Document:

Exhibit to Pivotal 10Q (12/31/2002)

EXHIBIT 10.47  

Silicon Valley Bank

Loan and Security
Agreement 

	
Borrower:  	
Pivotal Corporation, a British Columbia corporation ("Parent");
and Pivotal Corporation, a Washington corporation
("Pivotal US")  
	  
	Address: 	858 Beatty Street, Suite 700

Vancouver, British Columbia, Canada V6B 1C1 
	  
	
Date: 
	
December __, 2002 

THIS LOAN AND SECURITY
AGREEMENT is entered into on the above date between SILICON VALLEY BANK
(“Silicon”), whose main address is 3003 Tasman Drive, Santa Clara, California
95054 (and with an office at 4110 Carillon Point, Kirkland, Washington 98033), and the
borrower(s) named above (individually and collectively, and jointly and severally, the
“Borrower”), whose chief executive office is located at the above address
(“Borrower’s Address”). The Schedule to this Agreement (the
“Schedule”) shall for all purposes be deemed to be a part of this Agreement, and
the same is an integral part of this Agreement. (Definitions of certain terms used in this
Agreement are set forth in Section 8 below.) 

1. LOANS.  

        1.1
Loans. Subject to the terms and conditions of this Agreement, Silicon will
make loans to Borrower (the “Loans”), in amounts determined by Silicon in its
good faith business judgment,up to the amounts (the “Credit Limit”) shown
in Section 1 of the Schedule, provided no Default or Event of Default has occurred and is
continuing, and subject to deduction of Reserves for * accrued interest and
** such other Reserves as Silicon deems proper from time to time in its good faith
business judgment. *** 

      *
(i)  

      **
(ii) so long as the ABL Provisions are in effect,  

      ***
Clause (ii) of the immediately preceding sentence is an ABL Provision.  

        1.2
Interest. All Loans and all other monetary Obligations shall bear interest
at the rate shown on the Schedule, except where expressly set forth to the contrary in
this Agreement. Interest shall be payable monthly, on the last day of the month. Interest
may, in Silicon’s discretion, be charged to Borrower’s loan account, and the
same shall thereafter bear interest at the same rate as the other Loans. Silicon may, in
its discretion, charge interest to Borrower’s Deposit Accounts maintained with
Silicon. Regardless of the amount of Obligations that may be outstanding from time to
time, Borrower shall pay Silicon minimum monthly interest during the term of this
Agreement in the amount set forth on the Schedule (the “Minimum Monthly
Interest”). 

        1.3
Overadvances. If at any time or for any reason the total of all outstanding
Loans and all other monetary Obligations exceeds the Credit Limit (an
“Overadvance”), Borrower shall immediately pay the amount of the excess to
Silicon, without notice or demand. Without limiting Borrower’s obligation to repay to
Silicon the amount of any Overadvance, Borrower agrees to pay Silicon interest on the
outstanding amount of any Overadvance, on demand, at the Default Rate. 

        1.4
Fees. Borrower shall pay Silicon the fees shown on the Schedule, which are
in addition to all interest and other sums payable to Silicon and are not refundable. 

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Silicon Valley Bank
            
            
            
             	
Loan and Security Agreement  
	

        1.5
Loan Requests. To obtain a Loan, Borrower shall make a request to Silicon
by facsimile or telephone. Loan requests received after 12:00 Noon (California time) will
not be considered by Silicon until the next Business Day. Silicon may rely on any
telephone request for a Loan given by a person whom Silicon believes is an authorized
representative of Borrower, and Borrower will indemnify Silicon for any loss Silicon
suffers as a result of that reliance. 

        1.6
Letters of Credit. At the request of Borrower, Silicon may, in its sole
discretion, issue or arrange for the issuance of letters of credit for the account of
Borrower, in each case in form and substance satisfactory to Silicon in its sole
discretion (collectively, “Letters of Credit”). The Borrower agrees that the
aggregate face amount of all outstanding Letters of Credit from time to time shall never
exceed the lesser of amount defined in Section 1 of the Schedule as the “Letter of
Credit Sublimit” or the amount of Loans and other extensions of credit which are from
time to time available hereunder, and that the amount of outstanding Letters of Credit
shall be reserved against Loans and other extensions of credit which would otherwise be
available hereunder. If at any time or for any reason the aggregate face amount of all
outstanding Letters of Credit shall exceed the foregoing limit, Borrower shall immediately
pay an amount equal to said excess to Silicon, without notice or demand. Borrower shall
pay all bank charges (including charges of Silicon) for the issuance * of Letters
of Credit, together with such additional fees as Silicon’s letter of credit
department shall charge in connection with the issuance of the Letters of Credit. Any
payment by Silicon under or in connection with a Letter of Credit shall constitute a Loan
hereunder on the date such payment is made. Each Letter of Credit shall have an expiry
date no later than thirty days prior to the Maturity Date **. Borrower hereby
agrees to indemnify, save, and hold Silicon harmless from any loss, cost, expense, or
liability, including payments made by Silicon, expenses, and reasonable attorneys’
fees incurred by Silicon arising out of or in connection with any Letters of Credit.
Borrower agrees to be bound by the regulations and interpretations of the issuer of any
Letters of Credit guarantied by Silicon and opened for Borrower’s account or by
Silicon’s interpretations of any Letter of Credit issued by Silicon for
Borrower’s account, and Borrower understands and agrees that Silicon shall not be
liable for any error, negligence, or mistake, whether of omission or commission, in
following Borrower’s instructions or those contained in the Letters of Credit or any
modifications, amendments, or supplements thereto. Borrower understands that Letters of
Credit may require Silicon to indemnify the issuing bank for certain costs or liabilities
arising out of claims by Borrower against such issuing bank. Borrower hereby agrees to
indemnify and hold Silicon harmless with respect to any loss, cost, expense, or liability
incurred by Silicon under any Letter of Credit as a result of Silicon’s
indemnification of any such issuing bank. The provisions of this Agreement, as it pertains
to Letters of Credit, and any other present or future documents or agreements between
Borrower and Silicon relating to Letters of Credit are cumulative. 

      *
(and confirmation, if applicable)  

        **
; provided that a Letter of Credit may have an expiry date later than thirty days prior to
the Maturity Date if and only if Borrower’s reimbursement obligation with respect to
such Letter of Credit is secured by cash on terms acceptable to Silicon and in the manner
set forth in Section 6.3 hereof. The outstanding Letters of Credit shall be secured by
cash in amounts and on terms and conditions acceptable to Silicon in its sole discretion
upon the occurrence of any CSL Provisions Trigger and so long as the CSL Provisions are in
effect. The immediately preceding sentence is a CSL Provision. 

2.              SECURITY
INTEREST. To secure the payment and performance of all           of the
Obligations when due, Borrower hereby pledges and grants to Silicon a           security
interest in all of the following (collectively, the           “Collateral”):
all right, title and interest of Borrower in and to all           of the following,
whether now owned or hereafter arising or acquired and           wherever located: all
Accounts; all Inventory; all Equipment; all Deposit           Accounts; * all
General Intangibles (including without limitation all           Intellectual Property);all
Investment Property; all Other Property; and any           and all claims, rights and
interests in any of the above, and all guaranties and           security for any of the
above, and all substitutions and replacements for,           additions, accessions,
attachments, accessories, and improvements to, and           proceeds (including proceeds
of any insurance policies, proceeds of proceeds and           claims against third
parties) of, any and all of the above, and all           Borrower’s books relating
to any and all of the above. ** 

      *
all payment intangibles;  

        **
The Collateral does not include any Excluded General Intangibles; provided,
however, that the Collateral shall include the proceeds of all Intellectual
Property (including, without limitation, proceeds consisting of Accounts or payment
intangibles of Borrower) if a judicial authority (including a U.S. Bankruptcy Court or
Canadian equivalent) holds that a security interest in the underlying Intellectual
Property is necessary to have a security interest in such items that are proceeds of the
Intellectual Property, and in such circumstance, then the Collateral shall automatically,
and effective as of the date of this Agreement, include the Intellectual Property to the
extent necessary to permit perfection of Silicon’s security interest in such proceeds
(including, without limitation, proceeds consisting of Accounts or payment intangibles of
Borrower). 

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Silicon Valley Bank
            
            
            
             	
Loan and Security Agreement  
	

3. REPRESENTATIONS,
WARRANTIES AND COVENANTS OF BORROWER.  

        In
order to induce Silicon to enter into this Agreement and to make Loans, Borrower
represents and warrants to Silicon as follows, and Borrower covenants that the following
representations will continue to be true, and that Borrower will at all times comply with
all of the following covenants, throughout the term of this Agreement and until all
Obligations have been paid and performed in full: 

        3.1
Corporate Existence and Authority. Borrower is and will continue to be,
duly organized, validly existing and in good standing under the laws of the jurisdiction
of its incorporation. Borrower is and will continue to be qualified and licensed to do
business in all jurisdictions in which any failure to do so could reasonably be expected
to result in a Material Adverse Change. The execution, delivery and performance by
Borrower of this Agreement, and all other documents contemplated hereby (i) have been duly
and validly authorized, (ii) are enforceable against Borrower in accordance with their
terms (except as enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors’ rights
generally), and (iii) do not violate Borrower’s articles or certificate of
incorporation, or Borrower’s by-laws, or any law or any material agreement or
instrument which is binding upon Borrower or its property, and (iv) do not constitute
grounds for acceleration of any material indebtedness or obligation under any agreement or
instrument which is binding upon Borrower or its property. 

        3.2
Name; Trade Names and Styles. The name of Borrower set forth in the heading
to this Agreement is its correct name. Listed in the Representations are all prior names
of Borrower and all of Borrower’s present and prior trade names. Borrower shall give
Silicon 30 days’ prior written notice before changing its name or doing business
under any other name. Borrower has complied, and will in the future comply, in all
material respects, with all laws relating to the conduct of business under a fictitious
business name, except where the failure to so comply could not reasonably be expected to
result in a Material Adverse Change. 

        3.3
Place of Business; Location of Collateral. The address set forth in the
heading to this Agreement is Borrower’s chief executive office. In addition, Borrower
has places of business and Collateral is located only at the locations set forth in the
Representations. Borrower will give Silicon at least 30 days prior written notice before
opening any additional place of business, changing its chief executive office, or moving
any of the Collateral to a location other than Borrower’s Address or one of the
locations set forth in the Representations, except that Borrower may maintain sales
offices in the ordinary course of business at which not more than a total of *
$10,000 fair market value of Equipment is located. 

      *
$25,000  

      3.4
Title to Collateral; Perfection; Permitted Liens.  

    (a)        Borrower
is now, and will at all times in the future be, the sole owner of all           the
Collateral, except for items of Equipment which are leased to Borrower. The
          Collateral now is and will remain free and clear of any and all liens, charges,
          security interests, encumbrances and adverse claims, except for Permitted
Liens.           Silicon now has, and will continue to have, a first-priority perfected
and           enforceable security interest in all of the Collateral, subject in lien
priority           only to those Permitted Liens that are expressly entitled to such
priority over           the security interests of Silicon by operation of law or by
written           subordination agreement duly executed and delivered by Silicon in favor
of the           holders of such Permitted Liens, and Borrower will at all times defend
Silicon           and the Collateral against all claims of others.  

         (b)       
          Borrower has set forth in the Representations all of Borrower’s Deposit
          Accounts, and Borrower will give Silicon five Business Days advance written
          notice before establishing any new Deposit Accounts and, in accordance with
          Section 8(1) of the Schedule, will cause the institution where any such new
          Deposit Account is maintained to execute and deliver to Silicon a control
          agreement in form sufficient to perfect Silicon’s security interest in the
          Deposit Account and otherwise satisfactory to Silicon in its good faith business
          judgment. Nothing herein limits any requirements which may be set forth in the
          Schedule as to where Deposit Accounts will be maintained. 

         
(c)       
          In the event that Borrower shall at any time after the date hereof have any
          commercial tort claims against others, which it is asserting or intends to
          assert, and in which the potential recovery exceeds * $100,000,
          Borrower shall promptly notify Silicon thereof in writing and provide Silicon
          with such information regarding the same as Silicon shall request (unless
          providing such information would waive the Borrower’s attorney-client
          privilege). Such notification to Silicon shall constitute a grant of a security
          interest in the commercial tort claim and all proceeds thereof to Silicon, and
          Borrower shall execute and deliver all such documents and take all such actions
          as Silicon shall request in connection therewith. 

         *
$250,000  

    
(d)       None
of the Collateral now is or will be affixed to any real property in such a
          manner, or with such intent, as to become a fixture. Borrower is not and will
          not become a lessee under any real property lease pursuant to which the lessor 

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Silicon Valley Bank
            
            
            
             	
Loan and Security Agreement  
	

may obtain any rights in any of the
Collateral and no such lease now prohibits,           restrains, impairs or will
prohibit, restrain or impair Borrower’s right to           remove any Collateral
from the leased premises. Whenever any Collateral is           located upon premises in
which any third party has an interest, Borrower shall,           whenever requested by
Silicon, use its best efforts to cause such third party to           execute and deliver
to Silicon, in form acceptable to Silicon, such waivers and           subordinations as
Silicon shall specify in its good faith business judgment.           Borrower will keep
in full force and effect, and will comply with all material           terms of, any lease
of real property where any of the Collateral now or in the           future may be
located.  

        3.5
Maintenance of Collateral. Borrower will maintain the Collateral in good
working condition (ordinary wear and tear excepted), and Borrower will not use the
Collateral for any unlawful purpose. Borrower will immediately advise Silicon in writing
of any material loss or damage to the Collateral. 

        3.6
Books and Records. Borrower has maintained and will maintain at
Borrower’s Address complete and accurate books and records, comprising an accounting
system in accordance with GAAP. 

        3.7
Financial Condition, Statements and Reports. All financial statements now
or in the future delivered to Silicon have been, and will be, prepared in conformity with
GAAP and now and in the future will fairly present the results of operations and financial
condition of Borrower, in accordance with GAAP, at the times and for the periods therein
stated. Between the last date covered by any such statement provided to Silicon and the
date hereof, there has been no Material Adverse Change. 

        3.8
Tax Returns and Payments; Pension Contributions. Borrower has timely filed,
and will timely file, all required Tax returns and reports, and Borrower has timely paid,
and will timely pay, all foreign, federal, state * and local ** taxes,
assessments, deposits and contributions now or in the future owed by Borrower
(collectively, “Taxes”). Borrower may, however, defer payment of any contested
Taxes (other than federal taxes and payroll taxes), provided that Borrower (i) in good
faith contests Borrower’s obligation to pay the Taxes by appropriate proceedings
promptly and diligently instituted and conducted, (ii) notifies Silicon in writing of the
commencement of, and any material development in, the proceedings, and (iii) posts bonds
or takes any other steps required to keep the contested Taxes from becoming a lien upon
any of the Collateral. Borrower is unaware of any claims or adjustments proposed for any
of Borrower’s prior tax years which could result in Taxes becoming due and payable by
Borrower. Borrower has paid, and shall continue to pay all amounts necessary to fund all
present and future pension, profit sharing and deferred compensation plans in accordance
with their terms, and Borrower has not and will not withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event with
respect to, any such plan which could reasonably be expected to result in any liability of
Borrower, including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency. *** 

      *
(or provincial),  

      **
(or municipal) 

      ***
Section 10(C) of the Schedule is incorporated herein by this reference.  

        3.9
Compliance with Law. Borrower has, to the best of its knowledge, complied,
and will comply, in all material respects, with all provisions of all foreign, federal,
state * and local ** laws and regulations applicable to Borrower, including,
but not limited to, those relating to Borrower’s ownership of real or personal
property, the conduct and licensing of Borrower’s business, and all environmental
matters. *** 

      *
(or provincial),  

      **
(or municipal)  

        ***
Borrower is not in default of its filing obligations with any securities regulatory
authority having jurisdiction over it. 

        3.10
Litigation. There is no claim, suit, litigation, proceeding or
investigation pending or (to best of Borrower’s knowledge) threatened against or
affecting Borrower in any court or before any governmental agency (or any basis therefor
known to Borrower) which could reasonably be expected to result, either separately or in
the aggregate, in any Material Adverse Change. Borrower will promptly inform Silicon in
writing of any claim, proceeding, litigation or investigation in the future threatened or
instituted against Borrower involving any single claim of * $50,000 or more,
or involving ** $100,000 or more in the aggregate. 

      *
$150,000  

      **
$250,000  

        3.11
Use of Proceeds. All proceeds of all Loans shall be used solely for lawful
business purposes. Borrower is not purchasing or carrying any “margin stock” (as
defined in Regulation U of the Board of Governors of the Federal Reserve  

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Loan and Security Agreement  
	

System) and no part of the proceeds
of any Loan will be used to purchase or carry any “margin stock” or to extend
credit to others for the purpose of purchasing or carrying any “margin stock.” 

      3.12
Environmental Compliance.  

         (a)       
          To the best of Borrower’s knowledge, Borrower has not Released, generated,
          used, stored, treated, transported, manufactured, handled, produced or disposed
          of any Contaminants on or off its premises (whether or not owned by Borrower),
          in any manner that violates in any material respect any applicable Environmental
          Laws or any Governmental Approvals, and the Business and operations of Borrower
          comply in all material respects with all Environmental Laws and all Governmental
          Approvals and similar authorizations. 

         (b)       
          (i) There is not and has not been any Remedial Action taken with respect to any
          real estate leased by Borrower, (ii) there has not been nor is there now pending
          any investigation, proceeding, complaint, order, directive, claim, citation or
          notice by any governmental authority or any other person with respect to any
          non-compliance with or violation of the requirements of any Environmental Laws
          by Borrower, and (iii) there has not been any Release, threatened or actual, of
          any Contaminants, or generation, use, storage, treatment, transportation,
          manufacture, handling, production, or disposal of any Contaminants, or any other
          environmental, health or safety matter, which affects adversely in any material
          respect (A) Borrower, (B) its Business, operations, or assets, or (C) any
          properties at which Borrower has transported, or stored any Contaminants. 

         (c)       
          Borrower does not have any liability (contingent or otherwise) for any known
          Release, threatened or actual, from any real property owned or leased by
          Borrower, or the generation, use, storage, treatment, transportation,
          manufacture, handling, production, or disposal of any Contaminant, on the owned
          or leased real property of Borrower. 

         (d)       
          All material Governmental Approvals or similar authorizations required to be
          obtained or filed in connection with the operations of Borrower under any
          Environmental Laws have been obtained, and all Governmental Approvals and
          similar authorizations are valid and in full force and effect in all material
          respects. 

4. ACCOUNTS.  

        4.1
Representations Relating to Accounts. * Borrower represents and warrants to
Silicon as follows: Each Account with respect to which Loans are requested by Borrower
shall, on the date each Loan is requested and made, (i) represent an undisputed bona fide
existing unconditional obligation of the Account Debtor created by the sale, delivery, and
acceptance of goods or the rendition of services, or the non-exclusive licensing of
Intellectual Property, in the ordinary course of Borrower’s business, and (ii) meet
the Minimum Eligibility Requirements set forth in Section 8 below. ** 

      *
So long as the ABL Provisions are in effect,  

      **
This Section 4.1 is an ABL Provision.  

        4.2
Representations Relating to Documents and Legal Compliance. Borrower
represents and warrants to Silicon as follows: All statements made and all unpaid balances
appearing in all invoices, instruments and other documents evidencing the Accounts are and
shall be true and correct and all such invoices, instruments and other documents and all
of Borrower’s books and records are and shall be genuine and in all respects what
they purport to be. All sales and other transactions underlying or giving rise to each
Account shall comply in all material respects with all applicable laws and governmental
rules and regulations. To the best of Borrower’s knowledge, all signatures and
endorsements on all documents, instruments, and agreements relating to all Accounts are
and shall be genuine, and all such documents, instruments and agreements are and shall be
legally enforceable in accordance with their terms. 

        4.3
Schedules and Documents relating to Accounts. Borrower shall deliver to
Silicon transaction reports and schedules of collections, as provided in the Schedule
*, on Silicon’s standard forms; provided, however, that Borrower’s
failure to execute and deliver the same shall not affect or limit Silicon’s security
interest and other rights in all of Borrower’s Accounts, nor shall Silicon’s
failure to advance or lend against a specific Account affect or limit Silicon’s
security interest and other rights therein. ** If requested by Silicon *,
Borrower shall furnish Silicon with copies (or, at Silicon’s request, originals) of
all contracts, orders, invoices, and other similar documents, and all shipping
instructions, delivery receipts, bills of lading, and other evidence of delivery, for any
goods the sale or disposition of which gave rise to such Accounts, and Borrower warrants
the genuineness of all of the foregoing. ** Borrower shall also furnish to Silicon
an aged accounts receivable trial balance as provided in the Schedule. In addition
*, Borrower shall deliver to Silicon, on its request, the originals of all
instruments, chattel paper, security agreements, guarantees and other documents and
property evidencing or securing any Accounts, in the same form as received, with all
necessary indorsements, and copies of all credit memos. ** 

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Loan and Security Agreement  
	

      *
and so long as the ABL Provisions are in effect,  

      **
The immediately preceding sentence is an ABL Provision.  

        
4.4
Collection of Accounts and payment intangibles. Borrower shall have the
right to collect all Accounts and payment intangibles, unless and until a Default or an
Event of Default has occurred and is continuing. Whether or not an Event of Default has
occurred and is continuing,* Borrower shall hold all payments on, and proceeds
of, Accounts and payment intangibles in trust for Silicon, and Borrower shall immediately
deliver all such payments and proceeds to Silicon in their original form, duly endorsed
** , to be applied to the Obligations in such order as Silicon shall
determine. *** Silicon may, in its good faith business judgment, require that all
proceeds of Collateral be deposited by Borrower into a lockbox account, or such other
“blocked account” as Silicon may specify, pursuant to a blocked account
agreement in such form as Silicon may specify in its good faith business judgment. 

      *
Upon the occurrence and during the continuation of an Event of Default,  

      **
, which payments and proceeds Silicon shall have the right to apply  

        ***
The immediately preceding sentence is an ABL Provision to the extent applicable as set
forth therein. 

        4.5.
          Remittance of Proceeds. All proceeds arising from the
disposition           of any Collateral shall be delivered, in kind, by Borrower to
Silicon in the           original form in which received by Borrower not later than the
following           Business Day after receipt by Borrower * , to be applied to
the           Obligations in such order as Silicon shall determine; provided that, if no
          Default or Event of Default has occurred and is continuing, Borrower shall not
          be obligated to remit to Silicon the proceeds of the sale of worn out or
          obsolete Equipment disposed of by Borrower in good faith in an arm’s
length           transaction for an aggregate purchase price of $25,000 or less (for all
such           transactions in any fiscal year). ** Borrower agrees that it will
not           commingle proceeds of Collateral with any of Borrower’s other funds or
          property, but will hold such proceeds separate and apart from such other funds
          and property and in an express trust for Silicon. Nothing in this Section
limits           the restrictions on disposition of Collateral set forth elsewhere in
this           Agreement.  

        *
, and, upon the occurrence and during the continuation of an Event of Default or so long
as the ABL Provisions are in effect, Silicon shall have the right to apply any and all
such proceeds  

        **
The immediately preceding sentence is an ABL Provision to the extent applicable as set
forth therein. 

        4.6
Disputes. Borrower shall notify Silicon promptly of all disputes or claims
* relating to Accounts. Borrower shall not forgive (completely or partially),
compromise or settle any Account for less than payment in full, or agree to do any of the
foregoing, except that Borrower may do so, provided that: (i) Borrower does so in good
faith, in a commercially reasonable manner, in the ordinary course of business, and in
arm’s length transactions, which are reported to Silicon on the regular reports
provided to Silicon; (ii) no Default or Event of Default has occurred and is continuing;
and (iii) taking into account all such discounts, settlements and forgiveness, the total
outstanding Loans will not exceed the Credit Limit. 

      *
, in excess of $100,000 in the aggregate at any one time,  

        4.7
Returns. Provided no Event of Default has occurred and is continuing, if
any Account Debtor returns any Inventory to Borrower, Borrower shall promptly determine
the reason for such return and promptly issue a credit memorandum to the Account Debtor in
the appropriate amount. In the event any attempted return occurs after the occurrence and
during the continuance of any Event of Default, Borrower shall hold the returned Inventory
in trust for Silicon, and immediately notify Silicon of the return of the Inventory. 

        4.8
Verification. Silicon may, from time to time, verify directly with the
respective Account Debtors the validity, amount and other matters relating to the
Accounts, by means of mail, telephone or otherwise, either in the name of Borrower or
Silicon or such other name as Silicon may choose. 

        4.9
No Liability. Silicon shall not be responsible or liable for any shortage
or discrepancy in, damage to, or loss or destruction of, any goods, the sale or other
disposition of which gives rise to an Account, or for any error, act, omission, or delay
of any kind occurring in the settlement, failure to settle, collection or failure to
collect any Account, or for settling any Account in good faith for less than the full
amount thereof, nor shall Silicon be deemed to be responsible for any of Borrower’s
obligations under any contract or agreement giving rise to an Account. Nothing herein
shall, however, relieve Silicon from liability for its own gross negligence or willful
misconduct. 

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Loan and Security Agreement  
	

5. ADDITIONAL DUTIES OF
BORROWER.  

        5.1
Financial and Other Covenants. Borrower shall at all times comply with the
financial and other covenants set forth in the Schedule. 

        5.2
Insurance. Borrower shall, at all times insure all of the tangible personal
property Collateral and carry such other business insurance, with insurers reasonably
acceptable to Silicon, in such form and amounts as Silicon may reasonably require and that
are customary and in accordance with standard practices for Borrower’s industry and
locations, and Borrower shall provide evidence of such insurance to Silicon. All such
insurance policies shall name Silicon as an additional insured and loss payee, and shall
contain a lenders (or mortgagee) loss payee endorsement in form reasonably acceptable to
Silicon. Upon receipt of the proceeds of any such insurance, Silicon shall apply such
proceeds in reduction of the Obligations as Silicon shall determine in its good faith
business judgment, except that, provided no Default or Event of Default has occurred and
is continuing, Silicon shall release to Borrower insurance proceeds with respect to
Equipment totaling less than $100,000, which shall be utilized by Borrower for the
replacement of the Equipment with respect to which the insurance proceeds were paid.
Silicon may require reasonable assurance that the insurance proceeds so released will be
so used. If Borrower fails to provide or pay for any insurance, Silicon may, but is not
obligated to, obtain the same at Borrower’s expense. Borrower shall promptly deliver
to Silicon copies of all material reports made to insurance companies. 

        5.3
Reports. Borrower, at its expense, shall provide Silicon with the written
reports set forth in the Schedule, and such other written reports with respect to Borrower
(including budgets, sales projections, operating plans and other financial documentation),
as Silicon shall from time to time specify in its good faith business judgment. 

        5.4
Access to Collateral, Books and Records. At reasonable times, and on at
least one Business Day’s notice, Silicon, or its agents, shall have the right to
inspect the Collateral, and the right to audit and copy Borrower’s books and records
*. Silicon shall take reasonable steps to keep confidential all information
obtained in any such inspection or audit, but Silicon shall have the right to disclose any
such information to its auditors, regulatory agencies, and attorneys, and pursuant to any
subpoena or other legal process. The foregoing inspections and audits shall be at
Borrower’s expense and the charge therefor shall be $700 per person per day (or such
higher amount as shall represent Silicon’s then current standard charge for the
same), plus reasonable out-of-pocket expenses. In the event Borrower and Silicon schedule
an audit more than 10 days in advance, and Borrower seeks to reschedules the audit with
less than 10 days written notice to Silicon, then (without limiting any of Silicon’s
rights or remedies), Borrower shall pay Silicon a cancellation fee of $1,000 plus any
out-of-pocket expenses incurred by Silicon, to compensate Silicon for the anticipated
costs and expenses of the cancellation. 

        *
; provided, however, that, so long as no Event of Default has occurred and is continuing,
any audits (other than the initial audit conducted prior to the date of this Agreement and
other than audits conducted while the ABL Provisions are in effect) shall be conducted no
more often than once every 6 months (it being understood that audits taking place at one
or more locations of Borrower during substantially the same overall examination period
shall constitute but a single audit for purposes of the foregoing proviso) 

        5.5
Negative Covenants. Except as may be permitted in the Schedule, Borrower
shall not, without Silicon’s prior written consent (which shall be a matter of its
good faith business judgment), do any of the following: (i) merge or consolidate
* with another corporation or entity; (ii) acquire any assets, except in the
ordinary course of business; (iii) enter into any other transaction outside the ordinary
course of business; (iv) sell or transfer any Collateral, except for: (A) the
non-exclusive licensing of Intellectual Property by Borrower (as licensor) in the ordinary
course of business; (B) the sale of finished Inventory in the ordinary course of
Borrower’s business; (C) the sale of obsolete or unneeded Equipment in the ordinary
course of business; (v) store any Inventory or other Collateral with any warehouseman or
other third party; (vi) sell any Inventory on a sale-or-return, guaranteed sale,
consignment, or other contingent basis; (vii) make any loans of any money or other assets;
(viii) incur any debts, outside the ordinary course of business, which could reasonably be
expected to result in a Material Adverse Change; (ix) guarantee or otherwise become liable
with respect to the obligations of another party or entity **; (x) pay or declare
any dividends on Borrower’s stock (except for *** dividends payable solely in
stock of Borrower); (xi) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Borrower’s stock; (xii) make any change in Borrower’s capital
structure which could reasonably be expected to result in a Material Adverse Change; or
(xiii) engage, directly or indirectly, in any business other than the businesses currently
engaged in by Borrower or reasonably related thereto; or (xiv) dissolve or elect to
dissolve. Transactions permitted by the foregoing provisions of this Section 5.5 are only
permitted if no Default or Event of Default would occur as a result of such transaction.
Borrower agrees that it shall not, while this Agreement is in effect, transfer funds,
assets or any Collateral to any of Borrower’s subsidiaries and affiliates (except for
such transfers by one Borrower to the other Borrower, in each case, subject to
Silicon’s continuing security interests therein and the continued perfection and
priority of such security interests). 

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        *
enter into any merger, amalgamation, “arrangement” (as such business combination
term is used under applicable Canadian law), or consolidation 

      **
(except for the Cross-Guaranty)  

      ***
: (a) dividends paid by Pivotal US to Parent; and (b)  

        5.6
Litigation Cooperation. Should any third-party suit or proceeding be
instituted by or against Silicon with respect to any Collateral or relating to Borrower,
Borrower shall, without expense to Silicon, make available Borrower and its officers,
employees and agents and Borrower’s books and records, to the extent that Silicon may
deem them reasonably necessary in order to prosecute or defend any such suit or
proceeding. 

