsection 2.2A(ii) is hereby
amended by deleting the table set forth therein in its entirety and
substituting the following therefor with the understanding that the
Applicable Eurodollar Rate Margin with respect to outstanding Loans will
change upon the effectiveness of this subsection 2.2A(ii):
6
<PAGE>
<TABLE>
<CAPTION>
APPLICABLE APPLICABLE
EURODOLLAR EURODOLLAR
LEVERAGE RATIO RATE MARGIN I RATE MARGIN II
---------------------- --------------- ---------------
<S> <C> <C>
Less than 2.50:1.00 0.250% 0.125%
2.50:1.00--2.99:1.00 0.375% 0.250%
3.00:1.00--3.49:1.00 0.625% 0.500%
3.50:1.00--3.99:1.00 0.750% 0.625%
4.00:1.00--4.49:1.00 1.000% 0.875%
4.50:1.00 and greater 1.250% 1.125%
</TABLE>
B. Prepayments from Proceeds of Permitted Receivables Transaction.
Subsection 2.4A(ii)(f) is hereby amended by adding the following proviso at
the end thereof:
"; provided that New Receivable Proceeds (as defined in the Second
Amendment) received by Company or any of its Subsidiaries that
constitute an increase in the New Receivables Facility to an amount
greater than $200,000,000 shall not be required to be applied to prepay
the Loans and reduce the Commitments as provided herein except to the
extent of the Cumulative Receivables Proceeds Prepayment Amount in
effect at the time of such receipt by the Company or such Subsidiary of
Company."
C. Prepayments and Reductions Due to Issuance of Debt. Subsection
2.4A(ii)(c) is hereby amended by adding the following proviso at the end of
the first sentence thereof:
"; provided, further that cash proceeds (net of underwriting discounts
and commissions and other reasonable costs associated therewith) from
the issuance or sale of any Additional Subordinated Indebtedness or
other debt Securities of Company or any of its Subsidiaries shall not
include any Receivables Proceeds for purposes of this subsection
2.4A(ii)(c)."
2.3. Amendments to Section 5: Affirmative Covenants
Deposit Accounts and Cash Management Systems. Subsection 5.13 is hereby
amended by adding the following at the end thereof:
"Notwithstanding anything herein and to the contrary, this subsection
5.13 shall not apply to any Deposit Accounts of the New Receivables SPC
or any Deposit Accounts of Company which only hold payments in respect
of Receivables
7
<PAGE>
Assets which Receivables Assets have been transferred to the New
Receivables SPC."
2.4. Amendments to Section 6: Negative Covenants
A. Indebtedness. Subsection 6.1 is hereby amended by deleting the period
at the end of subsection 6.1(xii), adding a semi-colon in its place and by
adding new subsections 6.1(xiii) and 6.1(xiv) thereto as follows:
"(xiii) New Receivables SPC (as defined in the Second Amendment) may
become and remain liable with respect to any Indebtedness under the New
Receivables Documents; provided that neither Company nor any of its
other Subsidiaries (other than the New Receivables SPC) shall have
guarantied or pledged any of their respective assets to secure such
Indebtedness, it being understood that Company may enter into customary
unsecured indemnities (as reasonably determined by Company) under the
New Receivables Documents (including without limitation an indemnity as
to customary yield protection, increased cost and reduced return
obligations (as reasonably determined by the Company) of the New
Receivables SPC); provided that such indemnities do not constitute a
guaranty of collectibility of any Receivables Assets or a guaranty of
the payment of principal or interest of any Indebtedness of the New
Receivables SPC (or the equivalent with respect to Receivables Assets
sold by the New Receivables SPC); and
(xiv) New Receivables SPC (as defined in the Second Amendment) may
become and remain liable with respect to promissory notes issued to
Company or any Subsidiary of Company that evidence payment of the
purchase price of Receivables Assets acquired by the New Receivables SPC
(as defined in the Second Amendment) from the Company or such Subsidiary
as provided for under the New Receivables Documents."
B. Liens. Subsection 6.2 is hereby amended by deleting the period at the
end of subsection 6.2(vi), adding a semi-colon in its place and by adding new
subsection 6.2(vii) thereto as follows:
"and (vii) Liens granted by the New Receivables SPC (as defined in the
Second Amendment) in its Receivables Assets and in its rights under the
New Receivables Documents pursuant to the New Receivables Documents."
C. Investments; Joint Ventures. Subsection 6.3 is hereby amended by
deleting the period at the end of subsection
8
<PAGE>
6.3(xi), adding a semi-colon in its place and by adding new subsections
6.3(xii) and 6.3(xiii) thereto as follows:
"(xii) Company may own the equity interests in the New Receivables
SPC (as defined in the Second Amendment); and
(xiii) Company and its Subsidiaries may receive and hold promissory
notes issued by the New Receivables SPC (as defined in the Second
Amendment) in connection with the sale of Receivable Assets to the New
Receivables SPC (as defined in the Second Amendment) as provided under
the New Receivables Documents."
D. Contingent Obligations. Subsection 6.4 is hereby amended by deleting
the period at the end of subsection 6.4(vi), adding a semi-colon in its place
and by adding new subsection 6.4(viii) thereto as follows:
"(viii) New Receivables SPC may become and remain liable with respect
to Contingent Obligations incurred pursuant to the New Receivables
Documents."
E. Consolidated Fixed Charge Coverage Ratio. Subsection 6.6A is hereby
amended by deleting the table set forth therein in its entirety and
substituting the following therefor:
<TABLE>
<CAPTION>
MINIMUM
CONSOLIDATED
FIXED CHARGE
REFERENCE DATE COVERAGE RATIO
-------------- --------------
<S> <C>
Second Fiscal Quarter 1996.............. 1.85:1.00
Third Fiscal Quarter 1996............... 1.90:1.00
Fourth Fiscal Quarter 1996.............. 2.00:1.00
First Fiscal Quarter 1997............... 2.00:1.00
Second Fiscal Quarter 1997.............. 2.00:1.00
Third Fiscal Quarter 1997............... 2.00:1.00
Fourth Fiscal Quarter 1997.............. 2.00:1.00
First Fiscal Quarter 1998............... 2.00:1.00
Second Fiscal Quarter 1998.............. 1.75:1.00
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
MINIMUM
CONSOLIDATED
FIXED CHARGE
REFERENCE DATE COVERAGE RATIO
-------------- --------------
<S> <C>
Third Fiscal Quarter 1998............... 1.75:1.00
Fourth Fiscal Quarter 1998.............. 1.50:1.00
First Fiscal Quarter 1999............... 1.50:1.00
Second Fiscal Quarter 1999.............. 1.30:1.00
Third Fiscal Quarter 1999............... 1.30:1.00
Fourth Fiscal Quarter 1999.............. 1.30:1.00
First Fiscal Quarter 2000............... 1.30:1.00
Second Fiscal Quarter 2000.............. 1.30:1.00
Third Fiscal Quarter 2000............... 1.30:1.00
Fourth Fiscal Quarter 2000.............. 1.20:1.00
First Fiscal Quarter 2001............... 1.20:1.00
Second Fiscal Quarter 2001.............. 1.20:1.00
Third Fiscal Quarter 2001............... 1.20:1.00
Fourth Fiscal Quarter 2001.............. 1.20:1.00
First Fiscal Quarter 2002............... 1.20:1.00
Second Fiscal Quarter 2002.............. 1.00:1.00
Third Fiscal Quarter 2002............... 1.00:1.00
</TABLE>
F. Leverage Ratio. Subsection 6.6B is hereby amended by deleting the
table set forth therein in its entirety and substituting the following
therefor:
10
<PAGE>
<TABLE>
<CAPTION>
REFERENCE DATE MAXIMUM LEVERAGE RATIO
-------------- ----------------------
<S> <C>
Second Fiscal Quarter 1996.............. 4.95:1.00
Third Fiscal Quarter 1996............... 4.65:1.00
Fourth Fiscal Quarter 1996.............. 4.15:1.00
First Fiscal Quarter 1997............... 4.15:1.00
Second Fiscal Quarter 1997.............. 4.15:1.00
Third Fiscal Quarter 1997............... 4.15:1.00
Fourth Fiscal Quarter 1997.............. 3.90:1.00
First Fiscal Quarter 1998............... 3.90:1.00
Second Fiscal Quarter 1998.............. 3.65:1.00
Third Fiscal Quarter 1998............... 3.65:1.00
Fourth Fiscal Quarter 1998.............. 3.65:1.00
First Fiscal Quarter 1999............... 3.40:1.00
Second Fiscal Quarter 1999.............. 3.40:1.00
Third Fiscal Quarter 1999............... 3.40:1.00
Fourth Fiscal Quarter 1999.............. 3.15:1.00
First Fiscal Quarter 2000............... 3.15:1.00
Second Fiscal Quarter 2000.............. 3.15:1.00
Third Fiscal Quarter 2000............... 3.15:1.00
Fourth Fiscal Quarter 2000.............. 2.65:1.00
First Fiscal Quarter 2001............... 2.65:1.00
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
REFERENCE DATE MAXIMUM LEVERAGE RATIO
-------------- ----------------------
<S> <C>
Second Fiscal Quarter 2001.............. 2.65:1.00
Third Fiscal Quarter 2001............... 2.65:1.00
Fourth Fiscal Quarter 2001.............. 2.15:1.00
First Fiscal Quarter 2002............... 2.15:1.00
Second Fiscal Quarter 2002.............. 2.15:1.00
Third Fiscal Quarter 2002............... 2.15:1.00
</TABLE>
G. Restriction on Fundamental Changes. Subsection 6.7 is hereby amended
by deleting the period at the end of subsection 6.7(ix), adding a semi-colon
in its place and by adding the following clause (x) at the end thereof:
"and (x) in addition to the Acquisitions permitted under subsection
6.7(v) and the dispositions permitted under subsection 6.7(iii), the
Company may exercise its early buyout option with respect to any or all
of the equipment being leased under the GECC Leveraged Lease and may
sell any or all of such equipment to a third party in connection with
its entry into another Operating Lease for such equipment within 30 days
of exercising its early buyout option, it being understood and agreed
that such sale shall not be deemed to be an Asset Sale for purposes of
this Agreement, that subsection 2.4 hereof shall not apply to the
proceeds of any such sale and that, during the 30 day period after the
acquisition of such equipment by the Company, such equipment shall be
"Excluded Collateral" that is not pledged to secure any Obligations."
H. Limitation on Net Consolidated Capital Expenditures. Subsection 6.9 is
hereby amended by adding "(i)" after the words "Notwithstanding the
foregoing," in the second sentence and by adding the following at the end
thereof:
"and (ii) if the Company exercises its early buyout option with respect
to the equipment being leased under the GECC Leveraged Lease to the
extent that the Company enters into another Operating Lease with respect
to equipment previously leased pursuant to the GECC Leveraged Lease
12
<PAGE>
within 30 days it will not be deemed to be a Consolidated Capital
Expenditure under this subsection 6.9."
I. Sale or Discount of Receivables. Subsection 6.10 is hereby amended by
adding the following after the words "or otherwise convey their respective
Receivables Assets to a Receivables SPC" contained in the proviso therein:
"(or to the Company which then sells, transfers or otherwise conveys
such Receivables Assets to a Receivables SPC)."
Subsection 6.10 is further amended by adding the words "to the extent
required" after the words "so long as Company applies the Receivables
Proceeds thereof to prepay the Loans" contained in the proviso therein.
J. Transactions with Affiliates. Subsection 6.11 is hereby amended by
adding the following at the end thereof:
"or (v) the transactions contemplated by the New Receivables
Documents."
K. Other Indebtedness; Amendments and Waivers of Certain Documents.
Subsection 6.12 is hereby amended by adding the following paragraph after the
first paragraph thereof:
"Neither Company nor any of its Subsidiaries will amend or otherwise
change the terms of the New Receivables Documents as in effect on the
Second Effective Date (as such term is defined in the Second Amendment)
or make any payment consistent with an amendment or change thereto, if
the effect of such amendment or change is to increase the applicable
interest rate thereunder in a material amount, change the dates upon
which payments are due thereunder in a manner adverse in any material
respect to the obligor, change any event of default or termination event
or condition to an event of default or termination event under such New
Receivables Documents in a manner adverse in any material respect to the
Company or any of its Subsidiaries, or which amendment or change,
together with all other amendments or changes made, increases in any
material respect the obligations of the Company or any of its
Subsidiaries or confers additional rights on the holder of the
Indebtedness or other obligations of the Company and its Subsidiaries
which would be adverse in any material respect to Company, any of its
Subsidiaries or Lenders."
13
<PAGE>
2.5. Amendments to Exhibits.
The Compliance Certificate attached to the Credit Agreement as Exhibit
IV is amended to add the following at the end thereof:
"M. Receivables Proceeds Prepayment Amount
Set forth below is a description of each Acquisition consummated
in the preceding Fiscal Quarter along with the corresponding
Receivables Proceeds Prepayment Amount for each such
Acquisition which generated a Receivables Proceeds
Prepayment Amount:
1. The Accounts Receivable of the Target of the Acquisition
or accounts receivable allocable to the assets of
the Target being acquired in the Acquisition as
indicated on the most recent audited financial
statements of the Target:
$______
2. A fraction, the numerator of which equals the amount
of cash consideration financed directly or indirectly
with Loans and the denominator of which equals the
aggregate cash consideration paid by the Company and
its Subsidiaries in connection with the Acquisition:
$______
3. Receivables Proceeds Prepayment Amount
((1) x (2) x 80%):
$______
[Repeat for each Acquisition in Fiscal Quarter]
4. Total Receivables Proceeds Prepayment Amounts
for Fiscal Quarter:
$______
N. Cumulative Receivables Proceeds Prepayment Amount
1. Cumulative Receivables Proceeds Prepayment Amount
as of the end of the preceding Fiscal Quarter:
$______
14
<PAGE>
2. Total Receivables Proceeds Prepayment Amount for
Fiscal Quarter (see item M.4. above):
$______
3. Prepayments that have occurred pursuant to
subsection 2.4A(ii)(f) as a result of the increase
of the New Receivables Facility over and above
$200,000,000 during Fiscal Quarter:
$______
4. Cumulative Receivables Proceeds Prepayment Amount
as of the end of Fiscal Quarter
((1) + (2) - (3)):
$______
O. New Receivables Facility
1. Maximum Amount of New Receivables Facility as of
the end of the preceding Fiscal Quarter:
$______
2. Amount of Indebtedness under New Receivables Agreement
as of the end of the previous Fiscal Quarter:
$______
3. CONSENT
Pursuant to subsection 6.10 of the Credit Agreement and subject to the
terms and conditions set forth herein and in reliance on the representations and
warranties of Company herein contained, Administrative Agent and Lenders hereby
consent to and approve the terms and conditions of the accounts receivables
financing described in the New Receivables Term Sheet, substantially in the form
of Exhibit A annexed hereto.
4. LIMITATION OF WAIVERS, AMENDMENTS AND CONSENT
Without limiting the generality of the provisions of subsection 9.7 of
the Credit Agreement, the waivers, amendments and consent set forth above shall
be limited precisely by their terms, shall not have any force or effect with
respect to any other matter except as expressly provided above, and nothing in
this Amendment shall be deemed to:
(a) constitute a waiver or modification of any other term,
provision or condition of the Credit Agreement
15
<PAGE>
or any other
instrument or agreement referred to therein (whether in
connection with the New Receivables Facility of otherwise); or
(b) prejudice any right or remedy that Administrative Agent or
any Lender may now have (except to the extent such right or
remedy was based upon existing defaults that will not exist after
giving effect to this Amendment) or may have in the future under
or in connection with the Credit Agreement or any other
instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
5. CONDITIONS TO EFFECTIVENESS
5.1. First Effective Date.
Sections 2.1A, 2.2A, 2.4E, 2.4F, 2.4G, 2.4H, 3, 4, 5, 6, 7 and 8 of
this Amendment shall become effective only upon the satisfaction of all of the
following conditions precedent on or prior to June 30, 1997 (the date of
satisfaction of such conditions being referred to herein as the "First
Effective Date"):
A. On or before the First Effective Date, Company and the Guarantors
shall have delivered to Administrative Agent executed copies of this Amendment.
B. On or before the First Effective Date, Lenders shall have
delivered to Administrative Agent an executed original or telefacsimile of a
counterpart of this Amendment or shall have orally confirmed to Administrative
Agent that such Lender agreed to all of the terms and conditions of this
Amendment, as set forth herein.
C. On or before the First Effective Date, Administrative Agent shall
have received for distribution to each Lender consenting to this Amendment in
accordance with its Pro Rata Share under the Credit Agreement a non-refundable
amendment fee equal to 0.05% of the aggregate Commitments in effect as of the
date hereof.
16
<PAGE>
5.2. Second Effective Date.
Sections 1, 2.1B, 2.1C, 2.1D, 2.1E, 2.2B, 2.2C, 2.3, 2.4A, 2.4B, 2.4C,
2.4D, 2.4I, 2.4J, 2.4K and 2.5 of this Amendment shall become effective only
upon the satisfaction of all of the following conditions precedent in
subsections 5.2A and B set forth below on or prior to September 30, 1997 (the
date of satisfaction of such conditions being referred to herein as the "Second
Effective Date"):
A. All of the conditions set forth in subsection 5.1. of this
Amendment have been satisfied.
B. On or before the Second Effective Date, Administrative Agent and
the other Agents shall have received on behalf of Lenders copies of the final
definitive agreements relating to the New Receivables Facility and, in addition
either (i) Administrative Agent shall have received an Officer's Certificate of
Company certifying that such final definitive agreements do not materially
differ from the terms set forth in the New Receivables Facility Term Sheet or
(ii) in the event that such final definitive agreements materially differ from
the terms set forth in the New Receivables Facility Term Sheet, Requisite
Lenders shall have approved such final documentation relating to such New
Receivables Facility.
C. On or after the Second Effective Date, the Collateral Agent is
authorized to release the Receivables Assets transferred to the New Receivables
SPC in connection with the New Receivables Documents, and in connection
therewith the Collateral Agent shall execute and file UCC releases and take such
other actions as are necessary to effect the release of such Liens in the
Receivables Assets.
6. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. Corporate Power and Authority. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the ``Amended Agreement").
17
<PAGE>
B. Authorization of Agreements. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of Company.
C. No Conflict. The execution and delivery by Company of this
Amendment and the performance by Company of the Amended Agreement do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than Liens created under any
of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Second Amendment Effective date and disclosed in writing to Lenders.
D. Governmental Consents. The execution and delivery by Company of
this Amendment and the performance by Company of the Amended Agreement do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body.
E. Binding Obligation. This Amendment has been duly executed and
delivered by Company and, when executed and delivered, this Amendment and the
Amended Agreement will be the legally valid and binding obligations of Company,
enforceable against Company in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Effective Date and the Second Effective Date to
the same extent as though made on and as of that date, except to the
18
<PAGE>
extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date.
G. Absence of Default. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
7. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the Other
Loan Documents.
(i) On and after the First Effective Date, each reference in the
Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents
to the "Credit Agreement", "thereunder", "thereof" or words
of like import referring to the Credit Agreement shall mean and
be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force
and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein,
constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of Agent or any Lender under, the
Credit Agreement or any of the other Loan Documents.
B. Fees and Expenses. Company acknowledges that all costs, fees and
expenses as described in subsection 9.3 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
C. Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
19
<PAGE>
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts; Effectiveness. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment (other than the
provisions of Sections 1, 2 and 3 hereof, the effectiveness of which is governed
by Section 5 hereof) shall become effective upon the execution of a counterpart
hereof by Company, Lenders, Syndication Agent, Distribution Agent and
Administrative Agent and receipt by Company and Administrative Agent of written
or telephonic notification of such execution and authorization of delivery
thereof.
8. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS
Each Guarantor hereby acknowledges that it has read this Amendment and
consents to the terms thereof and further hereby confirms and agrees that,
notwithstanding the effectiveness of this Amendment, the obligations of such
Guarantor under the Guaranty shall not be impaired or affected and the Guaranty
is, and shall continue to be, in full force and effect and is hereby confirmed
and ratified in all respects.
[Remainder of page intentionally left blank]
20
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
WORLD COLOR PRESS, INC.
By:
--------------------------
Name:
Title:
THE LANMAN COMPANIES, INC.
By:
--------------------------
Name:
Title:
LANMAN LITHOTECH, INC.
By:
--------------------------
Name:
Title:
CENTRAL FLORIDA PRESS, L.C.
By:
--------------------------
Name:
Title:
NORTHEAST GRAPHICS INC.
By:
--------------------------
Name:
Title:
S-1
<PAGE>
THE WESSEL COMPANY, INC.
By:
--------------------------
Name:
Title:
IMAGE TECHNOLOGIES, INC.
By:
--------------------------
Name:
Title:
SHEA COMMUNICATIONS COMPANY
By:
--------------------------
Name:
Title:
KRUEGER ACQUISITION CORPORATION
By:
--------------------------
Name:
Title:
KRI, INC.
By:
--------------------------
Name:
Title:
RAI, INC.
By:
--------------------------
Name:
Title:
S-2
<PAGE>
BCK 140 PARTNERSHIP
By: WORLD COLOR PRESS, INC.,
its General Partner
By:
--------------------------
Name:
Title:
By: THE LANMAN COMPANIES, INC., its General
Partner
By:
--------------------------
Name:
Title:
WORLD COLOR BOOK SERVICES, INC.
By:
--------------------------
Name:
Title:
S-3
<PAGE>
BANKERS TRUST COMPANY,
individually as a Lender and
as Administrative Agent
By:
--------------------------
Name:
Title:
BANK OF AMERICA NT & SA,
as a Lender
By:
--------------------------
Name:
Title:
CITIBANK, N.A.,
as a Lender
By:
--------------------------
Name:
Title:
ABN AMRO BANK, NV, NEW YORK BRANCH,
as Lender
By: ABN Amro North America, Inc.,
as Agent
By:
--------------------------
Name:
Title:
BANK OF MONTREAL,
as Lender
By:
--------------------------
Name:
Title:
S-4
<PAGE>
THE BANK OF NOVA SCOTIA
as Lender
By:
--------------------------
Name:
Title:
BANK OF SCOTLAND,
as Lender
By:
--------------------------
Name:
Title:
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
as Lender
By:
--------------------------
Name:
Title:
BANQUE PARIBAS,
as Lender
By:
--------------------------
Name:
Title:
CIBC, INC.,
as Lender
By:
--------------------------
Name:
Title:
S-5
<PAGE>
FLEET NATIONAL BANK,
as Lender
By:
--------------------------
Name:
Title:
THE FUJI BANK, LIMITED, NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LTD.,
as Lender
By:
--------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD. CHICAGO
BRANCH,
as Lender
By:
--------------------------
Name:
Title:
NATIONSBANK, N.A.,
as Lender
By:
--------------------------
Name:
Title:
S-6
<PAGE>
PNC BANK, KENTUCKY, INC.,
as Lender
By:
--------------------------
Name:
Title:
THE SANWA BANK, LIMITED,
as Lender
By:
--------------------------
Name:
Title:
BANK OF IRELAND, GRAND CAYMAN BRANCH,
as Lender
By:
--------------------------
Name:
Title:
BANKBOSTON, N.A. (formerly know as The First
National Bank of Boston), as Lender
By:
--------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
S-7
<PAGE>
CREDIT SUISSE FIRST BOSTON (formerly
known as Credit Suisse),
as Lender
By:
--------------------------
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.,
as Lender
By:
--------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES,
as Lender
By:
--------------------------
Name:
Title:
THE SAKURA BANK, LIMITED,
as Lender
By:
--------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
S-8
<PAGE>
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK
BRANCH,
as Lender
By:
--------------------------
Name:
Title:
TORONTO DOMINION (NEW YORK), INC.,
as Lender
By:
--------------------------
Name:
Title:
UNITED JERSEY BANK,
as Lender
By:
--------------------------
Name:
Title:
THE YASUDA TRUST AND BANKING CO., LTD., NEW YORK
BRANCH,
as Lender
By:
--------------------------
Name:
Title:
THE TOKAI BANK, LTD., NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
S-9
<PAGE>
MERITA BANK LTD NEW YORK BRANCH
as Lender
By:
--------------------------
Name:
Title:
BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Lender
By:
--------------------------
Name:
Title:
RIGGS BANK N.A.,
as Lender
By:
--------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
as Lender
By:
--------------------------
Name:
Title:
S-10
<PAGE>
GIROCREDIT BANK
AKTIENGESELLSCHAFT DER SPARKASSEN,
GRAND CAYMAN ISLAND BRANCH,
as Lender
By:
--------------------------
Name:
Title:
BANK LEUMI TRUST COMPANY NEW
YORK,
as Lender
By:
--------------------------
Name:
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE,
as Lender
By:
--------------------------
Name:
Title:
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Lender
By:
--------------------------
Name:
Title:
S-11
<PAGE>
LEHMAN COMMERCIAL PAPER INC.,
as Lender
By:
--------------------------
Name:
Title:
MORGAN STANLEY SENIOR FUNDING, INC.,
as Lender
By:
--------------------------
Name:
Title:
THE TOYO TRUST AND BANKING CO. LTD.,
as Lender
By:
--------------------------
Name:
Title:
S-12
<PAGE>
EXHIBIT 10.2
EXECUTION
WORLD COLOR PRESS, INC.
THIRD AMENDMENT
TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is dated as of June 27, 1997 and entered into by and among
WORLD COLOR PRESS, INC., a Delaware corporation ("Company"), the Lenders party
to the Credit Agreement referred to below on the date hereof (the "Lenders"),
and BANKERS TRUST COMPANY, as Administrative Agent, and, for purposes of Section
6 hereof, THE SUBSIDIARIES OF COMPANY LISTED ON THE SIGNATURE PAGES HERETO (each
a "Guarantor" and collectively, the "Guarantors"). All capitalized terms
used herein without definition shall have the same meanings herein as set forth
in the Credit Agreement (as defined below).
RECITALS
WHEREAS, Company, the Lenders, BancAmerica Securities, Inc., as
Syndication Agent, Citibank, N.A., as Documentation Agent and Bankers Trust
Company, as Administrative Agent are parties to that certain Second Amended and
Restated Credit Agreement dated as of June 6, 1996, as amended or modified by
that certain First Amendment to Second Amended and Restated Credit Agreement
dated as of June 10, 1996 and as further amended or modified by that certain
Limited Waiver, Consent and Second Amendment to Second Amended and Restated
Credit Agreement dated as of June 9, 1997 (as so amended and modified, the
"Credit Agreement");
WHEREAS, the parties hereto wish to amend the Credit Agreement as set
forth below.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
<PAGE>
1. AMENDMENT
All references to "Amsterdam Funding" in the Credit Agreement and in
that certain Limited Waiver, Consent and Second Amendment to Second Amended and
Restated Credit Agreement dated as of June 9, 1997 and the exhibits thereto are
hereby amended to include Amsterdam Funding, Windmill Funding Corporation or
another affiliate of ABN Amro.
2. LIMITATION OF AMENDMENT
Without limiting the generality of the provisions of subsection 9.7 of
the Credit Agreement, the amendment set forth above shall be limited precisely
by its terms, shall not have any force or effect with respect to any other
matter except as expressly provided above, and nothing in this Amendment shall
be deemed to:
(a) constitute a waiver or modification of any other term, provision
or condition of the Credit Agreement or any other instrument or agreement
referred to therein; or
(b) prejudice any right or remedy that Administrative Agent or any
Lender may now have (except to the extent such right or remedy was based
upon existing defaults that will not exist after giving effect to this
Amendment) or may have in the future under or in connection with the Credit
Agreement or any other instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
3. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "Third
Amendment Effective Date"):
A. On or before the Third Amendment Effective Date, Company and the
Guarantors shall have delivered to Administrative Agent executed copies of this
Amendment.
2
<PAGE>
B. On or before the Third Amendment Effective Date, Lenders shall
have delivered to Administrative Agent an executed original or telefacsimile of
a counterpart of this Amendment or shall have orally confirmed to Administrative
Agent that such Lender agreed to all of the terms and conditions of this
Amendment, as set forth herein.
4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. Corporate Power and Authority. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "Amended Agreement").
B. Authorization of Agreements. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of Company.
C. No Conflict. The execution and delivery by Company of this
Amendment and the performance by Company of the Amended Agreement do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than Liens created under any
of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Third Amendment Effective Date and disclosed in writing to Lenders.
3
<PAGE>
D. Governmental Consents. The execution and delivery by Company of
this Amendment and the performance by Company of the Amended Agreement do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body.
E. Binding Obligation. This Amendment has been duly executed and
delivered by Company and, when executed and delivered, this Amendment and the
Amended Agreement will be the legally valid and binding obligations of Company,
enforceable against Company in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Third Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. Absence of Default. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
5. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the Other
Loan Documents.
(i) On and after the Third Amendment Effective Date, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
4
<PAGE>
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of Agent
or any Lender under, the Credit Agreement or any of the other Loan
Documents.