        5.7
Further Assurances. Borrower agrees, at its expense, on request by Silicon,
to execute all documents and take all actions, as Silicon, may, in its good faith business
judgment, deem necessary or useful in order to perfect, and maintain the
first-lien-priority of, Silicon’s security interests in the Collateral (subject in
lien priority only to those Permitted Liens that are expressly entitled to such priority
over the security interests of Silicon by operation of law or by written subordination
agreement duly executed and delivered by Silicon in favor of the holders of such Permitted
Liens), and in order to fully consummate the transactions contemplated by this Agreement. 

      5.8
Environmental Covenants. Borrower shall:  

         (a)       
          keep any property either owned or operated by Borrower free of any Environmental
          Liens or post bonds or other financial assurances sufficient to satisfy the
          obligations or liability evidenced by such Environmental Liens; 

         (b)       
          comply, in all material respect, with Environmental Laws and provide to Silicon
          documentation of such compliance which Silicon reasonably requests; 

         (c)       
          promptly notify Silicon of any release of a Contaminant in any reportable
          quantity from or onto property owned or operated by Borrower and take any
          Remedial Actions required to abate said release or otherwise to come into
          compliance with applicable Environmental Law; 

         (d)       
          promptly provide Silicon with written notice within 10 days of the receipt of
          any of the following: (i) notice that an Environmental Lien has been filed
          against any of the real or personal property of Borrower, (ii) commencement of
          any Environmental Action or notice that an Environmental Action will be filed
          against Borrower, and (iii) notice of a violation, citation, or other
          administrative order which reasonably could be expected to result in a Material
          Adverse Effect; 

         (e)       
          ensure that any Contaminant brought onto, stored or used by any Person on any
          lands used in the Business shall be transported, used and stored only in
          accordance with all applicable laws, regulations, by-laws and other lawful
          requirements; 

         (f)       
          ensure that the lands used in the Business will not be used for storing or using
          any Contaminant except in compliance with all Environmental Laws and regulations
          and no use of any lands used in the Business will be allowed which may cause or
          increase the likelihood of the escape, seepage, leakage, spillage, release or
          discharge of any Contaminant on, from or under any such lands or into the
          environment or permit any policy of insurance to be cancelled or cancellable; 

         (g)       
          Borrower shall promptly notify Silicon as soon as it knows of or suspect that
          any Contaminant (other than in the normal course of the Business and in
          compliance with Environmental Laws) has been brought onto any lands used in the
          Business or that there is any actual, threatened or potential escape, seepage,
          leakage, spillage, release or discharge of any Contaminant on, from or under the
          any lands used in the Business or into the environment; 

         (h)       
          Borrower shall otherwise comply in all respects with all Environmental Laws,
          rules and regulations affecting or relating to the Business and will assume and
          perform any and all liabilities and obligations arising under Environmental Laws
          relating to the Business, or other property used in the Businesses or for
          otherwise failing to comply with Environmental Laws including, without
          limitation, any liability for the clean up of any Contaminant on, under or
          emanating from the Business, or any lands used in the Business; and 

         (i)       
          Borrower shall, at their expense, furnish such information and such
          environmental audits and studies with respect to the Business as Silicon may
          reasonably request from time to time, such audits or studies to be prepared by
          an engineer or environmental consultant reasonably satisfactory to Silicon;
          without limiting the generality of the foregoing Borrower shall permit Silicon
          and its agents access to the lands used in the Business at all reasonable times
          for the purpose of conducting such environmental assessments as Silicon may
          require from time to time. 

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6. TERM.  

        6.1
Maturity Date. This Agreement shall continue in effect until the maturity
date set forth on the Schedule (the “Maturity Date”), subject to Section 6.3
below. 

      6.2
Early Termination.  

         (a)       
          This Agreement may be terminated prior to the Maturity Date as follows: (i) by
          Borrower, effective three Business Days after written notice of termination is
          given to Silicon; or (ii) by Silicon at any time after the occurrence and during
          the continuance of an Event of Default, without notice, effective immediately. 

         (b)       
          If  * this Agreement is terminated by Borrower or by Silicon
          under this Section 6.2, Borrower shall pay to Silicon a termination fee in an
          amount equal to two percent (2.0%) of the Maximum Credit Limit, provided that no
          termination fee shall be charged if the credit facility hereunder is replaced
          with a new facility from another division of Silicon Valley Bank. The
          ** termination fee shall be due and payable on the effective date of
          termination and thereafter shall bear interest at a rate equal to the highest
          rate applicable to any of the Obligations. *** 

      *
So long as the ABL Provisions are in effect, if  

      **
Such  

      ***
This Section 6.2(b) is an ABL Provision.  

        6.3
Payment of Obligations. On the Maturity Date or on any earlier effective
date of termination, Borrower shall pay and perform in full all Obligations, whether
evidenced by installment notes or otherwise, and whether or not all or any part of such
Obligations are otherwise then due and payable. Without limiting the generality of the
foregoing, if on the Maturity Date, or on any earlier effective date of termination, there
are any outstanding Letters of Credit issued by Silicon or issued by another institution
based upon an application, guarantee, indemnity or similar agreement on the part of
Silicon, then on such date Borrower shall provide to Silicon cash collateral in an amount
equal to 105% of the face amount of all such Letters of Credit plus all interest, fees and
cost due or to become due in connection therewith (as estimated by Silicon in its good
faith business judgment), to secure all of the Obligations relating to said Letters of
Credit, pursuant to Silicon’s then standard form cash pledge agreement.
Notwithstanding any termination of this Agreement, all of Silicon’s security
interests in all of the Collateral and all of the terms and provisions of this Agreement
shall continue in full force and effect until all Obligations have been paid and performed
in full; provided that Silicon may, in its sole discretion, refuse to make any further
Loans after termination. No termination shall in any way affect or impair any right or
remedy of Silicon, nor shall any such termination relieve Borrower of any Obligation to
Silicon, until all of the Obligations have been paid and performed in full. Upon payment
and performance in full of all the Obligations and termination of this Agreement, Silicon
shall promptly terminate its financing statements * with respect to the Borrower
and deliver to Borrower such other documents as may be required to fully terminate
Silicon’s security interests. 

      *
or PPSA registrations (as the case may be)  

7. EVENTS OF DEFAULT AND
REMEDIES.  

        7.1
Events of Default. The occurrence of any of the following events shall
constitute an “Event of Default” under this Agreement, and Borrower shall give
Silicon immediate written notice thereof: (a) Any warranty, representation, statement,
report or certificate made or delivered to Silicon by Borrower or any of Borrower’s
officers, employees or agents, now or in the future, shall be untrue or misleading in a
material respect when made or deemed to be made; or (b) Borrower shall fail to pay when
due any Loan or any interest thereon or any other monetary Obligation; or (c) the total
Loans and other Obligations outstanding at any time shall exceed the Credit Limit; or (d)
Borrower (i) shall fail to comply with any of the financial covenants set forth in the
Schedule, or (ii) shall fail to perform any other non-monetary Obligation which by its
nature cannot be cured, or (iii) shall fail to permit Silicon to conduct an inspection or
audit as specified in Section 5.4 hereof; or (e) Borrower shall fail to perform any other
non-monetary Obligation, which failure is not cured within five Business Days after the
date due; or (f) any levy, assessment, attachment, seizure, lien or encumbrance (other
than a Permitted Lien) is made on all or any part of the Collateral which is not cured
within * 10 days after the occurrence of the same; or (g) any default or event of
default occurs under any obligation secured by a Permitted Lien, which is not cured within
any applicable cure period or waived in writing by the holder of the Permitted Lien; or
(h) Borrower breaches any material contract or obligation, which has resulted or could
reasonably be expected to result in a Material Adverse Change; or (i) Dissolution,
termination of existence, insolvency or business failure of Borrower or any guarantor of
any of the Obligations; or appointment of a receiver, trustee or custodian, for all or any
part of the property of, assignment for the benefit of creditors by, or the commencement
of any 

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proceeding by Borrower or any
guarantor of any of the Obligations under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or in the future in effect; or (j) the commencement of any proceeding
against Borrower or any guarantor of any of the Obligations under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof within 30 days after the date commenced; or (k) revocation or
termination of, or limitation or denial of liability upon, any guaranty of the
Obligations or any attempt to do any of the foregoing; or (l) revocation or termination
of, or limitation or denial of liability upon, any pledge of any certificate of deposit,
securities or other property or asset of any kind pledged by any third party to secure
any or all of the Obligations, or any attempt to do any of the foregoing, or commencement
of proceedings by or against any such third party under any bankruptcy or insolvency law;
or (m) Borrower makes any payment on account of any indebtedness or obligation which has
been subordinated to the Obligations other than as permitted in the applicable
subordination agreement, or if any Person who has subordinated such indebtedness or
obligations terminates or in any way limits his subordination agreement; or (n) without
the prior written consent of Silicon, (1) a “person”or “group” (within
the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended) becomes, after the date of this Agreement, the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of more than 20% of the total voting power of all classes of capital stock
then outstanding of any Borrower, or (2) a majority of the members of the Board of
Directors of any Borrower shall not constitute Continuing Directors **; or (o)
Borrower shall generally not pay its debts as they become due, or Borrower shall conceal,
remove or transfer any part of its property, with intent to hinder, delay or defraud its
creditors, or make or suffer any transfer of any of its property which may be fraudulent
under any bankruptcy, fraudulent conveyance or similar law; or (p) a Material Adverse
Change shall occur; or (q) Silicon, acting in good faith and in a commercially reasonable
manner, deems itself insecure because of the occurrence of an event prior to the
effective date hereof of which Silicon had no knowledge on the effective date or because
of the occurrence of an event on or subsequent to the effective date; or (s) an event of
default has occurred and is continuing under any other Loan Document (after giving effect
to, but without duplication of, any applicable grace periods). Silicon may cease making
any Loans hereunder during any of the above cure periods, and thereafter if an Event of
Default has occurred and is continuing.  

      *
10 Business Days  

      **
, or (3) Parent shall cease to own and control 100% of the issued and outstanding capital
stock of Pivotal US  

        7.2
Remedies. Upon the occurrence and during the continuance of any Event of
Default, Silicon, at its option, and without notice or demand of any kind (all of which
are hereby expressly waived by Borrower), may do any one or more of the following: (a)
Cease making Loans or otherwise extending credit to Borrower under this Agreement or any
other Loan Document; (b) Accelerate and declare all or any part of the Obligations to be
immediately due, payable, and performable, notwithstanding any deferred or installment
payments allowed by any instrument evidencing or relating to any Obligation; (c) Take
possession of any or all of the Collateral wherever it may be found, and for that purpose
Borrower hereby authorizes Silicon without judicial process to enter onto any of
Borrower’s premises without interference to search for, take possession of, keep,
store, or remove any of the Collateral, and remain on the premises or cause a custodian to
remain on the premises in exclusive control thereof, without charge for so long as Silicon
deems it necessary, in its good faith business judgment, in order to complete the
enforcement of its rights under this Agreement or any other Loan Document; provided,
however, that should Silicon seek to take possession of any of the Collateral by court
process, Borrower hereby irrevocably waives: (i) any bond and any surety or security
relating thereto required by any statute, court rule or otherwise as an incident to such
possession; (ii) any demand for possession prior to the commencement of any suit or action
to recover possession thereof; and (iii) any requirement that Silicon retain possession
of, and not dispose of, any such Collateral until after trial or final judgment; (d)
Require Borrower to assemble any or all of the Collateral and make it available to Silicon
at places designated by Silicon which are reasonably convenient to Silicon and Borrower,
and to remove the Collateral to such locations as Silicon may deem advisable; (e) Complete
the processing, manufacturing or repair of any Collateral prior to a disposition thereof
and, for such purpose and for the purpose of removal, Silicon shall have the right to use
Borrower’s premises, vehicles, hoists, lifts, cranes, and other Equipment and all
other property without charge; (f) Sell, lease or otherwise dispose of any of the
Collateral, in its condition at the time Silicon obtains possession of it or after further
manufacturing, processing or repair, at one or more public and/or private sales, in lots
or in bulk, for cash, exchange or other property, or on credit, and to adjourn any such
sale from time to time without notice other than oral announcement at the time scheduled
for sale. Silicon shall have the right to conduct such disposition on Borrower’s
premises without charge, for such time or times as Silicon deems reasonable, or on
Silicon’s premises, or elsewhere and the Collateral need not be located at the place
of disposition. Silicon may directly or through any affiliated company purchase or lease
any Collateral at any such public disposition, and if permissible under applicable law, at
any private disposition. Any sale or other disposition of Collateral shall not relieve
Borrower of any liability Borrower may have if any Collateral is defective as to title or
physical condition or otherwise at the time of sale; (g) Demand payment of, and collect
any Accounts and * General Intangibles comprising Collateral and, in  

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connection therewith, Borrower
irrevocably authorizes Silicon to endorse or sign Borrower’s name on all
collections, receipts, instruments and other documents, to take possession of and open
mail addressed to Borrower and remove therefrom payments made with respect to any item of
the Collateral or proceeds thereof, and, in Silicon’s good faith business judgment,
to grant extensions of time to pay, compromise claims and settle Accounts, payment
intangibles, and the like for less than face value; (h) Effect an administrative “hold” or
offset against any sums in any of Borrower’s general, special or other Deposit
Accounts with Silicon against any or all of the Obligations; and (i) Demand and receive
possession of any of Borrower’s federal and state ** income tax returns and
the books and records utilized in the preparation thereof or referring thereto. All
reasonable attorneys’ fees, expenses, costs, liabilities and obligations incurred by
Silicon with respect to the foregoing shall be added to and become part of the
Obligations, shall be due on demand, and shall bear interest at a rate equal to the
highest interest rate applicable to any of the Obligations. Without limiting any of
Silicon’s rights and remedies, from and after the occurrence and during the
continuance of any Event of Default, the interest rate applicable to the Obligations
shall be increased by an additional four percent per annum (the “Default Rate”).  

      *
payment intangibles  

      **
(or provincial)  

        7.3
Standards for Determining Commercial Reasonableness. Borrower and Silicon
agree that a sale or other disposition (collectively, “sale”) of any Collateral
which complies with the following standards will conclusively be deemed to be commercially
reasonable: (i) Notice of the sale is given to Borrower at least ten days prior to the
sale, and, in the case of a public sale, notice of the sale is published at least ten days
before the sale in a newspaper of general circulation in the county where the sale is to
be conducted; (ii) Notice of the sale describes the collateral in general, non-specific
terms; (iii) The sale is conducted at a place designated by Silicon, with or without the
Collateral being present; (iv) The sale commences at any time between 8:00 a.m. and 6:00
p.m; (v) Payment of the purchase price in cash or by cashier’s check or wire transfer
is required; (vi) With respect to any sale of any of the Collateral, Silicon may (but is
not obligated to) direct any prospective purchaser to ascertain directly from Borrower any
and all information concerning the same. Silicon shall be free to employ other methods of
noticing and selling the Collateral, in its discretion, if they are commercially
reasonable. 

        7.4
Power of Attorney. Upon the occurrence and during the continuance of any
Event of Default, without limiting Silicon’s other rights and remedies, Borrower
grants to Silicon an irrevocable power of attorney coupled with an interest, authorizing
and permitting Silicon (acting through any of its employees, attorneys or agents) at any
time, at its option, but without obligation, with or without notice to Borrower, and at
Borrower’s expense, to do any or all of the following, in Borrower’s name or
otherwise, but Silicon agrees that if it exercises any right hereunder, it will do so in
good faith and in a commercially reasonable manner: (a) Execute on behalf of Borrower any
documents that Silicon may, in its good faith business judgment, deem advisable in order
to perfect and maintain Silicon’s security interest in the Collateral, or in order to
exercise a right of Borrower or Silicon, or in order to fully consummate all the
transactions contemplated under this Agreement, and all other Loan Documents; (b) Execute
on behalf of Borrower, any invoices relating to any Account, any draft against any Account
Debtor and any notice to any Account Debtor, any proof of claim in bankruptcy, any Notice
of Lien, claim of mechanic’s, materialman’s or other lien, or assignment or
satisfaction of mechanic’s, materialman’s or other lien; (c) Take control in any
manner of any cash or non-cash items of payment or proceeds of Collateral; endorse the
name of Borrower upon any instruments, or documents, evidence of payment or Collateral
that may come into Silicon’s possession; (d) Endorse all checks and other forms of
remittances received by Silicon; (e) Pay, contest or settle any lien, charge, encumbrance,
security interest and adverse claim in or to any of the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; (f) Grant
extensions of time to pay, compromise claims and settle Accounts and *  General
Intangibles for less than face value and execute all releases and other documents in
connection therewith; (g) Pay any sums required on account of Borrower’s taxes or to
secure the release of any liens therefor, or both; (h) Settle and adjust, and give
releases of, any insurance claim that relates to any of the Collateral and obtain payment
therefor; (i) Instruct any third party having custody or control of any books or records
belonging to, or relating to, Borrower to give Silicon the same rights of access and other
rights with respect thereto as Silicon has under this Agreement; and (j) Take any action
or pay any sum required of Borrower pursuant to this Agreement and any other Loan
Documents. Any and all reasonable sums paid and any and all reasonable costs, expenses,
liabilities, obligations and attorneys’ fees incurred by Silicon with respect to the
foregoing shall be added to and become part of the Obligations, shall be payable on
demand, and shall bear interest at a rate equal to the highest interest rate applicable to
any of the Obligations. In no event shall Silicon’s rights under the foregoing power
of attorney or any of Silicon’s other rights under this Agreement be deemed to
indicate that Silicon is in control of the business, management or properties of Borrower. 

      *
payment intangibles  

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        7.5
Application of Proceeds. All proceeds realized as the result of any sale of
the Collateral shall be applied by Silicon first to the reasonable costs, expenses,
liabilities, obligations and attorneys’ fees incurred by Silicon in the exercise of
its rights under this Agreement, second to the interest due upon any of the Obligations,
and third to the principal of the Obligations, in such order as Silicon shall determine in
its sole discretion. Any surplus shall be paid to Borrower or other persons legally
entitled thereto; Borrower shall remain liable to Silicon for any deficiency. If, Silicon,
in its good faith business judgment, directly or indirectly enters into a deferred payment
or other credit transaction with any purchaser at any sale of Collateral, Silicon shall
have the option, exercisable at any time, in its good faith business judgment, of either
reducing the Obligations by the principal amount of purchase price or deferring the
reduction of the Obligations until the actual receipt by Silicon of the cash therefor. 

        7.6
Remedies Cumulative. In addition to the rights and remedies set forth in
this Agreement, Silicon shall have all the other rights and remedies accorded a secured
party under the California Uniform Commercial Code and under all other applicable laws,
and under any other instrument or agreement now or in the future entered into between
Silicon and Borrower, and all of such rights and remedies are cumulative and none is
exclusive. Exercise or partial exercise by Silicon of one or more of its rights or
remedies shall not be deemed an election, nor bar Silicon from subsequent exercise or
partial exercise of any other rights or remedies. The failure or delay of Silicon to
exercise any rights or remedies shall not operate as a waiver thereof, but all rights and
remedies shall continue in full force and effect until all of the Obligations have been
fully paid in cash and otherwise performed and this Agreement has been terminated. 

     8.    
          DEFINITIONS. As used in this Agreement, the following terms
          have the following meanings: 

      “ABL
Provisions” has the meaning set forth in Section 5 of the Schedule.  

        “ABL
Provisions Trigger” has the meaning set forth in Section 5 of the Schedule. 

        “Account
Debtor” means the obligor on an Account. 

        “Accounts”
means all present and future “accounts” as defined in the California Uniform
Commercial Code in effect on the date hereof with such additions to such term as may
hereafter be made, and includes without limitation all accounts receivable and other sums
owing to Borrower. 

        “Affiliate”
means, with respect to any Person, a relative, partner, shareholder, director, officer, or
employee of such Person, or any parent or subsidiary of such Person, or any Person
controlling, controlled by or under common control with such Person.  

        “Bankruptcy
Code” means (a) the United States Bankruptcy Code (11 U.S.C. Sections 101
et seq.), as amended, and any successor statute, and (b) the Bankruptcy and
Insolvency Act (Canada), as amended, and any successor statute, and the Companies
Creditors Arrangement Act, as amended, and any successor statute. 

        “Business”
means the business of Borrower as conducted by Borrower as at the date hereof and as
proposed to be conducted by Borrower hereafter, including the ownership, operation and
lease of assets and property in connection therewith and the investment therein and all
other activities necessary, useful, incidental or ancillary to the foregoing. 

        “Business
Day” means a day on which Silicon is open for business. 

        “Canada”
means Canada, its provinces, territories and possessions, and/or any department, agency,
or instrumentality of any of the foregoing. 

        “Code”
means the Uniform Commercial Code as adopted and in effect in the State of California from
time to time. 

        “Collateral”
has the meaning set forth in Section 2 above. 

        “Contaminant”
means any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special
waste, petroleum or petroleum-derived substance or waste, or any constituent of any such
substance or waste. 

        “continuing”
and “during the continuance of” when used with reference to a Default or
Event of Default means that the Default or Event of Default has occurred and has not been
either waived in writing by Silicon or cured within any applicable cure period. 

        “Continuing
Director” means (a) any member of the Board of Directors who was a director (or
comparable manager) of Borrower on the date of this Agreement, and (b) any individual who
becomes a member of the Board of Directors after the date of this Agreement if such
individual was appointed or nominated for election to the Board of Directors by a majority
of the Continuing Directors, but excluding any such individual originally proposed for
election in opposition to the Board of Directors in office at the date of this Agreement
in an actual or threatened election contest relating to the election of the  

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directors (or comparable managers)
of Borrower (as such terms are used in Rule 14a-11 under the Securities Exchange Act of
1934, as amended) and whose initial assumption of office resulted from such contest or
the settlement thereof.  

      “CSL
Provisions” has the meaning set forth in Section 5 of the Schedule.  

        “CSL
Provisions Trigger” has the meaning set forth in Section 5 of the Schedule. 

        “Default”
means any event which with notice or passage of time or both, would constitute an Event of
Default. 

        “Default
Rate” has the meaning set forth in Section 7.2 above. 

        “Deposit Accounts”
means all present and future “deposit accounts” as defined in the California
Uniform Commercial Code in effect on the date hereof with such additions to such term as
may hereafter be made, and includes without limitation all general and special bank
accounts, demand accounts, checking accounts, savings accounts and certificates of
deposit. 

        “Dollars”
and “$” means and refers to United States dollars or such coin or
currency of the United States as at the time of payment shall be legal tender for the
payment of public and private debts in the United States. 

        “Dot
Com Account Debtor” means an Account Debtor that, in Silicon’s sole
discretion, is an internet based company. 

        “Eligible
Accounts” means Accounts of Borrower arising in the ordinary course of
Borrower’s business from the sale of goods by Borrower or the rendition of services
by Borrower, or the non-exclusive licensing of Intellectual Property by Borrower (as
licensor), that Silicon, in its good faith business judgment, shall deem eligible for
borrowing. Without limiting the fact that the determination of which Accounts are eligible
for borrowing is a matter of Silicon’s good faith business judgment, the requirements
in the remainder of this definition (the “Minimum Eligibility
Requirements”) are the minimum requirements for an Account to be an Eligible
Account: (i) the Account must not be outstanding for more than * 90 days
from its invoice date (the “Eligibility Period”); (ii) the Account must
not represent progress billings, or be due under a fulfillment or requirements contract
with the Account Debtor; (iii) the Account must not be subject to any contingencies
(including Accounts arising from sales on consignment, guaranteed sale or other terms
pursuant to which payment by the Account Debtor may be conditional); (iv) the Account must
not be owing from an Account Debtor with whom Borrower has any dispute (whether or not
relating to the particular Account); (v) the Account must not be owing from an Affiliate
of Borrower; (vi) the Account must not be owing from an Account Debtor which is subject to
any insolvency or bankruptcy proceeding, or whose financial condition is not acceptable to
Silicon, or which, fails or goes out of a material portion of its business; (vii) the
Account must not be owing from the United States or any department, agency or
instrumentality thereof (unless there has been compliance, to Silicon’s satisfaction,
with the United States Assignment of Claims Act); (viii) the Account must not be owing
from an Account Debtor located outside the United States or those provinces or territories
of Canada that have adopted the Personal Property Security Act (unless pre-approved by
Silicon in its discretion in writing, or backed by a letter of credit satisfactory to
Silicon, or FCIA insured satisfactory to Silicon); (ix) the Account must not be owing from
an Account Debtor to whom Borrower is or may be liable for goods or services purchased by
Borrower, or third-party intellectual property licensed by Borrower (as licensee), from
such Account Debtor or otherwise (but, in such case, the Account will be deemed not
eligible only to the extent of any amounts owed by Borrower to such Account Debtor); (x)
the Account must not be owing from a Dot Com Account Debtor unless and to the extent
specifically approved by Silicon; (xi) ** the Account must not be owing by an
Account Debtor as to whom Borrower has recognized or can recognize deferred revenue,
unless and in which case the portion of such Account that is equal to such deferred
revenue amount shall be ineligible under this clause (xi), and (xii) the Account must have
been billed to the Account Debtor. Accounts owing from one Account Debtor will not be
deemed Eligible Accounts to the extent they exceed 25% of the total Eligible Accounts
outstanding. In addition, if more than 50% of the Accounts owing from an Account Debtor
are outstanding for a period longer than their Eligibility Period (without regard to
unapplied credits) or are otherwise not Eligible Accounts, then all Accounts owing from
that Account Debtor will be deemed ineligible for borrowing. Silicon may, from time to
time, in its good faith business judgment, revise the Minimum Eligibility Requirements,
upon written notice to Borrower. 

      *
120  

      **
if an Event of Default has occurred and is continuing,  

      “Eligible
Inventory” [Not Applicable]  

        “Environmental
Action” means any complaint, summons, citation, notice, directive, order, claim,
litigation, investigation, judicial or administrative proceeding, judgement, letter, or
other communication from any Official Body, or any third party involving violations of
Environmental Laws or releases of Contaminants from (a) any assets, properties, or
Business or any predecessor in interest, (b) from adjoining properties or businesses, or
(c) from or onto any facilities which received Contaminants secreted by Borrower or any
predecessor in interest. 

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        “Environmental
Laws” means all federal, provincial, state, municipal, local and foreign laws now
or hereafter in effect relating to pollution or protection of the environment, including
laws relating to emissions, discharges, Releases or threatened Releases of pollutants,
Contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, surface water, ground water, or
land), or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, removal, transport, or handling of pollutants, Contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes, and all regulations, notices or
demand letters issued, entered, promulgated or approved thereunder. 

        “Environmental
Liabilities and Costs” means all liabilities, monetary obligations, Remedial
Actions, losses, damages, punitive damages, consequential damages, costs and expenses
(including all reasonable fees, disbursements, expenses and applicable taxes of counsel,
experts or consultants, and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by any
Official Body or any third party, and which relate to Environmental Action. 

        “Environmental
Liens” means any Lien in favor of an Official Body for Environmental Liabilities
and Costs. 

        “Equipment”
means all present and future “equipment” as defined in the California Uniform
Commercial Code in effect on the date hereof with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures, goods,
vehicles (including motor vehicles and trailers), and any interest in any of the
foregoing. 

        “Event
of Default” means any of the events set forth in Section 7.1 of this
Agreement. 

        “Exchange
Rate” means and refers to the nominal rate of exchange available to Silicon from
or through recognized brokers in a recognized foreign exchange market for the purchase by
Silicon at 12:00 noon, local time (or such other time as Silicon may determine in its good
faith business judgment), one Business Day prior to any date of determination, expressed
as the number of units of such currency per one (1) Dollar. 

        “Excluded
General Intangibles” means General Intangibles other than payment intangibles. 

        “GAAP”
means U.S. generally accepted accounting principles consistently applied. 

        “General
Intangibles” means all present and future “general intangibles” as
defined in the California Uniform Commercial Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation all
Intellectual Property and payment intangibles. 

        “good
faith business judgment” means honesty in fact and good faith (as defined in
Section 1201 of the Code) in the exercise of Silicon’s business judgment. 

        “Governmental
Approvals” means all authorizations, consents, approvals, licenses and exemptions
of, registrations and filings with, and reports to, all governmental bodies, whether
federal, state, provincial, local, municipal, or foreign, and all agencies thereof. 

        “including”
means including (but not limited to). 

        “Intellectual
Property” means all present and future (a) copyrights, copyright rights,
copyright applications, copyright registrations and like protections in each work of
authorship and derivative work thereof, whether published or unpublished, (b) trade secret
rights, including all rights to unpatented inventions and know-how, and confidential
information; (c) mask work or similar rights available for the protection of semiconductor
chips; (d) patents, patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same; (e) trademarks, servicemarks, trade styles, and trade
names, whether or not any of the foregoing are registered, and all applications to
register and registrations of the same and like protections, and the entire goodwill of
the business of Borrower connected with and symbolized by any such trademarks; (f)
computer software and computer software products; (g) designs and design rights; (h)
technology; (i) all claims for damages by way of past, present and future infringement of
any of the rights included above; (j) all licenses or other rights to use any property or
rights of a type described above. 

      “Interest
Act” means the Interest Act (Canada), as amended. 

        “Inventory”
means all present and future “inventory” as defined in the California Uniform
Commercial Code in effect on the date hereof with such additions to such term as may
hereafter be made, and includes without limitation all merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and finished products, including
without limitation such inventory as is temporarily out of Borrower’s custody or
possession or in transit and including any returned goods and any documents of title
representing any of the above. 

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        “Investment
Property” means all present and future investment property, securities, stocks,
bonds, debentures, debt securities, partnership interests, limited liability company
interests, options, security entitlements, securities accounts, commodity contracts,
commodity accounts, and all financial assets held in any securities account or otherwise,
and all options and warrants to purchase any of the foregoing, wherever located, and all
other securities of every kind, whether certificated or uncertificated. 

        “Lien”
as applied to the property of any Person means: (a) any mortgage, deed to secure debt,
deed of trust, lien, pledge, charge, conditional sale or other title retention agreement,
or other security interest, security title or encumbrance of any kind in respect of any
property of such Person, or upon the income or profits therefrom, and (b) any other
arrangement, express or implied, under which any property of such Person is transferred,
sequestered or otherwise identified for the purpose of subjecting the same to the payment
of indebtedness or performance of any other obligation in priority to the payment of the
general, unsecured creditors of such Person. 

        “Loan
Documents” means, collectively, this Agreement, the Representations, and all
other present and future documents, instruments and agreements between Silicon, on the one
hand, and any Borrower or any guarantor of any of the Obligations, on the other hand,
including, but not limited to those relating to this Agreement or any other Loan Document,
and all amendments and modifications thereto and replacements therefor. 

        “Material
Adverse Change” means any of the following: (i) a material adverse change in the
business, operations, or financial or other condition of the Borrower, or (ii) a material
impairment of the prospect of repayment of any portion of the Obligations; or (iii) a
material impairment of the value or priority of Silicon’s security interests in the
Collateral. 