B. Fees and Expenses. Company acknowledges that all costs, fees and
expenses as described in subsection 9.3 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
C. Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts; Effectiveness. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment (other than the
provisions of Section 1 hereof, the effectiveness of which is governed by
Section 3 hereof) shall become effective upon the execution of a counterpart
hereof by Company, Lenders, Syndication Agent, Distribution Agent and
Administrative Agent and receipt by Company and Administrative Agent of written
or telephonic notification of such execution and authorization of delivery
thereof.
5
<PAGE>
6. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS
Each Guarantor hereby acknowledges that it has read this Amendment and
consents to the terms thereof and further hereby confirms and agrees that,
notwithstanding the effectiveness of this Amendment, the obligations of such
Guarantor under the Guaranty shall not be impaired or affected and the Guaranty
is, and shall continue to be, in full force and effect and is hereby confirmed
and ratified in all respects.
[Remainder of page intentionally left blank]
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
WORLD COLOR PRESS, INC.
By:
--------------------------
Name:
Title:
THE LANMAN COMPANIES, INC.
By:
--------------------------
Name:
Title:
LANMAN LITHOTECH, INC.
By:
--------------------------
Name:
Title:
CENTRAL FLORIDA PRESS, L.C.
By:
--------------------------
Name:
Title:
NORTHEAST GRAPHICS INC.
By:
--------------------------
Name:
Title:
S-1
<PAGE>
THE WESSEL COMPANY, INC.
By:
--------------------------
Name:
Title:
IMAGE TECHNOLOGIES, INC.
By:
--------------------------
Name:
Title:
SHEA COMMUNICATIONS COMPANY
By:
--------------------------
Name:
Title:
KRUEGER ACQUISITION CORPORATION
By:
--------------------------
Name:
Title:
KRI, INC.
By:
--------------------------
Name:
Title:
RAI, INC.
By:
--------------------------
Name:
Title:
S-2
<PAGE>
BCK 140 PARTNERSHIP
By: WORLD COLOR PRESS, INC.,
its General Partner
By:
--------------------------
Name:
Title:
By: THE LANMAN COMPANIES, INC., its General
Partner
By:
--------------------------
Name:
Title:
WORLD COLOR BOOK SERVICES, INC.
By:
--------------------------
Name:
Title:
S-3
<PAGE>
BANKERS TRUST COMPANY,
individually as a Lender and
as Administrative Agent
By:
--------------------------
Name:
Title:
BANK OF AMERICA NT & SA,
as a Lender
By:
--------------------------
Name:
Title:
CITIBANK, N.A.,
as a Lender
By:
--------------------------
Name:
Title:
ABN AMRO BANK, NV, NEW YORK BRANCH,
as Lender
By: ABN Amro North America,Inc.,
as Agent
By:
--------------------------
Name:
Title:
BANK OF MONTREAL,
as Lender
By:
--------------------------
Name:
Title:
S-4
<PAGE>
THE BANK OF NOVA SCOTIA,
as Lender
By:
--------------------------
Name:
Title:
BANK OF SCOTLAND,
as Lender
By:
--------------------------
Name:
Title:
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
as Lender
By:
--------------------------
Name:
Title:
BANQUE PARIBAS,
as Lender
By:
--------------------------
Name:
Title:
CIBC, INC.,
as Lender
By:
--------------------------
Name:
Title:
S-5
<PAGE>
FLEET NATIONAL BANK,
as Lender
By:
--------------------------
Name:
Title:
THE FUJI BANK, LIMITED, NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LTD.,
as Lender
By:
--------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD. CHICAGO
BRANCH,
as Lender
By:
--------------------------
Name:
Title:
PNC BANK, KENTUCKY, INC.,
as Lender
By:
--------------------------
Name:
Title:
S-6
<PAGE>
THE SANWA BANK, LIMITED,
as Lender
By:
--------------------------
Name:
Title:
BANKBOSTON, N.A. (formerly know as The First
National Bank of Boston),
as Lender
By:
--------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
(formerly known as Credit
Suisse),
as Lender
By:
--------------------------
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.,
as Lender
By:
--------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES,
as Lender
By:
--------------------------
Name:
Title:
S-7
<PAGE>
THE SAKURA BANK, LIMITED,
as Lender
By:
--------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK
BRANCH,
as Lender
By:
--------------------------
Name:
Title:
THE YASUDA TRUST AND BANKING CO., LTD., NEW YORK
BRANCH,
as Lender
By:
--------------------------
Name:
Title:
S-8
<PAGE>
THE TOKAI BANK, LTD., NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
MERITA BANK LTD NEW YORK BRANCH,
as Lender
By:
--------------------------
Name:
Title:
BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH, as
Lender
By:
--------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Lender
By:
--------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
as Lender
By:
--------------------------
Name:
Title:
S-9
<PAGE>
GIROCREDIT BANK
AKTIENGESELLSCHAFT DER SPARKASSEN,
GRAND CAYMAN ISLAND BRANCH,
as Lender
By:
--------------------------
Name:
Title:
BANK LEUMI TRUST COMPANY NEW
YORK,
as Lender
By:
--------------------------
Name:
Title:
CAISSE NATIONALE DE CREDIT
AGRICOLE,
as Lender
By:
--------------------------
Name:
Title:
GOLDMAN SACHS CREDIT PARTNERS
L.P.,
as Lender
By:
--------------------------
Name:
Title:
S-10
<PAGE>
LEHMAN COMMERCIAL PAPER INC.,
as Lender
By:
--------------------------
Name:
Title:
MORGAN STANLEY SENIOR FUNDING,
INC.,
as Lender
By:
--------------------------
Name:
Title:
THE TOYO TRUST AND BANKING CO.
LTD.,
as Lender
By:
--------------------------
Name:
Title:
S-11
<PAGE>
Exhibit 10.3
AMENDED AND RESTATED 1995 SENIOR MANAGEMENT STOCK OPTION PLAN
OF
WORLD COLOR PRESS, INC.
On November 20, 1995 World Color Press, Inc., a corporation organized
under the laws of the State of Delaware (the "Company"), adopted, and the
stockholders of the Company approved, the 1995 Senior Management Stock Option
Plan of World Color Press, Inc. (the "Plan").
In furtherance of the purposes of this Plan as set forth below and in
order to reflect amendments to applicable laws, an amendment to the Plan was
adopted by a resolution of the Committee (as defined below) as of January 31,
1997, effective as of such date. This amendment to the Plan constitutes a
complete amendment, restatement and continuation of the plan.
The purposes of this Plan are as follows:
1) To further the growth, development and financial success of the
Company by providing additional incentives to certain of its key
Employees who have been or will be given responsibility for the
management or administration of the Company's business affairs, by
assisting them to become owners of capital stock of the Company and
thus to benefit directly from its growth, development and financial
success.
2) To enable the Company to obtain and retain the services of the type
of professional, technical and managerial employees considered
essential to the long-range success of the Company by providing and
offering them an opportunity to become owners of capital stock of the
Company under options.
3) To provide for continued ownership of an equity interest in the
Company by those persons employed or formerly employed by companies
which are or were affiliated with the Company.
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, where the context so indicates.
Section 1.1. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3. Committee
<PAGE>
"Committee" shall mean the Stock Option Committee of the Board.
Section 1.4. Company
"Company" shall mean World Color Press, Inc.
Section 1.5. Current Affiliate
"Current Affiliate" shall mean any Parent, any Subsidiary of the Company,
and any company which is affiliated with the Company.
Section 1.6. Director
"Director" shall mean a member of the Board.
Section 1.7. Employee
"Employee" shall mean any employee (as defined in accordance with the
Regulations and Revenue Rulings then applicable under Section 3401(c) of the
Code) of the Company, any corporation which is then a Parent Corporation or a
Subsidiary of the Company, whether such employee is so employed at the time
this Plan is adopted or becomes so employed subsequent to the adoption of
this Plan.
Section 1.8. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.9. Officer
"Officer" shall mean an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
Section 1.10. Option
"Option" shall mean an option to purchase capital stock of the Company,
granted under the Plan.
Section 1.11. Optionee
"Optionee" shall mean an Employee to whom an Option is granted under the
Plan.
Section 1.12. Parent Corporation
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
Section 1.13. Performance Option
2
<PAGE>
"Performance Option" shall mean an Option that at the time of its grant
is intended to satisfy the requirements for performance-based compensation as
described in Section 162(m)(4)(C) of the Code.
Section 1.14. Plan
"Plan" shall mean this 1995 Senior Management Stock Option Plan of World
Color Press, Inc.
Section 1.15. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act,
as such Rule may be amended in the future.
Section 1.16. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.17. Section 16 Person
"Section 16 Person" shall mean any person who at the time of
determination is subject to the provisions of Section 16 of the Exchange Act.
Section 1.18. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.19. Subcommittee
"Subcommittee" shall mean the subcommittee appointed as provided in
Section 6.1.
Section 1.20. Subsidiary
"Subsidiary" shall mean a subsidiary corporation as defined in Section
424(f) of the Code.
Section 1.21. Termination of Employment
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the Company or any
Current Affiliate is terminated for any reason, with or without cause,
including, without limitation, a termination by resignation, discharge,
death, permanent disability or retirement, but excluding terminations where
there is a simultaneous reemployment by the Company or any Current Affiliate.
The Committee, in its sole discretion, shall determine the effect of all
other matters and questions relating to Termination of Employment, including,
without limitation, the question of whether a Termination of Employment
resulted from a discharge for good cause, and all questions of whether
particular leaves of absence constitute Terminations of Employment and the
question of whether any reemployment by any entity is simultaneous with
termination.
ARTICLE II.
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<PAGE>
SHARES SUBJECT TO PLAN
Section 2.1. Shares Subject to Plan
The shares of stock subject to Options shall be shares of the Company's
$.01 par value Common Stock. The aggregate number of such shares which may
be issued upon exercise of Options shall not exceed 1,250,000 (calculated
after giving effect to the contemplated merger of Printing Holdings, L.P.
with and into the Company). The maximum number of shares which may be
subject to Options granted under the Plan to any individual in any calendar
year shall not exceed 125,000, and the method of counting such shares shall
conform to any requirements applicable to performance-based compensation
under Section 162(m) of the Code.
Section 2.2. Unexercised Options
If any Option expires or is cancelled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised prior to its expiration or cancellation may again be
optioned hereunder, subject to the limitations of Section 2.1.
Section 2.3. Changes in Company's Shares
In the event that the outstanding shares of Common Stock of the Company
are hereafter changed into or exchanged for a different number or kind of
shares or other securities of the Company, or of another corporation, by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or combination of shares,
appropriate adjustments shall be made by the Committee in the number and kind
of shares for the purchase of which Options may be granted, including
adjustments of the limitations in Section 2.1 on the maximum number and kind
of shares which may be issued on exercise of Options.
ARTICLE III.
GRANTING OF OPTIONS
Section 3.1. Eligibility
Any key Employee or former Employee of the Company or of any corporation
which is a Parent Corporation or a Subsidiary of the Company shall be
eligible to be granted Options, except as provided in Section 3.3.
Section 3.2. Granting of Options
(a) The Committee (the Subcommittee with respect to Section 16 Persons
and Performance Options) shall from time to time, in its sole discretion:
(i) Determine which Employees or former Employees (including
those to whom Options have been previously granted under the Plan) should
be granted Options; and
(ii) Determine the number of shares to be subject to such
Options; and
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(iii) Determine the terms and conditions of such Options,
consistent with the Plan; provided, that no Options shall be "incentive
stock options" as described in Code Section 422.
(b) Upon the selection of an Employee or former Employee to be granted
an Option, the Committee (or the Subcommittee, as applicable) shall instruct
the Secretary to issue such Option and may impose such conditions on the
grant of such Option as it deems appropriate. Without limiting the
generality of the preceding sentence, the Committee (or the Subcommittee, as
applicable) may, in its sole discretion and on such terms as it deems
appropriate, require as a condition on the grant of an Option to any such
person that he surrender for cancellation some or all of the unexercised
Options which have been previously granted to him. An Option the grant of
which is conditioned upon such surrender may have an option price lower (or
higher) than the option price of the surrendered Option, may cover the same
(or a lesser or greater) number of shares as the surrendered Option, may
contain such other terms as the Committee (or the Subcommittee, as
applicable) deems appropriate and shall be exercisable in accordance with its
terms, without regard to the number of shares, price, option period or any
other term or condition of the surrendered Option.
ARTICLE IV.
TERMS OF OPTIONS
Section 4.1. Option Agreement
Each Option shall be evidenced by a written Stock Option Agreement, which
shall be executed by the Optionee and an authorized Officer of the Company
and which shall contain such terms and conditions as the Committee (or the
Subcommittee, as applicable) shall determine, consistent with the Plan.
Section 4.2. Option Price
(a) The price of the shares subject to each Option shall be set by the
Committee; provided, that the Subcommittee shall specify the price per share
subject to each Performance Option (which price shall not be less than the
fair market value of a share of the Company's Common Stock on the date of
Option grant) and each Option granted to a Section 16 Person.
(b) For purposes of the Plan, the fair market value of a share of the
Company's stock as of a given date shall be: (i) the closing price of a share
of the Company's stock on the principal exchange on which shares of the
Company's stock are then trading, if any, on the day previous to such date,
or, if shares were not traded on the day previous to such date, then on the
next preceding trading day during which a sale occurred; or (ii) if such
stock is not traded on an exchange but is quoted on NASDAQ or a successor
quotation system, (1) the last sales price (if the stock is then listed as a
National Market Issue under the NASD National Market System) or (2) the mean
between the closing representative bid and asked prices (in all other cases)
for the stock on the day previous to such date as reported by NASDAQ or such
successor quotation system; or (iii) if such stock is not publicly traded on
an exchange and not quoted on NASDAQ or a successor quotation system, the
mean between the closing bid and asked prices for the stock, on the day
previous to such date, as determined in good faith by the Committee; or (iv)
if the Company's stock
5
<PAGE>
is not publicly traded, the fair market value established by the Committee
acting in good faith.
Section 4.3. Commencement of Exercisability
(a) Subject to the provisions of Sections 4.3(b) and 4.4 and the
requirements of Rule 16b-3(b), Options shall become exercisable at such times
and in such installments (which may be cumulative) as the Committee (or the
Subcommittee, as applicable) shall provide in the terms of each individual
Option; provided, that by a resolution adopted after an Option is granted the
Committee (or the Subcommittee, as applicable) may, on such terms and
conditions as it may determine to be appropriate and subject to Sections
4.3(b) and 4.4 and the requirements of Rule 16b-3(b), accelerate the time at
which such Option or any portion thereof may be exercised.
(b) No portion of an Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
Section 4.4. Expiration of Options
(a) No Option may be exercised to any extent by anyone after the
expiration of ten years from the "Grant Date" or "Vesting Reference Date" as
set forth in the Stock Option Agreement covering such Option ("Expiration
Date"), provided, that the Committee (or the Subcommittee, as applicable)
may, with respect to any individual Option, at the time such Option is
granted or at any time thereafter, provide that the then applicable
Expiration Date (whether such applicable Expiration Date is the original
Expiration Date specified in the Stock Option Agreement covering such Option
or has been extended pursuant to this proviso) may be extended and that such
individual Option may be exercised from and after the then applicable
Expiration Date to and including such later date as shall be specified by the
Committee (or the Subcommittee, as applicable) with respect to such
individual Option.
(b) Subject to the provisions of Section 4.4(a), the Committee (or the
Subcommittee, as applicable) shall provide, in the terms of each individual
Option, when such Option expires and becomes unexercisable; and (without
limiting the generality of the foregoing) the Committee (or the Subcommittee,
as applicable) may provide in the terms of individual Options that said
Options expire immediately upon a Termination of Employment for any reason.
Section 4.5. Consideration
Nothing in this Plan or in any Stock Option Agreement hereunder shall
confer upon any Optionee any right to continue in the employ of the Company,
any Parent Corporation, any Subsidiary of the Company, or any other entity,
or shall interfere with or restrict in any way the rights of the Company, any
Parent Corporation, any Subsidiary of the Company or any other entity, which
are hereby expressly reserved, to discharge any Optionee at any time for any
reason whatsoever, with or without cause.
Section 4.6. Adjustments in Outstanding Options
In the event that the outstanding shares of the stock subject to Options
are changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend or combination of shares, the Committee (or the Subcommittee, as
applicable)
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<PAGE>
shall make an appropriate and equitable adjustment in the number and kind of
shares as to which all outstanding Options, or portions thereof then
unexercised, shall be exercisable, to the end that after such event the
Optionee's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in an outstanding Option shall be
made without change in the total price applicable to the Option or the
unexercised portion of the Option (except for any change in the aggregate
price resulting from rounding-off of share quantities or prices) and with any
necessary corresponding adjustment in Option price per share. Any such
adjustment made by the Committee (or the Subcommittee, as applicable) shall
be final and binding upon all Optionees, the Company and all other interested
persons.
Section 4.7. Merger, Consolidation, Acquisition, Liquidation or
Dissolution
Notwithstanding the provisions of Section 4.6, in its sole discretion,
and on such terms and conditions as it deems appropriate, the Committee (or
the Subcommittee, as applicable) may provide by the terms of any Option that
such Option cannot be exercised after the merger or consolidation of the
Company with or into another corporation, the acquisition by another
corporation or person of all or substantially all of the Company's assets or
80% or more of the Company's then outstanding voting stock or the liquidation
or dissolution of the Company; and if the Committee (or the Subcommittee, as
applicable) so provides, it may, in its sole discretion and on such terms and
conditions as it deems appropriate, also provide, either by the terms of such
Option or by a resolution adopted prior to the occurrence of such merger,
consolidation, acquisition, liquidation or dissolution, that, for some period
of time prior to such event, such Option shall be exercisable as to all
shares covered thereby, notwithstanding anything to the contrary in Section
4.3(a) and/or any installment provisions of such Option, but subject to
Section 4.3(b).
ARTICLE V.
EXERCISE OF OPTIONS
Section 5.1. Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise an Option (or
any portion thereof) granted to him. After the death of the Optionee, any
exercisable portion of an Option may, prior to the time when such portion
becomes unexercisable under the Plan or the applicable Stock Option
Agreement, be exercised by his personal representative or by any person
empowered to do so under the deceased Optionee's will or under the then
applicable laws of descent and distribution.
Section 5.2. Partial Exercise
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof becomes unexercisable under the Plan or
the applicable Stock Option Agreement, such Option or portion thereof may be
exercised in whole or in part; provided, that the Company shall not be
required to issue fractional shares and the Committee (or the Subcommittee,
as applicable) may, by the terms of the Option, require any partial exercise
to be with respect to a specified minimum number of shares.
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<PAGE>
Section 5.3. Manner of Exercise
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:
(a) Notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee (or the Subcommittee, as applicable) ; and
(b) Full payment (by certified or bank check or by wire transfer of
immediately available funds) for the shares with respect to which such Option
or portion is thereby exercised. However, the Committee (or the
Subcommittee, as applicable), in its sole discretion, may (i) allow a delay
in payment up to thirty (30) days from the date the Option is exercised; (ii)
allow payment, in whole or in part, through the delivery of shares of Common
Stock owned by the Optionee (including, subject to Section 5.4, Option Shares
issuable upon such exercise), duly endorsed for transfer to the Company with
a fair market value on the date of delivery equal to the aggregate exercise
price of the Option or exercised portion thereof; (iii) allow payment, in
whole or in part, through the delivery of property of any kind which
constitutes good and valuable consideration; (iv) allow payment, in whole or
in part, through the delivery of a full recourse promissory note bearing
interest (at no less than such rate as shall then preclude the imputation of
interest under the Code) and payable upon such terms as may be prescribed by
the Committee (or the Subcommittee, as applicable); or (v) allow payment
through any combination of the consideration provided in the foregoing
subparagraphs (ii), (iii) and (iv). In the case of a promissory note, the
Committee (or the Subcommittee, as applicable) may also prescribe the form of
such note and the security to be given for such note. The Option may not be
exercised, however, by delivery of a promissory note or by a loan from the
Company when or where such loan or other extension of credit is prohibited by
law; and
(c) The payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the exercise of
the Option; and
(d) Such representations and documents as the Committee (or the
Subcommittee, as applicable), in its sole discretion, deems necessary,
appropriate or advisable to effect compliance with all applicable provisions
of the Securities Act and any other federal or state securities laws, rules
or regulations. The Committee (or the Subcommittee, as applicable) may, in
its sole discretion, also take whatever additional actions it deems
necessary, appropriate or advisable to effect such compliance including,
without limitation, placing legends on share certificates and issuing
stop-transfer orders to transfer agents and registrars; and
(e) In the event that the Option or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option or portion thereof.
Section 5.4. Conditions to Issuance of Stock Certificates
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<PAGE>
The shares of stock issuable and deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the
Company. The Company shall not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the exercise
of any Option or portion thereof prior to fulfillment of all of the following
conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory
body, which the Committee (or the Subcommittee, as applicable) shall, in its
sole discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee (or the Subcommittee, as
applicable) shall, in its sole discretion, determine to be necessary or
advisable; and
(d) The payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the exercise of
the Option; and
(e) The lapse of such reasonable period of time following the exercise
of the Option as the Committee (or the Subcommittee, as applicable) may
establish from time to time for reasons of administrative convenience.
Section 5.5. Rights as Stockholders
The holders of Options shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect of any shares
purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
holders.
Section 5.6. Transfer Restrictions
The Committee (or the Subcommittee, as applicable), in its sole
discretion, may impose such restrictions on the transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such
other restriction shall be set forth in the respective Stock Option Agreement
and may be referred to on the certificates evidencing such shares.
ARTICLE VI.
ADMINISTRATION
Section 6.1. Stock Option Committee; Subcommittee
(a) The Stock Option Committee shall consist of three or more Directors,
appointed by and holding office at the pleasure of the Board, none of whom
shall be an Employee, and at least two of whom shall be both a "non-employee
director" as defined under Rule 16b-3 and an "outside director" as
9
<PAGE>
described under Section 162(m) of the Code and the regulations thereunder.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee shall be filled by the Board.
(b) If any member of the Committee shall not be both a "non-employee
director" and an "outside director," there shall be a Subcommittee that will
consist of two or more Committee members, appointed by and serving office at
the pleasure of the Board, each of whom is both a "non-employee director" and
an "outside director."
Section 6.2. Duties and Powers of Committee
It shall be the duty of the Committee and the Subcommittee to conduct the
general administration of the Plan in accordance with its provisions. The
Committee and the Subcommittee shall have the power to interpret the Plan and
the Options and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret,
amend or revoke any such rules. In its sole discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the
Committee under the Plan, except with respect to matters which under Rule
16b-3 or Section 162(m) of the Code (as each may be applicable), or any
regulations or rules issued thereunder, are required to be determined in the
sole discretion of the Committee (or the Subcommittee, as applicable).
Section 6.3. Majority Rule
The Committee and the Subcommittee shall each act by a majority of its
members in office. The Committee and Subcommittee may each act either by
vote at a meeting or by a memorandum or other written instrument signed by a
majority of its members.
Section 6.4. Compensation; Professional Assistance; Good Faith Actions
Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee and
the Subcommittee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons. The Committee, the Company and its Officers and
Directors shall be entitled to rely upon the advice, opinions or valuations
of any such persons. All actions taken and all interpretations and
determinations made by the Committee or the Subcommittee in good faith shall
be final and binding upon all Optionees, the Company and all other interested
persons. No member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to
the Plan or the Options, and all members of the Committee shall be fully
protected by the Company in respect to any such action, determination or
interpretation.
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ARTICLE VII.
OTHER PROVISIONS
Section 7.1. Options Not Transferable
No Option or interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect; provided, that nothing in this Section 7.1 shall
prevent transfers by will or by the applicable laws of descent and
distribution.
Section 7.2. Amendment, Suspension or Termination of the Plan
The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board or the
Committee. However, without approval of the Company's stockholders given
within 12 months before or after the action by the Board or the Committee, no
action of the Board or the Committee may, except as provided in Section 2.3,
increase any limit imposed in Section 2.1 on the maximum number of shares
which may be issued on exercise of Options, and no action of the Board or the
Committee may be taken that would otherwise require stockholder approval as a
matter of applicable law, regulation or rule. None of the amendment,
suspension or termination of the Plan shall, without the consent of the
holder of the Option, impair any rights or obligations under any Option
theretofore granted. No Option may be granted during any period of
suspension nor after termination of the Plan, and in no event may any Option
be granted under this Plan after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted by the
Board; or
(b) The expiration of ten years from the date the Plan is initially
approved by the Company's stockholders.
Section 7.3. Effect of Plan Upon Other Option and Compensation Plans
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary of the Company. Nothing in this Plan shall be construed to limit
the right of the Company, any Parent Corporation or any Subsidiary of the
Company (a) to establish any other forms of incentives or compensation for
employees of the Company, any Parent Corporation or any Subsidiary of the
Company or (b) to grant or assume options otherwise than under this Plan in
connection with any proper corporate purpose, including, without limitation,
the grant or assumption of options in connection with the acquisition by
purchase, lease, merger, consolidation or otherwise, of the business, stock
or assets of any corporation, firm or association.
Section 7.4. Titles
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Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
Section 7.5. Conformity to Securities Laws and Code Section 162(m)
The Plan is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including, without limitation, Rule 16b-3. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and Options
shall be granted and may be exercised, only in such a manner as to conform to
such laws, rules and regulations. To the extent permitted by applicable law,
the Plan and Options granted hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations. Furthermore,
notwithstanding any other provision of this Plan, any Option intended to
qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including, without limitation, any
amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and this Plan
shall be deemed amended to the extent necessary to conform to such
requirements.
* * * *
I hereby certify that the foregoing Plan was duly adopted by the Stock
Option Committee of the Board of Directors of World Color Press, Inc. as of
January 31, 1997.
Executed as of this 31st day of March, 1997.
By: /s/ Jennifer L. Adams
--------------------------------------
Secretary
* * * *
I hereby certify that the foregoing Plan was duly approved by the
stockholders of World Color Press, Inc. representing a majority of the issued
and outstanding shares of the common stock, par value, $.01 per share, of
World Color Press, Inc. entitled to vote at a meeting of stockholders, as of
November 20, 1995.
Executed as of this 31st day of March, 1997.
By: /s/ Jennifer L. Adams
--------------------------------------
Secretary
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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
- -------------------------------------------------------------------------------
<PAGE>
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
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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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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:
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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)
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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.
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(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
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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;
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(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
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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
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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.
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(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
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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.
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(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
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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
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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
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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.
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(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,
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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;
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(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
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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 mark
its computer and master data processing books and records with a legend
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describing the Agent's and the Purchasers' interest therein and (B) upon
the request of the Agent, so mark 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
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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.
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(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
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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
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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.
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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
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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
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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,
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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
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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
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"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 Moody's, 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).
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(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
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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
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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
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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
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thereof. Any previous or contemporaneous agreements, whether written or
oral, concerning such matters are superseded thereby.
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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
135 South LaSalle Street 135 South LaSalle Street
Chicago, Illinois 60674-9135 Chicago, Illinois 60674-9135
Attention: Purchaser Agent- Attention: Enhancer-Windmill
Windmill Telephone: (312) 904-6263
Telephone: (312) 904-6263 Telecopy: (312) 904-6376
Telecopy: (312) 904-6376
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 Wall Street
New York, New York 10005
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Attention: Richard Taiano,
Vice President
Attention:____________________
Telephone: (212) 346-9000
Telecopy: (212) 346-9012
Telephone:_____________________
Telecopy: _____________________
with a copy to:
World Color Finance, Inc. ABN AMRO Bank N.V.
Address: Structured Finance,
Asset Securitization
135 South LaSalle Street
By: ________________________________ Chicago, Illinois 60674-9135
Title:______________________________ Attention:
_____________________ Administrator -
Address: The Mill Windmill
340 Pemberwick Road Telephone: (312) 904-6263
Greenwich, Connecticut 06831 Telecopy: (312) 904-6376
Attention: ____________
Telephone:
Telecopy:
with a copy to:
Latham & Watkins
885 Third Avenue
New York, New York 10022
Attn: Steven Della Rocca
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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.
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"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
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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
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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
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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:
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(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;
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(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
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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
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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
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(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,
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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.
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"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 Moody's 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.
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"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).
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"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
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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.
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"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.
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"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)
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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
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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
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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.
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"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., Shea Communications Company, Lanman Lithotech, Inc., Image
Technologies, Inc., Central Florida Press, L.C., The Wessel Company, Inc.,
RAI, Inc., KRI, Inc. and The Lanman 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.