        “Obligations”
means all present and future Loans, advances, debts, liabilities, obligations, guaranties,
covenants, duties and indebtedness at any time owing by any one or more of the Borrowers
to Silicon, whether evidenced by this Agreement or any note or other instrument or
document, or otherwise, whether arising from an extension of credit, opening of a letter
of credit, banker’s acceptance, loan, guaranty, indemnification or otherwise, whether
direct or indirect (including, without limitation, those acquired by assignment and any
participation by Silicon in any debts of any one or more of the Borrowers owing to
others), absolute or contingent, due or to become due, including, without limitation, all
interest, charges, expenses, fees, attorney’s fees, expert witness fees, audit fees,
letter of credit fees, collateral monitoring fees, closing fees, facility fees,
termination fees, minimum interest charges and any other sums chargeable to any one or
more of the Borrowers under this Agreement or under any other Loan Documents (including
any interest and other amounts that, but for the provisions of the * Bankruptcy
Code, would have accrued). It is expressly acknowledged and agreed that each and all of
the Borrowers are, and at all times shall be, jointly and severally liable for all
Obligations, regardless of which Borrower or Borrowers requested, received, used, or
directly enjoyed the benefit of, the Obligations. 

      *
applicable  

        “Official
Body” means any government or political subdivision or any agency, authority,
bureau, central bank, monetary authority, commission, department or instrumentality
thereof, or any court, tribunal, grand jury or arbitrator, whether foreign or domestic. 

        “Other
Property” means the following as defined in the California Uniform Commercial
Code in effect on the date hereof with such additions to such term as may hereafter be
made, and all rights relating thereto: all present and future “commercial tort
claims” (including without limitation any commercial tort claims identified in the
Representations), “documents”, “instruments”, “promissory
notes”, “chattel paper”, “letters of credit”,
“letter-of-credit rights”, “fixtures”, “farm products” and
“money”; and all other goods and personal property of every kind, tangible and
intangible, whether or not governed by the California Uniform Commercial Code. 

        “Permitted
Liens” means the following: (i) purchase money security interests in specific
items of Equipment; (ii) leases of specific items of Equipment; (iii) liens for taxes not
yet payable; (iv) additional security interests and liens consented to in writing by
Silicon, which consent may be withheld in its good faith business judgment; (v) security
interests being terminated substantially concurrently with this Agreement; (vi) (A)
liens of landlords, warehousemen, and other bailees, if and to the extent such lien is (1)
pursuant to applicable law, expressly junior and subordinate to the security interests of
Silicon, or (2) subject to a landlord agreement or bailee agreement (in form and substance
satisfactory to Silicon in its good faith business judgment) duly executed and delivered
to Silicon by such lienholder and in full force and effect; and (B) liens of materialmen,
mechanics, carriers, or other similar liens arising in the ordinary course of business and
securing obligations which are not delinquent; (vii) liens incurred in connection
with the extension, renewal or refinancing of the indebtedness secured by liens of the
type described above in clauses (i) or (ii) above, provided that any extension, renewal or
replacement lien is limited to the property encumbered by the existing lien and the
principal amount of the indebtedness being extended, renewed or 

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refinanced does not increase; and
(viii) Liens in favor of customs and revenue authorities which secure payment of customs
duties in connection with the importation of goods. Silicon will have the right to
require, as a condition to its consent under subparagraph (iv) above, that the holder of
the additional security interest or lien sign an intercreditor agreement on Silicon’s
then standard form, acknowledge that the security interest is subordinate to the security
interest in favor of Silicon, and agree not to take any action to enforce its subordinate
security interest so long as any Obligations remain outstanding, and Borrower hereby
agrees that any uncured default in any obligation secured by the subordinate security
interest shall also constitute an Event of Default under this Agreement.  

        “Person”
means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company,
government, or any agency or political division thereof, or any other entity. 

        “PPSA”
means, as the context may require, any or all personal property security act(s) in effect
from time to time in any Canadian jurisdiction. 

        “Release”
means release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the outdoor environment or into or out of any
property, including the movement of Contaminants through or in the air, soil, surface
water or groundwater. 

        “Remedial
Action” means actions required to (a) clean up, remove, treat or in any other way
address Contaminants in the outdoor environment; (b) prevent the Release or threat of
Release or minimize the further Release of Contaminants so they do not migrate or endanger
or threaten to endanger public health or welfare or the outdoor environment; or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and care. 

        “Representations”
means the written Representations and Warranties provided by Borrower to Silicon referred
to in the Schedule. 

        “Reserves”
means, as of any date of determination, such amounts as Silicon may from time to time
establish and revise in its good faith business judgment, reducing the amount of Loans,
Letters of Credit and other financial accommodations which would otherwise be available to
Borrower under the lending formula(s) provided in the Schedule: (a) to reflect events,
conditions, contingencies or risks which, as determined by Silicon in its good faith
business judgment, do or may adversely affect (i) the Collateral or any other property
which is security for the Obligations or its value (including without limitation any
increase in delinquencies of Accounts), (ii) the assets, business or prospects of Borrower
or any guarantor of any of the Obligations, or (iii) the security interests and other
rights of Silicon in the Collateral (including the enforceability, perfection and priority
thereof); or (b) to reflect Silicon’s good faith belief that any collateral report or
financial information furnished by or on behalf of Borrower, or any guarantor of any of
the Obligations, to Silicon is or may have been incomplete, inaccurate or misleading in
any material respect; or (c) in respect of any state of facts which Silicon determines in
good faith constitutes an Event of Default or may, with notice or passage of time or both,
constitute an Event of Default. 

        “Restricted
Pledged Cash” means cash of Borrower held in a Deposit Account of Borrower
maintained at Silicon and as to which Borrower’s access is restricted on terms and
conditions satisfactory to Silicon; it being acknowledged and agreed that the same is
pledged to Silicon as Collateral pursuant to Section 2 of this Agreement. 

        “Tax
Act” means the Income Tax Act (Canada), as amended, and any successor statute. 

        Other
Terms. All accounting terms used in this Agreement, unless otherwise indicated, shall
have the meanings given to such terms in accordance with GAAP, consistently applied. All
other terms contained in this Agreement, unless otherwise indicated, shall have the
meanings provided by the Code, to the extent such terms are defined therein. 

9. GENERAL PROVISIONS.  

        9.1
Interest Computation. In computing interest on the Obligations, all checks,
wire transfers and other items of payment received by Silicon (including proceeds of
Accounts and payment of the Obligations in full) shall be deemed applied by Silicon on
account of the Obligations three Business Days after receipt by Silicon of immediately
available funds, and, for purposes of the foregoing, any such funds received after 12:00
Noon (California time) on any day shall be deemed received on the next Business Day.
Silicon shall not, however, be required to credit Borrower’s account for the amount
of any item of payment which is unsatisfactory to Silicon in its good faith business
judgment, and Silicon may charge Borrower’s loan account for the amount of any item
of payment which is returned to Silicon unpaid. 

        9.2
Application of Payments. All payments with respect to the Obligations may
be applied, and in Silicon’s good faith business judgment reversed and re-applied, to
the Obligations, in such order and manner as Silicon shall determine in its good faith
business judgment. 

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        9.3
Charges to Accounts. Silicon may, in its discretion, require that Borrower
pay monetary Obligations in cash to Silicon, or charge them to Borrower’s Loan
account, in which event they will bear interest at the same rate applicable to the Loans.
Silicon may also, in its discretion, charge any monetary Obligations to any one or more of
Borrower’s Deposit Accounts maintained with Silicon. 

        9.4
Monthly Accountings. Silicon shall provide Borrower monthly with an account
of advances, charges, expenses and payments made pursuant to this Agreement. Such account
shall be deemed correct, accurate and binding on Borrower and an account stated (except
for reverses and reapplications of payments made and corrections of errors discovered by
Silicon), unless Borrower notifies Silicon in writing to the contrary within 60 days after
such account is rendered, describing the nature of any alleged errors or omissions. 

        9.5
Notices. All notices to be given under this Agreement shall be in writing
and shall be given either personally or by reputable private delivery service * or
by regular first-class mail, or certified mail return receipt requested, and addressed as
follows: (a) if to Borrower (in care of Parent with respect to any and all Borrowers) at
the address for Borrower shown in the heading to this Agreement; (b) if to Silicon, at
Silicon Valley Bank, 4110 Carillon Point, Kirkland, Washington 98033, Attn: Manager; or
(c) at any other address designated in writing by one party to the other party in
accordance with this Section 9.5. **  All notices shall be deemed to have been
given upon delivery in the case of notices personally delivered, or at the expiration of
one Business Day following delivery to the private delivery service, or two Business Days
following the deposit thereof in the United States mail, with postage prepaid.

        *
, or by facsimile (if to Borrower at 604.699.8001 or if to Silicon at 425.827.6404), 

        **
All notices shall be deemed to have been given: (a) in the case of notices personally
delivered, upon delivery; (b) if sent by facsimile, when receipt is acknowledged by the
receiving facsimile equipment (or at the opening of the next business day if receipt is
after normal business hours); and (c) at the expiration of one Business Day following
delivery to the private delivery service, or two Business Days following the deposit
thereof in the United States mail (in the case of Silicon) or Canada Post (in the case of
Borrower), with postage prepaid. 

        9.6
Severability. Should any provision of this Agreement be held by any court
of competent jurisdiction to be void or unenforceable, such defect shall not affect the
remainder of this Agreement, which shall continue in full force and effect. 

        9.7
Integration. This Agreement and such other written agreements, documents
and instruments as may be executed in connection herewith are the final, entire and
complete agreement between Borrower and Silicon and supersede all prior and
contemporaneous negotiations and oral representations and agreements, all of which are
merged and integrated in this Agreement. There are no oral understandings,
representations or agreements between the parties which are not set forth in this
Agreement or in other written agreements signed by the parties in connection herewith. 

        9.8
Waivers; Indemnity. The failure of Silicon at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any other Loan
Document shall not waive or diminish any right of Silicon later to demand and receive
strict compliance therewith. Any waiver of any default shall not waive or affect any other
default, whether prior or subsequent, and whether or not similar. None of the provisions
of this Agreement or any other Loan Document shall be deemed to have been waived by any
act or knowledge of Silicon or its agents or employees, but only by a specific written
waiver signed by an authorized officer of Silicon and delivered to Borrower. To the
maximum extent permitted by applicable law, Borrower waives the benefit of all statutes of
limitations relating to any of the Obligations or this Agreement or any other Loan
Document, and Borrower waives demand, protest, notice of protest and notice of default or
dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or
renewal of any commercial paper, instrument, account, General Intangible, document or
guaranty at any time held by Silicon on which Borrower is or may in any way be liable, and
notice of any action taken by Silicon, unless expressly required by this Agreement or any
other Loan Document. Borrower hereby agrees to indemnify Silicon and its affiliates,
subsidiaries, parent, directors, officers, employees, agents, and attorneys, and to hold
them harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, causes of action, penalties, costs and expenses (including
reasonable attorneys’ fees), of every kind, which they may sustain or incur based
upon or arising out of any of the Obligations, or any relationship or agreement between
Silicon and Borrower, or any other matter, relating to Borrower or the Obligations;
provided that, with respect to any indemnitee, this indemnity shall not extend to damages
proximately caused by the indemnitee’s own gross negligence or willful misconduct.
Notwithstanding any provision in this Agreement to the contrary, the indemnity agreement
set forth in this Section shall survive any termination of this Agreement and shall for
all purposes continue in full force and effect. * 

      **
Section 10(D) of the Schedule is incorporated herein by this reference.  

        9.9
No Liability for Ordinary Negligence. Neither Silicon, nor any of its
directors, officers, employees, agents, attorneys or any other Person affiliated with or
representing Silicon shall be liable for any claims, demands, losses or damages, of any

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kind whatsoever, made, claimed,
incurred or suffered by Borrower or any other party through the ordinary negligence of
Silicon, or any of its directors, officers, employees, agents, attorneys or any other
Person affiliated with or representing Silicon, but nothing herein shall relieve Silicon
from liability for its own gross negligence or willful misconduct.  

        9.10
Amendment. The terms and provisions of this Agreement may not be waived or
amended, except in a writing executed by Borrower and a duly authorized officer of
Silicon. 

        9.11
Time of Essence. Time is of the essence in the performance by Borrower of
each and every obligation under this Agreement. 

        9.12
Attorneys Fees and Costs. Borrower shall reimburse Silicon for all
reasonable attorneys’ fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Silicon, pursuant to, or in
connection with, or relating to this Agreement (whether or not a lawsuit is filed),
including, but not limited to, any reasonable attorneys’ fees and costs Silicon
incurs in order to do the following: prepare and negotiate this Agreement and all present
and future documents relating to this Agreement; obtain legal advice in connection with
this Agreement or Borrower; enforce, or seek to enforce, any of its rights; prosecute
actions against, or defend actions by, Account Debtors; commence, intervene in, or defend
any action or proceeding; initiate any complaint to be relieved of the automatic stay in
bankruptcy; file or prosecute any probate claim, bankruptcy claim, third-party claim, or
other claim; examine, audit, copy, and inspect any of the Collateral or any of
Borrower’s books and records; protect, obtain possession of, lease, dispose of, or
otherwise enforce Silicon’s security interest in, the Collateral; and otherwise
represent Silicon in any litigation relating to Borrower. In satisfying Borrower’s
obligation hereunder to reimburse Silicon for attorneys fees, Borrower may, for
convenience, issue checks directly to Silicon’s attorneys, Levy, Small & Lallas,
but Borrower acknowledges and agrees that Levy, Small & Lallas is representing only
Silicon and not Borrower in connection with this Agreement. If either Silicon or Borrower
files any lawsuit against the other predicated on a breach of this Agreement, the
prevailing party in such action shall be entitled to recover its reasonable costs and
attorneys’ fees, including (but not limited to) reasonable attorneys’ fees and
costs incurred in the enforcement of, execution upon or defense of any order, decree,
award or judgment. All attorneys’ fees and costs to which Silicon may be entitled
pursuant to this Section shall immediately become part of Borrower’s Obligations,
shall be due on demand, and shall bear interest at a rate equal to the highest interest
rate applicable to any of the Obligations. 

        9.13
Benefit of Agreement. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries
and representatives of Borrower and Silicon; provided, however, that Borrower may not
assign or transfer any of its rights under this Agreement without the prior written
consent of Silicon, and any prohibited assignment shall be void. No consent by Silicon to
any assignment shall release Borrower from its liability for the Obligations. 

        9.14
Joint and Several Liability. If Borrower consists of more than one Person,
their liability shall be joint and several, and the compromise of any claim with, or the
release of, any Borrower shall not constitute a compromise with, or a release of, any
other Borrower. 

        9.15
Limitation of Actions. Any claim or cause of action by Borrower against
Silicon, its directors, officers, employees, agents, accountants or attorneys, based upon,
arising from, or relating to this Agreement, or any other Loan Document, or any other
transaction contemplated hereby or thereby or relating hereto or thereto, or any other
matter, cause or thing whatsoever, occurred, done, omitted or suffered to be done by
Silicon, its directors, officers, employees, agents, accountants or attorneys, shall be
barred unless asserted by Borrower by the commencement of an action or proceeding in a
court of competent jurisdiction by the filing of a complaint within one year after the
first act, occurrence or omission upon which such claim or cause of action, or any part
thereof, is based, and the service of a summons and complaint on an officer of Silicon, or
on any other person authorized to accept service on behalf of Silicon, within thirty (30)
days thereafter. Borrower agrees that such one-year period is a reasonable and sufficient
time for Borrower to investigate and act upon any such claim or cause of action. The
one-year period provided herein shall not be waived, tolled, or extended except by the
written consent of Silicon in its sole discretion. This provision shall survive any
termination of this Agreement or any other Loan Document. 

        9.16
Section Headings; Construction. Section headings are only used in this
Agreement for convenience. Borrower and Silicon acknowledge that the headings may not
describe completely the subject matter of the applicable section, and the headings shall
not be used in any manner to construe, limit, define or interpret any term or provision of
this Agreement. This Agreement has been fully reviewed and negotiated between the parties
and no uncertainty or ambiguity in any term or provision of this Agreement shall be
construed strictly against Silicon or Borrower under any rule of construction or
otherwise. 

        9.17
Governing Law; Jurisdiction; Venue. This Agreement and (except to the
extent expressly provided to the  

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contrary) the other Loan Documents
and all acts and transactions hereunder and (except to the extent expressly provided to
the contrary) thereunder and all rights and obligations of Silicon and Borrower shall be
governed by the laws of the State of California. As a material part of the consideration
to Silicon to enter into this Agreement and the other Loan Documents, Borrower (i) agrees
that all actions and proceedings relating directly or indirectly to this Agreement and
the other Loan Documents shall, at Silicon’s option, be litigated in courts located
within California, and that the exclusive venue therefor shall be Santa Clara County;
(ii) consents to the jurisdiction and venue of any such court and consents to service of
process in any such action or proceeding by personal delivery or any other method
permitted by law; and (iii) waives any and all rights Borrower may have to object to the
jurisdiction of any such court, or to transfer or change the venue of any such action or
proceeding. 

        9.18
Mutual Waiver of Jury Trial. BORROWER AND SILICON EACH HEREBY WAIVE THE RIGHT TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO,
THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN SILICON AND
BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF SILICON OR BORROWER OR ANY OF THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH
SILICON OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE. 

        9.19
Payments without Setoffs or Counterclaims, etc. All payments hereunder and
under the other Loan Documents made by or on behalf of Borrower shall be made: (a) without
setoff or counterclaim; and (b) * free and clear of, and without deduction or
withholding for or on account of, any foreign, federal, provincial, state, or local Taxes. 

      *
subject to Section 10(C) of the Schedule,  

      [remainder
of page intentionally left blank; signature page follows]  

-19- 

	
Silicon Valley Bank
            
            
            
             	
Loan and Security Agreement  
	

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed and delivered as of the
date first above written.  

	Borrower:

PIVOTAL CORPORATION, a British Columbia 

corporation

By                
           
           
           
           
           

       President or Vice President 

By                
           
           
           
           
           

       Secretary or Ass't Secretary	Silicon:

SILICON VALLEY BANK

By                
           
           
           
           
           

Title                
           
           
           
           
        
 

	
PIVOTAL CORPORATION, a Washington corporation

By                
           
           
           

       President or Vice President 

By                
           
           
           

       Secretary or Ass't Secretary	
 

Signature Page 

Silicon Valley
Bank 

Schedule to 

Loan and Security Agreement 

	
Borrower:  	
Pivotal Corporation, a British Columbia corporation ("Parent");
and Pivotal Corporation, a Washington corporation
("Pivotal US")  
	  
	Address: 	858 Beatty Street, Suite 700

Vancouver, British Columbia, Canada V6B 1C1 
	  
	
Date: 
	
December __, 2002 

This Schedule forms an integral part
of the Loan and Security Agreement between Silicon Valley Bank and the above-named
borrower(s) (individually and collectively, and jointly and severally, the
“Borrower”) of even date (as amended, restated, supplemented, or otherwise
modified from time to time, this “Agreement”). 

JOINT AND SEVERAL
LIABILITY

        The
Borrowers each are, and at all times shall be, jointly and severally liable for each and
every one of the Obligations, regardless of which Borrower or Borrowers requested,
received, used, or directly enjoyed the benefit of, the Obligations. All of the
Collateral shall secure all of the Obligations.  

1. CREDIT LIMIT

     (Section 1.1): 

	  	
The Credit Limit equals: (a) so long as the ABL Provisions are not in effect, an amount
not to exceed at any one time outstanding the result of (i) $7,000,000 (the “Maximum
Credit Limit”), minus (ii) the sum of (y) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit) and (z) the FX Reserve; and
(b) upon the occurrence of the ABL Provisions Trigger and so long as the ABL Provisions
are in effect, an amount not to exceed the result of (i) the lesser of (y) the Maximum
Credit Limit and (z) the sum of (1) 80% (the “Advance Rate”) of the
amount of Borrower’s Eligible Accounts (as defined in Section 8 above) and (2) the
amount of Restricted Pledged Cash (if any) of Borrower, minus (ii) the sum of (y) the
amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) and (z) the FX Reserve. The foregoing clause (b) is an ABL Provision.  

-1- 

	
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Schedule to Loan and
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Anything
herein to the contrary notwithstanding, all outstanding Loans shall be immediately repaid
upon the occurrence of the CSL Provisions Trigger and no further Loans shall be made so
long as the CSL Provisions are in effect. This paragraph is a CSL Provision. 

	  	
Anything
herein to the contrary notwithstanding, all outstanding Loans shall be immediately repaid
upon the occurrence of the ABL Provisions Trigger and no further Loans shall be made so
long as the ABL Provisions are in effect. This paragraph is an ABL Provision. 

	  	
Upon
the occurrence of the ABL Provisions Trigger and so long as the ABL Provisions are in
effect, extensions of credit (other than Loans) hereunder will be made to (or for the
account of) each Borrower based on the Eligible Accounts and Restricted Pledged Cash of
such Borrower, subject to the Maximum Credit Limit for all such extensions of credit to
(or for the account of) all Borrowers combined. This paragraph is an ABL Provision. 

	  	
Silicon
may, from time to time, modify the Advance Rate, in its good faith business judgment, upon
notice to the Borrower, based on changes in collection experience with respect to Accounts
or other issues or factors relating to the Accounts or other Collateral. 

	Foreign Exchange

Contract Sublimit  	

$1,000,000
 (subject to all provisions in this Section 1 of this Schedule relative to the
Credit Limit).  

	  	
Borrower
may enter into foreign exchange forward contracts with Silicon, on its standard forms,
under which Borrower commits to purchase from or sell to Silicon a set amount of foreign
currency more than one Business Day after the contract date (the “FX Forward
Contracts”); provided that (1) at the time the FX Forward Contract is entered into,
Borrower has credit availability under this Agreement in an amount at least equal to 10%
of the amount of the FX Forward Contract; (2) the total FX Forward Contracts at any one
time outstanding may not exceed 10 times the amount of the Foreign Exchange Contract
Sublimit set forth above. Silicon shall have the right to withhold, from the Loans or
other extensions of credit otherwise available to Borrower under this Agreement, a reserve
(which shall be in addition to all other reserves) in an amount equal to 10% of the total
FX Forward Contracts from time to time outstanding (the “FX Reserve”), and in
the event at any time there are insufficient Loans and other extensions of credit
available to Borrower for such reserve, Borrower shall deposit and maintain with Silicon
cash collateral in an amount at all times equal to such deficiency, which shall be held as
Collateral for all purposes of this Agreement. Silicon may, in its discretion, terminate
the FX Forward Contracts at any

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Schedule to Loan and
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time that an Event of Default occurs and is continuing. The FX Forward Contracts shall terminate
upon the earlier of (a) the Maturity Date, or (b) any earlier effective date of
termination of this Agreement (or such later date requested by Borrower as Silicon may
agree in writing in its sole discretion if and to the extent Borrower’s Obligations
in respect of the FX Forward Contracts are secured by cash in amounts and on terms and
conditions acceptable to Silicon in its sole discretion). The FX Forward Contracts shall
be secured by cash in amounts and on terms and conditions acceptable to Silicon in its
sole discretion upon the occurrence of any CSL Provisions Trigger and so long as the CSL
Provisions are in effect. The immediately preceding sentence is a CSL Provision. Borrower
shall execute all standard form applications and agreements of Silicon in connection with
the FX Forward Contracts, and without limiting any of the terms of such applications and
agreements, Borrower shall pay all standard fees and charges of Silicon in connection
with the FX Forward Contracts. All amounts that Silicon pays or expends in respect of any
FX Forward Contracts shall constitute Obligations hereunder.  

	
Letter of Credit Sublimit

(Section 1.6): 	
$7,000,000
(subject to all provisions in this Section 1 of this Schedule relative to the Credit
Limit).  

2.  INTEREST. 

	
Interest Rate 
(Section 1.2): 	
A rate equal to the sum of the “Prime Rate” in effect from time to time, plus
0.50% per annum (the “Contract Rate”). “Prime Rate” means the
rate announced from time to time by Silicon as its “prime rate”; it is a base
rate upon which other rates charged by Silicon are based, and it is not necessarily the
best rate available at Silicon. The interest rate applicable to the Obligations shall
change on each date there is a change in the Prime Rate. Interest shall be calculated on
the basis of a 360-day year for the actual number of days elapsed. 

	  	
As
a result, based on a Prime Rate of 4.25% per annum in effect on the date of this
Agreement, the actual rate of interest chargeable hereunder in the absence of an Event of
Default, as of the date of this Agreement and in accordance with the Interest Act, is
approximately 4.81597 percent per annum for any year other than a leap year. Upon any
change in the Prime Rate after the date of this Agreement, the effective annual rate of
interest chargeable hereunder in accordance with the  

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Schedule to Loan and
Security Agreement  
	

	  	
Interest
Act shall be that percent per annum resulting from multiplying the Contract Rate or the
Default Rate (as the case may be) applicable hereunder by the applicable Conversion
Factor (as defined below). For purposes of this Section 2 of the Schedule, the term “Conversion
Factor” shall mean: (a) for any year other than a leap year (i.e., a year with 365
days), the quotient obtained from dividing 365 by 360, or (b) for any leap year (i.e., a
year with 366 days), the quotient obtained from dividing 366 by 360. For ease of
reference, the effective annual rate of interest for a 365 day year, as calculated by
application of the foregoing formula, in respect of certain Contract Rates appears next
to the specified Prime Rate in Schedule C-1 attached hereto. At any time and from time to
time, Borrower may request in writing that Silicon provide it with a written confirmation
of the effective annual rate of interest chargeable hereunder in accordance with the
Interest Act if, for any reason, the calculation thereof in accordance with the formula
set forth in this paragraph cannot be determined by reference to Schedule C-1. For
purposes of this Agreement and the other Loan Documents, all borrowings, repayments, and
calculations in respect of Obligations shall be in Dollars.  

	Minimum Monthly 

Interest

(Section 1.2): 	
n/a. 

     3.    
          FEES (Section 1.4): 

	Loan
Fee:	
$30,625, which is fully earned on the date of this Agreement
and is due and payable as promptly
as practicable after the date of this Agreement but in any event no later than January 3,
2003. 

	LC
Fees: 	
In addition to the charges, commissions, fees, and costs described in Section 1.6 of
the Agreement, Borrower shall pay Silicon an issuance fee with respect to each Letter of
Credit, in an amount equal to the product of (i) a percentage equal to (y) 1.15%, in the
case of any Letter of Credit issued to Canadian Imperial Bank of Commerce as beneficiary),
and (z) 1.25%, in the case of any other Letter of Credit, times (ii) the original
face amount of such Letter of Credit, which fee shall be earned in full on the date of
issuance of such Letter of Credit and shall be due and payable in 4 equal quarterly
installments, with each installment in an amount equal to 1/4 of such issuance fee, with
the first such installment due and payable on the date of issuance of such Letter of
Credit and each successive installment on the first day of each calendar quarter
thereafter until the fee is paid in cash in full; provided, however, that all such
installments shall be due and payable upon termination of this Agreement. 

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Schedule to Loan and
Security Agreement  
	

4.  MATURITY DATE

 

	(Section 6.1): 	
November 15, 2003. 

5.  FINANCIAL COVENANTS

	(Section 5.1):  	
Borrower
shall comply with each of the following covenants. Compliance shall be determined as of
the end of each quarter, except as otherwise specifically provided below:  

	Minimum Qualifying
Cash: 	
Without limiting the generality of the first sentence of Section 8(1) of this Schedule, Pivotal
US shall, at all times, maintain Qualifying Cash on deposit in Deposit Accounts of
Pivotal US maintained with Silicon in an amount not less than: (a) so long as the CSL
Provisions are not in effect, the Required Deposit Amount plus the Supplemental Required
Deposit Amount; and (b) so long as the CSL Provisions are in effect, the Reduced Required
Deposit Amount plus the Supplemental Required Deposit Amount. As used herein, the term
“Required Deposit Amount” means $9,500,000. As used herein, the term “Reduced
Required Deposit Amount” means $3,000,000. As used herein, the term “Qualifying
Cash” means Restricted Pledged Cash of Pivotal US or unrestricted cash of Pivotal
US, in each case, which shall not directly or indirectly be funded from Loans or other
extensions of credit by Silicon, and which at all times shall be subject to Silicon’s
first-priority perfected security interest but not encumbered by any other lien. As used
herein, the term “Supplemental Required Deposit Amount” means, as of any date
of determination, an amount equal to: (i) until such time (if ever) that Silicon receives
all items required under clauses (a) and (b) of Section 8(7) of this Schedule,
$1,000,000; and (b) thereafter, $–0–.  

	
Maximum Quarterly Net Loss 	
Borrower shall not cause, suffer, or permit its net loss (and, in the case of
the fiscal quarter ending December 31, 2002, the portion of such net loss attributable to
negative EBITDA), measured on a fiscal quarter-end basis, to exceed the amount set forth
in the following table for the applicable period set forth opposite thereto:  

	
Maximum Quarterly Net Loss	
Fiscal Quarter Ending
	
$17,000,000, and of which net loss negative EBITDA may not account for
more than $7,000,000	
December 31, 2002 

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Schedule to Loan and
Security Agreement  
	

	$5,000,000	March 31, 2003
	$4,000,000	June 30, 2003
	$3,000,000	September 30, 2003

	Special Provisions 

Relating
to Violations:  	
(1) Solely with respect to the first violation (if ever) of the Maximum
Quarterly Net Loss financial covenant set forth above occurring after the date of this
Agreement, such violation (the “ABL Provisions Trigger”) shall constitute an
Event of Default that is immediately and automatically waived, but shall trigger the
applicability of the provisions herein and in the other Loan Documents that specifically
are identified as an ABL Provision (collectively, the “ABL Provisions”); it
being acknowledged and agreed that the ABL Provisions shall remain in effect unless and
until either (a) Silicon in its sole discretion waives the applicability thereof or (b) a
Net Loss CSL Provisions Trigger occurs (and thereupon the CSL Provisions shall be in
effect in lieu of the ABL Provisions). 

	 	
(2) Solely
with respect to the second violation (if ever) of the Maximum Quarterly           Net
Loss financial covenant set forth above occurring after the date of this
          Agreement, such violation (the “Net Loss CSL Provisions Trigger”)
          shall constitute an Event of Default that is immediately and automatically
          waived, but shall trigger the applicability of the provisions herein and in the
          other Loan Documents that specifically are identified as a CSL Provision
          (collectively, the “CSL Provisions”); it being acknowledged and
agreed           that the CSL Provisions shall remain in effect unless and until either
(a)           Silicon in its sole discretion waives the applicability thereof or (b)
solely in           the case that a Qualifying Cash CSL Provisions Trigger occurs, the
Qualifying           Cash CSL Deactivation Condition is satisfied.  