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EXHIBIT 10.5
EXECUTION COPY
Receivables Purchase Agreement
dated as of June 30, 1997
between
WORLD COLOR PRESS, INC.
and
WORLD COLOR FINANCE, INC.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS................................. 1
SECTION 1.1. Defined Terms............................................ 1
ARTICLE II
PURCHASES AND SALES............................ 5
SECTION 2.1. Sales and Purchases of Receivables....................... 5
SECTION 2.2. Purchase Price........................................... 6
SECTION 2.3. Payments and Computations................................ 7
SECTION 2.4. Rights of the Purchaser....................................7
SECTION 2.5. Consent to Assignment of this Agreement.................. 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES....................... 7
SECTION 3.1. Representations and Warranties of the Seller............. 7
SECTION 3.2. Representations and Warranties of the Purchaser.......... 9
ARTICLE IV
CONDITIONS PRECEDENT............................. 10
SECTION 4.1. Conditions to Closing.................................... 10
ARTICLE V
COVENANTS.................................. 10
SECTION 5.1. Affirmative Covenants of Seller.......................... 10
ARTICLE VI
TERMINATION................................ 14
SECTION 6.1. Termination.............................................. 14
ARTICLE VII
INDEMNIFICATION............................... 15
SECTION 7.1. Indemnities by the Seller................................ 15
SECTION 7.2. Indemnities by the Purchaser............................. 15
SECTION 7.3. Indemnification Procedures............................... 15
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ARTICLE VIII
MISCELLANEOUS............................... 16
SECTION 8.1. Waivers and Amendments................................... 16
SECTION 8.2. Notices.................................................. 16
SECTION 8.3. GOVERNING LAW; SUBMISSION TO
JURISDICTION; INTEGRATION;
SERVICE OF PROCESS...................................... 17
SECTION 8.4. Severability and Counterparts............................ 18
SECTION 8.5. Successors and Assigns................................... 18
SECTION 8.6. Waiver of Confidentiality................................ 18
SECTION 8.7. Characterization of the Transactions
Contemplated by the Agreement........................... 18
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EXHIBITS
Exhibit A - Form of Contribution Agreement
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RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of June 30, 1997 (this
"Agreement"), is by and among World Color Press, Inc., a Delaware
corporation, as the seller (the "Seller"), and World Color Finance, Inc., a
Delaware corporation, as the purchaser (the "Purchaser").
R E C I T A L S
WHEREAS, the Seller desires to sell, and the Purchaser desires to
purchase, all of the Seller's right, title and interest in, to and under its
accounts receivable and related rights.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual benefits to be derived
under this Agreement and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Seller and the Purchaser
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Adverse Claim" means, for any asset or property of any Person, a
lien, security interest, charge, mortgage, pledge, hypothecation, assignment or
encumbrance, or any other right or claim, in, of or on any such asset or
property in favor of any other Person.
"Agent" shall have the meaning given to it in the RSA.
"Business Day" means any day excluding Saturday, Sunday, and any day
on which banks in New York, New York or Greenwich, Connecticut are authorized or
required by law to be closed.
"Closing Date" means the first Business Day on which all of the
conditions set forth in Section 4.1 of this Agreement have been satisfied.
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"Collection Agent" means, with respect to any date, the Seller or
such other Person appointed to administer and collect the Receivables
pursuant to Section 3.1(b) of the RSA.
"Collections" means, with respect to any Receivable, all amounts
paid on or with respect to such Receivable (including, without limitation,
any proceeds from collateral securing, or any guaranty of, such Receivable).
"Contract" means any agreement or invoice generated in the ordinary
course of business of the Seller or any Selling Subsidiary pursuant to which
an Obligor shall be obligated to pay for services rendered to, or merchandise
sold to, such Obligor by the Seller or any Selling Subsidiary.
"Contributed Receivables" means all of the Receivables assigned and
transferred by the Seller to the Purchaser as a capital contribution pursuant
to a Contribution Agreement.
"Contribution Agreement" means any agreement between the Seller and
the Purchaser pursuant to which the Seller makes a capital contribution to
the Purchaser of all of the Seller's right, title and interest in, to and
under the Receivables described in such agreement, which agreement shall be
substantially in the form of Exhibit A to this Agreement, as amended,
supplemented or otherwise modified by the Seller and the Purchaser from time
to time.
"Credit and Collection Policies" means the credit and collection
policies and practices relating to the Receivables and the Contracts of the
Seller and the Selling Subsidiaries.
"Eligible Receivable" shall have the meaning given to it in the RSA.
"Excluded Receivable" shall have the meaning given to it in the RSA.
"Enhancer" shall have the meaning given to it in the RSA.
"Government Authority" means any (i) federal, state, municipal or
other governmental entity, board, bureau, agency or instrumentality, (ii)
administrative or regulatory authority (including any central bank or similar
authority), or (iii) court, judicial authority or arbitrator, in each case,
whether foreign or domestic.
"Indemnified Amounts" means damages, losses, claims, liabilities,
costs and expenses (including, without limitation, reasonable attorneys' fees
and disbursements).
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"Indemnified Party" means each Person that is entitled to be
indemnified against Indemnified Amounts pursuant to Article VII of this
Agreement.
"Indemnifying Party" means any Person that is obligated to indemnify
any other Person against Indemnified Amounts pursuant to Article VII of this
Agreement.
"Indemnity Agreement" means the Indemnity Agreement, dated as of the
date of the RSA, entered into between the Seller and the Agent.
"Intercompany Purchase Agreement" means any Intercompany Receivables
Purchase Agreement entered into by and between the Seller and any of the
Selling Subsidiaries on or after the date of this Agreement.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree, or
award of any Official Body.
"Lock-Box Account" shall have the meaning given to it in the RSA.
"Liquidity Providers" shall have the meaning given to it in the RSA.
"Lock-Box Agreement" means each agreement entered into by the
Seller and a Lock-Box Bank with respect to a Lock-Box Account.
"Lock-Box Bank" shall have the meaning given to it in the RSA.
"Obligor" means, with respect to any Receivable, each Person
obligated to pay such Receivable and each guarantor of such obligation.
"Official Body" means any federal, state or local government or
political subdivision or any agency, authority, bureau, central bank
commission, department or instrumentality of any such government or political
subdivision, or any court, tribunal, grand jury, or arbitrator, in each case
whether foreign or domestic.
"Outstanding Balance" means, with respect to any Receivable at any
time, the then outstanding principal amount thereof (excluding any accrued
and unpaid finance charges and interest related thereto).
"Person" means an individual, corporation, association, joint
venture, trust, unincorporated organization, Governmental Authority or other
entity of any kind.
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"Purchaser Indemnified Parties" shall have the meaning given to it
in Section 7.1 of this Agreement.
"Purchase Price" means, with respect to each sale and assignment of
Receivables to the Purchaser by the Seller pursuant to Section 2.1 of this
Agreement, the amount payable by the Purchaser to the Seller in consideration
of such sale and assignment, which amount shall be equal to (i) 98.5% of
aggregate Outstanding Balance of the Receivables included in such sale and
assignment, or (ii) such other amount as may be agreed to by the Seller and
the Purchaser.
"Purchaser" means World Color Finance, Inc., a Delaware corporation.
"Receivable" means each obligation of any Person to pay for
merchandise sold or services rendered by the Seller (or a Selling Subsidiary
if such obligation was sold to the Seller) to such Person, and includes all
of the Seller's rights in and to (i) the payment of any interest or finance
charges with respect to such obligation, (ii) the merchandise (including
returned goods) and Contracts relating to such obligation, (iii) all security
interests, guarantees and property securing or supporting payment of such
obligation, (iv) all Records relating to or evidencing such obligation, and
(v) all proceeds of the foregoing (including, without limitation, all
Collections on such obligation).
"Records" means, with respect to each Receivable, all Contracts,
books, records and other documents or information (including computer
programs, tapes, disks, software, and related property and rights) related to
or evidencing such Receivable.
"RSA" means the Receivables Sale Agreement, dated as of June 30,
1997, by and among the Purchaser, ABN AMRO Bank, N.V., as provider of the
program letter of credit, the liquidity providers from time to time party
thereto, Windmill Funding Corporation, and ABN AMRO Bank, N.V., as agent, as
may be amended, supplemented and modified from time to time.
"Revolving Subordinated Note" means the revolving promissory note
issued by the Purchaser to the Seller to finance any part of the Purchase
Price for Sold Receivables that is not paid to the Seller in cash, as such
promissory note may be amended, supplemented or modified by the Seller and
the Purchaser from time to time.
"Seller" means World Color Press, Inc., a Delaware corporation.
"Seller Indemnified Parties" shall have the meaning given to it in
Section 7.2 of this Agreement.
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"Selling Subsidiaries" means each of the following subsidiaries of
the Seller: (i) The Lanman Companies, Inc., a District of Columbia
corporation, (ii) Lanman Lithotech, Inc., a Florida corporation, (iii) Image
Technologies, Inc., a Florida corporation, (iv) The Wessel Company, Inc., an
Illinois corporation, (v) Northeast Graphics Inc., a Delaware corporation,
(vi) RAI, Inc., a Wisconsin corporation, (vii) KRI, Inc., a Delaware
corporation, (viii) Shea Communications Company, a Kentucky corporation, (ix)
Central Florida Press, L.C., a Florida limited liability company, (x) World
Color Book Services, Inc., a Delaware corporation, and (xi) such other wholly
owned subsidiaries of the Seller, if any, that are agreed by the Seller and
the Purchaser from time to time after the date of this Agreement.
"Sold Receivables" means all of Receivables sold to the Purchaser by
the Seller pursuant to Section 2.1 of this Agreement.
"Termination Date" means the earliest of (a) the Business Day
designated by the Seller or the Purchaser with no less than thirty (30) days
prior notice to the other, (b) the Termination Date (as defined in the RSA),
and (c) such other date as is agreed to by the Seller and the Purchaser.
"Termination Event" shall have the meaning given to it in the RSA.
"Transferred Receivables" means all of the Sold Receivables and all
of the Contributed Receivables.
ARTICLE II
PURCHASES AND SALES
SECTION 2.1. Sales and Purchases of Receivables. Upon the terms and
subject to the conditions set forth in this Agreement, on the Closing Date
and each subsequent Business Day prior to the Termination Date, the Seller
shall sell and assign to the Purchaser, and the Purchaser shall purchase, all
of the Seller's right, title and interest in, to and under all of the
outstanding Receivables that have not been sold and assigned to the Purchaser
on or prior to such day pursuant to either this Agreement or a Contribution
Agreement; provided, however, that notwithstanding any such sale and
assignment, the Purchaser shall not assume, and shall not have, any
obligation or liability under or with respect to any Contract. The Seller
shall, and the Seller shall cause each of the Selling Subsidiaries to, (i)
remain responsible for all of its obligations under the Contracts, and (ii)
observe and perform all of the conditions and obligations to be observed and
performed by it under the Contracts in accordance with the terms of such
Contracts.
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SECTION 2.2. Purchase Price.(a) The Purchase Price for each sale and
assignment of Receivables by the Seller to the Purchaser pursuant to Section
2.1 of this Agreement shall be payable to the Seller within five Business
Days of the date of such sale and assignment. At the election of the
Purchaser, all or any part of the Purchase Price payable to the Seller with
respect to any sale and assignment of Receivables to the Purchaser may be
paid by borrowings under the Revolving Subordinated Note rather than cash;
provided, however, that (i) unless otherwise agreed to by the Seller, on the
Closing Date, the Purchaser shall pay the Seller in cash an amount not less
than seventy-five percent (75%) of the Purchase Price payable for the
Receivables sold and assigned to the Purchaser on the Closing Date, and (ii)
after the Closing Date, the Purchaser shall not be permitted to increase its
borrowings under the Revolving Subordinated Note without the prior written
consent of the Seller if immediately prior to, or immediately after giving
effect to, such increase the stockholders' equity of the Purchaser (as
determined in accordance with generally accepted accounting practices) would
be less than five percent (5%) of the aggregate amount then payable under the
Revolving Subordinated Note.
(b) The Purchaser may prepay all or any part of the amounts
outstanding under the Revolving Subordinated Note at any time without premium
or penalty.
(c) Unless otherwise agreed to by the Seller and the Purchaser, all
Collections on the Sold Receivables shall be applied to reduce the amounts
then payable to the Seller pursuant to the terms of this Agreement
(including, without limitation, all amounts then payable under the Revolving
Subordinated Note) until all such amounts have been paid in full. If the
aggregate amount of cash received by the Seller from the Purchaser pursuant
to this Agreement and the Collection Agent pursuant to the RSA on any day
exceeds the aggregate amount then payable to the Seller pursuant to this
Agreement (including, without limitation, all amounts payable under the
Revolving Subordinated Note), the Seller shall promptly transfer such excess
amount to the Purchaser.
(d) The Seller, or the Collection Agent on behalf of the Seller,
shall make and maintain all appropriate recordkeeping entries to reflect (i)
all amounts payable by the Purchaser to the Seller pursuant to this Agreement
on each day (including, without limitation, all amounts then payable under
the Revolving Subordinated Note), and (ii) all payments received by the
Seller on each day from (1) the Purchaser pursuant to this Agreement, and (2)
the Collection Agent pursuant to the RSA.
SECTION 2.3. Payments and Computations. All amounts to be paid or
deposited by either party to this Agreement to the other party pursuant to
the terms of this Agreement shall be paid or deposited to or in account
designated by, or on behalf of, the party entitled to receive such amounts no
later than 1:00 p.m. (New York City time) on the day when due in immediately
available funds. The Seller and the Purchaser shall pay interest on all
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amounts not paid or deposited when due under this Agreement at a rate equal
to 2% per annum plus the rate then payable on the Revolving Subordinated
Note. All computations of discount, interest and all per annum fees under
this Agreement shall be made on the basis of a year of 360 days for the
actual number of days (including the first but excluding the last day)
elapsed.
SECTION 2.4. Rights of the Purchaser. The Purchaser, or the Collection
Agent on behalf of the Purchaser, shall be entitled to: (i) receive all
Collections on the Transferred Receivables; (ii) endorse all drafts, checks
and other forms of payment on account of the Transferred Receivables and to
settle, adjust and forgive any amounts payable with respect to the
Transferred Receivables; and (iii) exercise all other rights and incidences
of ownership of the Transferred Receivables.
SECTION 2.5. Consent to Assignment of this Agreement. The Agent, on
behalf of the Purchasers (as defined in the RSA), is intended to be a third
party beneficiary of this Agreement. The Seller hereby consents to the
assignment by the Purchaser to Agent, for the benefit of the Purchasers (as
defined in RSA), of all of the Purchaser's right and title to and interest in
this Agreement with respect to the Sold Receivables (other than the Excluded
Receivables) as security for the Purchaser's obligations under the RSA. The
Seller consents to the Purchaser's agreement that, following a Termination
Event, the Agent shall have the sole right to enforce the Purchaser's rights
and remedies under this Agreement with respect to all of the Sold Receivables
other than the Excluded Receivables (including, without limitation, all of
the Purchaser's rights to enforce the Seller's rights and remedies under the
Contracts); provided, however, that under no circumstances shall the Agent
have any obligation to perform any of the Purchaser's obligations under this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Seller. The Seller
represents and warrants to the Purchaser that:
(a) Corporate Existence and Power. The Seller is a corporation
duly organized, validly existing, and in good standing under the laws of its
state of incorporation and has all corporate power and authority and all
governmental licenses, authorizations, consents, and approvals required to
carry on its business in each jurisdiction in which its business is now
conducted, except where failure to obtain such license, authorization,
consent or approval is not reasonably likely to have a material adverse
effect on (i) its ability to perform its obligations under, or the
enforceability of, this Agreement, (ii) its business or
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financial condition, (iii) the interests of the Purchaser under this
Agreement, or (iv) the enforceability or collectibility of any Transferred
Receivable that is an Eligible Receivable.
(b) Corporate Authorization and No Contravention. The execution,
delivery, and performance by the Seller of this Agreement (i) is within its
corporate powers, (ii) has been duly authorized by all necessary corporate
action, (iii) does not contravene or constitute a default under (A) any
applicable law, rule or regulation, (B) its charter or by-laws, or (C) any
agreement, order or other instrument to which it is a party or its property
is subject, and (iv) will not result in any Adverse Claim on any Transferred
Receivable that is an Eligible Receivable.
(c) No Consent Required. No approval, authorization or other
action by, filings with, or notices to, any Governmental Authority or other
Person is required to be obtained or made by the Seller in connection with
the execution, delivery and performance by the Seller of this Agreement or
any transaction contemplated by this Agreement.
(d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Seller enforceable against the Seller in
accordance with its terms, except as limited by (i) bankruptcy, insolvency,
or other similar laws relating to or affecting the enforcement of creditors'
rights, and (ii) general principles of equity.
(e) Good Title. Immediately prior to each sale and assignment of
Transferred Receivables to the Purchaser pursuant to Section 2.1 of this
Agreement, the Seller will have undivided good title to, and be the sole
legal and beneficial owner of, all such Transferred Receivables free and
clear of all Adverse Claims. All of the Transferred Receivables will be
transferred by the Seller to the Purchaser free and clear of all Adverse
Claims. The Purchaser's ownership interest in the Transferred Receivables
shall at all times be duly perfected by all required filings, notices and
registrations under all applicable laws.
(f) No Actions, Suits. There are no actions, suits or other
proceedings pending or threatened against or affecting the Seller, or any of
its properties, that (i) if adversely determined (individually or in the
aggregate), are reasonably likely to have a material adverse effect on the
financial condition of the Seller or on the collectibility of any Transferred
Receivable that is an Eligible Receivable, or (ii) involve this Agreement or
any transaction contemplated by this Agreement. The Seller is not in default
of any contractual obligation or in violation of any order, rule or
regulation of any Governmental Authority, which default or violation is
reasonably likely to have a material adverse effect upon (a) the financial
condition of the Seller, or (b) the collectibility of any Transferred
Receivable that is an Eligible Receivable.
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SECTION 3.2. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants to the Seller that:
(a) Corporate Existence and Power. The Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of its
state of incorporation and has all corporate power and authority and all
governmental licenses, authorizations, consents, and approvals required to
carry on its business in each jurisdiction in which its business is now
conducted, except where failure to obtain such license, authorization,
consent or approval is not reasonably likely to have a material adverse
effect on its ability to perform its obligations under, or the enforceability
of, this Agreement or the Revolving Subordinated Note.
(b) Corporate Authorization and No Contravention. The execution,
delivery, and performance by the Purchaser of this Agreement (i) is within
its corporate powers, (ii) has been duly authorized by all necessary
corporate action, and (iii) does not contravene or constitute a default under
(A) any applicable law, rule or regulation, (B) its charter or by-laws, or
(C) any agreement, order or other instrument to which it is a party or its
property is subject.
(c) No Consent Required. No approval, authorization or other
action by, filings with, or notices to, any Governmental Authority or other
Person is required to be obtained or made by the Purchaser in connection with
the execution, delivery and performance by the Purchaser of this Agreement or
any transaction contemplated by this Agreement.
(d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as limited by (i) bankruptcy, insolvency,
or other similar laws relating to or affecting the enforcement of creditors'
rights, and (ii) general principles of equity.
(e) No Actions, Suits. There are no actions, suits or other
proceedings pending or threatened against or affecting the Purchaser or any
of its properties.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. This Agreement shall become
effective on the first date on which all conditions in this Section 4.1 are
satisfied:
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(a) all of the conditions precedent to the effectiveness of the RSA
shall have been satisfied or waived; and
(b) an executed copy of the Revolving Subordinated Note shall have
been delivered by the Purchaser to the Seller.
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Seller. At all times from the
date of this Agreement until the first date after the Termination Date on
which all amounts due and owing with respect to the Transferred Receivables
have been paid in full or written-off in accordance with the Credit and
Collection Policies, unless the Purchaser shall give its prior consent (which
consent shall not be unreasonably withheld or delayed), the Seller hereby
agrees as follows:
(a) Conduct of Business. The Seller will, and will cause each
Selling Subsidiary to, perform all actions necessary to remain duly
incorporated, validly existing and in good standing in its jurisdiction of
incorporation and to maintain all requisite authority to conduct its business
in each jurisdiction in which it conducts business.
(b) Compliance with Laws. The Seller will, and will cause each
Selling Subsidiary to, comply with all laws, regulations, judgments and other
directions or orders imposed by any Governmental Authority to which it may be
subject other than those which are not likely to have a material adverse
effect on the Transferred Receivables.
(c) Furnishing Information and Inspection of Records. The Seller
will, and will cause each Selling Subsidiary to, from time to time furnish to
the Purchaser such information concerning the Transferred Receivables as, and
promptly after, the Purchaser reasonably requests such information. The
Seller will, and will cause each Selling Subsidiary to, permit, at any time
during regular business hours, the Purchaser (or any representatives thereof)
to: (i) examine and make copies of any or all of the Records relating to or
evidencing the Transferred Receivables, (ii) visit the offices and properties
of the Seller and the Selling Subsidiaries for the purpose of examining any
or all of the Records relating to or evidencing the Transferred Receivables,
and (iii) discuss matters relating to this Agreement and/or the Transferred
Receivables with any of the officers, directors, employees or independent
public accountants of the Seller and/or the Selling Subsidiaries who have
knowledge of such matters.
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(d) Keeping Records. The Seller will, and will cause each Selling
Subsidiary to, have and maintain (i) administrative and operating procedures
(including an ability to recreate Records relating to or evidencing
Transferred Receivables if originals are destroyed), (ii) adequate
facilities, personnel and equipment, and (iii) all Records and other
information necessary for collecting the Transferred Receivables (including
Records adequate to permit the identification of each Transferred Receivable
and all Collections on, and all adjustments to, each Transferred Receivable).
The Seller will, and will cause each Selling Subsidiary to, clearly and
conspicuously mark its computer and master data processing books and records
with a legend describing the Purchaser's ownership interest in the
Transferred Receivables at all times after the date of this Agreement.
(e) Perfection. (i) The Seller will, and will cause each Selling
Subsidiary to, promptly execute and deliver all instruments and documents and
take all action necessary or reasonably requested by the Purchaser (including
the execution and filing of financing or continuation statements, amendments
thereto or assignments thereof) to enable the Purchaser to (1) exercise and
enforce all of its rights under this Agreement, and (2) vest and maintain
vested in the Purchaser a valid, first priority perfected ownership interest
in the Transferred Receivables free and clear of all Adverse Claims. The
Seller hereby agrees, and will cause each Selling Subsidiary to agree, that
the Purchaser will be permitted to sign and file any continuation statements,
amendments thereto and assignments thereof with respect to the Transferred
Receivables without the signature of the Seller or any Selling Subsidiary.
(ii) The Seller will not, and will not permit any Selling
Subsidiary to, change its name, identity or corporate structure or relocate
its chief executive office or the Records relating to or evidencing the
Transferred Receivables unless it has (1) given at least ten (10) days
advance notice to the Purchaser, and (2) delivered to the Purchaser of all
financing statements, instruments and other documents (including direction
letters) required to maintain the Purchaser's ownership interest in the
Transferred Receivables or otherwise reasonably requested by the Purchaser.
(iii) The Seller will, and will cause each Selling
Subsidiary to, maintain its chief executive officers within a jurisdiction in
the United States of America at all times after the date of this Agreement.
If the Seller or any Selling Subsidiary moves its chief executive office to a
location that imposes taxes, fees or other charges to perfect the Purchaser's
ownership interests in the Transferred Receivables, the Seller will pay all
such amounts and any other costs and expenses incurred in order to maintain
the enforceability of (1) this Agreement, each Intercompany Purchase
Agreement and the Indemnity Agreement, and (2) the Transferred Receivables or
the Purchaser's ownership interests in the Transferred Receivables.
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(f) Performance of Duties. The Seller will perform all of its
duties and obligations under this Agreement, all of the Intercompany Purchase
Agreements and the Indemnity Agreement, and the Seller will cause each of the
Selling Subsidiaries to perform all of its duties and obligations under the
Intercompany Purchase Agreements. The Seller will, and will cause each
Selling Subsidiary to, (i) fully and timely perform in all material respects
all of the obligations required to be performed by it in connection with each
Transferred Receivable, and (ii) comply in all material respects with its
Credit and Collection Policy. If requested by the Purchaser, the Seller
shall perform the duties of the Collection Agent in accordance with Article
III of the RSA, and, if requested, will cause each Selling Subsidiary to act
as a sub-collection agent in accordance with Article III of the RSA. In the
event that any Person other than the Seller is appointed as the Collection
Agent at any time, the Seller shall, upon the request of the Purchaser,
promptly deliver all Records relating to or evidencing the Transferred
Receivables to such Collection Agent (or its designee) at the location
designated by the Purchaser or such Collection Agent; provided, however, that
any such Collection Agent shall provide the Seller with reasonable access to
such Records.
(g) Payments on Receivables. The Seller will, and will cause each
Selling Subsidiary to, at all times instruct all Obligors to deliver all
Collections on the Transferred Receivables to a Lock-Box Account. If any
Collections on the Transferred Receivables are received by the Seller or any
Selling Subsidiary, the Seller shall, and shall cause each such Selling
Subsidiary to, hold such Collections in trust for the benefit of the
Purchaser and promptly (but in any event within two Business Days after
receipt) deposit such Collections into a Lock-Box Account. The Seller shall
use its reasonable best efforts to prevent any funds other than Collections
on Transferred Receivables from being deposited into any Lock-Box Account;
provided, however, that if any funds other than such Collections are
nevertheless deposited into any Lock-Box Account, the Seller will identify
and remit such funds to the owner of such funds as soon as practicable. Any
payment by an Obligor to the Seller shall, except as otherwise instructed by
the Purchaser, be remitted to the Collection Agent as a Collection on the
Transferred Receivables of such Obligor (starting with the oldest such
Transferred Receivable) to the extent of any amounts then due and payable
thereunder before being applied to any other Receivable or other indebtedness
of such Obligor.
(h) Extension or Amendment of Receivables. Except as permitted by
the Credit and Collection Policies, the Seller shall not, and shall not
permit any Selling Subsidiary to, amend or otherwise modify the terms of any
Transferred Receivable, or otherwise amend, modify or waive any term or
condition of any Contract related to or evidencing such Transferred
Receivable.
(i) Change in Business or Credit and Collection Policy. The Seller
will not, and will not permit any Selling Subsidiary to, make any material
change in the character of
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its business or its Credit and Collection Policy that would impair the
collectibility or enforceability of any Transferred Receivable that is an
Eligible Receivable.
(j) Adverse Claims. The Seller shall not, and shall not permit any
Selling Subsidiary to, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim on or
against any of the Transferred Receivables.
(k) Separateness Covenants. The Seller shall do all things
necessary and appropriate to maintain its existence separate and apart from
the Purchaser, including, without limitation:
(i) practicing and adhering to corporate formalities, such
as maintaining appropriate books and records;
(ii) other than pursuant to the Indemnity Agreement,
refraining from (1) guaranteeing or otherwise becoming liable for any
obligations of the Purchaser, (2) having obligations guaranteed by the
Purchaser, and (3) holding itself out as responsible for debts of the
Purchaser or for decisions or actions with respect to the affairs of
the Purchaser;
(iii) maintaining all of its deposit and other bank accounts
and all of its assets separate from those of the Purchaser;
(iv) maintaining all of its financial records separate and
apart from those of the Purchaser and ensuring that any consolidated
financial statements or other public information contain appropriate
disclosures concerning the Purchaser's separate existence;
(v) reimbursing the Purchaser out of the Seller's own funds
for any services provided to the Seller by employees, officers,
consultants, and agents of the Purchaser;
(vi) maintaining office space separate and apart from that
of the Purchaser or allocating fairly and reasonably any overhead for
shared office space;
(vii) accounting for and managing all of its liabilities
separately from the Purchaser (including, without limitation, payment
directly by the Seller of all payroll, accounting and other
administrative expenses and taxes);
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(viii) allocating, on an arm's-length basis, all corporate
operating services, leases and expenses shared between the Seller and
the Purchaser (including, without limitation, those associated with
the services of shared consultants and agents and shared computer
equipment and software);
(ix) refraining from filing or otherwise initiating or
supporting the filing of a motion in any bankruptcy or other
insolvency proceeding involving the Purchaser to substantively
consolidate the assets and liabilities of the Seller or any Selling
Subsidiary with the assets and liabilities of the Purchaser;
(x) maintaining adequate capitalization in light of its
business and purpose;
(xi) refraining from commingling assets with those of the
Purchaser;
(xii) refraining from acquiring obligations or securities of
the Purchaser (other than the Revolving Subordinated Note) and
refraining from loaning any funds to the Purchaser;
(xiii) using separate stationery, invoices, and checks from
the Purchaser; and
(xiv) correcting any known misunderstanding regarding the
separate identity of the Purchaser.