	 	
(3) Solely
with respect to the first violation (if ever) of the Minimum Qualifying           Cash
financial covenant set forth above occurring after the date of this           Agreement,
such violation (the “Qualifying Cash CSL Provisions           Trigger”) shall
constitute an Event of Default that is immediately and           automatically waived,
but shall trigger the applicability of the CSL Provisions; provided, however,
that the CSL Provisions shall be deactivated if           and only if, within 15 Business
Days following the occurrence of the Qualifying           Cash CSL Provisions Trigger,
Pivotal US deposits sufficient additional           Qualifying Cash in Deposit Accounts
of Pivotal US maintained with Silicon such           that the aggregate amount of
Qualifying Cash in Deposit Accounts of Pivotal US           maintained with Silicon
thereafter at all times shall equal at least 

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Schedule to Loan and
Security Agreement  
	

	  	
the
          Required Deposit Amount plus the Supplemental Required Deposit Amount (the
          “Qualifying Cash CSL Deactivation Condition”).  

	 	
(4) As
used herein, the term “CSL Provisions Trigger” means, individually
          and collectively, the Net Loss CSL Provisions Trigger and the Qualifying Cash
          CSL Provisions Trigger.  

	 	
           (5) For the avoidance of doubt, any violation of the Maximum Quarterly Net Loss
          financial covenant set forth above occurring after the date of this Agreement
          that is not the ABL Provisions Trigger or the Net Loss CSL Provisions Trigger
          shall constitute an Event of Default that is not automatically waived. 

          

	 	
           (6) For the avoidance of doubt, any violation of the Minimum Qualifying Cash
          financial covenant set forth above occurring after the date of this Agreement
          that is not the Qualifying Cash CSL Provisions Trigger shall constitute an Event
          of Default that is not automatically waived and that is not eligible for
          deactivation by the Qualifying Cash CSL Deactivation Condition. 

          

	
Definitions.	
For
purposes of the foregoing financial covenants:  

	  	
“EBITDA”
shall be determined in accordance with GAAP; provided, however, that net loss shall be so
determined with the following adjustments 

	  	
“Net
loss”shall be determined in accordance with GAAP, with the following adjustments:  

		
(A) non-cash writedowns of goodwill shall be excluded for purposes of determining
net loss; and 

          

	 	
(B) any post-September 2002 capitalized development costs shall be treated as
R&D expenses for purposes of determining net loss. 

          

6.  REPORTING.
 

	(Section 5.3):  	
Borrower
shall provide Silicon with the following:  

	 	1.	Upon
the occurrence of the ABL Provisions Trigger and so long as the ABL
               Provisions are in effect, transaction reports and schedules of collections
in                respect of US and Canadian Accounts, on Silicon’s standard form,
               concurrently in connection with each requested Loan or other extension of
credit (but in any event 

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Schedule to Loan and
Security Agreement  
	

	 	  	not less
frequently than on a weekly basis). The immediately preceding sentence is
an ABL Provision.  

	   	2.	Monthly
US and Canadian accounts receivable agings, aged by invoice date, within
               fifteen days after the end of each month.  

	 	3.	Monthly
US and Canadian accounts payable agings, aged by invoice date, and
               outstanding or held check registers, if any, within fifteen days after the
end                of each month.  

	 	4.	Monthly
reconciliations of US and Canadian accounts receivable agings (aged by
               invoice date), transaction reports, and general ledger, within fifteen
days                after the end of each month.  

	   	5.	Monthly
schedule of US and Canadian deferred maintenance revenues, within                fifteen
days after the end of each month.  

	   	6.	Monthly
unaudited financial statements, as soon as available, and in any event
               within thirty days after the end of each month.  

	 	7.	Monthly
Compliance Certificates, within thirty days after the end of each month,
               in such form as Silicon shall reasonably specify, signed by the Chief
Financial                Officer of Borrower, certifying that as of the end of such month
Borrower was in                full compliance with all of the terms and conditions of
this Agreement, (or, if                Borrower was not in such full compliance,
specifying the nature and period of                existence of such non-compliance), and
setting forth calculations showing                compliance (or non-compliance, as the
case may be) with the financial covenants                set forth in this Agreement and
such other information as Silicon shall                reasonably request, including,
without limitation, a statement that at the end                of such month there were
no held checks.  

	 	8.	Quarterly
unaudited financial statements, as soon as available, and in any event
               within forty-five days after the end of each fiscal quarter of Borrower.  

	 	9.	Annual
operating budgets (including income statements, balance sheets and cash
               flow statements, by quarter) for the upcoming fiscal year of Borrower
within                thirty days prior to the end of each fiscal year of Borrower.  

	 	10.	Annual
financial statements, as soon as available, and in any event within 120
               days following the end of Borrower’s fiscal year, certified by, and
with an                unqualified opinion of, independent certified public accountants
approved by the                Board of Directors and requisite shareholders of Parent
(so long as Parent                remains a publicly traded company) or otherwise
acceptable to Silicon.  

With respect to Items #1, 2, 3, 4,
and 5 above, the relevant amounts covered thereby shall be reported in Dollars. 

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Schedule to Loan and
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With respect to the financial
statements referred to above, the relevant amounts covered thereby shall be reported in
Dollars. 

With respect to the financial
statements referred to above, Borrower agrees to deliver financial statements prepared on
both a consolidated and consolidating basis and agrees that no subsidiary of Borrower
existing as of the date of this Agreement (other than Market First, if and to the extent
such different fiscal year is disclosed and accounted for in accordance with GAAP) will
have a fiscal year different from that of Borrower.  

7. BORROWER INFORMATION: 

	  	
Borrower
represents and warrants that the information set forth in the Representations and
Warranties of the Borrower dated December 23, 2002, previously submitted to Silicon (the
“Representations”) is true and correct as of the date hereof. 

8. ADDITIONAL
PROVISIONS

	 	(1) 	Banking
Relationship. Borrower shall at all times maintain its primary banking relationship
(including without limitation operating accounts and investment services) with Silicon.
As to any Deposit Accounts and Investment Property (including securities accounts)
maintained with another institution, Borrower shall cause such institution, within 30
days after the date of this Agreement, to enter into a control agreement in form
acceptable to Silicon in its good faith business judgment in order to perfect Silicon’s
first-priority security interest in such Deposit Accounts and grant Silicon “control” (within
the meaning of Articles 8 and 9 of the Code) over such Investment Property (including
securities accounts). Thereafter, Borrower shall not maintain any Deposit Accounts or
Investment Property (including securities accounts) with any bank, securities
intermediary, or other institution unless Silicon has received such a control agreement
duly executed by such party in favor of Silicon covering such Deposit Account or
Investment Property (including securities accounts), as the case may be.  

	 	(2) 	Subordination
of Inside Debt. All present and future indebtedness of           Borrower to its
officers, directors, shareholders, and subsidiaries           (“Inside Debt”)
shall, at all times, be subordinated to the           Obligations pursuant to one or more
subordination agreements in form and           substance satisfactory to Silicon
(individually and collectively, the           “Insider Subordination Agreement”).
Borrower represents and warrants           that there is no 

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Schedule to Loan and
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	 	  	Inside Debt
presently outstanding. Prior to incurring any           Inside Debt in the future,
Borrower shall cause the person to whom such Inside           Debt will be owed to
execute and deliver to Silicon an Insider Subordination           Agreement.  

	 	(3) 	Copyrights,
etc.; Excluded General Intangibles 

     	 	
        (a) Section 11 of this Schedule identifies, as of the date of this Agreement, any
          and all maskworks, computer software, and other copyrights of Borrower that
          generate Accounts from the sale or licensing thereof (individually, a
          “Material Copyright” and, collectively, the “Material
          Copyrights”) and, in each case, whether such Material Copyright is
          registered (or is the subject of any application for registration) with the
          United States Copyright Office. Borrower will NOT register
          with the United States Copyright Office (or apply for such registration of) any
          of Borrower’s maskworks or computer software, unless Borrower has provided
          Silicon not less than 30 days prior written notice of the commencement of such
          registration/application and Borrower has executed and delivered to Silicon such
          security agreement(s) and other documentation (in form and substance reasonably
          satisfactory to Silicon) which Silicon in its good faith business judgment deems
          necessary for the grant by Borrower to Silicon of security interests in such
          maskworks or computer software (and all proceeds and products (including without
          limitation licensing revenue) thereof) and for filing with respect to such
          registration or application. Borrower will: (i) protect, defend and maintain the
          validity and enforceability of Borrower’s copyrights, patents, and
          trademarks; (ii) promptly advise Silicon in writing of material infringements of
          Borrower’s copyrights, patents, or trademarks of which Borrower is or
          becomes aware; and (iii) not allow any material item of Borrower’s
          copyrights, patents, or trademarks to be abandoned, forfeited or dedicated to
          the public without Silicon’s written consent. 

          

     	 	
          (b) (i) Borrower shall not sell or transfer (except as permitted under clause (iv)
          of Section 5.5 of this Agreement) any Excluded General Intangibles; (ii)
          Borrower shall not mortgage, pledge, grant a security interest in, or encumber
          any of Borrower’s Excluded General Intangibles (except in favor of Silicon,
          if and to the extent required under Section 8(3)(a) of this Schedule or Silicon
          and Borrower otherwise agree to do so in writing, and except for Permitted
          Liens); and (iii) Borrower hereby represents and warrants that Borrower has not
          agreed, and Borrower hereby covenants and agrees that Borrower shall not agree,
          in favor of any Person other than Silicon, that Borrower will not sell,
           

          

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transfer,  mortgage, pledge, grant a security interest in, or encumber any of           Borrower’s
Excluded General Intangibles (except for Permitted Liens).  

	 	(4) 	Landlord
Agreement. With respect to any leased premises of Borrower,           Borrower shall,
promptly upon Silicon’s request therefor, deliver to           Silicon a landlord
agreement (in form and substance satisfactory to Silicon)           duly executed by the
lessor of such leased premises.  

	 	(5) 	Bailee
Agreement. Borrower hereby represents and warrants that, as of           the date of
execution and deliver of this Agreement, no goods of Borrower are in           the
possession of any warehouseman or other bailee, and hereby covenants that
          Borrower promptly shall deliver written notice to Silicon of any goods of
          Borrower being in the possession of any warehouseman or other bailee. With
          respect to any goods of Borrower in the possession of any warehouseman or other
          bailee, Borrower shall, promptly upon Silicon’s request therefor, deliver
          to Silicon a bailee agreement (in form and substance satisfactory to Silicon)
          duly executed by such warehouseman or other bailee.  

	  	(6) 	Broker. Borrower
shall pay any and all brokerage commissions or finders           fees incurred in
connection with or as a result of Borrower’s obtaining           financing from
Silicon under this Agreement. Borrower agrees and acknowledges           that payment of
all such brokerage commissions or finders fees shall be the sole           responsibility
of Borrower, and Borrower agrees to indemnify, defend, and hold           Silicon
harmless from and against any claim of any broker or finder arising out           of
Borrower’s obtaining financing from Silicon under this Agreement (and           any
reasonable attorneys fees and costs incurred by Silicon in connection
          therewith).  

	 	(7) 	Certain
Post-Closing Requirements. As conditions subsequent to initial           closing
hereunder, Silicon shall receive timely each of the following (the           failure of
Silicon to timely receive any of the following constituting an Event           of
Default):  

	  	
        (a) as
 soon as practicable and in any event no later than January 30, 2003, Silicon
          shall receive each of the items described in clause (b) of the last sentence of
          Section 9(A) of this Schedule, if and to the extent the same was not already
          delivered on or before the date of this Agreement pursuant to Section 9(A) of
          this Schedule.  

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        (b) as
soon as practicable and in any event no later than February 10, 2003,           Silicon
shall receive the following searches (the results of which shall be
          satisfactory to Silicon) relative to Parent: (i) Corporation Capital Tax; (ii)
          Social Services Tax; and (iii) Canada Customs and Revenue Agency regarding (x)
          Source Deductions, (y) Corporate Tax remittances, and (z) Excise Branch, Goods
          and Services Tax; in each case, if and to the extent the same was not already
          received by Silicon on or before the date of this Agreement pursuant to Section
          9(B) of this Schedule.  

	  	
        (c) without
limiting the generality of Sections 8(4) and 8(5) of this Schedule,           Silicon
shall receive, as soon as practicable and in any event no later than           January
30, 2003, landlord agreements or bailee agreements (as the case may be)           in
respect of each location of Borrower or Borrower’s goods identified in           the
Representations.  

	  	
        (d) as
soon as practicable and in any event no later than January 30, 2003,           evidence
satisfactory to Silicon that Pivotal US is in good standing with the           State of
Washington Secretary of State as of a date following the date of this
          Agreement.  

9. CONDITIONS
PRECEDENT

	  	
In
addition to the other conditions precedent set forth in this Agreement, the making of the
initial Loan is subject to the following additional conditions: 

	  	
(A) Silicon shall have received lien searches listing all effective financing
          statements and PPSA registrations which name any Borrower (or any predecessor
          corporation or any tradename thereof or any seller of assets acquired by any
          Borrower outside of the ordinary course of business) as debtor that are filed in
          the applicable filing offices with respect to such Borrower, none of which
          financing statements and PPSA registrations shall cover any of the Collateral of
          any Borrower, except (1) financing statements and PPSA registrations perfecting
          Permitted Liens, (2) financing statements and PPSA registrations as to which
          Silicon has received duly executed authorization by the applicable secured party
          to file executed termination statements, partial release statements, or
          authorizations to discharge, each in form and substance satisfactory to Silicon,
          or (3) as otherwise agreed in writing by Silicon. Without limiting the
          generality of the foregoing, Silicon shall have received: (a) a letter, in form
          and substance satisfactory to Bank, duly executed and delivered by Canadian
          Imperial Bank of Commerce (“Existing Lender”)  

-12- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

	  	
to
Silicon (the           “Payoff Letter”) respecting the amount (or Letters of
Credit in such           amount) necessary to repay (or, in the case of Letters of
Credit, to secure) in           full all of the obligations of Borrower owing to Existing
Lender and authorizing           the filing of executed UCC/PPSA termination statements
or discharges and           evidencing the termination by Existing Lender of its security
interests in the           properties and assets of Borrower or any guarantor of any of
the Obligations;           and (b) except to the extent (if any) permitted by Silicon to
be delivered after           the date of this Agreement pursuant to Section 8(7) of this
Schedule, written           authorization by the respective secured parties to terminate
(or amend, in form           and substance satisfactory to Silicon) each of the following
financing           statements or PPSA registrations: (i) PPSA filing listing Parent as
debtor and           DSM Leasing Ltd. as secured party, registered with the British
Columbia Personal           Property Registry on November 26, 2002 as Registration
#744436A; (ii) PPSA           filing listing Parent as debtor and Gould Leasing Ltd. as
secured party,           registered with the British Columbia Personal Property Registry
on November 25,           2002 as Registration #742571A; (iii) PPSA filing listing Parent
as debtor and           Onset Capital Corporation as secured party, registered with the
British Columbia           Personal Property Registry on November 2, 2001 as Registration
#045256A; (iv)           PPSA filing listing Parent as debtor and Sun Microsystems
Finance as secured           party, registered with the British Columbia Personal
Property Registry on June           14, 2001 as Registration #9509924; and (v) PPSA
filing listing Parent as debtor           and Sun Microsystems Finance as secured party,
registered with the British           Columbia Personal Property Registry on May 2, 2001
as Registration #9432771 .  

	  	
(B) Except
to the extent (if any) permitted by Silicon to be delivered after the           date of
this Agreement pursuant to Section 8(7) of this Schedule, Silicon shall           have
received satisfactory evidence that (i) all returns required to be filed by
          Borrower have been timely filed with Canada Customs and Revenue Agency (Income
          Tax and GST), the Ministry of Finance and Corporate Relations (British
          Columbia), and with the comparable Ministry in those other provinces that
          require Borrower to file such returns, and (ii) all Taxes upon Borrower or its
          properties, assets, income and franchises (including real property Taxes and
          payroll Taxes) have been paid prior to delinquency, except such Taxes that are
          permitted to be, and in fact are, contested in accordance with the second
          sentence of Section 3.8 of the Agreement.  

	  	
(C) Each
Borrower shall execute and deliver to Silicon a continuing guaranty with
          respect to all of the Obligations of all other Borrowers, in form and substance
          satisfactory to Silicon (the “Cross Guaranty”). Throughout the term
of           this Agreement, Borrower shall not cause, suffer, or permit the Cross
Guaranty           to cease to be in full force and effect.  

-13- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

	  	
(D) Each
Borrower (and guarantor of any of the Obligations) shall execute and           deliver to
Silicon a subordination agreement with respect to all indebtedness           and
obligations of all other Borrowers (and guarantors of any of the           Obligations)
owing to such Borrower (and guarantor of any of the Obligations),           on Silicon’s
standard form (the “Intercompany Subordination           Agreement”).
Throughout the term of this Agreement, Borrower shall not           cause, suffer, or
permit the Intercompany Subordination Agreement to cease to be           in full force
and effect.  

	  	
(E) Parent
shall execute and deliver a Pledge Agreement to Silicon, on           Silicon’s
standard form, granting Silicon a security interest in 100% of           the outstanding
stock of Pivotal US in order to secure all of the Obligations.           Borrower shall
cause said Pledge Agreement to continue in full force and effect           at all times
during the term of this Agreement with respect to 100% of the           outstanding stock
of Pivotal US now outstanding or hereafter issued and 100% of           all options and
warrants to acquire stock of Pivotal US hereafter issued.           Borrower represents
and warrants that there are no outstanding options or           warrants to acquire stock
of Pivotal US. Borrower shall deliver to Silicon           possession of the original
stock certificates respecting all of the issued and           outstanding shares of stock
of Pivotal US, together with stock powers with           respect thereto endorsed in
blank.  

	  	
(F) Parent
shall execute and deliver a General Security Agreement (governed under           British
Columbia law and other applicable Canadian laws), granting Silicon a           security
interest in all personal property of Parent (other than Excluded           General
Intangibles) in order to secure all of the Obligations. Such General           Security
Agreement (as the same may be amended, restated, supplemented, or           otherwise
modified from time to time, the “GSA”) and this Agreement           are
intended by the parties to be construed together; provided, however, that to
          the extent that any provision of this Agreement conflicts with any provision of
          the GSA, the provision giving Silicon greater rights or remedies shall govern
          (to the maximum extent permitted by applicable law), it being understood that
          the purpose of this Agreement, the GSA, or any other Loan Document is to add
to,           and not detract from, the rights granted to Silicon under the Loan
Documents;           provided further that, subject to the foregoing, in the case of any
          irreconcilable conflict between the GSA and this Agreement with respect to the
          security interests granted by Parent to Silicon in any Collateral located in
          Canada and the rights and remedies of Silicon relative thereto, the GSA shall
          govern with respect to such conflict.  

-14- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

10. ADDITIONAL
CANADA-RELATED PROVISIONS

	  	
(A) The
Obligations shall be payable in Dollars. The Loans and other extensions of
          credit shall be funded or made in Dollars. The amounts of Obligations and
          Reserves shall be calculated in Dollars. The amounts of Accounts shall be
          determined in Dollars, and any amount of Accounts that is denominated in a
          currency other than Dollars shall be valued in Dollars based on the applicable
          Exchange Rate for such currency as of the date one day prior to the date of
          determination.  

	  	
(B) In
the event that Silicon obtains any judgment in Canadian dollars in respect           of
any liability of Borrower in Dollars, Silicon and Borrower agree that the
          Exchange Rate to be used in determining the amount of the judgment shall be the
          Exchange Rate determined on the Business Day immediately preceding the date of
          such judgment. The liability of the Borrower in respect of any amount due in
          Dollars shall, despite any judgment in Canadian dollars, be discharged only to
          the extent on the Business Day following receipt of the payment or satisfaction
          of the judgment, Silicon is able to purchase the required amount of Dollars
with           Canadian dollars. If the amount of Dollars purchased by Silicon is less
than the           amount of Dollars due to it under this Agreement and the other Loan
Documents,           Borrower agrees, as a separate obligation to indemnify Silicon
against such           loss, and if the amount so purchased exceeds the amount due to
Silicon under           this Agreement and the other Loan Documents, Silicon agrees to
remit such excess           to the Borrower.  

	  	
(C) Without
limiting the generality of the Section 3.8 of the Agreement: (1)           Borrower shall
(a) timely file all returns required to be filed by Borrower with           Canada
Customs and Revenue Agency (Income Tax and GST), the Ministry of Finance           and
Corporate Relations (British Columbia), and with the comparable Ministry in
          those other provinces that require Borrower to file such returns, and (b) pay
          all Taxes upon Borrower or its properties, assets, income and franchises
          (including real property Taxes and payroll Taxes) prior to delinquency, except
          such Taxes that are permitted to be, and in fact are, contested in accordance
          with the second sentence of Section 3.8 of the Agreement; and (2) (a) Borrower
          agrees to deliver to Silicon copies of each of Borrower’s future Canadian
          federal income Tax returns, and any amendments thereto, within thirty (30) days
          of the filing thereof with Canada Customs and Revenue Agency; and (b) anything
          in Section 9.19 of the Agreement to the contrary notwithstanding, if Borrower
          (or any guarantor of the Obligations) shall be required by applicable Canadian
          law or the administration thereof to deduct or withhold any Canadian Taxes from
          or in respect of any sum payable to Silicon hereunder or under the other Loan
          Documents, (i) the sum payable to Silicon shall be increased as may  

-15- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

	  	
be
necessary           so that after making all required deductions or withholdings
(including           deductions or withholdings applicable to additional amounts paid
under this           Section 10(C) of this Schedule), Silicon receives an amount equal to
the sum it           would have received if no such deduction or withholding had been
made, and (ii)           Borrower (or any guarantor of the Obligations) shall make such
deductions or           withholdings, and promptly shall pay the full amount deducted or
withheld to the           relevant taxation or other authority in accordance with
applicable law. Without           limiting the generality of the foregoing, Borrower
agrees that it will pay to           Canada Customs and Revenue Agency, no less
frequently than monthly, the           applicable withholding tax required to be paid by
Silicon under the provisions           of the Tax Act or under the Convention Between the
United States of America and           Canada with Respect to Taxes on Income and on
Capital brought into force August           16, 1984, or any successor treaty of similar
import, whichever is applicable,           with respect to the interest, charges, and
other fees payable by Borrower           hereunder and under the other Loan Documents
and, within ten (10) days of the           end of each month, Borrower agrees to provide
Silicon with documentation           sufficient to establish its full payment of such Tax
amounts.  

	  	
(D) Without
limiting the generality of Section 9.8 of the Agreement, Borrower           agrees to
pay, indemnify, and hold Silicon harmless from (i) any and all           Canadian Taxes,
if any, that may be payable or determined to be payable in           connection with the
execution and delivery of, or consummation of any of the           transactions
contemplated by, this Agreement, any Loans or other extensions of           credit made
pursuant hereto or the other Loan Documents, or the payment or           accrual of any
and all interest, charges, or fees charged under this Agreement           or the other
Loan Documents, including any amounts due under the provisions of           the Tax Act,
other than any such Taxes that result from the establishment in           Canada by
Silicon of a “permanent establishment” within the meaning of           Article
V of the Convention Between the United States of America and Canada with
          Respect to Taxes on Income and on Capital brought into force August 16, 1984,
or           any successor treaty of similar import, (ii) foreign exchange risks or costs
          (other than in respect of FX Forward Contracts pursuant to Section 1 of this
          Schedule), (iii) any and all costs, expenses, reserves, or capital requirements
          imposed upon Silicon with respect to the subject transactions by the Canadian
          governmental authorities or those of any province in which Borrower conducts
its           business (other than those that result solely from it being established
that           Silicon is engaging in the banking business in Canada, which neither
Borrower           nor Silicon in good faith believe Silicon is doing in entering into
this           Agreement and the related transactions), and (iv) any penalties, interest,
or           other liabilities accrued or resulting from any failure of Borrower to pay
such           amounts when first due and payable. Silicon agrees that, during the term
of this           Agreement, it will cooperate in good faith (at Borrower’s expense)
to           assist Borrower in connection with any attempts 

-16- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

	  	
by
Borrower in good faith to           seek appropriate refunds of any and all such Canadian
Tax amounts. This Section           10(D) of this Schedule and Section 9.8 of this
Agreement shall survive the           termination of this Agreement.  

	  	
(E) Notwithstanding
any provision to the contrary contained herein, in no event           shall the aggregate
“interest” (as defined in Section 347 of the Criminal Code, R.S.C. 1985,
c. C-46, as the same may be amended, replaced           or re-enacted from time to time)
payable hereunder exceed the effective annual           rate of interest on the “credit
advanced” (as defined in that section)           hereunder lawfully permitted under
that section and, if any payment, collection           or demand pursuant to this
Agreement in respect of “interest” (as           defined in that section) is
determined to be contrary to the provisions of that           section, such payment,
collection or demand shall be deemed to have been made by           mutual mistake of
Borrower and Silicon and the amount of such payment or           collection shall be
refunded to Borrower; for purposes hereof the effective           annual rate of interest
shall be determined in accordance with generally           accepted actuarial practices
and principles over the term of the Loans on the           basis of annual compounding of
the rate lawfully permitted under that section           and, in the event of a dispute,
a certificate of a Fellow of the Canadian           Institute of Actuaries appointed by
Silicon will be prima facie evidence           for the purposes of such
determination.  

	  	
(F)  Borrower represents, warrants and agrees: 

          

	  	
          (1) 
Section 12 of this Schedule lists all the employee benefit, health, welfare,
          supplemental unemployment benefit, bonus, pension, profit sharing, deferred
          compensation, stock compensation, stock purchase, retirement, hospitalization
          insurance, medical, dental, legal, disability and similar plans or arrangements
          or practices relating to the employees or former employees of Borrower which are
          currently maintained or were maintained at any time in the last five calendar
          years (the “Employee Plans”). 

          

     	 	
          (2) All of the Employee
Plans are and have been established, registered, qualified,
          invested and administered in all respects in accordance with all laws,
          regulations, orders or other legislative, administrative or judicial
          promulgations applicable to the Employee Plans (“Applicable Employee
          Benefit Laws”). No fact or circumstance exists that could adversely affect
          the tax-exempt status of an Employee Plan. 

          

     	 	
                   (3) 
           All obligations regarding the Employee Plans have been satisfied, there are no
          outstanding defaults or violations by any party  

          

-16- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

	  	
to
any Employee Plan and no           taxes, penalties or fees are owing or exigible under
any of the Employee Plans. 

	  	
                  (4) Borrower may unilaterally amend, modify, vary, revoke or terminate, in whole or
          in part, each Employee Plan and take contribution holidays under or withdraw
          surplus from each Employee Plan, subject only to approvals required by
          Applicable Employee Benefit Laws. 

          

	  	
                  (5) No
Employee Plan, nor any related trust or other funding medium thereunder, is
          subject to any pending investigation, examination or other proceeding, action
or           claim initiated by any governmental agency or instrumentality, or by any
other           party (other than routine claims for benefits), and there exists no state
of           facts which after notice or lapse of time or both could reasonably be
expected           to give rise to any such investigation, examination or other
proceeding, action           or claim or to affect the registration of any Employee Plan
required to be           registered.  

	  	
                  (6) All
contributions or premiums required to be made by Borrower under the terms           of
each Employee Plan or by Applicable Employee Benefit Laws have been made in a
          timely fashion in accordance with Applicable Employee Benefit Laws and the
terms           of the Employee Plans, and Borrower does not have, and as of the date of
this           Agreement will not have, any liability (other than liabilities accruing
after           the date of this Agreement) with respect to any of the Employee Plans.
          Contributions or premiums will be paid by Borrower on an accrual basis for the
          period up to the date of this Agreement even though not otherwise required to
be           made until a later date.  

	  	
                  (7) No
amendments have been made to any Employee Plan and no improvements to any
          Employee Plan have been promised and no amendments or improvements to an
          Employee Plan will be made or promised by the Borrowers before the Closing
Date.  

	  	
                  (8) 
There have been no improper withdrawals, applications or transfers of assets
          from any Employee Plan or the trusts or other funding media relating thereto,
          and neither Borrower nor any of its agents has been in breach of any fiduciary
          obligation with respect to the administration of the Employee Plans or the
          trusts or other funding media relating thereto. 

          

	  	
                  (9) Subject
to approvals under Applicable Employee Benefit Laws, Borrower may           amend, revise
or merge any Employee Plan or the assets transferred from any           Employee Plan
with any other arrangement, plan or fund.  

-18- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

	  	
                  (10) Each
Employee Plan is fully funded or fully insured on both an ongoing and           solvency
basis pursuant to the actuarial assumptions and methodology set forth           in
Section 12 of this Schedule.  

	  	
                  (11) None
of the Employee Plans enjoys any special tax status under Applicable           Employee
Benefit Laws, nor have any advance tax rulings been sought or received           in
respect of the Employee Plans.  

	  	
                  (12) 
No insurance policy or any other contract or agreement affecting any Employee
          Plan requires or permits a retroactive increase in premiums or payments due
          thereunder. The level of insurance reserves under each insured Employee Plan is
          reasonable and sufficient to provide for all incurred but unreported claims. 

          

	  	
                  (13) 
Except as disclosed in Section 12 of
this Schedule, none of the Employee Plans           provides benefits to retired
employees or to the beneficiaries or dependents of           retired employees.  

	  	
(G) 
Without limiting the generality of the foregoing, Borrower represents, warrants
          and agrees that: 

          

	  	
                  (1) all
tax returns and reports, assessments for workers’ compensation,           pension
plan payments, unemployment insurance payments, employment standards           payments,
excise taxes and any other statutory payment required by law to be           filed by
Borrower (including without limitation all federal, provincial and           state income
tax returns), have been and will continue to be properly filed on a           timely
basis and are true, complete and correct; and  

	  	
                  (2) There
are no liabilities of Borrower as to property taxes, income taxes,           pension plan
payments, unemployment insurance, payroll taxes, social services           taxes, goods
and services taxes, workers’ compensation assessments,           corporation capital
taxes, employment standards assessments or any other amount           due or owing to any
taxing or Official Body and all taxes and other assessments           which Borrower are
required by law to withhold or to collect have been duly           recorded, withheld and
collected, and have been and will continue to be paid           over to the proper
Official Body.  

-19- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

11. MATERIAL
COPYRIGHTS

[Identify all Material Copyrights and
whether each such Material Copyright is registered (or is the subject of any application
for registration) with the United States Copyright Office] 

12. EMPLOYEE PLANS

[Borrower to complete per Section
10(F) of this Schedule.] 

[remainder of page intentionally
left blank; signature page follows]  

-19- 

	
Silicon Valley Bank
            
            
            
             	
Schedule to Loan and
Security Agreement  
	

IN WITNESS WHEREOF, the
parties hereto have caused this Schedule to Loan and Security Agreement to be executed and
delivered as of the date first above written. 