ARTICLE VI
TERMINATION
SECTION 6.1. Termination. This Agreement shall terminate upon the
Termination Date; provided, however, that the following rights and obligations
shall survive the termination of this Agreement: (i) the indemnification and
payment provisions of Article VII of this Agreement, and (ii) the Purchaser's
obligations under the Revolving Subordinated Note.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1. Indemnities by the Seller. Without limiting any other
rights that the Purchaser may have under this Agreement or under applicable
law, the Seller hereby agrees
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to indemnify the Purchaser, and any permitted assigns and its officers,
directors, agents and employees (collectively, the "Purchaser Indemnified
Parties") from and against any and all Indemnified Amounts awarded against or
incurred by the Purchaser Indemnified Parties in any action or proceeding
between the Seller and any of the Purchaser Indemnified Parties or between
any of the Purchaser Indemnified Parties and any other Person or otherwise,
arising out of or as a result of any breach by the Seller of any of its
representations, warranties and covenants in this Agreement.
SECTION 7.2. Indemnities by the Purchaser. Without limiting any other
rights that the Seller may have under this Agreement or under applicable law,
the Purchaser hereby agrees to indemnify the Seller, and any permitted
assigns and its officers, directors, agents and employees (collectively, the
"Seller Indemnified Parties") from and against any and all Indemnified
Amounts awarded against or incurred by the Seller Indemnified Parties in any
action or proceeding between the Purchaser and any of the Seller Indemnified
Parties or between any of the Indemnified Parties and any other Person or
otherwise, arising out of or as a result of any breach by the Purchaser of
any of its representations, warranties and covenants in this Agreement;
provided, however, that notwithstanding any other provision to the contrary
in this Agreement, until the first day after the Termination Date on which
all amounts due and owing with respect to the Transferred Receivables have
been paid in full or written-off in accordance with the Credit and Collection
Policies, all of the Purchaser's obligations under this Section 7.2 shall be
satisfied by increasing the amount outstanding under the Revolving
Subordinated Note by the aggregate amount of the Indemnified Amounts, if any,
that become payable to the Seller Indemnified Parties.
SECTION 7.3. Indemnification Procedures. In the event that any claim,
action or proceeding for Indemnified Amounts is made or brought against any
Indemnified Party, such Indemnified Party shall promptly notify the
Indemnifying Party in writing; provided, however, that no delay on the part
of such Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any obligation under this Agreement unless (and
then solely to the extent) the Indemnifying Party is prejudiced by such
delay. The Indemnifying Party will have the right to defend such claim or
proceeding with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as the Indemnifying Party notifies the Indemnified
Party that it will assume the defense thereof within twenty (20) days after
notice from the Indemnified Party of such claim, action or proceeding and the
Indemnifying Party reimburses the Indemnified Party for any fees and expenses
incurred by it during such twenty (20) day period; provided, however, that
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of such claim, action or proceeding;
and provided further that the Indemnified Party may retain its own counsel at
the sole cost and expense of the Indemnifying Party if: (i) the employment of
such counsel has been specifically authorized in writing by the Indemnifying
Party; (ii) the Indemnifying Party has failed to assume the defense and
employ counsel within thirty
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(30) days of receiving notice of such claim or proceeding; and (iii) the
named parties to any such action (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by its counsel that there may be one or more
legal defenses available to it that are different from or additional to those
available to the Indemnifying Party (in which case the Indemnifying Party
shall not have the right to assume the defense of such action on behalf of
such Indemnified Party). The Indemnifying Party shall not be liable for any
settlement of any such action effected without the written consent of the
Indemnifying Party; provided, however, if any action is settled with the
written consent of the Indemnifying Party, the Indemnifying Party agrees to
indemnify and hold harmless any Indemnified Party from and against any loss
or liability by reason of such settlement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Waivers and Amendments. No failure or delay on the part of
either party to this Agreement in exercising any of its power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any
other further exercise thereof or the exercise of any other power, right or
remedy. The rights and remedies provided in this Agreement shall be
cumulative and nonexclusive of any rights or remedies provided by law. Any
provision of this Agreement may be amended if, but only if, such amendment is
in writing and is signed by the Seller and the Purchaser.
SECTION 8.2. Notices. Except as provided below, all communications and
notices provided for under this Agreement shall be in writing (including bank
wire, telex, telecopy or electronic facsimile transmission or similar
writing) and shall be given to the other party at its address or telecopy
number set forth below or at such other address or telecopy number as such
party may hereafter specify for the purposes of notice to such party. Each
such notice or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
in this Section 8.2 and confirmation is received, (ii) two (2) Business Days
after the date on which such notice or communication is delivered to a
nationally or internationally recognized overnight courier service, or (iii)
if given by any other means, when received at the address specified in this
Section 8.2.
If to the Seller:
World Color Press, Inc.
The Mill
340 Pemberwick
Greenwich, CT 06831
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and
If to the Purchaser:
World Color Finance, Inc.
c/o World Color Press, Inc.
The Mill
340 Pemberwick
Greenwich, CT 06831
SECTION 8.3. GOVERNING LAW; SUBMISSION TO JURISDICTION; INTEGRATION;
SERVICE OF PROCESS. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE SELLER AND
THE PURCHASER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. Each of the Seller and the Purchaser hereby
irrevocably waives, to the fullest extent it may effectively do so, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court, any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum and any
claim based on its immunity from suit. Nothing in this Section 8.3 shall
affect the right of the Purchaser or Seller to bring any action or proceeding
against the other or its property in the courts of other jurisdictions.
(b) This Agreement contains the final and complete integration of
all prior expressions by the Seller and the Purchaser with respect to the
subject matter of this Agreement and shall constitute the entire Agreement
among the Seller and the Purchaser with respect to the subject matter of this
Agreement superseding all prior oral or written understandings.
SECTION 8.4. Severability and Counterparts. Any provisions of this
Agreement that are prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
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jurisdiction. This Agreement may be executed in any number of separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same Agreement.
SECTION 8.5. Successors and Assigns. (a) This Agreement shall be
binding on the Seller and the Purchaser and their successors and assigns;
provided, however, that the Seller may not assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the Purchaser. No provision of this Agreement shall in any manner
restrict the ability of the Purchaser to assign, participate, grant security
interests in, or otherwise transfer, any Transferred Receivable.
(b) The Seller hereby agrees and consents to the complete
assignment by the Purchaser from time to time of all or any part of its
rights, title and interest in and to this Agreement and the Transferred
Receivables (other than the Excluded Receivables) to the Agent for the
benefit of the Purchasers (as defined in the RSA).
SECTION 8.6. Waiver of Confidentiality. The Seller hereby consents to
the disclosure of any nonpublic information with respect to it received by
the Purchaser to any nationally recognized rating agency rating Windmill
Funding Corporation's commercial paper, the Agent, the Liquidity Providers or
the Enhancer in connection with the RSA.
SECTION 8.7. Characterization of the Transactions Contemplated by the
Agreement. It is the intention of the Seller and the Purchaser that (i) the
transactions contemplated by this Agreement constitute an absolute and
irrevocable assignment, transfer and conveyance to the Purchaser of all of
the Seller's right, title and interest in, to and under all of the
Transferred Receivables, free and clear of all Adverse Claims, and (ii) the
Seller has no interest or right whatsoever in any of the Transferred
Receivables. If, however, the transactions contemplated by this Agreement
should nevertheless be deemed a financing, the Seller and the Purchaser
intend that (i) the Seller shall be deemed to have granted to the Purchaser,
and the Seller hereby grants to the Purchaser, a first priority perfected
security interest in all of the Seller's right, title and interest in, to and
under the Transferred Receivables, and (ii) this Agreement shall constitute a
security agreement under applicable law. Notwithstanding any other provision
of this Agreement, regardless of whether the transactions contemplated by
this Agreement are deemed to be a sale or financing, the Seller and the
Purchaser agree that the Purchaser shall not have any recourse against the
Transferor or any of its affiliates as a result of any uncollectible
Transferred Receivable.
-18-
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have executed and
delivered this Receivables Purchase Agreement as of the date first written
above.
WORLD COLOR PRESS, INC.
By: /s/ Jennifer Adams
------------------------------------
Name: Jennifer Adams
Title: Executive Vice President
WORLD COLOR FINANCE, INC.
By: /s/ Daniel M. Snopkowski
------------------------------------
Name: Daniel M. Snopkowski
Title: Vice President and Treasurer
<PAGE>
EXHIBIT A
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of June 30, 1997 (the
"Agreement"), between WORLD COLOR PRESS, INC., a Delaware corporation ("World
Color"), and WORLD COLOR FINANCE, INC., a Delaware corporation ("WCF").
In consideration of the mutual agreements contained in this Agreement,
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used and not
otherwise defined in this Agreement will have the meanings given to them in the
Receivables Purchase Agreement, dated as of June 30, 1997 (the "RPA"), by and
between WCF and World Color.
ARTICLE II
CONTRIBUTION TO WCF
Section 2.01. Capital Contribution to WCF. World Color hereby agrees
to transfer, assign, set over and otherwise convey to WCF all of World Color's
right, title and interest in, to and under:
(a) each outstanding Receivable listed or described on Schedule A
attached to this Agreement, which may include Receivables originated after the
date of this Agreement (collectively, the "Contributed Receivables"),
(b) all amounts payable with respect to the Contributed Receivables,
(c) all Collections received by World Color, WCF or any other Person
with respect to the Contributed Receivables, and
(d) all proceeds of the foregoing.
The property described in clauses (a) through (d) above is
collectively called the "Related Contributed Assets."
Section 2.02. Acceptance by WCF. WCF hereby acknowledges its
acceptance of all right, title and interest in and to the property contributed
to WCF by World Color pursuant to Section 2.01 of this Agreement.
Section 2.03. Absolute Transfer; Assumption of Obligations. World
Color and WCF hereby agree and acknowledge that the contribution of the
Contributed Receivables and Related Contributed Assets to WCF pursuant to
Section 2.01 of this Agreement is an absolute
<PAGE>
and irrevocable transfer of such property, and is not intended to be a transfer
for purposes of security. World Color represents and warranties that all of its
representations and warranties in the RPA with respect to the Contributed
Receivables and Related Contributed Assets are true and correct on the date such
Receivables are contributed to WCF.
ARTICLE III
MISCELLANEOUS
Section 3.01. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which shall constitute but one and the same instrument.
Section 3.02. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, World Color and WCF have caused this Agreement to
be duly executed as of the date of this Agreement.
WORLD COLOR PRESS, INC.
By: ------------------------------
Name:
Title:
WORLD COLOR FINANCE, INC.
By: ------------------------------
Name:
Title:
<PAGE>
Indemnity Agreement
This Indemnity Agreement (the "Indemnity Agreement"), dated as of June 30,
1997, made by and between World Color Press, Inc. (the "Originator") and the
Agent (as defined below) for the benefit of the Beneficiaries (as defined
below);
W i t n e s s e t h:
Whereas, World Color Finance, Inc. (the "Seller") has entered into a
Receivables Sale Agreement dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Receivables Sale
Agreement") by and among the Seller, ABN AMRO Bank N.V. as provider of the
program letter of credit (the "Program LOC Provider"), the liquidity providers
from time to time party thereto (the "Liquidity Providers"), Windmill Funding
Corporation ("Windmill" and, together with the Liquidity Providers and the
Program LOC Provider, the "Purchasers") and ABN AMRO Bank N.V., as agent for the
Purchasers (in such capacity, the "Agent") (terms used herein and not otherwise
defined herein having the respective meanings ascribed thereto in the
Receivables Sale Agreement);
Whereas, the Originator directly or indirectly owns all equity interests in
the Seller; and
Whereas, in order to induce the Agent and the Purchasers to enter into the
Receivables Sale Agreement and in consideration therefor, the Originator is
willing to make certain representations, warranties and covenants as hereinafter
set forth and to indemnify the Agent for the benefit of the Agent on its own
behalf, the Purchasers and any other Person to whom any amounts are owed by the
Seller under the Receivables Sale Agreement (collectively, the "Beneficiaries")
against certain liabilities as hereinafter described;
Now, Therefore, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
<PAGE>
Article I
Indemnification
Section 1.1. Indemnities. Without limiting any other rights that any
Beneficiary may otherwise have hereunder or under applicable law, the Originator
shall pay, and shall indemnify on an after-Tax basis each Beneficiary for, any
and all damages, losses, claims, liabilities, penalties, Taxes, costs and
expenses (collectively, the "Indemnified Losses") arising out of or otherwise
relating to any Transaction Document, the transactions contemplated thereby or
the acquisition of any portion of the Sold Interest, excluding only Indemnified
Losses (the "Excluded Losses") to the extent (a) a final judgment of a court of
competent jurisdiction holds such Indemnified Losses resulted from gross
negligence or willful misconduct of the Beneficiary seeking indemnification,
(b) such Indemnified Losses due to or result from the credit risk of an Obligor
and for which reimbursement would constitute recourse for uncollectible
Receivables, (c) such Indemnified Losses include Taxes on, or measured by, the
overall net income of the Agent, any Purchaser or any Beneficiary computed in
accordance with the Intended Tax Characterization, or (d) such Indemnified
Losses would constitute recourse to the Originator for Discount payable by the
Seller under the Receivables Sale Agreement or fees under Section 1.4 of the
Receivables Sale Agreement or under the Fee Letter or Pricing Letter; provided,
however, that nothing contained in this sentence shall limit the liability of
the Originator or limit the recourse of any Beneficiary to the Originator for
any amounts otherwise specifically provided to be paid by the Originator
hereunder. Without limiting the foregoing indemnification, the Originator shall
indemnify each Beneficiary for Indemnified Losses relating to or resulting from:
(a) any representation or warranty made by the Originator, the Seller
or the Collection Agent (or any employee or agent of the Originator, the
Seller or the Collection Agent) under or in connection with any of the
Transaction Documents, any Periodic Report or any other information or
-2-
<PAGE>
report delivered by the Originator, the Seller or the Collection Agent
pursuant thereto having been false or incorrect in any material respect
when made or deemed made;
(b) the failure by the Originator, the Seller or the Collection Agent
to comply with any applicable law, rule or regulation related to any
Receivable, or the nonconformity of any Receivable with any such applicable
law, rule or regulation;
(c) the failure of the Seller to vest and maintain vested in the
Agent, for the benefit of the Purchasers, a perfected ownership or security
interest in the Sold Interest and the property conveyed pursuant to
Section 1.1(e) and Section 1.8 of the Sale Agreement, free and clear of any
Adverse Claim;
(d) any commingling of funds to which the Agent or any Purchaser is
entitled under the Receivables Sale Agreement with any other funds;
(e) any failure of a Lock-Box Bank to comply with the terms of the
applicable Lock-Box Letter;
(e) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
in which the Purchasers have a Sold Interest, or any other claim resulting
from the sale or lease of goods or the rendering of services related to
such Receivable or the furnishing or failure to furnish any such goods or
services or other similar reason not arising from the financial ability of
any Obligor to pay undisputed indebtedness;
(f) any failure of the Originator, the Seller or any Affiliate of
either thereof to perform its duties or obligations in accordance with the
provisions of any Transaction Document to which such Person is a party;
-3-
<PAGE>
(g) any action taken by the Agent as attorney-in-fact for the Seller
pursuant to Section 3.5(b) of the Sale Agreement; or
(h) any environmental liability claim, product liability claim or
personal injury or property damage suit or other similar or related claim
or action of whatever sort arising out of or in connection with any
Receivable or any other suit, claim action of whatever sort relating to any
of the Transaction Documents.