	Borrower:

PIVOTAL CORPORATION, a British Columbia 

corporation

By                
           
           
           
           
           

       President or Vice President 

By                
           
           
           
           
           

       Secretary or Ass't Secretary	Silicon:

SILICON VALLEY BANK

By                
           
           
           
           
           

Title                
           
           
           
           
        
 

	
PIVOTAL CORPORATION, a Washington corporation

By                
           
           
           

       President or Vice President 

By                
           
           
           

       Secretary or Ass't Secretary<PAGE>

                                                           --------------------
                                                              EXECUTION COPY
                                                           --------------------

================================================================================

                                                 Exhibit 10.18.2

                           Second Amended and Restated
                         RECEIVABLES PURCHASE AGREEMENT
                          Dated as of November 20, 2002
                                      Among
                            CADMUS RECEIVABLES CORP.
                                    as Seller
                                       and
                        CADMUS COMMUNICATIONS CORPORATION
                               as Master Servicer
                                       and
                      BLUE RIDGE ASSET FUNDING CORPORATION
                                  as Purchaser
                                       and
                       WACHOVIA BANK, NATIONAL ASSOCIATION
                                  as the Agent

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----
<S>                                                                                                   <C>
ARTICLE I. PURCHASES AND REINVESTMENTS ..............................................................    5

  Section 1.1  Commitments to Purchase; Limits on Purchaser's Obligations ...........................    5
               ----------------------------------------------------------
  Section 1.2  Purchase Procedures; Assignment of the Purchaser's Interests .........................    5
               ------------------------------------------------------------
  Section 1.3  Reinvestments of Certain Collections; Payment of Remaining Collections ...............    6
               ----------------------------------------------------------------------
  Section 1.4  Asset Interest .......................................................................    8
               --------------

ARTICLE II. COMPUTATIONAL RULES .....................................................................    9

  Section 2.1  Selection of Asset Tranches ..........................................................    9
               ---------------------------
  Section 2.2  Computation of Invested Amount and Purchaser's Tranche Investment ....................    9
               -----------------------------------------------------------------
  Section 2.3  Computation of Concentration Limits and Unpaid Balance ...............................   10
               ------------------------------------------------------
  Section 2.4  Computation of Earned Discount .......................................................   10
               ------------------------------
  Section 2.5  Estimates of Earned Discount Rate, Fees, etc .........................................   10
               --------------------------------------------

ARTICLE III. SETTLEMENTS ............................................................................   11

  Section 3.1  Settlement Procedures ................................................................   11
               ---------------------
  Section 3.2  Deemed Collections; Reduction of Invested Amount, Etc ................................   13
               -----------------------------------------------------
  Section 3.3  Payments and Computations, Etc .......................................................   15
               ------------------------------
  Section 3.4  Treatment of Collections and Deemed Collections ......................................   16
               -----------------------------------------------

ARTICLE IV. FEES AND YIELD PROTECTION ...............................................................   16

  Section 4.1  Fees .................................................................................   16
               ----
  Section 4.2  Yield Protection. ....................................................................   16
               ----------------
  Section 4.3  Funding Losses .......................................................................   18
               --------------

ARTICLE V. CONDITIONS OF PURCHASES ..................................................................   19

  Section 5.1  Conditions Precedent to Initial Purchase .............................................   19
               ----------------------------------------
  Section 5.2  Conditions Precedent to All Purchases and Reinvestments ..............................   21
               -------------------------------------------------------

ARTICLE VI. REPRESENTATIONS AND WARRANTIES ..........................................................   22

  Section 6.1  Representations and Warranties of the Seller Parties .................................   22
               ----------------------------------------------------

ARTICLE VII. GENERAL COVENANTS OF THE SELLER PARTIES ................................................   27

  Section 7.1  Affirmative Covenants of the Seller Parties ..........................................   27
               -------------------------------------------
  Section 7.2  Reporting Requirements of the Seller Parties .........................................   29
               --------------------------------------------
  Section 7.3  Negative Covenants of the Seller Parties .............................................   31
               ----------------------------------------
  Section 7.4  Separate Corporate Existence of the Seller. ..........................................   33
               ------------------------------------------
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                                     <C>
ARTICLE VIII. ADMINISTRATION AND COLLECTION .........................................................   37

  Section 8.1  Designation of Master Servicer .......................................................   37
               ------------------------------
  Section 8.2  Duties of Master Servicer ............................................................   38
               -------------------------
  Section 8.3  Servicer Advances ....................................................................   39
               -----------------
  Section 8.4  Servicer Defaults ....................................................................   40
               -----------------
  Section 8.5  Rights of the Agent ..................................................................   41
               -------------------
  Section 8.6  Responsibilities of the Seller Parties ...............................................   42
               --------------------------------------
  Section 8.7  Further Action Evidencing Purchases and Reinvestments ................................   42
               -----------------------------------------------------
  Section 8.8  Application of Collections ...........................................................   44
               --------------------------

ARTICLE IX. SECURITY INTEREST .......................................................................   44

  Section 9.1  Grant of Security Interest ...........................................................   44
               --------------------------
  Section 9.2  Further Assurances ...................................................................   44
               ------------------
  Section 9.3  Remedies .............................................................................   44
               --------

ARTICLE X. LIQUIDATION EVENTS .......................................................................   44

  Section 10.1 Liquidation Events ...................................................................   44
               ------------------
  Section 10.2 Remedies .............................................................................   46
               --------

ARTICLE XI. THE AGENT ...............................................................................   46

  Section 11.1 Authorization and Action .............................................................   46
               ------------------------
  Section 11.2 Agent's Reliance, Etc. ...............................................................   47
               ---------------------
  Section 11.3 Wachovia and Affiliates ..............................................................   47
               -----------------------

ARTICLE XII. ASSIGNMENT OF THE PURCHASER'S INTEREST .................................................   47

  Section 12.1 Restrictions on Assignments ..........................................................   47
               ---------------------------
  Section 12.2 Rights of Assignee ...................................................................   48
               ------------------
  Section 12.3 Terms and Evidence of Assignment .....................................................   48
               --------------------------------
  Section 12.4 Rights of Collateral Agent ...........................................................   48
               --------------------------

ARTICLE XIII. INDEMNIFICATION .......................................................................   49

  Section 13.1 Indemnities by the Seller ............................................................   49
               -------------------------
  Section 13.2 Indemnities by Master Servicer .......................................................   51
               ------------------------------

ARTICLE XIV. MISCELLANEOUS ..........................................................................   51

  Section 14.1 Amendments, Etc ......................................................................   52
               ---------------
  Section 14.2 Notices, Etc. ........................................................................   52
               ------------
  Section 14.3 No Waiver; Remedies ..................................................................   52
               -------------------
  Section 14.4 Binding Effect; Survival .............................................................   52
               ------------------------
  Section 14.5 Costs, Expenses and Taxes ............................................................   53
               -------------------------
  Section 14.6 No Proceedings .......................................................................   53
               --------------
  Section 14.7 Confidentiality of the Seller Information ............................................   54
               -----------------------------------------
  Section 14.8 Confidentiality of Program Information. ..............................................   56
               --------------------------------------
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                   <C>
Section 14.9 Captions and Cross References. .......................................................   57
             -----------------------------
Section 14.10 Integration. ........................................................................   58
              -----------
Section 14.11 Governing Law .......................................................................   58
              -------------
Section 14.12 Waiver Of Jury Trial ................................................................   58
              --------------------
Section 14.13 Consent To Jurisdiction; Waiver Of Immunities .......................................   58
              ---------------------------------------------
Section 14.14 Execution in Counterparts ...........................................................   59
              -------------------------
Section 14.15 No Recourse Against Other Parties ...................................................   59
              ---------------------------------
</TABLE>

                                    APPENDIX

Appendix A   Definitions

                                    SCHEDULES

SCHEDULE 6.1(i)   Description of Material Adverse Changes
SCHEDULE 6.1(n)   List Of Offices Of the Master Servicer And the Seller Where
                  Records Are Kept
SCHEDULE 6.1(o)   List of Lock-Box Banks
SCHEDULE 14.2     Notice Addresses
SCHEDULE A        Initial Originators and Servicers
SCHEDULE B        Fiscal Periods

                                    EXHIBITS

EXHIBIT 1.2(a)    Form of Purchase Request
EXHIBIT 3.1(a-1)  Form of Settlement Report
EXHIBIT 3.1(a-2)  Form of Interim Settlement Report
EXHIBIT 5.1(h)    Form of Opinion of Special Counsel for the Seller Parties
EXHIBIT A-1       Form of Lock-Box Agreement
EXHIBIT B         Form of Certificate of Financial Officer

                                      iii

<PAGE>

SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

                          Dated as of November 20, 2002

          THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, is by and
among:

          (1)  CADMUS RECEIVABLES CORP., a Virginia corporation (together with
     its successors and permitted assigns, the "Seller"),

          (2)  CADMUS COMMUNICATIONS CORPORATION, a Virginia corporation
     (together with its successors, "Cadmus"), as Master Servicer hereunder (in
     such capacity, together with any successor Master Servicer appointed
     pursuant to Section 8.1, the "Master Servicer"; Cadmus, in its capacity as
     the Master Servicer, together with the Seller, each a "Seller Party" and
     collectively the "Seller Parties"),

          (3)  BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware corporation
     (together with its successors and assigns, the "Purchaser"), and

          (4)  WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
     association ("Wachovia"), as agent for the Secured Parties (as defined
     below) (in such capacity, together with any successors thereto in such
     capacity, the "Agent"),

and amends and restated in its entirety that certain Amended and Restated
Receivables Purchase Agreement dated as of January 2, 2001 by and among the
parties, as amended from time to time (the "Existing Agreement"). Unless
otherwise indicated, capitalized terms used in this Agreement are defined in
Appendix A.

                                   Background

          1.   The Seller is a wholly-owned direct subsidiary of Cadmus.

          2.   Cadmus, through the Originators and its other Subsidiaries, is
     engaged in the business of providing high-end, integrated graphic
     communications services to its customers.

          3.   Each of the Originators, Cadmus and the Seller have entered into
     the Sale Agreement pursuant to which each Originator has transferred, and
     hereafter will transfer, to the Seller all of its right, title and interest
     in and to the Pool Receivables and certain related property.

          4.   The Seller has requested the Purchaser, and the Purchaser has
     agreed, subject to the terms and conditions contained in this Agreement, to
     purchase from the Seller from time to time an undivided percentage
     interest, referred to herein as the Asset Interest, in Pool Receivables and
     related property.

                                        4

<PAGE>

          5.   The Seller and the Purchaser also desire that, subject to the
     terms and conditions of this Agreement, certain of the daily Collections in
     respect of the Asset Interest be reinvested in Pool Receivables, which
     reinvestment shall constitute part of the Asset Interest.

          6.   Wachovia has been requested, and is willing, to act as the Agent
     under this Agreement.

          7.   The parties wish to amend and restate the Existing Agreement as
     hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:

                                   ARTICLE I.
                           PURCHASES AND REINVESTMENTS

     Section 1.1 Commitments to Purchase; Limits on Purchaser's Obligations.

          Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article V), from time to time during the
Revolving Period, the Seller may request that the Purchaser purchase from the
Seller ownership interests in Pool Receivables and Related Assets, and the
Purchaser shall make such purchase (each being a "Purchase"); provided that no
Purchase shall be made by the Purchaser if, after giving effect thereto, based
upon the Settlement Report delivered on the most recent Reporting Date pursuant
to clause (a) of the definition of Reporting Date either (a) the Invested Amount
would exceed $45,000,000 (as adjusted pursuant to Section 3.2(b)) (the "Purchase
Limit"), or (b) the Asset Interest, expressed as a percentage of Net Pool
Balance, would exceed 100%; and provided, further that (i) each Purchase made
pursuant to this Section 1.1 shall have a purchase price equal to at least
$10,000, (ii) Purchases made pursuant to this Section 1.1 shall occur on
Settlement Dates and on up to two (2) additional Business Days in any Settlement
Period, and (iii) the number of Purchases pursuant to this Section 1.1 and
Aggregate Reductions pursuant to Section 3.2(b) shall not exceed, in the
aggregate, three (3) in any Settlement Period (or two (2) in any Settlement
Period in which at least one of such Purchases or one of such Aggregate
Reductions does not occur on the applicable Settlement Date).

     Section 1.2 Purchase Procedures; Assignment of the Purchaser's Interests.

     (a)  Purchase Request. Each Purchase from the Seller by the Purchaser shall
be made on irrevocable notice from the Seller to the Agent (on behalf of the
Purchaser) received by the Agent not later than 12:00 noon (New York City time)
two Business Days prior to the date of such proposed Purchase. Each such notice
of a proposed Purchase shall be substantially in the form of Exhibit 1.2(a) and
shall specify, among other items, the desired amount and date of such Purchase.
The Agent shall promptly upon receipt notify the Purchaser of any such notice.

     (b)  Funding of Purchase. On the date of each Purchase, the Purchaser
shall, upon satisfaction of the applicable conditions set forth in Article V,
make available to the Seller the

                                        5

<PAGE>

amount of its Purchase in same day funds by wire transfer to an account
designated in writing by the Seller.

     (c)  Assignment of Asset Interest. The Seller hereby sells, assigns and
transfers to the Purchaser, effective on and as of the date of each Purchase and
each Reinvestment by the Purchaser hereunder, the Asset Interest in the Pool
Receivables and Related Assets.

     Section 1.3 Reinvestments of Certain Collections; Payment of Remaining
Collections.

     (a)  On the close of business on each day during the period from the date
of the first Purchase to the Termination Date, the Master Servicer will, out of
all Collections received on such day from Pool Receivables and Related Assets:

          (i)   determine the portion of the Collections attributable to the
     Asset Interest by multiplying (A) the amount of such Collections times (B)
     the Purchaser's Share;

          (ii)  out of the portion of such Collections allocated to the Asset
     Interest pursuant to clause (i), identify and hold in trust for the
     Purchaser an amount equal to the sum of the estimated amount (based on the
     rate information provided by the Agent pursuant to Section 2.5) of Earned
     Discount and CP Costs accrued in respect of each Asset Tranche, all other
     amounts due to the Purchaser or the Agent hereunder and the Purchaser's
     Share of the Servicer's Fee (in each case, accrued through such day) and
     not so previously accounted for; and

          (iii) apply the Collections allocated to the Asset Interest pursuant
     to clause (i) and not required to be identified and held in trust pursuant
     to clause (ii) to the purchase from the Seller of ownership interests in
     Pool Receivables and Related Assets (each such purchase being a
     "Reinvestment"); provided that:

                (A)  if (I) the then Asset Interest would exceed 100% or (II)
          the Invested Amount would exceed the Purchase Limit, then the Master
          Servicer shall not reinvest to the extent of such excess, but shall
          identify and hold in trust for the benefit of the Purchaser, a portion
          of such Collections which, together with other Collections previously
          so identified and then so held, shall equal the amount necessary to
          reduce the Invested Amount to the Purchase Limit and the Asset
          Interest to 100%; and

                (B)  if any of the conditions precedent to Reinvestment in
          clause (a), (b) and (d) of Section 5.2, subject to the proviso set
          forth in Section 5.2, are not satisfied, then the Master Servicer
          shall not reinvest any of such remaining Collections, but shall
          identify them and hold them in trust for the benefit of the Purchaser;

          (iv)  out of the portion of Collections not allocated to the Asset
     Interest pursuant to clause (i), pay to the Master Servicer the Seller's
     Share of the Servicer's Fee accrued through such day and not previously
     paid; and

                                        6

<PAGE>

          (v)  pay to the Seller (A) the remaining portion of Collections not
     allocated to the Asset Interest pursuant to clause (i) net of the amount
     paid to the Master Servicer pursuant to clause (iv) and (B) the Collections
     applied to Reinvestment pursuant to clause (iii).

     (b)  Unreinvested Collections. The Master Servicer shall identify and hold
in trust for the benefit of the Purchaser all Collections allocated to the Asset
Interest pursuant to clause (i) of Section 1.3(a) which, pursuant to clause
(iii) of Section 1.3(a), may not be reinvested in the Pool Receivables and
Related Assets, provided that unless otherwise requested by the Agent after a
Liquidation Event, such Collections need not be held in a segregated account.
If, prior to the date when such Collections are required to be paid to the Agent
for the benefit of the Purchaser pursuant to Section 1.3(c)(iv), (1) the amount
of Collections so identified exceeds the greater of (x) the amount, if any,
necessary to reduce the Invested Amount to the Purchase Limit and (y) the Asset
Interest to 100%, and (2) the conditions precedent to Reinvestment set forth in
clauses (a), (b) and (d) of Section 5.2, subject to the proviso set forth in
Section 5.2, are satisfied, then the Master Servicer shall apply such
Collections (or, if less, a portion of such Collections equal to the amount of
such excess) to the making of a Reinvestment.

     (c)  Payment of Amounts. Unless a Lock-Box Notice has been given and
alternate instructions have been given by the Agent pursuant thereto:

          (i)   The Master Servicer shall pay all amounts identified pursuant to
     Section 1.3(a)(ii) in respect of Earned Discount on an Asset Tranche funded
     by a Liquidity Funding to the Agent, on the Purchaser's behalf, on the last
     day of the then current Yield Period for an Asset Tranche, as provided in
     Section 3.1.

          (ii)  The Master Servicer shall pay all amounts of Collections
     identified pursuant to Section 1.3(a)(ii) in respect of CP Costs on any
     Asset Tranche funded by Commercial Paper Notes to the Agent, on the
     Purchaser's behalf, on the Settlement Date following the last day of the
     then current CP Accrual Period for such Asset Tranche, as provided in
     Section 3.1.

          (iii) The Master Servicer shall pay all amounts of Collections
     identified pursuant to Section 1.3(a)(ii) and not applied pursuant to
     clauses (i) or (ii) above to the Agent, on the Purchaser's behalf, on each
     Settlement Date for each Settlement Period, as provided in Section 3.1.

          (iv)  The Master Servicer shall pay all other amounts identified and
     held in trust for the benefit of the Purchaser pursuant to Section 1.3(a)
     to the Agent for the account of the Purchaser (A) on the last day of the
     then current Yield Period for any Asset Tranche funded by a Liquidity
     Funding, as notified pursuant to Section 3.1(b), in an amount not exceeding
     the Purchaser's Tranche Investment of such Asset Tranche, and (B) on the
     last day of the then current CP Accrual Period for any Asset Tranche funded
     by Commercial Paper Notes, as notified pursuant to Section 3.1(b), in an
     amount not exceeding the Purchaser's Tranche Investment of such Asset
     Tranche; provided, however, no payment

                                        7

<PAGE>

     shall be made under clause (B) above unless the Purchaser's Tranche
     Investments of all Asset Tranches, if any, funded by Liquidity Fundings
     shall have been reduced to zero.

     (d)  Funds Under Sale Agreement. Upon the written request of the Agent, on
the Purchaser's behalf, given at any time when (i) based on the most recent
Settlement Report, the Asset Interest would exceed 100% or the Invested Amount
would exceed the Purchase Limit, or (ii) a Liquidation Event or Unmatured
Liquidation Event shall have occurred and be continuing, the Seller shall hold
all funds that under the Sale Agreement would be applied to repay principal of
the Seller Notes owing to the Originators. The Seller may make withdrawals of
such funds only for the purposes of (i) at any time, purchasing Receivables from
any Originator in accordance with the Sale Agreement; (ii) on the Settlement
Date for any Settlement Period, making payments in accordance with the last
sentence of Section 3.1(c)(ii), and (iii) on the Settlement Date for any
Settlement Period, if, on the basis of the most recent Settlement Report, and
after giving effect to any payment made to the Master Servicer on such date
pursuant to the last sentence of Section 3.1(c)(ii), the Invested Amount does
not exceed the Purchase Limit and the Asset Interest does not exceed 100%, and
provided that no Liquidation Event or Unmatured Liquidation Event shall have
occurred and be continuing, repaying principal of the Seller Notes in accordance
with this Agreement and the Sale Agreement.

     (e)  If, on any day any payment is required to be made pursuant to any of
the provisions of Section 1.3(c), the Seller does not have sufficient funds
available to make any such payment, the Master Servicer may make a Servicer
Advance in an amount necessary for the payment, subject to the restrictions set
forth in Section 8.3.

     (f)  Notwithstanding anything herein to the contrary, the Master Servicer
may recover any Servicer Advance that it has made in respect of any Receivable
or related Contract from amounts received in respect of such Receivable or
related Contract. If the Master Servicer has previously made a Servicer Advance
which it later determines to be nonrecoverable, the Master Servicer may,
following delivery of an officer's certificate to the Agent detailing the Master
Servicer's determination that such Servicer Advance is nonrecoverable, recover
the amount of such Servicer Advance from Collections. Any amount so recovered by
the Master Servicer shall not be a Collection for purposes of this Section 1.3.

     Section 1.4 Asset Interest.

     (a)  Components of Asset Interest. On any date the Asset Interest will
represent the Purchaser's undivided percentage ownership interest in all then
outstanding Pool Receivables and all Related Assets with respect to such Pool
Receivables as at such date.

     (b)  Computation of Asset Interest. On any date, the Asset Interest will be
equal to a percentage equivalent of the following fraction:

                                     IA + RR
                                   -----------
                                       NPB

          where:

          IA   =   Invested Amount as of the time of such computation;

                                        8

<PAGE>

          RR   =   the then Required Reserve; and

          NPB  =   the then Net Pool Balance

provided, however, that the Asset Interest during the Liquidation Period shall
equal 100% and shall at no time exceed 100%.

     (c)  Frequency of Computation. The Asset Interest shall be computed (i) as
provided in Section 3.1, as of the Cut-Off Date for each Settlement Period, and
(ii) on the Settlement Date following each Reporting Date, after giving effect
to the payments made pursuant to Section 3.1. In addition, at any time, the
Agent, on the Purchaser's behalf, may require the Master Servicer to provide a
Settlement Report, based on the information then available to the Master
Servicer, for purposes of computing the Asset Interest or the Purchase Limit as
of any other date, and the Master Servicer agrees to do so within five (5) (or
three (3), if a Liquidation Event has occurred and is continuing) Business Days
of its receipt of the Agent's request.

                                  ARTICLE II.
                               COMPUTATIONAL RULES

     Section 2.1 Selection of Asset Tranches.

          The Agent shall, from time to time for purposes of computing Earned
Discount on that portion of the Asset Interest funded with Liquidity Fundings,
divide the Asset Interest into Asset Tranches; in doing so, the Agent shall,
prior to the occurrence of a Liquidation Event, consult with the Seller. The
applicable Earned Discount Rate may be different for each Asset Tranche funded
by a Liquidity Funding. The total Invested Amount shall be allocated to the
Asset Tranches by the Agent, on the Purchaser's behalf, to reflect the funding
sources for the Asset Interest such that the total amount of the Purchaser's
Tranche Investments of such Asset Tranches shall equal the Invested Amount, so
that:

          (a)  there will be a single Asset Tranche with a Purchaser's Tranche
     Investment equal to the excess of the Invested Amount over the aggregate
     amount allocated at such time pursuant to clause (b) below, which Asset
     Tranche shall reflect the portion of the Asset Interest funded by
     Commercial Paper Notes; and

          (b)  there will be one or more Asset Tranches, selected by the Agent,
     on the Purchaser's behalf, reflecting the portion or portions of the Asset
     Interest funded by outstanding Liquidity Fundings.

     Section 2.2 Computation of Invested Amount and Purchaser's Tranche
Investment.

          In making any determination of the Invested Amount and any Purchaser's
Tranche Investment, the following rules shall apply:

                                        9

<PAGE>

     (a)  the Invested Amount shall not be considered reduced by any allocation,
setting aside or distribution of any portion of Collections unless such
Collections shall have been actually delivered hereunder to the Agent, on the
Purchaser's behalf;

     (b)  the Invested Amount shall not be considered reduced by any
distribution of any portion of Collections if at any time such distribution is
rescinded or must otherwise be returned for any reason; and

     (c)  if there is any reduction in the Invested Amount, there shall be a
corresponding reduction in the Purchaser's Tranche Investment with respect to
one or more Asset Tranches selected by the Agent, on the Purchaser's behalf, in
its discretion.

     Section 2.3 Computation of Concentration Limits and Unpaid Balance.

          The Obligor Concentration Limits and the aggregate Unpaid Balance of
Pool Receivables of any Obligor and its Affiliated Obligors (if any) shall be
calculated as if such Obligor and its Affiliated Obligors were one Obligor.

     Section 2.4 Computation of Earned Discount.

          In making any determination of Earned Discount, the following rules
shall apply:

     (a)  the Agent, on the Purchaser's behalf, shall determine the Earned
Discount accruing with respect to each Asset Tranche funded with a Liquidity
Funding for each Yield Period, in accordance with the definition of Earned
Discount;

     (b)  no provision of this Agreement shall require the payment or permit the
collection of Earned Discount in excess of the maximum permitted by applicable
law; and

     (c)  the Earned Discount for any Asset Tranche shall not be considered paid
by any distribution if at any time such distribution is rescinded or must
otherwise be returned for any reason.

It is the intent of the Purchaser to fund the Asset Interest by the issuance of
Commercial Paper Notes. If the Purchaser is unable, or determines that it is
undesirable, to issue Commercial Paper Notes to fund the Asset Interest, or is
unable to repay such Commercial Paper Notes upon the maturity thereof, the
Purchaser will draw on Liquidity Fundings to fund the Asset Interest to the
extent Liquidity Fundings are available. If the Purchaser funds or refinances
its investment in an Asset Tranche through a Liquidity Funding, in lieu of
paying CP Costs on the Invested Amount thereof, the Seller will pay Earned
Discount thereon at a Bank Rate selected in accordance with this Agreement.
Nothing herein shall be deemed to constitute a commitment of the Purchaser to
issue Commercial Paper Notes.

     Section 2.5 Estimates of Earned Discount Rate, Fees, etc.

          For purposes of determining the amounts required to be identified and
held in trust by Master Servicer pursuant to Section 1.3, the Agent, on the
Purchaser's behalf, shall

                                       10

<PAGE>

notify the Master Servicer (and, if Cadmus is not the Master Servicer, the
Seller) from time to time of the Purchaser's Tranche Investment of each Asset
Tranche, the Earned Discount Rate applicable to each Asset Tranche funded by a
Liquidity Funding and the rates at which fees and other amounts are accruing
hereunder. It is understood and agreed that (i) the CP Costs for any Asset
Tranche funded through the issuance of Commercial Paper Notes are determined in
arrears and may change from one applicable CP Accrual Period to the next, (ii)
the Earned Discount Rate for any Asset Tranche funded through a Liquidity
Funding may change from one applicable Yield Period to the next, (iii) the Bank
Rate used to calculate the Earned Discount Rate may change from time to time
during an applicable Yield Period, (iv) certain rate information provided by the
Agent to the Master Servicer shall be based upon the Agent's good faith
estimate, (v) the amount of Earned Discount actually accrued with respect to an
Asset Tranche funded through a Liquidity Funding during any Yield Period may
exceed, or be less than, the amount identified with respect thereto by Master
Servicer, and (vi) the amount of fees or other amounts payable by the Seller
hereunder which have accrued hereunder with respect to any Settlement Period may
exceed, or be less than, the amount identified with respect thereto by the
Master Servicer. Failure to identify and hold in trust any amount so accrued
shall not relieve the Master Servicer of its obligation to remit Collections to
the Agent, for the benefit of the Purchaser, with respect to such accrued
amount, as and to the extent provided in Section 3.1.

                                  ARTICLE III.
                                   SETTLEMENTS

     Section 3.1 Settlement Procedures.

          The parties hereto will take the following actions with respect to
each Settlement Period:

     (a)  Settlement Report. On the Reporting Date, the Master Servicer shall
deliver to the Agent, on the Purchaser's behalf, a report in the form of Exhibit
3.1(a-1) or, in the case of a Reporting Date pursuant to clause (b) of the
definition of the Reporting Date, in the form of Exhibit 3.1(a-2) (each, a
"Settlement Report").

     (b)  Earned Discount and CP Costs; Other Amounts Due.

          (i)  (A) On or before 12:00 noon (Atlanta, Georgia time) two (2)
     Business Days before the last day of each Yield Period, the Agent shall
     notify the Master Servicer of the amount of Earned Discount accrued with
     respect to any Asset Tranche corresponding to such Yield Period, and (B) on
     or before 12:00 noon (Atlanta, Georgia time) five (5) Business Days before
     each Reporting Date, the Agent shall notify the Master Servicer of the
     amount of CP Costs accrued during the CP Accrual Period then most recently
     ended with respect to any Asset Tranche funded with Commercial Paper Notes
     during all or any portion of such CP Accrual Period.

          (ii) The Master Servicer shall pay to the Agent for the benefit of the
     Purchaser the amount of such Earned Discount before 12:00 noon (Atlanta,
     Georgia time) on the

                                       11

<PAGE>

     last day of such Yield Period and the amount of such CP Costs before 12:00
     noon (Atlanta, Georgia time) on each Settlement Date.

          (iii) On or before 12:00 noon (Atlanta, Georgia time) on the Business
     Day before each Reporting Date, the Agent, on the Purchaser's behalf, shall
     notify the Master Servicer of all Broken Funding Costs, fees and other
     amounts accrued and payable by the Seller under this Agreement during the
     prior calendar month (other than amounts described in clause (c) below).
     The Master Servicer shall pay to the Agent, for the benefit of the
     Purchaser, the amount of such Broken Funding Costs, fees and other amounts
     on the Settlement Date for such month. Such payments shall be made out of
     amounts identified pursuant to Section 1.3 for such payment; provided,
     however, that to the extent that Collections attributable to the Asset
     Interest during such Settlement Period are not sufficient to make such
     payment, the shortfall shall be paid from amounts paid to the Seller
     pursuant to Section 1.3(a)(v) and, if such amounts are not sufficient to
     fully cover such shortfall, the Master Servicer may make a Servicer Advance
     in the amount of such remaining shortfall in accordance with, and subject
     to the provisions of Section 8.3.

     (c)  Asset Interest Computations.

          (i)   On the Reporting Date for each Settlement Period, the Master
     Servicer shall compute, as of the related Cut-Off Date and based upon the
     assumptions in the next sentence, (A) the Asset Interest, (B) the amount of
     the reduction or increase (if any) in the Invested Amount and the
     percentage interest represented by the Asset Interest since the immediately
     preceding Cut-Off Date, (C) the excess (if any) of the Asset Interest over
     100%, and (D) the excess (if any) of the Invested Amount over the Purchase
     Limit. Such calculations shall be based upon the assumptions that (x) the
     information in the Settlement Report is correct, and (y) Collections
     identified pursuant to Section 1.3(b) will be paid to the Agent, for the
     benefit of the Purchaser, on the Settlement Date for such Settlement
     Period.