Section 1.2. Payments and Allocations. If any Beneficiary seeks
compensation pursuant to this Article I, such Person shall deliver to the
Originator and the Agent a certificate setting forth in reasonable detail the
amount due to such Person, a description of the circumstance giving rise thereto
and the basis of the calculations of such amount, which certificate shall be
conclusive absent manifest error so long as such determinations and any
allocations are made on a reasonable basis. The Originator shall pay to the
Agent (for the account of such Person) such amount shown as due on any such
certificate.
Article II
Extent and Waivers
Section 2.1. Indemnity Absolute. The obligations of the Originator under
this Indemnity Agreement constitute a present and continuing obligation, shall
be absolute and unconditional, shall not be subject to any counterclaim, setoff,
deduction or defense based upon any claim that the Originator or any Obligor may
have against the Seller or any other Person and, shall remain in full force and
effect without regard to, and shall not be released, discharged or in any way
affected or impaired by, any thing, event, happening, matter, circumstance or
condition whatsoever (whether or not the Originator shall have any knowledge or
notice thereof or consent thereto). The liability of the Originator under this
Indemnity Agreement shall be absolute, unconditional, present and continuing
-4-
<PAGE>
until all Investment and amounts payable by the Seller under the Transaction
Documents have been paid in full, irrespective of:
(a) any attempt to collect from the Seller amounts due from the
Seller under the Transaction Documents;
(b) any lack of validity or enforceability of any or all of the
Transaction Documents, or any provision thereof, or any other agreement or
instrument relating thereto or any assignment or transfer of any of the
foregoing or any failure or omission to enforce or agreement not to
enforce, or the stay or enjoining by order of court, by operation of law or
otherwise, of the exercise or nonexercise of any right, power, privilege or
remedy under or with respect to the foregoing;
(c) any amendment, or waiver, renewal, extension or release of or
any consent to departure from or other action or inaction with respect to
any or all of the Transaction Documents or any other agreement or
instrument relating thereto;
(d) any new conveyance of, or any exchange, release or nonperfection
of, any collateral or security interest conveyed to any of the
Beneficiaries in connection with the transactions contemplated by the
Receivables Sale Agreement, acceptance by any of the Beneficiaries of
partial payment from the Seller of its obligations under the Transaction
Documents, or any release or amendment or waiver of or consent to departure
from any guaranty or security for all or any of the Investment held, or
obligations owed, under the Transaction Documents;
(e) any merger or consolidation of the Seller into or with any other
Person, or any other change in the Seller whatsoever, or any sale, lease or
transfer of any or all of the assets of the Seller to any other Person;
(f) any sale, transfer or other disposition by the Originator of any
stock of the Seller;
-5-
<PAGE>
(g) any bankruptcy, insolvency, reorganization, arrangement,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to the Seller, or any action taken with respect to any or all of
the Transaction Documents, including this Indemnity Agreement, by any
trustee or receiver, or by any court, in any such proceeding; or
(h) any absence of any notice to, or knowledge by, the Originator of
the existence or occurrence of any of the matters or events set forth in
the foregoing subdivisions (a) through (g); or
(i) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Originator from its obligations under
the Transaction Documents, including the obligations of the Originator
hereunder.
Section 2.2. Waiver. To the fullest extent permitted by applicable law,
the Originator hereby waives promptness, diligence, all setoffs, counterclaims,
presentments, protests and notice of acceptance and any other notice with
respect to any of its obligations hereunder and any requirement of the
Beneficiaries (or any of them) to protect, secure, perfect or insure any
security interest or lien or any property subject to the Receivables Sale
Agreement or to exhaust any right or take any action against the Seller or any
other Person or entity or any collateral. To the fullest extent permitted by
applicable law, the Originator waives all principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms of this
Indemnity Agreement and any legal or equitable discharge of its obligations
hereunder and the benefit of any statute of limitations affecting its liability
hereunder or the enforcement hereof.
Section 2.3. Subrogation. The Originator agrees that it shall not assert
any rights (direct or indirect) of subrogation, contribution, reimbursement,
indemnification, or other rights of payment or recovery from the Seller for any
-6-
<PAGE>
payments made by the Originator hereunder until all Investment and amounts owing
under the Transaction Documents have been paid in full.
Section 2.4. Reinstatement. The obligations of the Originator under this
Indemnity Agreement shall continue to be effective or shall be reinstated, as
the case may be, if at any time any payment made by the Originator hereunder or
by the Seller with respect to any coextensive obligations that it has under the
Transaction Documents is rescinded or must otherwise be returned to any Person
upon the insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation or reorganization of the Seller or any guarantor or for any other
reason, all as though such payment had not been made or performance had not
occurred, as applicable.
Article III
Representations and Warranties
Section 3.1. Representations and Warranties of the Originator. The
Originator represents and warrants to the Agent and each other Beneficiary as
follows:
(a) Receivables Sale Agreement. Each representation and warranty
with respect to it and the Receivables or collections set forth in the
Receivables Sale Agreement is true and correct on the date hereof and on
the date each Purchase is made under the Receivables Sale Agreement.
(b) Licenses, Registrations, and Compliance with Laws. To the best
of Originator's knowledge, each of Originator and the World Color Entities
has all permits, governmental licenses, registrations, and approvals
material to carrying out its businesses as presently conducted and as
required by law or the rules and regulations of any Governmental Authority
having jurisdiction over Originator or the World Color Entities. There is
no material violation or material failure of compliance or allegation or
notice of such violation or failure of compliance on the part of the
-7-
<PAGE>
Originator or any of the World Color Entities with any of the foregoing
permits, licenses, registrations, approvals, rules or regulations.
Section 3.2. Representations and Warranties of the Agent. The Agent
represents and warrants on behalf of the Beneficiaries that it is entering into
this Agreement based on the separate credit of the Originator and that it does
not expect the assets or liabilities of the Originator and the Seller to be
substantively consolidated in any bankruptcy or similar proceeding.
Article IV
Covenants of the Originator
Section 4.1. Affirmative Covenants. The Originator hereby covenants,
undertakes and agrees that at all times from the date hereof, unless the Agent,
with the consent of the Instructing Group, shall otherwise consent in writing:
(a) Financial Reporting. The Originator shall provide the Seller
with the annual and quarterly financial statements of the Originator and
any certificate of an officer of the Originator required to be delivered by
the Seller pursuant to Section 5.1(a) of the Receivables Sale Agreement and
the Originator shall deliver such financial statements and certificates
directly to the Agent and each Purchaser if the Seller fails to comply with
its obligation to do so.
(b) Notices. The Originator will notify the Agent in writing of any
of the following immediately upon any officer of the Originator learning of
the occurrence thereof, describing the same and, if applicable, the steps
being taken by the Persons affected with respect thereto:
(i) Representations and Warranties. The failure of any
representation or warranty made by the Originator in any Transaction
Document to be true (when made or deemed made) in any material respect.
-8-
<PAGE>
(ii) Changes in Business. Any change in, or proposed change in, the
character of the Originator's business that is reasonably likely to
materially impair the collectibility of any material amount of the
Receivables.
Section 4.2. Receivables Purchase Agreement Covenants. The Originator
agrees, for the benefit of the Agent and the Purchasers, to comply with each
covenant set forth in Section 5.1(c), (d), (e), (f), (g), (h), (i), (k) or (l)
of the Purchase Agreement as if such covenants were set forth in their entirety
herein and as if all references therein to Seller where references to the
Originator.
Article V
Miscellaneous
Section 5.1. No Waiver; Remedies. No failure or delay on the part of the
Agent for the benefit of the Beneficiaries in exercising any power, right or
remedy under this Indemnity Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any such power, right or remedy preclude
any other or further exercise thereof or the exercise of any other power, right
or remedy. The rights and remedies provided in this Indemnity Agreement are
cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Indemnity Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
Section 5.2. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Indemnity Agreement nor consent to any departure
by the Originator therefrom shall in any event be effective unless the same
shall be in writing and signed by the Originator and the Agent and consented to
by the Instructing Group and, with respect to Article I hereof, all of the
Liquidity Providers. Any amendment, supplement, modification or waiver of this
Indemnity Agreement entered into in accordance with this Section 5.2 shall apply
-9-
<PAGE>
to each of the Beneficiaries equally and shall be binding upon the Originator,
each Beneficiary and the Agent.
Section 5.3. Waiver of Confidentiality. The Originator hereby consents
to the disclosure of any nonpublic information relating to the Originator or the
Transaction Documents obtain in connection with the transactions contemplated by
the Transaction Documents among the Agent and the Purchasers and by the Agent or
the Purchasers to (i) any officers, directors, members, managers, employees or
outside accountants, auditors or attorneys thereof, (ii) any prospective or
actual assignee or participant, (iii) any rating agency, surety, guarantor or
credit or liquidity enhancer to the Agent or any Purchaser, (iv) any entity
organized to purchase, or make loans secured by, financial assets for which ABN
AMRO provides managerial services or acts as an administrative agent,
(v) Windmill's administrator, management company, referral agents, issuing
agents or depositaries or CP Dealers and (vi) Governmental Authorities with
appropriate jurisdiction, in each case only to the extent necessary in
connection with the services provided by, or the requirements of, such Person;
provided, that prior to any such disclosure, the Person receiving such
information shall agree in writing to keep such information confidential.
Section 5.4. Agreement Not to Petition. The Originator agrees, for the
benefit of the holders of the privately or publicly placed indebtedness for
borrowed money of Windmill, not, prior to the date which is one (1) year and one
(1) day after the payment in full of all such indebtedness, to acquiesce,
petition or otherwise, directly or indirectly, invoke, or cause Windmill to
invoke, the process of any Governmental Authority for the purpose of (a)
commencing or sustaining a case against Windmill under any federal or state
bankruptcy, insolvency or similar law (including the Federal Bankruptcy Code),
(b) appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official for Windmill, or any substantial part of
its property, or (c) ordering the winding up or liquidation of the affairs of
Windmill.
-10-
<PAGE>
Section 5.5. No Recourse. The obligations of Windmill, its management
company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.6. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address or number specified by such Person. The number of days for any
advance notice required hereunder may be waived (orally or in writing) by the
Person receiving such notice and, in the case of notices to the Agent, the
consent of each Person to which the Agent is required to forward such notice.
Section 5.7. Governing Law; Submission to Jurisdiction; Integration.
This Indemnity Agreement shall be governed by and construed in accordance with
the internal laws (and not the law of conflicts) of the State of Illinois. The
Originator hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois state
court sitting in Chicago for purposes of all legal proceedings arising out of or
relating to this Indemnity Agreement or the transactions contemplated hereby.
The Originator hereby irrevocably waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum. Nothing in this Section 5.7 shall affect the right of the
Agent or any Beneficiary to bring any action or proceeding against the
Originator or its property in the courts of other jurisdictions. This Indemnity
-11-
<PAGE>
Agreement contains the final and complete integration of all prior expressions
by the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.
Section 5.8. Severability; Counterparts. This Indemnity Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Indemnity Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.9. Assignment. This Indemnity Agreement shall be binding upon
the Originator, its successors and assigns, and inure to the benefit of and be
enforceable by the Agent for the benefit of the Beneficiaries and their
respective successors and assigns; provided, however, that the obligations of
the Originator hereunder may not be assigned, transferred or delegated without
the prior written consent of the Agent and the Instructing Group and any such
purported assignment, transfer or delegation absent such consent shall be void.
Section 5.10. Survival of Warranties. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Indemnity Agreement, any investigation at any time made by the Agent or the
Beneficiaries or on their behalf, and the execution and delivery of each of the
Transaction Documents. The rights and remedies of the Agent on behalf of each
Beneficiary with respect to the representations and warranties made herein and
the indemnification provisions hereof shall be continuing and shall survive any
termination of the Receivables Sale Agreement or any of the other Transaction
Documents.
-12-
<PAGE>
Section 5.11. Further Assurances. At any time or from time to time upon
the request of the Agent, the Originator shall execute and deliver such further
documents and do such other acts and things as the Agent may reasonably request
in order to effect fully the purposes of this Indemnity Agreement.
Section 5.12. Headings. Article and Section headings used herein are for
convenience and reference only, are not part of this Indemnity Agreement and are
not to affect the construction of, or to be taken into consideration in
interpreting, this Indemnity Agreement.
Section 5.13. No Claims. The Originator shall not have any claim against
the Seller as a result of any payment made by the Originator under this
Agreement.
-13-
<PAGE>
In Witness Whereof, the parties hereto have caused this Indemnity Agreement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
ABN AMRO Bank N.V., as Agent
By:_______________________________
Title:____________________________
By:_________________________________
Title:___________________________
Address: Structured Finance,
Asset Securitization
Suite 725
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Purchaser Agent-Windmill
Telephone: (312) 904-6263
Telecopy: (312) 904-6376
World Color Press, Inc.
By:_________________________________
Title:______________________________
Address: The Mill
340 Pemberwick Road
-14-
<PAGE>
Greenwich, Connecticut 06831
Telephone: _______________________
Telecopy: ____________________________
With a copy to:
Latham & Watkins
885 Third Avenue
New York, New York 10022
Attention: Steve Della Rocca
-15-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 29, 1997 AND THE CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 29, 1997 OF
WORLD COLOR PRESS, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-END> JUN-29-1997
<CASH> 22,383
<SECURITIES> 0
<RECEIVABLES> 325,543
<ALLOWANCES> 0
<INVENTORY> 158,036
<CURRENT-ASSETS> 562,820
<PP&E> 1,458,724
<DEPRECIATION> 585,469
<TOTAL-ASSETS> 2,004,205
<CURRENT-LIABILITIES> 324,019
<BONDS> 1,049,053
0
0
<COMMON> 337
<OTHER-SE> 428,078
<TOTAL-LIABILITY-AND-EQUITY> 2,004,205
<SALES> 883,998
<TOTAL-REVENUES> 883,998
<CGS> 732,631
<TOTAL-COSTS> 732,631
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,268
<INCOME-PRETAX> 23,247
<INCOME-TAX> 9,764
<INCOME-CONTINUING> 13,483
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,483
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.39
</TABLE>