          (ii)  If, according to the computations made pursuant to clause (i)
     above, either (x) the Asset Interest exceeds 100% or (y) the Invested
     Amount exceeds the Purchase Limit, then on the Settlement Date for such
     Settlement Period, the Master Servicer shall pay to the Agent, for the
     benefit of the Purchaser, (to the extent of Collections during the related
     Settlement Period attributable to all Asset Tranches and not previously
     paid to the Agent and from other funds of the Seller) the amount necessary
     to reduce the Invested Amount to the Purchase Limit and the Asset Interest
     to 100%, subject, however, to the proviso to Section 1.3(c)(iv). Such
     payment shall be made out of amounts identified pursuant to Section 1.3 for
     such purpose and, to the extent such amounts were not so identified, the
     Seller hereby agrees to pay such amounts to the Master Servicer to the
     extent of Collections applied to Reinvestment under Section 1.3 during the
     relevant Settlement Period.

          (iii) In addition to the payments described in clause (ii) above,
     during the Liquidation Period, the Master Servicer shall pay to the Agent,
     for the benefit of the Purchaser, all amounts identified pursuant to
     Section 1.3 (A) on the last day of the current

                                       12

<PAGE>

     Yield Period for any Asset Tranche funded by a Liquidity Funding, in an
     amount not exceeding the Purchaser's Tranche Investment of such Asset
     Tranche, and (B) after reduction to zero of the Purchaser's Tranche
     Investments of the Asset Tranches, if any, funded by Liquidity Fundings, on
     the last day of the each CP Accrual Period, in an amount not exceeding the
     Purchaser's Tranche Investment of the Asset Tranche funded by Commercial
     Paper Notes.

     (d)  Order of Application. Upon receipt by the Agent, on the Purchaser's
behalf, of funds distributed pursuant to this Section 3.1, the Agent shall apply
them to the items specified in the subclauses below, in the order of priority of
such subclauses:

          (i)   to accrued Earned Discount , CP Costs and Broken Funding Costs,
     plus any previously accrued Earned Discount, CP Costs and Broken Funding
     Costs not paid ;

          (ii)  to the Purchaser's Share of the accrued and unpaid Servicer's
     Fee (if the Master Servicer is not Cadmus or its Affiliate);

          (iii) to the Usage Fee and the Unused Fee accrued during such
     Settlement Period, plus any previously accrued Usage Fee and Unused Fee not
     paid on a prior Settlement Date;

          (iv)  to the reduction of Invested Amount, to the extent such
     reduction is required under Section 3.1(c);

          (v)   to other accrued and unpaid amounts owing to the Purchaser or
     the Agent hereunder (except Earned Discount on any Asset Tranche funded by
     a Liquidity Funding which has accrued but is not yet overdue under Section
     1.3(c)); and

          (vi)  to the Purchaser's Share of the accrued and unpaid Servicer's
     Fee (if the Master Servicer is Cadmus or its Affiliate);

     (e)  Non-Distribution of Servicer's Fee. The Agent hereby consents (which
consent may be revoked at any time after the occurrence and during the
continuance of a Liquidation Event), to the retention by the Master Servicer of
the amounts (if any) identified pursuant to Section 1.3 in respect of the
Servicer's Fee, in which case no distribution shall be made in respect of the
Purchaser's Share of the Servicer's Fee pursuant to clause (d) above.

     (f)  Delayed Payment. If on any day described in this Section 3.1 (or in
Section 1.3(c)), because Collections during the relevant CP Accrual Period or
Yield Period were less than the aggregate amounts payable, the Master Servicer
shall not make any payment otherwise required, the next available Collections in
respect of the Asset Interest shall be applied to such payment, and no
Reinvestment shall be permitted hereunder until such amount payable has been
paid in full.

     Section 3.2 Deemed Collections; Reduction of Invested Amount, Etc.

     (a)  Deemed Collections. If on any day

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<PAGE>

          (i)  the Unpaid Balance of any Pool Receivable is

               (A) reduced as a result of any defective, rejected or returned
          merchandise or services, any cash discount, or any other adjustment by
          any Seller Party or any Affiliate thereof, or as a result of any
          tariff or other governmental or regulatory action, or

               (B) reduced or canceled as a result of a setoff in respect of any
          claim by the Obligor thereof (whether such claim arises out of the
          same or a related or an unrelated transaction), or

               (C) reduced on account of the obligation of any Seller Party or
          any Affiliate thereof to pay to the related Obligor any rebate or
          refund, or

               (D) less than the amount included in calculating the Net Pool
          Balance for purposes of any Settlement Report (for any reason other
          than such Receivable becoming a Defaulted Receivable), or

          (ii) any of the representations or warranties of the Seller set forth
     in Section 6.1(l) or (p) were not true when made with respect to any Pool
     Receivable, or any of the representations or warranties of the Seller set
     forth in Section 6.1(l) are no longer true with respect to any Pool
     Receivable, or any Pool Receivable is repurchased by the applicable
     Originator pursuant to the Sale Agreement,

then, on such day, the Seller shall be deemed to have received a Collection of
such Pool Receivable

          (I)  in the case of clause (i) above, in the amount of such reduction
     or cancellation or the difference between the actual Unpaid Balance and the
     amount included in calculating such Net Pool Balance, as applicable; and

          (II) in the case of clause (ii) above, in the amount of the Unpaid
     Balance of such Pool Receivable.

Collections deemed received by the Seller under this Section 3.2(a) are herein
referred to as "Deemed Collections." The Purchaser shall, with respect to any
Pool Receivable as to which the full Deemed Collection due under clause II above
has been received by the Purchaser, upon receipt of such Deemed Collection by
the Purchaser, reconvey to the Seller, without recourse, representation or
warranty by the Purchaser, all of the Purchaser's right, title and interest in
such Pool Receivable. Such Pool Receivable shall be released from any Lien
thereon created hereby and the Seller shall be deemed to reconvey to the related
Originator, without recourse, representation or warranty by the Seller, all of
the Seller's right, title and interest in such Pool Receivable.

     (b) Seller's Optional Reduction of Invested Amount. The Seller may at any
time elect to reduce the Invested Amount as follows:

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<PAGE>

          (i)   the Seller shall provide the Agent, on the Purchaser's behalf,
     with prior written notice in conformity with the Required Notice Period (a
     "Reduction Notice") of any proposed reduction of the aggregate Invested
     Amount. Such Reduction Notice shall designate (i) the date (the "Proposed
     Reduction Date") upon which any such reduction of aggregate Invested Amount
     shall occur (which date shall give effect to the applicable Required Notice
     Period), and (ii) the amount of aggregate Invested Amount to be reduced
     which shall be applied ratably to all Asset Tranches in accordance with the
     respective Invested Amounts thereof (the "Aggregate Reduction"). Only one
     (1) Reduction Notice shall be outstanding at any time.

          (ii)  on the Proposed Reduction Date, the Master Servicer shall
     refrain from reinvesting Collections pursuant to Section 1.3 until the
     amount thereof not so reinvested shall equal the desired amount of
     Aggregate Reduction, and

          (iii) the Master Servicer shall hold such Collections in trust for the
     Purchaser, pending payment to the Agent, as provided in Section 1.3;

provided that:

                (A) the amount of any such Aggregate Reduction shall be in (1)
          an amount of at least $10,000 or (2) an amount equal to the remaining
          Invested Amount,

                (B) the Seller shall use reasonable efforts to attempt to choose
          an Aggregate Reduction amount, and the date of commencement thereof,
          so that such reduction shall commence and conclude in the same
          Settlement Period,

                (C) unless the Invested Amount will be reduced to zero, after
          giving effect to such Aggregate Reduction, the Invested Amount will be
          at least $25,000,000,

                (D) Aggregate Reductions made pursuant to this Section 3.2(b)
          shall occur on Settlement Dates and on up to two (2) additional
          Business Days in any Settlement Period, and

                (E) the number of Purchases pursuant to Section 1.1 and
          Aggregate Reductions pursuant to this Section 3.2(b) shall not exceed,
          in the aggregate, three (3) in any Settlement Period (or two (2) in
          any Settlement Period in which at least one of such Purchases or one
          of such Aggregate Reductions does not occur on the applicable
          Settlement Date).

     Section 3.3 Payments and Computations, Etc.

     (a)  Payments. All amounts to be paid to the Agent or any other Person or
deposited by the Seller or the Master Servicer hereunder (other than amounts
payable under Section 4.2) shall be paid or deposited in accordance with the
terms hereof no later than 12:00 noon (Atlanta, Georgia time) on the day when
due in lawful money of the United States of America in same day

                                       15

<PAGE>

funds to the Purchaser in care of Wachovia Bank, National Association, ABA
#053100494, Account #8735-098787, for credit: Blue Ridge Asset Funding
Corporation, Reference: Cadmus Receivables Corp., Attention: Douglas Wilson
(704) 374-2520, or to such other account at the bank named therein or at such
other bank as the Agent on behalf of the Purchaser may designate by written
notice to the Person making such payment.

     (b) Late Payments. The Seller or the Master Servicer, as applicable, shall,
to the extent permitted by law, pay to the Person to whom payment is due
interest on all amounts not paid or deposited when due hereunder at 2% per annum
above the Base Rate, payable on demand, provided, however, that such interest
rate shall not at any time exceed the maximum rate permitted by applicable law.

     (c) Method of Computation. All computations of interest, CP Costs, Broken
Funding Costs, Earned Discount, Liquidation Fee, any fees payable under Section
4.1 and any other fees payable by the Seller to the Purchaser or the Agent
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day) elapsed.

     Section 3.4 Treatment of Collections and Deemed Collections.

         The Seller shall forthwith deliver to the Master Servicer all Deemed
Collections, and the Master Servicer shall hold or distribute such Deemed
Collections as Earned Discount, accrued Servicer's Fee, repayment of Invested
Amount, and to other accrued amounts owing hereunder to the same extent as if
such Deemed Collections had actually been received on the date of such delivery
to the Master Servicer. If Collections are then being paid to the Agent, on the
Purchaser's behalf, or its designee, or lock boxes or accounts directly or
indirectly owned or controlled by the Agent, the Master Servicer shall forthwith
cause such Deemed Collections to be paid to the Agent, on the Purchaser's
behalf, or its designee or to such lock boxes or accounts, as applicable, or as
the Agent shall request. So long as the Seller shall hold any Collections
(including Deemed Collections) required to be paid to the Master Servicer, the
Agent or the Collateral Agent, it shall hold such Collections in trust for the
benefit of the Agent, on behalf of the Purchaser, and shall clearly mark its
records to reflect such trust; provided that unless the Agent shall have
requested it in writing to do so, the Seller shall not be required to hold such
Collections in a separate deposit account containing only such Collections.

                                  ARTICLE IV.
                            FEES AND YIELD PROTECTION

     Section 4.1 Fees.

         The Seller shall pay to the Purchaser certain fees from time to time in
amounts and payable on such dates as are set forth in the Amended and Restated
Fee Letter dated on or about October 23, 2002 (as amended from time to time, the
"Fee Letter") among the Seller, the Master Servicer, the Purchaser and the
Agent.

     Section 4.2 Yield Protection.

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<PAGE>

     (a)  If (i) any change in the interpretation of Regulation D or (ii) any
Regulatory Change occurring after November 20, 2002:

               (A) shall subject an Affected Party to any tax, duty or other
          charge with respect to the Asset Interest or any Asset Tranche owned
          by or funded by it, or any obligations or right to make Purchases or
          Reinvestments or to provide funding therefor, or shall change the
          basis of taxation of payments to the Affected Party of any Invested
          Amount, Purchaser's Tranche Investment or Earned Discount owned by,
          owed to or funded in whole or in part by it or any other amounts due
          under this Agreement in respect of the Asset Interest or any Asset
          Tranche owned by or funded by it or its obligations or rights, if any,
          to make Purchases or Reinvestments or to provide funding therefor
          (except for (1) taxes based on, or measured by, net income, or changes
          in the rate of tax on or determined by reference to the overall net
          income, of such Affected Party imposed by the United States of
          America, or by the jurisdiction in which such Affected Party's
          principal executive office is located and, if such Affected Party's
          principal executive office is not in the United States of America, by
          the jurisdiction where such Affected Party's principal office in the
          United States is located or, (2) franchise taxes, taxes on, or in the
          nature of, doing business taxes or capital taxes); or

               (B) shall impose, modify or deem applicable any reserve
          (including, without limitation, any reserve imposed by the Federal
          Reserve Board, but excluding any reserve included in the determination
          of Earned Discount), special deposit or similar requirement against
          assets of any Affected Party, deposits or obligations with or for the
          account of any Affected Party or with or for the account of any
          affiliate (or entity deemed by the Federal Reserve Board to be an
          affiliate) of any Affected Party, or credit extended by any Affected
          Party; or

               (C) shall change the amount of capital maintained or required or
          requested or directed to be maintained by any Affected Party; or

               (D) shall impose any other condition affecting any Asset Interest
          owned or funded in whole or in part by any Affected Party, or its
          obligations or rights, if any, to make Purchases or Reinvestments or
          to provide funding therefor; or

               (E) shall change the rate for, or the manner in which the Federal
          Deposit Insurance Corporation (or a successor thereto) assesses,
          deposit insurance premiums or similar charges;

and the result of any of the foregoing is or would be

          (x)   to increase the cost to or to impose a cost on (I) an Affected
     Party funding or making or maintaining any Purchases or Reinvestments, any
     purchases, reinvestments, or loans or other extensions of credit under the
     Liquidity Agreement, or any commitment of such Affected Party with respect
     to any of the

                                       17

<PAGE>

     foregoing, or (II) the Agent for continuing its or the Seller's
     relationship with the Purchaser, in each case, in an amount deemed to be
     material by such Affected Party,

          (y) to reduce the amount of any sum received or receivable by an
     Affected Party under this Agreement or under the Liquidity Agreement, or

          (z) in the reasonable determination of such Affected Party, to reduce
     the rate of return on the capital of an Affected Party as a consequence of
     its obligations hereunder or arising in connection herewith to a level
     below that which such Affected Party could otherwise have achieved,

then, within thirty days after demand by such Affected Party (which demand shall
be accompanied by a certificate setting forth, in reasonable detail, the basis
of such demand and the methodology for calculating, and the calculation of, the
amounts claimed by the Affected Party), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such additional or increased cost or such reduction.

     (b)  Each Affected Party will promptly notify the Seller and the Agent of
any event of which it has knowledge (including any future event that, in the
judgment of such Affected Party, is reasonably certain to occur) which will
entitle such Affected Party to compensation pursuant to this Section 4.2;
provided, however, no failure to give or delay in giving such notification shall
adversely affect the rights of any Affected Party to such compensation.

     (c)  In determining any amount provided for or referred to in this Section
4.2, an Affected Party may use any reasonable averaging and attribution methods
(consistent with its ordinary business practices) that it (in its discretion)
shall deem applicable. Any Affected Party when making a claim under this Section
4.2 shall submit to the Seller the certificate (referred to in subsection (a)
above) as to such increased cost or reduced return (including calculation
thereof in reasonable detail), which statement shall, in the absence of
demonstrable error, be conclusive and binding upon the Seller.

     (d)  The Purchaser shall use reasonable efforts to cause any Affected Party
that makes a claim for payment under this Section 4.2 to take reasonable
measures to minimize the amounts payable by the Seller pursuant to this Section
4.2.

     (e)  For avoidance of doubt, any interpretation of Accounting Research
Bulletin No. 51 by the Financial Accounting Standards Board shall constitute an
adoption, change, request or directive subject to this Section 4.2.

     Section 4.3 Funding Losses.

          In the event that any Liquidity Bank shall actually incur any loss or
expense (including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Liquidity Bank to make
any Liquidity Funding or maintain any Liquidity Funding) as a result of (i) any
settlement with respect to the Purchaser's Tranche Investment of any Asset
Tranche funded by a Liquidity Funding being made on any day other

                                       18

<PAGE>

than the scheduled last day of an applicable Yield Period with respect thereto
(it being understood that the foregoing shall not apply to any portion of the
Purchasers' Tranche Investment that is accruing Earned Discount calculated by
reference to the Base Rate), or (ii) any Purchase not being made in accordance
with a request therefor under Section 1.2, then, upon written notice from the
Agent to the Seller and the Master Servicer, the Seller shall pay to the Master
Servicer, and the Master Servicer shall pay to the Agent for the account of such
Liquidity Bank, the amount of such loss or expense. Such written notice (which
shall include the methodology for calculating, and the calculation of, the
amount of such loss or expense, in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding upon the Seller and the Master
Servicer.

                                   ARTICLE V.
                             CONDITIONS OF PURCHASES

       Section 5.1     Conditions Precedent to Initial Purchase.

               The initial Purchase pursuant to the Existing Agreement was
subject to the following conditions precedent:

       (a)     the Agent, on the Purchaser's behalf, shall have received, on or
before the date of such initial Purchase, the following each (unless otherwise
indicated) dated such date and in form and substance reasonably satisfactory to
the Agent:

               (i)     The Sale Agreement, duly executed by the parties thereto;

               (ii)    A certificate of the Secretary or Assistant Secretary of
       each Seller Party certifying the names and true signatures of the
       officers authorized on its behalf to sign this Agreement and the other
       Transaction Documents to be delivered by it hereunder (on which
       certificate the Agent and the Purchaser may conclusively rely until such
       time as the Agent, on the Purchaser's behalf, shall receive from such
       Seller Party a revised certificate meeting the requirements of this
       subsection (ii));

               (iii)   The Articles or Certificate of Incorporation of each
       Seller Party, duly certified by the State Corporation Commission of the
       Commonwealth of Virginia, as of a recent date acceptable to Agent on the
       Purchaser's behalf, in each case together with a copy of the by-laws of
       such Seller Party, duly certified by the Secretary or an Assistant
       Secretary of such Seller Party;

               (iv)    Copies of good standing certificates for each Seller
       Party issued by the State Corporation Commission of the Commonwealth of
       Virginia and the state where such Seller Party's principal place of
       business is located;

               (v)     Acknowledgment copies (or other evidence of filing
       reasonably acceptable to the Agent, on behalf of the Secured Parties,) of
       (i) proper financing statements (Form UCC-1), in such form as the Agent,
       on behalf of the Secured Parties, may reasonably request, naming each of
       the Originators as the debtor and the seller of the Receivables and
       Related Assets, the Seller as the secured party and purchaser thereof and
       Wachovia,

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<PAGE>

solely in its capacity as Agent for the Secured Parties hereunder, as assignee,
and (ii) financing statements (Form UCC-1), in such form as the Agent, on behalf
of the Secured Parties, may reasonably request, naming the Seller as the debtor
and the seller of an undivided percentage interest in the Pool Receivables and
Related Assets and the Purchaser, as the secured party and purchaser thereof, or
other, similar instruments or documents, as may be necessary or, in the opinion
of the Agent, on behalf of the Secured Parties, desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect the sale by each
Originator to the Seller of, and the Purchaser's, undivided percentage interest
in, the Pool Receivables and Related Assets;

       (vi)    Search reports provided in writing to the Agent, on the
Purchaser's behalf, (i) listing all effective financing statements that name any
Seller Party as debtor and that are filed in the jurisdictions in which filings
were made pursuant to subsection (v) above and in such other jurisdictions that
the Agent shall reasonably request, together with copies of such financing
statements (none of which (other than any of the financing statements described
in subsection (v) above) shall cover any Receivables or Related Assets, and (ii)
listing all tax liens and judgment liens (if any) filed against any debtor
referred to in clause (i) above in the jurisdictions described therein and
showing no such Liens;

       (vii)   Evidence that the Seller Notes have been duly executed and
delivered by the Seller;

       (viii)  Favorable opinions of Mays & Valentine, L.L.P., counsel to the
Seller Parties, in substantially the form of Exhibit 5.1(a)(viii);

       (ix)    A favorable opinion of Mays & Valentine, L.L.P., counsel to the
Seller Parties, as to

               (x)   the existence of a "true sale" of the Receivables from the
       Originators to the Seller under the Sale Agreement; and

               (y)   the inapplicability of the doctrine of substantive
       consolidation to the Seller in connection with any bankruptcy proceeding
       involving any of the Originators or Cadmus;

       (x)     A pro forma Settlement Report, prepared as of the Cut-Off Date of
September 30, 1999;

       (xi)    A report in form and substance satisfactory to the Agent, on the
       Purchaser's behalf, from the Initial Due Diligence Auditor as to a
       pre-closing due diligence audit by the Initial Due Diligence Auditor
       (such report and any amendment, supplement, update or other modification,
       the "Due Diligence Report");

       (xii)   The Liquidity Agreement, in form and substance satisfactory to
       the Agent, on the Purchaser's behalf, duly executed by the Purchaser, the
       Liquidity Agent and each Liquidity Bank;

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<PAGE>

               (xiii)  Evidence that Cadmus has implemented all operational
       changes as set forth in the Letter Agreement;

               (xiv)   Lock-Box Agreements with respect to each Lock-Box and the
       Collection Account;

               (xv)    [Reserved];

               (xvi)   With respect to Cadmus and its Consolidated Subsidiaries,
       a consolidated balance sheet, income statement and statement of
       shareholders' equity as at June 30, 1999 and with respect to the Seller,
       a balance sheet as at October 26, 1999, each of the foregoing together
       with a certification of the chief financial officer or treasurer in the
       form attached hereto as Exhibit B; and

               (xvii)  such other agreements, instruments, certificates,
       approvals, opinions and other documents as the Agent may reasonably
       request; and

       (b)     Cadmus shall have paid (i) the Structuring Fee and (ii) all
Transaction Fees.

       Section 5.2   Conditions Precedent to All Purchases and Reinvestments.

               Each Purchase (including the initial Purchase) and each
Reinvestment shall be subject to the further conditions precedent that on the
date of such Purchase or Reinvestment the following statements shall be true
(and the Seller, by accepting the amount of such Purchase or by receiving the
proceeds of such Reinvestment, and each other Seller Party, upon such acceptance
or receipt by the Seller, shall be deemed to have certified that):

       (a)     the representations and warranties contained in Section 6.1 are
correct in all material respects on and as of such day as though made on and as
of such day and shall be deemed to have been made on such day;

       (b)     no event has occurred and is continuing, or would result from
such Purchase or Reinvestment, that constitutes a Liquidation Event or Unmatured
Liquidation Event;

       (c)     after giving effect to each proposed Purchase or Reinvestment,
the Invested Amount will not exceed the Purchase Limit and the Asset Interest
will not exceed 100%;

       (d)     the Termination Date shall not have occurred;

       (e)     in the case of a Purchase, the Agent shall have timely received
an appropriate notice of the proposed Purchase in accordance with Section
1.2(a); and

       (f)     the Agent shall have received such other agreements, instruments,
certificates, approvals, opinions and other documents as the Agent may
reasonably request.

provided, however, the absence of the occurrence and continuance of an Unmatured
Liquidation Event shall not be a condition precedent to any Reinvestment or any
Purchase on any day which

                                       21

<PAGE>

does not cause the Invested Amount, after giving effect to such Reinvestment or
Purchase, to exceed the Invested Amount as of the opening of business on such
day.

       Section 5.3   Conditions Precedent to This Second Amended and Restated
Receivables Purchase Agreement

       This Agreement shall become effective as of the date (the "Amendment
Effective Date") on which each of the following conditions precedent have been
satisfied:

       (a)     the Agent shall have received the Fee Letter duly executed by the
parties thereto;

       (b)     the representations and warranties contained in Section 6.1 shall
be true and correct in all material respects on and as of such day as though
made on and as of such day and shall be deemed to have been made on such day;

       (c)     no event shall have occurred and be continuing, that constitutes
a Liquidation Event or Unmatured Liquidation Event;

       (d)     the Invested Amount shall not exceed the Purchase Limit and the
Asset Interest shall not exceed 100%;

       (e)     the Agent shall have received acknowledgement copies (or other
evidence of filing reasonably acceptable to the Agent, on behalf of the Secured
Parties) of amendments to financing statements (Form UCC-3), in such form as the
Agent, on behalf of the Secured Parties, may reasonably request, naming the
Seller as the debtor and the seller of an undivided percentage interest in the
Collateral.

       (f)     The Agent shall have received such other agreements, instruments,
certificates, approvals, opinions and other documents as the Agent may
reasonably request.

                                  ARTICLE VI.
                         REPRESENTATIONS AND WARRANTIES

       Section 6.1   Representations and Warranties of the Seller Parties.

               Each Seller Party represents and warrants as to itself, except
when specifically provided, in which case, the specified Seller Party represents
and warrants as follows:

       (a)     Organization and Good Standing; Ownership. Each Seller Party's
jurisdiction of organization is correctly set forth in the preamble to this
Agreement. Each Seller Party is duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Virginia and
is a "registered organization" as defined in the UCC in effect in such
jurisdiction, with power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted. The Seller had at all relevant times, and now has, all necessary
corporate power and authority to acquire and own the Pool Receivables and
Related Assets.

                                       22

<PAGE>

       (b)     Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals, except where the failure to be so qualified or have such licenses or
approvals would not have a Material Adverse Effect.

       (c)     Power and Authority; Due Authorization. It (i) has all necessary
corporate power and authority (A) to execute and deliver this Agreement and the
other Transaction Documents to which it is a party, (B) to carry out the terms
of the Transaction Documents to which it is a party, (C) in the case of the
Master Servicer, to service the Receivables and the Related Assets in accordance
with this Agreement and the Sale Agreement, and (D) in the case of the Seller,
to sell and assign the Asset Interest on the terms and conditions herein
provided, and (ii) has duly authorized by all necessary corporate action the
execution, delivery and performance of this Agreement and the other Transaction
Documents and, in the case of the Seller, the sales and assignments described in
clause (i)(D) above.

       (d)     Valid Sale; Binding Obligations. (i) This Agreement constitutes a
valid sale, transfer, and assignment of the Asset Interest to the Purchaser,
enforceable against creditors of, and purchasers from, the Seller, and (ii) this
Agreement and each other Transaction Document signed by such Seller Party
constitutes, a legal, valid and binding obligation of such Seller Party,
enforceable against such Seller Party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws from time to time in effect affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.

       (e)     No Violation. The execution, delivery and performance by it of
this Agreement and the other Transaction Documents to which it is a party and
the consummation by it of the transactions contemplated hereby and thereby do
not (i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a default
under, its articles or certificate of incorporation or by-laws, or any material
indenture, loan agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument to which it is a party or by which it or
any of its properties is bound, (ii) result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such material
indenture, loan agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument, other than this Agreement and the other
Transaction Documents, or (iii) violate any law or any order, rule, or
regulation applicable to it of any court or of any federal or state regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over it or any of its properties; except where any such conflict,
breach, default, Lien or violation would not have a Material Adverse Effect.

       (f)     No Proceedings. There are no proceedings or investigations
against or affecting it which are pending, or, to its knowledge, threatened,
before any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
any other Transaction Document, (ii) seeking to prevent the sale and assignment
of the Receivables under the Sale Agreement or of the Asset Interest under this

                                       23

<PAGE>

Agreement or the consummation of any of the other transactions contemplated by
this Agreement or any other Transaction Document, or (iii) that would have a
Material Adverse Effect.

     (g) Bulk Sales Act. No transaction contemplated hereby requires compliance
with any bulk sales act or similar law.

     (h) Government Approvals. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by it of this
Agreement and each other Transaction Document to which it is a party, except,
(i) in the case of the Seller, for (A) the filing of the UCC financing
statements referred to in Article V, and (B) the filing of any UCC continuation
statements and amendments from time to time required in relation to any UCC
financing statements filed in connection with this Agreement, as provided in
Section 8.7, all of which, at the time required in Article V or Section 8.7, as
applicable, shall have been duly made and shall be in full force and effect; and
(ii) such authorizations, approvals, actions, notices and filings the failure of
which to obtain or make would not have a Material Adverse Effect.

     (i) Financial Condition. (w) The consolidated balance sheet of the Master
Servicer and its Consolidated Subsidiaries as at June 30, 2002, and the related
statements of income, shareholders' equity and cash flows for the Fiscal Year
then ended, reported on by Ernst & Young LLP, independent certified public
accountants, copies of which have been furnished to the Agent, fairly present,
in conformity with GAAP, the consolidated financial condition of the Master
Servicer and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such period stated, and
there are no material liabilities or unusual forward obligations that are not
set forth therein, (x) since June 30, 2002 there has been no material adverse
change in any such financial condition, business or operations except as
described in Schedule 6.1(i), (y) the balance sheet of the Seller as at June 30,
2002, certified by the chief financial officer or treasurer of the Seller by
means of a Certificate of Financial Officer in the form attached hereto as
Exhibit B, copies of which have been furnished to the Agent, fairly presents in
all material respects the financial condition, assets and liabilities of the
Seller as at such date, all in accordance with GAAP consistently applied, and
(z) since June 30, 2002, there has been no material adverse change in the
Seller's financial condition, business or operations.

     (j) Material Adverse Effect: Since June 30, 2002 there has been no event,
act, condition, circumstance or occurrence which would have a Material Adverse
Effect.

     (k) Federal Regulations. No part of any funds obtained by the Seller
hereunder has been used (x) to acquire any equity security of a class that is
registered pursuant to Section 12 of the Exchange Act or (y) for "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect or for any purpose which violates the
provisions of any Regulations of the Federal Reserve Board. If requested by the
Agent at any time, the Seller will furnish to the Agent a statement in
conformity with the requirements of FR Form U-1 referred to in Regulation U.

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     (l) Good Title. The Seller owns and has good and marketable title to the
Collateral free and clear of any Lien, except as created by the Transaction
Documents.

     (m) Accurate Reports. No Settlement Report (if prepared by such Seller
Party, or to the extent information therein was supplied by such Seller Party)
or other information, exhibit, financial statement, document, book, record or
report furnished, in each case in writing, by or on behalf of such Seller Party
to the Agent or the Purchaser pursuant to this Agreement was inaccurate in any
material respect as of the date it was dated or (except as otherwise disclosed
to the Agent or Purchaser at such time) as of the date so furnished, or
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not materially
misleading in light of the circumstances made or presented.

     (n) Offices. The principal places of business and chief executive offices
of the Master Servicer and the Seller are located at the respective addresses
set forth on Schedule 14.2, and the offices where the Master Servicer and the
Seller keep all their books, records and documents evidencing Pool Receivables,
the related Contracts and all purchase orders and other agreements related to
such Pool Receivables are located at the addresses specified in Schedule 6.1(n)
(or at such other locations, notified to the Agent, on the Purchaser's behalf,
in accordance with Section 7.1(f), in jurisdictions where all action required by
Section 8.7 has been taken and completed).

     (o) Lock-Boxes and Collection Account. The names and addresses of all the
Lock-Box Banks, together with the related account numbers of the accounts of the
Originators, the Master Servicer or the Seller at such Lock-Box Banks, are
specified in Schedule 6.1(o) (or have been notified to and approved by the
Agent, on the Purchaser's behalf, in accordance with Section 7.3(d)). All funds
in the Lock-Boxes and the Collection Account result from Collections on the
Receivables and other amounts received with respect thereto.

     (p) Eligible Receivables. Each Receivable included in the Net Pool Balance
as an Eligible Receivable on the date of any Purchase, Reinvestment or
computation of Net Pool Balance shall be an Eligible Receivable on such date.

     (q) [Reserved].

     (r) Perfection:

         (i)  This Agreement creates a valid and continuing security interest
(as defined in the UCC) in the Collateral in favor of Agent for the benefit of
the Secured Parties, which security interest is prior to all other Liens and is
enforceable as such as against creditors and purchasers from the Seller.

         (ii) There have been duly filed financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect (A) the Seller's ownership interest in each
Receivable, its Collections and the Related Assets and (B) the Agent's (on
behalf of the Secured Parties) security interest in the Collateral.

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<PAGE>

         (iii) Other than the security interest granted to Agent for the benefit
of the Secured Parties pursuant to this Agreement, the Seller has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Collateral.

         (iv)  The Seller's jurisdiction of organization is a jurisdiction whose
law generally requires information concerning the existence of a nonpossessory
security interest to be made generally available in a filing, record or
registration system as a condition or result of such a security interest's
obtaining priority over the rights of a lien creditor with respect to
collateral.

         (v)   The Seller has not authorized the filing of and is not aware of
any financing statements against the Seller that include a description of
collateral covering the Collateral other than any financing statement relating
to the security interest granted to Agent for the benefit of Secured Parties
hereunder or that has been terminated. The Seller is not aware of any judgment
or tax lien filings against the Seller.

         (vi)  Each Receivable is an "account", "instrument", "general
intangible" or "chattel paper" as defined in the UCC.

     (s) Compliance with Credit and Collection Policy. With respect to each Pool
Receivable, it has complied in all material respects with the Credit and
Collection Policy.

     (t) Payments to Originators. With respect to each Receivable transferred to
the Seller by the Originators pursuant to the Sale Agreement, the Seller has
given reasonably equivalent value to each Originator in consideration for the
Receivables originated by it and the Related Assets with respect thereto and
such transfer was not made for or on account of antecedent debt.

     (u) Names. In the past five years, the Seller has not used any corporate
names, trade names or assumed names other than the name in which it has executed
this Agreement.

     (v) Ownership of the Seller. Cadmus owns, directly or indirectly, 100% of
the issued and outstanding capital stock of the Seller, free and clear of any
Lien except as contemplated by the Conditional Waiver. Such capital stock is
validly issued, fully paid and nonassessable, and there are no options, warrants
or other rights to acquire securities of the Seller.

     (w) Investment Company. The Seller is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended from time to time,
or any successor statute.

     (x) Taxes. It has filed all material tax returns and reports required by
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except to the extent any failure to file such returns
or reports or pay such taxes or charges would not result in a Material Adverse
Effect.

     (y) Compliance with Laws. It is in compliance with all applicable laws,
including, without limitation, all Environmental Laws, except where any failure
to comply with any such laws would not, alone or in the aggregate, have a
Material Adverse Effect.

                                       26

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                                  ARTICLE VII.
                     GENERAL COVENANTS OF THE SELLER PARTIES

     Section 7.1 Affirmative Covenants of the Seller Parties.

         From the Amendment Closing Date until the Final Payout Date, unless the
Agent shall otherwise consent in writing:

     (a) Compliance With Laws, Etc. Each Seller Party will comply in all
material respects with all applicable laws, rules, regulations and orders,
including those with respect to the Pool Receivables and related Contracts,
except where the failure to so comply would not individually or in the aggregate
have a Material Adverse Effect.

     (b) Preservation of Corporate Existence. Each Seller Party will preserve
and maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification would have a Material Adverse Effect.

     (c) Audits. Each Seller Party will (i) at any time and from time to time
upon not less than five (5) Business Days' notice (unless a Liquidation Event
has occurred and is continuing (or the Agent, on the Purchaser's behalf,
believes in good faith that a Liquidation Event has occurred and is continuing),
in which case no such notice shall be required) during regular business hours,
permit the Agent, on the Purchaser's behalf, or any of its agents or
representatives, (A) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer tapes and disks)
in the possession or under the control of such Seller Party relating to Pool
Receivables, including, without limitation, the related Contracts and purchase
orders and other agreements, and (B) to visit the offices and properties of such
Seller Party for the purpose of examining such materials described in clause
(i)(A) next above, and to discuss matters relating to Pool Receivables or such
Seller Party's performance hereunder with any of the officers or employees of
such Seller Party having knowledge of such matters; (ii) permit the Agent or any
of its agents or representatives, upon not less than five (5) Business Days'
notice from the Agent (unless a Liquidation Event has occurred and is continuing
(or the Agent believes in good faith that a Liquidation Event has occurred and
is continuing) in which case no such notice shall be required), to meet with the
independent auditors of such Seller Party, to review such auditors' work papers
and otherwise to review with such auditors the books and records of such Seller
Party with respect to the Pool Receivables and Related Assets; and (iii) without
limiting the provisions of clause (i) or (ii) next above, from time to time, at
the expense of such Seller Party, permit certified public accountants or other
auditors acceptable to the Agent to conduct a review of such Seller Party's
books and records with respect to the Pool Receivables and Related Assets;
provided, that, so long as no Liquidation Event has occurred and is continuing,
(x) such examinations, visits, meetings and reviews shall not be done more than
two (2) times in any one calendar year and (y) the Seller Parties shall only be
responsible for the costs and expenses of one such review in any one calendar
year.

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<PAGE>

     (d) Keeping of Records and Books of Account. The Master Servicer will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Pool Receivables
in the event of the destruction of the originals thereof), and keep and
maintain, all documents, books, records and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including,
without limitation, records adequate to permit the daily identification of
outstanding Unpaid Balances by Obligor and related debit and credit details of
the Pool Receivables).

     (e) Performance and Compliance with Receivables and Contracts. Each Seller
Party will, at its expense, timely and fully perform and comply with all
material provisions, covenants and other promises, if any, required to be
observed by it under the Contracts related to the Pool Receivables and all
agreements related to such Pool Receivables, except where a failure to do so
would not have a Material Adverse Effect.

     (f) Location of Records. Each Seller Party will keep its chief place of
business and chief executive office, and the offices where it keeps its records
concerning the Pool Receivables, all related Contracts and all agreements
related to such Pool Receivables (and all original documents relating thereto),
at the address(es) of the applicable Servicer and the Seller referred to in
Section 6.1(n) or, upon 30 days' prior written notice to the Agent, at such
other locations in jurisdictions where all action required by Section 8.7 shall
have been taken and completed.

     (g) Credit and Collection Policies. Each Seller Party will comply in all
material respects with the Credit and Collection Policy in regard to each Pool
Receivable and the related Contract.

     (h) Sale Agreement. The Seller will perform and comply in all material
respects with all of its covenants and agreements set forth in the Sale
Agreement, and will enforce the performance by each Originator of its
obligations under the Sale Agreement.

     (i) Collection Bank Agreement. The Seller and the Master Servicer shall
instruct all Obligors to remit all Collections to the Lock-Boxes and each
Lock-Box Bank to deposit all Collections to the Collection Account. The Seller
will not give any contrary or conflicting instructions, and will, upon the
request of the Master Servicer or the Agent, confirm such instructions by the
Master Servicer or take such other action as may be reasonably required to give
effect to such instructions.

     (j) [Reserved]

     (k) Accurate Reports. All reports, information, financial statements,
documents, books, records or other material furnished by or on behalf of a
Seller Party to the Agent or the Purchaser, in each case in writing, shall be
true, complete and accurate in all material respects as of the date so furnished
and shall not contain any material misstatement of fact and shall not omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances made or presented.

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<PAGE>

     (l) Letter Agreement. Each Seller Party has implemented all required
operational changes as set forth in the Letter Agreement.

     (m) Servicing Agreements. Each Seller Party will use reasonable efforts to
secure not later than March 20, 2003, any license or approval which may be
required for the Agent's use of any program used by the Master Servicer in the
servicing of the Receivables.

     Section 7.2 Reporting Requirements of the Seller Parties.

         From the Amendment Closing Date until the Final Payout Date, unless the
Agent, on the Purchaser's behalf, shall otherwise consent in writing:

     (a) Quarterly Financial Statements - The Master Servicer. The Master
Servicer will furnish to the Agent, on the Purchaser's behalf, as soon as
available and in any event within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year, copies of the consolidated and
consolidating balance sheet of the Master Servicer and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter, the related consolidated and
consolidating statement of income and the related consolidated statement of cash
flows for such Fiscal Quarter and for the portion of the Fiscal Year ended at
the end of such Fiscal Quarter, setting forth in each case in comparative form
the figures for the corresponding Fiscal Quarter and the corresponding portion
of the previous Fiscal Year, together with a Certificate of Financial Officer in
the form attached hereto as Exhibit B executed by its chief financial officer or
treasurer.

     (b) Annual Financial Statements - The Master Servicer. The Master Servicer
will furnish to the Agent, as soon as available and in any event within 90 days
after the end of each Fiscal Year, a consolidated and consolidating balance
sheet of the Master Servicer and its Consolidated Subsidiaries as of the end of
such Fiscal Year, the related consolidated and consolidating statements of
income and shareholders' equity and the related consolidated statement of cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all certified by Ernst & Young LLP or
other independent public accountants of recognized national standing, with such
certification to be free of exceptions and qualifications not acceptable to the
Agent;

     (c) Quarterly Financial Statements-Seller. The Seller will furnish to the
Agent, as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of the Seller, copies of
the financial statements of the Seller, consisting of at least a balance sheet
as at the close of such quarter and a statement of earnings for such quarter and
for the period from the beginning of the fiscal year to the close of such
quarter, together with a Certificate of Financial Officer in the form attached
hereto as Exhibit B executed by the chief financial officer or treasurer of the
Seller;

     (d) Annual Financial Statements-Seller. The Seller will furnish to the
Agent, as soon as available and in any event within 90 days after the end of
each fiscal year of the Seller, copies of the financial statements of the
Seller, consisting of at least a balance sheet of the Seller for such year and a
statement of earnings, setting forth in each case in comparative form

                                       29

<PAGE>

corresponding figures from the preceding fiscal year, together with a
Certificate of Financial Officer in the form attached hereto as Exhibit B
executed by the chief financial officer or treasurer of the Seller;

     (e) Reports to Holders and Exchanges. In addition to the reports required
by subsections (a), (b), (c) and (d) next above, promptly upon the Agent's
request, the Master Servicer will furnish to the Agent, on the Purchaser's
behalf, copies of any reports specified in such request which the Master
Servicer sends to any of its securityholders, and any reports or registration
statements that the Master Servicer files with the Securities and Exchange
Commission or any national securities exchange other than registration
statements relating to employee benefit plans and to registrations of securities
for selling securities;

     (f) ERISA. If and when any Seller Party or any member of the Controlled
Group (i) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for termination of such Plan under Title IV of ERISA,
or knows that the plan administrator of any Plan has given or is required to
give such notice of any such reportable event, such Seller Party will promptly
deliver to the Agent a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, such Seller Party shall promptly
deliver to the Agent a copy of such notice; or (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to
administer any Plan, such Seller Party shall promptly deliver to the Agent a
copy of such notice;

     (g) Liquidation Events, Etc. As soon as possible and in any event within
five (5) Business Days after obtaining knowledge of the occurrence of any
Liquidation Event or any Unmatured Liquidation Event, each Seller Party will
furnish to the Agent, on the Purchaser's behalf, a written statement of the
chief financial officer, treasurer or chief accounting officer of such Seller
Party setting forth details of such event and the action that such Seller Party
will take with respect thereto;

     (h) Litigation. As soon as possible and in any event within ten Business
Days of any Seller Party's knowledge thereof, such Seller Party will furnish to
the Agent, on the Purchaser's behalf, notice of (i) any litigation,
investigation or proceeding which may exist at any time which would have a
Material Adverse Effect and (ii) any development in previously disclosed
litigation which development would have a Material Adverse Effect;

     (i) Audit of Pool Receivables. As soon as available and in any event by the
end of each fiscal year of the Seller, the Seller will furnish to the Agent, on
the Purchaser's behalf, an audit report, prepared by a Person reasonably
acceptable to the Agent (unless a Liquidation Event has occurred, in which case
such audit report shall be prepared by a nationally recognized accounting firm
or other Person acceptable to the Agent), as of the end of such fiscal year,
substantially in the form of the report delivered pursuant to Section 5.1(a)(xi)
and covering such other matters as the Agent may reasonably request in order to
protect the interests of the Agent or Purchaser under or as contemplated by this
Agreement;

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<PAGE>

     (j) Change in Credit and Collection Policy. Prior to its effective date,
each Seller Party will furnish to the Agent, on the Purchaser's behalf, notice
of (i) any material change in the character of such Seller Party's business, and
(ii) any material change in the Credit and Collection Policy;

     (k) [Reserved].

     (l) Deliveries to Investors. Each Seller Party will deliver to the Agent
for distribution to each of the Investors simultaneously with the delivery of
each set of annual and quarterly financial statements referred to in paragraphs
(a), (b), (c) and (d) above, a statement of the chief executive officer,
treasurer, chief financial officer or chief technology officer of such Seller
Party stating that no Unmatured Liquidation Event or Liquidation Event has
occurred and is continuing or, if an Unmatured Liquidation Event or Liquidation
Event has occurred and is continuing, a statement setting forth the details
thereof and the action which the Seller Parties are taking or propose to take
with respect thereto.

     (m) Other. Promptly, from time to time, each Seller Party will furnish to
the Agent, on the Purchaser's behalf, such other information, documents, records
or reports respecting the Receivables or the condition or operations, financial
or otherwise, of such Seller Party as the Agent may from time to time reasonably
request in order to protect the interests of the Agent or Purchaser under or as
contemplated by this Agreement.

     Section 7.3 Negative Covenants of the Seller Parties.

         From the Amendment Closing Date until the Final Payout Date, without
the prior written consent of the Agent:

     (a) Sales, Liens, Etc. (i) The Seller will not, except as otherwise
provided herein and in the other Transaction Documents, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Lien upon or with respect to, any Pool Receivable or any Related
Asset, or any interest therein, or any account to which any Collections of any
Pool Receivable are sent, or any right to receive income or proceeds from or in
respect of any of the foregoing, and (ii) the Master Servicer will not assert
any interest in the Receivables, except as Master Servicer.

     (b) Extension or Amendment of Receivables. No Seller Party will, except as
otherwise permitted in Section 8.2(c), extend, amend or otherwise modify the
terms of any Pool Receivable, or amend, modify or waive any material term or
condition of any Contract related thereto in any way that adversely affects the
collectibility of any Pool Receivable or the Purchaser's rights therein.

     (c) Change in Business or Credit and Collection Policy. No Seller Party
will make or permit to be made any change in the character of its business or in
the Credit and Collection Policy, which change would, in either case, impair the
collectibility of any significant portion of the Pool Receivables or otherwise
adversely affect the interests or remedies of the Purchaser under this Agreement
or any other Transaction Document.

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<PAGE>

     (d) Change in Payment Instructions to Obligors. No Seller Party will add or
terminate any bank as a Lock-Box Bank from those listed in Schedule 6.1(o), or
make any change in its instructions to Obligors regarding payments to be made to
the Seller or Master Servicer or payments to be made to any Lock-Box Bank
(except for a change in instructions solely for the purpose of directing
Obligors to make such payments to another existing Lock-Box Bank), unless (i)
the Agent shall have received prior written notice of such addition, termination
or change and (ii) if a Liquidation Event has occurred, the Agent shall have
received duly executed copies of Lock-Box Agreements with each new Lock-Box
Bank.

     (e) Deposits to the Collection Account. No Seller Party will deposit or
otherwise credit, or cause or permit to be so deposited or credited, to the
Collection Account, any cash or cash proceeds other than Collections of Pool
Receivables and other amounts received with respect thereto.

     (f) Changes to Other Documents. The Seller will not enter into any
amendment or modification of, or supplement to, the Sale Agreement or the
Seller's certificate of incorporation.

     (g) Restricted Payments by the Seller. The Seller will not (i) purchase or
redeem any shares of the capital stock of the Seller, (ii) declare or pay any
dividends thereon (other than stock dividends), (iii) make any distribution to
stockholders or set aside any funds for any such purpose, or (iv) pay any
principal amount of the Seller Notes, except that the Seller may declare or pay
any dividends and pay all or a portion of such principal amounts on the
Settlement Date for any Settlement Period, after making any payment required to
be made by the Seller on such Settlement Date in accordance with the last
sentence of Section 3.1(c)(ii) and Section 3.1(c)(iii) if after giving effect to
such payment the Invested Amount does not exceed the Purchase Limit and the
Asset Interest does not exceed 100% and the Seller's net worth (determined in
accordance with GAAP) is not less than 3% of the Purchase Limit.

     (h) Seller Indebtedness. The Seller will not incur or permit to exist any
Indebtedness or liability on account of deposits or advances or for borrowed
money or for the deferred purchase price of any property or services, except (A)
indebtedness of the Seller to the Originators incurred in accordance with the
Sale Agreement, (B) current accounts payable arising under or permitted by the
Transaction Documents and not overdue and tax liabilities not overdue, and (C)
other current accounts payable arising in the ordinary course of business and
not overdue, in an aggregate amount at any time outstanding not to exceed
$10,700.

     (i) Negative Pledges. No Seller Party will enter into or assume any
agreement (other than this Agreement and the other Transaction Documents)
prohibiting the creation or assumption of any Lien upon any Pool Receivables or
Related Assets, whether now owned or hereafter acquired, except as contemplated
by the Transaction Documents, or otherwise prohibiting or restricting any
transaction contemplated hereby or by the other Transaction Documents.

     (j) Change of Name. The Seller will not change its name, any trade name or
corporate structure, or commence the use of any new trade name unless it has
given the Agent at least 30 days prior written notice thereof and has taken all
steps necessary to continue the

                                       32

<PAGE>

perfection of the Purchaser's interest, including the filing of amendments to
the UCC financing statements filed pursuant to Section 5.1(a)(v).

     (k) Liens. The Seller will not create, incur, assume or permit to exist any
Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except as provided
in the Transaction Documents. The Master Servicer will not create, incur or
permit to exist any Lien (other than as contemplated by the Transaction
Documents) on any of the Receivables or Related Assets.

     (l) Consolidations, Mergers and Sales of Assets. The Master Servicer will
not, nor will it permit any Significant Subsidiary to, consolidate or merge with
or into, or sell, lease or otherwise transfer all or any substantial part of its
assets (including, without limitation, any of its Subsidiaries) to, any other
Person, or discontinue or eliminate any business line or segment, provided that
(a) the Master Servicer or a Subsidiary may merge with another Person if (i)
such Person was organized under the laws of the United States of America or one
of its states, (ii) the Master Servicer or such Subsidiary, as the case may be,
is the corporation surviving such merger and (iii) immediately after giving
effect to such merger, no Unmatured Liquidation Event or Liquidation Event shall
have occurred and be continuing, (b) Subsidiaries of the Master Servicer may
merge with the Master Servicer or one another, provided the conditions set forth
in clauses (i) and (iii) above are satisfied, and in the case of a merger with
the Master Servicer, the Master Servicer is the corporation surviving such
merger, (c) the foregoing limitation on the sale, lease or other transfer of
assets (including, without limitation, the sale or transfer of a Subsidiary) and
on the discontinuance or elimination of a business line or segment shall not
prohibit, during any Fiscal Quarter, a sale or transfer of assets (including,
without limitation, the sale or transfer of a Subsidiary) or the discontinuance
or elimination of a business line or segment (in a single transaction or in a
series of related transactions) unless the aggregate assets to be sold or
transferred or utilized in a business line or segment to be so discontinued,
when combined with all other assets sold or transferred, and all other assets
utilized in all other business lines or segments discontinued, during such
Fiscal Quarter and the immediately preceding three Fiscal Quarters (excluding
however, for purposes of this clause (c) sales, contributions, or other
transfers of Receivables pursuant to the Sale Agreement) either (x) contributed
more than 5% of Consolidated EBITDA during the 4 consecutive Fiscal Quarters
immediately preceding such Fiscal Quarter, or (y) constituted more than 5% of
Consolidated Total Assets at the end of such Fiscal Quarter, and (d) the Master
Servicer and its Subsidiaries may sell, contribute and make other transfers as
contemplated by the Transaction Documents.

     Section 7.4 Separate Corporate Existence of the Seller.

         Each Seller Party hereby acknowledges that Purchaser and the Agent are
entering into the transactions contemplated hereby in reliance upon Seller's
identity as a legal entity separate from the Master Servicer and its other
Affiliates. Therefore, each Seller Party shall take all steps specifically
required by this Agreement or reasonably required by the Agent to continue
Seller's identity as a separate legal entity and to make it apparent to third
Persons that the Seller is an entity with assets and liabilities distinct from
those of its Affiliates, and is not a division of

                                       33

<PAGE>

Cadmus or any other Person. Without limiting the foregoing, each Seller Party
will take such actions as shall be required in order that:

          (i)   The Seller will be a limited purpose corporation whose primary
     activities are restricted in its Articles of Incorporation to purchasing or
     otherwise acquiring from the Originators, owning, holding, granting
     security interests, or selling interests, in Receivables in the Receivables
     Pool and Related Assets, entering into agreements for the selling and
     servicing of the Receivables Pool, and conducting such other activities as
     it deems necessary or appropriate to carry out its primary activities;

          (ii)  The Seller shall have a board of Directors of at least three (3)
     members and not less than one member of the Seller's Board of Directors
     (the "Independent Director") shall be an individual who is not, has not
     been at any time during the preceding five (5) years: (i) a creditor,
     supplier, director, officer, employee, family member, manager, or
     contractor of Cadmus, any Originator or any of their respective
     Subsidiaries or Affiliates (other than Seller), (ii) a direct, indirect or
     beneficial owner, excluding de minimus ownership interests, (at the time of
     such individual's appointment as an Independent Director) of any of the
     outstanding common shares of Seller, Cadmus, any Originator, or any of
     their respective Subsidiaries or Affiliates, having general voting rights,
     or (iii) a person who controls (whether directly, indirectly or otherwise)
     Cadmus, any Originator or any of their respective Subsidiaries or
     Affiliates (other than Seller) or any creditor, supplier, employees,
     officer, director, associate, material supplier or material customer of
     Cadmus, any Originator or their respective Subsidiaries or Affiliates
     (other than Seller). The certificate of incorporation of the Seller shall
     provide that (a) at least one member of the Seller's Board of Directors
     shall be an Independent Director, (b) the Seller's Board of Directors shall
     not approve, or take any action to cause the filing of, a voluntary
     bankruptcy petition with respect to the Seller unless the Independent
     Director shall approve the taking of such action in writing prior to the
     taking of such action and (c) the provisions requiring an independent
     director and the provision described in clauses (a) and (b) of this
     paragraph (ii) cannot be amended without the prior written consent of the
     Independent Director;

          (iii) The Independent Director shall not at any time serve as a
     trustee in bankruptcy for the Seller or any Affiliate thereof;

          (iv)  The Seller shall maintain a sufficient number of employees in
     light of its contemplated business operations and compensate all employees,
     consultants and agents directly, from its own funds for services provided
     to the Seller by such employees, consultants and agents. Subject to the
     first sentence of this clause (iv), the Seller will not engage any agents
     other than its attorneys, auditors and other professionals, and a Master
     Servicer and any other agent contemplated by the Transaction Documents for
     the Receivables Pool, which the Master Servicer will be fully compensated
     for its services by payment of the Servicer's Fee, and certain
     organizational expenses in connection with the formation of the Seller;

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          (v)    The Seller will contract with the Master Servicer to perform
     for the Seller all operations required on a daily basis to service the
     Receivables Pool. The Seller will pay the Master Servicer the Servicer's
     Fee pursuant hereto. The Seller will not incur any material indirect or
     overhead expenses for items shared with Cadmus (or any other Affiliate
     thereof) which are not reflected in the Servicer's Fee. To the extent, if
     any, that the Seller (or any other Affiliate thereof) share items of
     expenses not reflected in the Servicer's Fee, for legal, auditing and other
     professional services and directors' fees, such expenses will be allocated
     fairly and reasonably on the basis of actual use or the value of services
     rendered, and otherwise on a basis reasonably related to the actual use or
     the value of services rendered, it being understood that Cadmus shall pay
     all expenses relating to the preparation, negotiation, execution and
     delivery of the Transaction Documents, including, without limitation,
     legal, rating agency and other fees;

          (vi)   The Seller's operating expenses will not be paid by any other
     Seller Party or other Affiliate of the Seller and all of its liabilities
     will be paid out of its own funds;

          (vii)  The Seller will have its own stationery, invoices and checks;

          (viii) The books of account, financial reports and corporate records
     of the Seller will be maintained separately from any other Person;

          (ix)   Any financial statements of any Seller Party or Affiliate
     thereof which are consolidated to include the Seller will contain detailed
     notes clearly stating that (A) all of the Seller's assets are owned by the
     Seller, and (B) the Seller is a separate corporate entity with its own
     separate creditors that will be entitled to be satisfied out of the
     Seller's assets prior to any value in the Seller becoming available to the
     Seller's equity holders; and the accounting records and the published
     financial statements of each Originator will clearly show that, for
     accounting purposes, the Pool Receivables and Related Assets have been sold
     by such Originator to the Seller;

          (x)    The Seller's assets will be maintained in a manner that
     facilitates their identification and segregation from those of the Master
     Servicer and the other Affiliates;

          (xi)   The Seller will observe all corporate formalities required by
     its Certificate of Incorporation. Each Affiliate of the Seller will
     strictly observe corporate formalities in its dealings with the Seller,
     and, except as permitted pursuant to this Agreement with respect to
     Collections, funds or other assets of the Seller will not be commingled
     with those of any other Person;

          (xii)  No Affiliate of the Seller will maintain joint bank accounts
     with the Seller or other depository accounts with the Seller to which any
     such Affiliate (other than in its capacity as the Master Servicer hereunder
     or under the Sale Agreement) has independent access, provided that prior to
     the occurrence of a Liquidation Event, Cadmus, in its capacity as Master
     Servicer and subject to the obligations of the Master Servicer hereunder,
     may manage Collections deposited into the Collection Account pursuant to

                                       35

<PAGE>

     centralized cash management procedures, including depositing Collections
     into general accounts of Cadmus;

          (xiii)  No Affiliate of the Seller shall, directly or indirectly, name
     the Seller or enter into any agreement to name the Seller as a direct or
     contingent beneficiary or loss payee on any insurance policy covering the
     property of any Affiliate of the Seller;

          (xiv)   Each Affiliate of the Seller will maintain arm's length
     relationships with the Seller, and each Affiliate of the Seller that
     renders or otherwise furnishes services or merchandise to the Seller will
     be compensated by the Seller at market rates for such services or
     merchandise;

          (xv)    No Affiliate of the Seller will be, nor will it hold itself
     out to be, responsible for the debts of the Seller or the decisions or
     actions in respect of the daily business and affairs of the Seller. Cadmus
     and the Seller will immediately correct any known misrepresentation with
     respect to the foregoing and they will not operate or purport to operate as
     an integrated single economic unit with respect to each other or in their
     dealing with any other entity. The Seller will not (i) guarantee or become
     obligated for the debts of any other person or hold out its credit as being
     available to satisfy the obligations of others, (ii) acquire obligations or
     securities of its shareholders or Affiliates or (iii) pledge its assets for
     the benefit of any other Person or make loans or advances to any other
     Person;

          (xvi)   The Seller will keep correct and complete books and records of
     account and minutes of the meetings and other proceedings of its
     stockholder and board of directors, as applicable, and the resolutions,
     agreements and other instruments of the Seller will be continuously
     maintained as official records by the Seller;

          (xvii)  The Seller, on the one hand, and each of the Originators, on
     the other hand, will conduct its business solely in its own corporate name
     and in such a separate manner so as not to mislead others with whom they
     are dealing and will correct any known misunderstanding regarding such
     Person's separate identity; and

          (xviii) The Seller will maintain adequate capital in light of its
     contemplated business operations.

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<PAGE>

                                 ARTICLE VIII.
                          ADMINISTRATION AND COLLECTION

     Section 8.1 Designation of Master Servicer.

     (a)  Cadmus as Initial Master Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person designated
as Master Servicer hereunder from time to time in accordance with this Section
8.1. Until the Agent, on the Purchaser's behalf, gives to Cadmus a Successor
Notice (as defined in Section 8.1(b)), Cadmus is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Master Servicer
pursuant to the terms hereof. Each of the Originators named in the Sale
Agreement, agrees to act as subservicer for the purpose of performing certain
duties and obligations with respect to all Receivables purchased by the Seller
from such Originator pursuant to the terms of the Sale Agreement. In so acting
as subservicer, each of such Originators shall comply with, and agrees to be
bound by, all of the terms and provisions of this Agreement applicable to such
Originator in the performance of its duties as subservicer; provided, however,
that each such Originator (i) shall cease to act as subservicer upon the Agent's
delivery of a Successor Notice to Cadmus (with a copy to each such Originator),
(ii) shall not be entitled to receive any Servicer's Fee provided for herein,
and (iii) shall not be bound by, or be deemed to have made, any of the
representations, warranties or covenants in Articles V and VI applicable to the
"Seller Parties," except as expressly provided in the Sale Agreement.

     (b)  Successor Notice; Servicer Transfer Events. Upon Cadmus' receipt of a
notice from the Agent of the Agent's designation, on the Purchaser's behalf, of
a new Master Servicer (a "Successor Notice"), Cadmus agrees that it will
terminate its activities as Master Servicer hereunder in a manner that the Agent
believes will facilitate the transition of the performance of such activities to
the new Master Servicer, and the Agent (or its designee) shall assume each and
all of Cadmus' obligations to service and administer such Receivables, on the
terms and subject to the conditions herein set forth, and Cadmus shall use its
best efforts to assist the Agent (or its designee) in assuming such obligations.
Without limiting the foregoing, Cadmus agrees, at its expense, to take all
actions necessary to provide the new Master Servicer with access to all computer
software necessary or useful in collecting or billing Receivables, solely for
use in collecting and billing Receivables. The Agent agrees not to give Cadmus a
Successor Notice until after the occurrence and during the continuance of any
Liquidation Event (any such event being herein called a "Servicer Transfer
Event"), in which case such Successor Notice may be given at any time in the
Agent's discretion. If Cadmus disputes the occurrence of a Servicer Transfer
Event, Cadmus may take appropriate action to resolve such dispute; provided that
Cadmus must terminate its activities hereunder as Master Servicer and allow the
newly designated Master Servicer to perform such activities on the date provided
by the Agent as described above, notwithstanding the commencement or
continuation of any proceeding to resolve the aforementioned dispute, if the
Agent, on the Purchaser's behalf, reasonably determines, in good faith, that
such termination is necessary or advisable to protect the Purchaser's interests
hereunder.

     (c)  Subcontracts. The Master Servicer may, with the prior consent of the
Agent, subcontract with any other Person for servicing, administering or
collecting the Pool Receivables,

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<PAGE>

provided that the Master Servicer shall remain liable for the performance of the
duties and obligations of the Master Servicer pursuant to the terms hereof and
such subservicing arrangement may be terminated at the Agent's request, on the
Purchaser's behalf, at anytime after a Successor Notice has been given.

     Section 8.2 Duties of Master Servicer.

     (a)  Appointment; Duties in General. Each of the Seller, the Purchaser and
the Agent hereby appoints as its agent the Master Servicer, as from time to time
designated pursuant to Section 8.1, to enforce its rights and interests in and
under the Pool Receivables and the Related Security. The Master Servicer shall
take or cause to be taken all such actions as may be necessary or advisable to
collect each Pool Receivable from time to time, all in accordance with
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy.

     (b)  Allocation of Collections; Segregation. The Master Servicer shall
identify and hold in trust for the account of the Seller and Purchaser their
respective allocable shares of the Collections of Pool Receivables in accordance
with Section 1.3 but shall not be required (unless otherwise requested by the
Agent, on the Purchaser's behalf, after the occurrence and during the
continuance of a Liquidation Event) to segregate the funds constituting such
portions of such Collections prior to the remittance thereof in accordance with
said Section. If instructed by the Agent, on the Purchaser's behalf, after the
occurrence and during the continuance of a Liquidation Event, the Master
Servicer shall segregate and deposit into the Collection Account, the
Purchaser's share of Collections of Pool Receivables, on the second Business Day
following receipt by the Master Servicer of such Collections in immediately
available funds.

     (c)  Modification of Receivables. So long as no Liquidation Event and no
Unmatured Liquidation Event shall have occurred and be continuing, Cadmus, while
it is Master Servicer, may, in accordance with the Credit and Collection Policy,
(i) extend the maturity or adjust the Unpaid Balance of any Defaulted Receivable
as Cadmus may reasonably determine to be appropriate to maximize Collections
thereof, and (ii) adjust the Unpaid Balance of any Receivable to reflect the
reductions or cancellations described in the first sentence of Section 3.2(a).

     (d)  Documents and Records. Each Seller Party shall deliver to the Master
Servicer, and the Master Servicer shall hold in trust for the Seller and the
Purchaser in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or disks)
that evidence or relate to Pool Receivables.

     (e)  Certain Duties to the Seller. The Master Servicer shall, as soon as
practicable following receipt, turn over to the Seller (i) that portion of
Collections of Pool Receivables representing its undivided percentage interest
therein, less the Seller's Share of the Servicer's Fee, and, in the event that
neither Cadmus nor any other Seller Party or Affiliate thereof is the Master
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of the
Master Servicer of servicing, collecting and administering the Pool Receivables
to the extent not covered by the Servicer's Fee received by it, and (ii) the
Collections of any Receivable which is not a

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<PAGE>

Pool Receivable. The Master Servicer, if other than Cadmus or any other Seller
Party or Affiliate thereof, shall, as soon as practicable upon demand, deliver
to the Seller all documents, instruments and records in its possession that
evidence or relate to Receivables of the Seller other than Pool Receivables, and
copies of documents, instruments and records in its possession that evidence or
relate to Pool Receivables.

     (f) Termination. The Master Servicer's authorization under this Agreement
shall terminate upon the Final Payout Date.

     (g) Power of Attorney. The Seller hereby grants to the Master Servicer an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of the Seller all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by the Seller or transmitted or received
by the Purchaser (whether or not from the Seller) in connection with any
Receivable.

     (h) Rebill of Receivables. The Master Servicer may, prior to the Rebill
Termination Date, rebill one or more Pool Receivables due to one or more errors
in the original invoice or to reflect a discount given to the Obligor thereof
(each such Receivable being a "Rebilled Receivable"); provided, however, that
(i) for purposes of calculating the age of any such Rebilled Receivable, such
Rebilled Receivable shall be deemed to have been originated on the date of the
invoice of the related original receivable (each such Receivable being an
"Original Receivable"), (ii) no Pool Receivable may be rebilled after the
occurrence of the Rebill Termination Date and (c) if any such Pool Receivable is
so rebilled as a result of a discount given to the Obligor thereof, no such
rebill shall occur unless and until the related Originator has complied with the
provisions of Section 3.5 of the Sale Agreement and the Seller has complied with
the provisions of Section 3.2(a) hereof.

     Section 8.3  Servicer Advances.

          For each Settlement Period, if the Master Servicer determines that any
payment (or portion thereof) which was due and payable pursuant to a Contract in
the Receivables Pool during such Settlement Period was not received prior to the
end of such Settlement Period, the Master Servicer may make an advance in an
amount up to the amount of such delinquent payment (or portion thereof); in
addition, if on any day there are not sufficient funds on deposit in the
Collection Account to pay accrued Earned Discount or CP Costs on any Asset
Interest the Settlement Period of which ends on such day, the Master Servicer
may make an advance in the amount necessary to pay such Earned Discount or CP
Costs (in either case, any such advance, a "Servicer Advance"). Notwithstanding
the preceding sentence, the Master Servicer need not make a Servicer Advance
with respect to any Contract if, the Master Servicer determines (such
determination to be conclusive and binding) in good faith that such Servicer
Advance will not ultimately be recoverable from future collections on, or the
liquidation of, the Receivables Pool. The Master Servicer will deposit any
Servicer Advances into the Collection Account on or prior to 12:00 p.m.
(Atlanta, Georgia time) on the date necessary to make any payment required to be
made under Section 3.1. All Servicer Advances shall be made by wire transfer in
immediately available funds.

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<PAGE>

     Section 8.4 Servicer Defaults.

          If any of the following events shall occur and be continuing, it shall
constitute a servicer default (each such event, a "Servicer Default"):

     (a) any failure by the Master Servicer to make any payment, transfer or
deposit as required by this Agreement including, without limitation, delivery of
any Settlement Report and, such failure shall remain unremedied for two (2)
Business Days after the earliest to occur of (A) written notice thereof shall
have been given by the Agent to the Master Servicer or (B) a Senior Officer of
the Master Servicer shall have actual knowledge thereof or should have had
knowledge thereof if such Senior Officer had exercised reasonable care in the
performance of his or her duties;

     (b) any failure on the part of the Master Servicer duly to observe or
perform any term, covenant or agreement of the Master Servicer set forth in this
Agreement or the Sale Agreement or to give instructions or notice to the Agent
as required by the Transaction Documents, which failure continues unremedied for
a period of five (5) days after the first to occur of (i) the date on which
written notice of such failure requiring the same to be remedied shall have been
given to the Master Servicer by the Agent and (ii) the date on which a Senior
Officer of the Master Servicer shall have actual knowledge thereof or should
have had knowledge thereof if such Senior Officer had exercised reasonable care
in the performance of his or her duties;

     (c) any representation, warranty or certification made by the Master
Servicer (or any of its officers) in this Agreement or in any certificate
delivered pursuant to this Agreement shall prove to have been false or incorrect
in any material respect when made; provided that the materiality qualification
in the preceding clause shall not be applicable with respect to any
representation or warranty which itself contains a materiality qualification;

     (d) An Event of Bankruptcy shall have occurred and remain continuing with
respect to the Master Servicer;

     (e) any Change in Control with respect to the Master Servicer shall occur;

     (f) any change by the Master Servicer in the Credit and Collection Policy
which shall materially adversely affect the collectibility of the Receivables
without the prior written consent of the Agent;

     (g) [Reserved];

     (h) Any default under any other agreement or instrument relating to the
purchase of receivables in an aggregate amount in excess of $5,000,000 of the
Master Servicer, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default (i) is to permit the termination of the commitment of
any party to such agreement or instrument to purchase receivables or the right
of the Master Servicer to reinvest in receivables the principal amount paid by
any party to such agreement or instrument for its interest in receivables or
(ii) is to terminate such commitment or right;

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<PAGE>

     (i) [Reserved]; or

     (j) An Event of Default (as defined in the Credit Agreement) shall have
occurred.

Notwithstanding anything herein to the contrary, so long as any such Servicer
Default shall not have been remedied, the Agent, by written notice to the Master
Servicer (a "Termination Notice"), may terminate all of the rights and
obligations of the Master Servicer as Master Servicer under this Agreement and
appoint a successor Master Servicer satisfactory to the Agent (in the Agent's
sole discretion).

     Section 8.5 Rights of the Agent.

     (a) Notice to Obligors. At any time following the occurrence of a
Liquidation Event, the Agent may notify the Obligors of Pool Receivables, or any
of them, of the ownership of the Asset Interest by the Purchaser; provided,
however, that the Agent may not begin to so notify the Obligors of Pool
Receivables after such Liquidation Event has been waived or otherwise cured.

     (b) Notice to Lock-Box Banks. At any time following the occurrence and
during the continuance of an Unmatured Liquidation Event or Liquidation Event,
the Agent is hereby authorized to give notice to the Lock-Box Banks, as provided
in the Lock-Box Agreements, of the transfer to the Agent of dominion and control
over the lock-boxes and related accounts to which the Obligors of Pool
Receivables make payments. The Seller and the Master Servicer hereby transfer to
the Agent, effective when the Agent shall give notice to the Lock-Box Banks as
provided in the Lock-Box Agreements, the exclusive dominion and control over
such lock-boxes and accounts, and shall take any further action that the Agent
may reasonably request to effect such transfer.

     (c) Rights on Servicer Transfer Event. At any time following the
designation of a Master Servicer other than Cadmus pursuant to Section 8.1:

         (i)   The Agent may direct the Obligors of Pool Receivables, or any of
     them, to pay all amounts payable under any Pool Receivable directly to the
     Agent or its designee.

         (ii)  Any Seller Party shall, at the Agent's request and at such Seller
     Party's expense, give notice of the Purchaser's ownership and security
     interests in the Pool Receivables to each Obligor of Pool Receivables and
     direct that payments be made directly to the Agent or its designee.

         (iii) Each Seller Party shall, at the Agent's request, (A) assemble all
     of the documents, instruments and other records (including, without
     limitation, computer programs, tapes and disks) which evidence the Pool
     Receivables, and the related Contracts and Related Security, or which are
     otherwise necessary or desirable to collect such Pool Receivables, and make
     the same available to the successor Master Servicer at a place selected by
     the Agent, and (B) segregate all cash, checks and other instruments
     received by it from time to time constituting Collections of Pool
     Receivables in a manner acceptable to the Agent and promptly upon receipt,
     remit all such cash, checks and

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<PAGE>

     instruments, duly endorsed or with duly executed instruments of transfer,
     to the successor Master Servicer.

         (iv) Each Seller Party and Purchaser hereby authorizes the Agent, on
     the Purchaser's behalf, and grants to the Agent an irrevocable power of
     attorney (which shall terminate on the Final Payout Date), to take any and
     all steps in such Seller Party's name and on behalf of the Seller Parties
     and the Purchaser which are necessary or desirable, in the determination of
     the Agent, to collect all amounts due under any and all Pool Receivables,
     including, without limitation, endorsing any Seller Party's name on checks
     and other instruments representing Collections and enforcing such Pool
     Receivables and the related Contracts.

     Section 8.6 Responsibilities of the Seller Parties.

         Anything herein to the contrary notwithstanding:

     (a) Contracts. Each Seller Party shall remain responsible for performing
all of its obligations (if any) under the Contracts related to the Pool
Receivables and under the related agreements to the same extent as if the Asset
Interest had not been sold hereunder, and the exercise by the Agent or its
designee of its rights hereunder shall not relieve any Seller Party from such
obligations.

     (b) Limitation of Liability. The Agent and Purchaser shall not have any
obligation or liability with respect to any Pool Receivables, Contracts related
thereto or any other related agreements, nor shall any of them be obligated to
perform any of the obligations of any Seller Party or any Originator thereunder.

     Section 8.7 Further Action Evidencing Purchases and Reinvestments.

     (a) Further Assurances. Each Seller Party agrees that from time to time, at
its expense, it will promptly execute and deliver all further instruments and
documents, and take all further action that the Agent or its designee may
reasonably request in order to perfect, protect or more fully evidence the
Purchases hereunder and the resulting Asset Interest, or to enable Purchaser or
the Agent or its designee to exercise or enforce any of their respective rights
hereunder or under any Transaction Document in respect thereof. Without limiting
the generality of the foregoing, each Seller Party will:

         (i)  upon the request of the Agent, execute and file such financing or
     continuation statements, or amendments thereto or assignments thereof, and
     such other instruments or notices, as may be necessary or appropriate, in
     accordance with the terms of this Agreement;

         (ii) upon the request of the Agent after the occurrence and during the
     continuance of a Liquidation Event, mark conspicuously each Contract
     evidencing each Pool Receivable with a legend, acceptable to the Agent,
     evidencing that the Asset Interest has been sold in accordance with this
     Agreement; and

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<PAGE>

         (iii) mark its master data processing records evidencing such Pool
     Receivables and related Contracts with a legend, acceptable to the Agent,
     evidencing that the Asset Interest has been sold in accordance with this
     Agreement.

     (b) Additional Financing Statements; Performance by Agent (i) Each Seller
Party irrevocably authorizes the Agent at any time and from time to time in the
sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to
act on behalf of such Seller Party (A) to authorize on behalf of the Seller as
debtor and to file financing statements describing the Collateral necessary or
desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the interest of the Agent, for the benefit of the
Secured Parties, in the Collateral and (B) to file a carbon, photographic or
other reproduction of this Agreement or any financing statement describing the
Collateral with respect to the Collateral as a financing statement in such
offices as the Agent or in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Agent's security
interest in the Collateral, for the benefit of the Secured Parties. This
appointment is coupled with an interest and is irrevocable; (ii) (A) Each of the
Seller Parties hereby authorizes the Agent to file financing statements
describing the Collateral and other filing or recording documents with respect
to the Collateral (including any amendments thereto, or continuation or
termination statements thereof), without the signature or other authorization of
the Seller Party, in such form and in such offices as the Agent reasonably
determines appropriate to perfect or maintain the perfection of the security
interest of the Agent hereunder, (B) each of the Seller Parties acknowledges and
agrees that it is not authorized to, and will not, file financing statements or
other filing or recording documents with respect to the Collateral (including
any amendments thereto, or continuation or termination statements thereof),
without the express prior written approval by the Agent, consenting to the form
and substance of such filing or recording document, and (C) each of the Seller
Parties approves, authorizes and ratifies any filings or recordings describing
the Collateral made by or on behalf of the Agent in connection with the
perfection of the security interests in favor of the Seller or the Agent; and
(iii) The reasonable expenses of the Agent or its designee incurred in
connection with this Section 8.7 shall be payable by the Seller Parties as
provided in Section 14.5.

     (c) Continuation Statements; Opinion. Without limiting the generality of
subsection (a), the Seller will, not earlier than six (6) months and not later
than three (3) months prior to the fifth anniversary of the date of filing of
the financing statements referred to in Section 5.1(a)(v) or any other financing
statement filed pursuant to this Agreement or in connection with any Purchase
hereunder, if the Final Payout Date shall not have occurred:

         (i)   if necessary, execute and deliver and file or cause to be filed
     an appropriate continuation statement with respect to such financing
     statement; and

         (ii)  deliver or cause to be delivered to the Agent an opinion of the
     counsel for the Seller Parties, in form and substance reasonably
     satisfactory to the Agent, confirming and updating the opinion delivered
     pursuant to Section 5.1(a)(viii) to the effect that the Asset Interest
     hereunder continues to be a valid and perfected ownership or security
     interest, subject to no other Liens of record except as provided herein or
     otherwise permitted hereunder.

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<PAGE>

     Section 8.8 Application of Collections.

          Any payment by an Obligor in respect of any indebtedness owed by it to
any Originator or the Seller shall, except as otherwise specified by such
Obligor or required by the underlying Contract or law, be applied, first, as a
Collection of any Pool Receivable or Receivables then outstanding of such
Obligor in the order of the age of such Pool Receivables, starting with the
oldest of such Pool Receivables and, second, to any other indebtedness of such
Obligor.

                                   ARTICLE IX.
                                SECURITY INTEREST

     Section 9.1 Grant of Security Interest.

          To secure all obligations of the Seller arising in connection with
this Agreement and each other Transaction Document, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or contingent,
including, without limitation, all Indemnified Amounts, payments on account of
Collections received or deemed to be received and fees, in each case pro rata
according to the respective amounts thereof, the Seller hereby assigns and
pledges to the Agent for the benefit of the Secured Parties and its successors
and assigns, for the benefit of the Secured Parties, and hereby grants to the
Agent, for the benefit of the Secured Parties, a security interest in, all of
the Seller's right, title and interest now or hereafter existing in, to all
assets of the Seller including, without limitation, all of the Seller's right,
title, and interest now or hereafter existing in (a) all the Pool Receivables
and Related Assets (and including specifically any undivided interest therein
retained by the Seller hereunder), (b) the Sale Agreement and the other
Transaction Documents and (c) all proceeds of any of the foregoing
(collectively, the "Collateral").

     Section 9.2 Further Assurances.

          The provisions of Section 8.7 shall apply to the security interest
granted under Section 9.1 as well as to the Purchases, Reinvestments and all the
Asset Interests hereunder.

     Section 9.3 Remedies.

          Upon the occurrence of a Liquidation Event, the Purchaser shall have,
with respect to the collateral granted pursuant to Section 9.1, and in addition
to all other rights and remedies available to the Purchaser or the Agent under
this Agreement and the other Transaction Documents or other applicable law, all
the rights and remedies of a secured party upon default under the UCC; provided,
however, the Purchaser shall not exercise any such rights and remedies under the
UCC after such Liquidation Event has been waived or otherwise cured.

                                   ARTICLE X.
                               LIQUIDATION EVENTS

     Section 10.1 Liquidation Events.

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<PAGE>

              The following events shall be "Liquidation Events" hereunder:

          (a) The Seller (i) shall fail to perform or observe any term, covenant
or agreement that is an obligation of the Seller hereunder (other than clause
(ii) below), and such failure shall remain unremedied for thirty (30) days after
the earliest to occur of (A) written notice thereof shall have been given by the
Agent to the Seller or (B) a Senior Officer of the Seller shall have actual
knowledge thereof or should have had knowledge thereof if such Senior Officer
had exercised reasonable care in the performance of his or her duties, or (ii)
shall fail to make any payment or deposit to be made by it hereunder when due
which failure shall continue for two (2) Business Days; or

          (b) Any representation or warranty made or deemed to be made by the
Seller (or any of its officers) under this Agreement or any other Transaction
Document or other information or report delivered pursuant hereto and thereto
shall prove to have been false or incorrect in any material respect when made;
provided that the materiality qualification in the preceding clause shall not be
applicable with respect to any representation or warranty which itself contains
a materiality qualification; or

          (c) The Seller shall (1) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness when the aggregate
unpaid principal amount is in excess of $10,000, when and as the same shall
become due and payable (after expiration of any applicable grace period) or (2)
fail to observe or perform any other term, covenant, condition or agreement
(after expiration of any applicable grace period) contained in any agreement or
instrument evidencing or governing any such Indebtedness the effect of which
default or other event or condition is to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity; or

          (d) An Event of Bankruptcy shall have occurred and remain continuing
with respect to the Seller; or

          (e) The Purchaser or its successor shall become an "investment
company" within the meaning of the Investment Company Act of 1940; or

          (f) At any Cut-Off Date, the average of the Dilution Ratio for the
immediately preceding three months exceeds 2.40%; or

          (g) The Default Trigger Ratio at any Cut-Off Date exceeds 19.5%; or

          (h) At any Cut-Off Date, the average of the Delinquency Ratio for the
immediately preceding three months exceeds 4.25%; or

          (i) On any Settlement Date, after giving effect to the payments made
under Section 3.1(c), (i) the Asset Interest exceeds 100% or (ii) the Invested
Amount exceeds the Purchase Limit and such situation remains unremedied for two
(2) Business Days; or

          (j) A Servicer Default shall have occurred; or

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          (k) The Seller or Cadmus is subject to a Change in Control which has
not received the prior written consent of the Agent; or

          (l) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the
Receivables or Related Assets and such lien shall not have been released within
seven (7) days, or the Pension Benefit Guaranty Corporation shall, or indicate
its intention to, file notice of a lien pursuant to Section 4068 of the Employee
Retirement Income Security Act of 1974 with regard to any of the Receivables or
Related Assets; or

          (m) Any Originator shall make any change in the policies as to the
origination of the Receivables which materially adversely affects the credit
quality of the Receivables in the Receivables Pool without the prior written
consent of the Agent; or

          (n) The Purchaser, for any reason, ceases to maintain a valid,
perfected first priority interest in the Pool Receivables and the Related
Assets; or

          (o) A final judgment or judgments shall be rendered against the Seller
for the payment of money with respect to which an aggregate amount in excess of
$10,000 is not covered by insurance and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to levy upon
assets or properties of the Seller to enforce any such judgment.

     Section 10.2 Remedies.

          (a) Optional Liquidation. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsection (d) of Section 10.1),
the Agent shall, at the request, or may with the consent, of the Purchaser, by
notice to the Seller declare the Funding Termination Date to have occurred and
the Liquidation Period to have commenced.

          (b) Automatic Liquidation. Upon the occurrence of a Liquidation Event
described in subsection (d) of Section 10.1, the Funding Termination Date shall
occur and the Liquidation Period shall commence automatically.

          (c) Additional Remedies. Upon any Funding Termination Date pursuant to
this Section 10.2, no Purchases or Reinvestments thereafter will be made, and
the Agent, the Purchaser and Wachovia shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all other rights and
remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.

                                   ARTICLE XI.
                                    THE AGENT

     Section 11.1 Authorization and Action.

          Pursuant to agreements entered into with the Agent, the Purchaser has
appointed and authorized the Agent (or its designees) to take such action as
agent on its behalf and to

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exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.

     Section 11.2 Agent's Reliance, Etc.

          The Agent and its directors, officers, agents or employees shall not
be liable for any action taken or omitted to be taken by it or them in good
faith under or in connection with the Transaction Documents (including, without
limitation, the servicing, administering or collecting of Pool Receivables as
Master Servicer pursuant to Section 8.1), except for its or their own breach of
the terms of the applicable terms of the Transaction Documents or its or their
own gross negligence or willful misconduct. Without limiting the generality of
the foregoing, the Agent: (a) may consult with legal counsel (including counsel
for the Seller), independent certified public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no warranty or representation to the Purchaser
or any other holder of any interest in Pool Receivables and shall not be
responsible to the Purchaser or any such other holder for any statements,
warranties or representations made by any Seller Party in or in connection with
any Transaction Document; (c) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any Transaction Document on the part of any Seller Party or to inspect the
property (including the books and records) of any Seller Party; (d) shall not be
responsible to the Purchaser or any other holder of any interest in Pool
Receivables for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Transaction Document; and (e) shall
incur no liability under or in respect of this Agreement by acting upon any
notice (including notice by telephone where permitted herein), consent,
certificate or other instrument or writing (which may be by facsimile or telex)
in good faith believed by it to be genuine and signed or sent by the proper
party or parties.

     Section 11.3 Wachovia and Affiliates.

          Wachovia and any of its Affiliates may generally engage in any kind of
business with any Seller Party or any obligor, any of their respective
Affiliates and any Person who may do business with or own securities of any
Seller Party or any Obligor or any of their respective Affiliates, all as if
Wachovia was not the Agent, and without any duty to account therefor to the
Purchaser or any other holder of an interest in Pool Receivables, but in any
event subject to Section 14.7.

                                  ARTICLE XII.
                     ASSIGNMENT OF THE PURCHASER'S INTEREST

     Section 12.1 Restrictions on Assignments.

     (a) Except as provided in Section 8.1(a), no Seller Party may assign its
rights, or delegate its duties hereunder or any interest herein without the
prior written consent of the Agent. The Purchaser may not assign its rights
hereunder (although it may delegate its duties hereunder as expressly indicated
herein) or the Asset Interest (or any portion thereof) to any Person without

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<PAGE>

the prior written consent of the Seller, which consent shall not be unreasonably
withheld; provided, however, that

          (i)   the Purchaser may assign all of its rights and interests in the
     Transaction Documents, together with all its interest in the Asset
     Interest, to any Liquidity Bank, Wachovia, or any Affiliate thereof, or to
     any "bankruptcy remote" special purpose entity, the business of which is
     administered by Wachovia or any Affiliate thereof (which assignee shall
     then be subject to this Article XII);

          (ii)  the Purchaser may assign and grant a security interest in all of
     its rights in the Transaction Documents, together with all of its rights
     and interest in the Asset Interest, to the Collateral Agent, to secure the
     Purchaser's obligations under or in connection with the Commercial Paper
     Notes, the Liquidity Agreement, and certain other obligations of the
     Purchaser incurred in connection with the funding of the Purchases and
     Reinvestments hereunder, which assignment and grant of a security interest
     (and any subsequent assignment by the Collateral Agent) shall not be
     considered an "assignment" for purposes of Section 12.1(b) or, prior to the
     enforcement of such security interest, for purposes of any other provision
     of this Agreement (other than Section 12.3); and

          (iii) the Master Servicer may delegate its duties provided herein to
     any Originator who agrees to act as a Servicer hereunder and assumes in
     writing the obligations of the Master Servicer hereunder with respect to
     that portion of the Pool Receivables originated by such Originator.
     Notwithstanding any delegation pursuant to this clause (iii), the Master
     Servicer shall remain responsible for all of its obligations hereunder.

     (b) The Seller agrees to advise the Agent within five Business Days after
notice to the Seller of any proposed assignment by the Purchaser of the Asset
Interest (or any portion thereof), not otherwise permitted under subsection (a),
of the Seller's consent or non-consent to such assignment, and if it does not
consent, the reasons therefor. If the Seller does not consent to such
assignment, the Purchaser may immediately or at any time thereafter assign such
Asset Interest (or portion thereof) to any Person or Persons permitted under
clause (i) of Section 12.1(a).

     Section 12.2 Rights of Assignee.

          Upon the assignment by the Purchaser in accordance with this Article
XII, the assignee receiving such assignment shall have all of the rights of the
Purchaser with respect to the Transaction Documents and the Asset Interest (or
such portion thereof as has been assigned).

     Section 12.3 Terms and Evidence of Assignment.

          Any assignment of the Asset Interest (or any portion thereof) to any
Person which is otherwise permitted under this Article XII shall be upon such
terms and conditions as the Purchaser and the assignee may mutually agree, and
may be evidenced by such instrument(s) or document(s) as may be satisfactory to
the Purchaser, the Agent and the assignee.

     Section 12.4 Rights of Collateral Agent.

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<PAGE>

          The Seller hereby agrees that, upon notice to the Seller, the
Collateral Agent or the Liquidity Banks may exercise all the rights of the Agent
and Purchaser hereunder, with respect to the Asset Interest (or any portions
thereof), and Collections with respect thereto, which are owned by the
Purchaser, and all other rights and interests of the Purchaser in, to or under
this Agreement or any other Transaction Document. Without limiting the
foregoing, upon such notice or at any time thereafter (but subject to any
conditions applicable to the exercise of such rights by the Agent), the
Collateral Agent or the Liquidity Banks may request the Master Servicer to
segregate the Purchaser's allocable share of Collections from the Seller's
allocable share, may give a Successor Notice pursuant to and in accordance with
Section 8.1(b), may give or require the Agent to give notice to the Lock-Box
Banks as referred to in Section 8.3(b) and may direct the Obligors of Pool
Receivables to make payments in respect thereof directly to an account
designated by them, in each case, to the same extent as the Agent might have
done.

                                  ARTICLE XIII.
                                 INDEMNIFICATION

     Section 13.1 Indemnities by the Seller.

     (a) General Indemnity. Without limiting any other rights which any such
Person may have hereunder or under applicable law, the Seller hereby agrees to
indemnify each of Wachovia, both individually and as the Agent, the Purchaser,
the Liquidity Banks, the Liquidity Agent, each of their respective Affiliates,
and all successors, transferees, participants and assigns and all officers,
directors, shareholders, controlling persons, employees and agents of any of the
foregoing (each an "Indemnified Party"), forthwith on demand, from and against
any and all damages, losses, claims, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (all of the foregoing
being collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them arising out of or relating to the Transaction Documents
or the ownership or funding of the Asset Interest or in respect of any
Receivable or any Contract, excluding, however, (a) Indemnified Amounts to the
extent determined by a court of competent jurisdiction to have resulted from
gross negligence or willful misconduct on the part of such Indemnified Party or
(b) recourse (except as otherwise specifically provided in this Agreement) for
nonpayment due to a credit problem of the applicable Obligor. Without limiting
the foregoing (but subject to the specified exclusions), the Seller shall
indemnify each Indemnified Party for Indemnified Amounts arising out of or
relating to:

          (i)  the transfer by any Seller Party of any interest in any
     Receivable other than the transfer of Receivables and related property by
     the Originators to the Seller pursuant to the Sale Agreement, the transfer
     of the Asset Interest to the Purchaser pursuant to this Agreement and the
     grant of a security interest to the Purchaser pursuant to Section 9.1;

          (ii) any representation or warranty made by any Seller Party (or any
     of its officers) under or in connection with any Transaction Document, any
     Settlement Report or any other information or report delivered by or on
     behalf of any Seller Party pursuant hereto, which shall have been false,
     incorrect or misleading in any material respect when made or deemed made or
     delivered, as the case may be;

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<PAGE>

          (iii)  the failure by any Seller Party to comply with any applicable
     law, rule or regulation with respect to any Pool Receivable or the related
     Contract, or the nonconformity of any Pool Receivable or the related
     Contract with any such applicable law, rule or regulation;

          (iv)   the failure to vest and maintain vested in the Purchaser an
     undivided percentage ownership interest, to the extent of the Asset
     Interest, in the Receivables in, or purporting to be in, the Receivables
     Pool, free and clear of any Lien, other than a Lien arising solely as a
     result of an act of the Purchaser or the Agent, whether existing at the
     time of any Purchase or Reinvestment of such Asset Interest or at any time
     thereafter;

          (v)    the failure of any Seller Party to file, or any delay in
     filing, financing statements or other similar instruments or documents
     under the UCC of any applicable jurisdiction or other applicable laws with
     respect to any Receivables in, or purporting to be in, the Receivables
     Pool, whether at the time of any Purchase or Reinvestment or at any time
     thereafter;

          (vi)   any dispute, claim, offset or defense (other than nonpayment
     due to any credit problem of the applicable Obligor) of the Obligor to the
     payment of any Receivable in, or purporting to be in, the Receivables Pool
     (including, without limitation, a defense based on such Receivables or the
     related Contract not being a legal, valid and binding obligation of such
     Obligor enforceable against it in accordance with its terms), or any other
     claim resulting from the sale of the merchandise or services related to
     such Receivable or the furnishing or failure to furnish such merchandise or
     services;

          (vii)  any matter described in clause (i) or (ii) of Section 3.2(a);

          (viii) any failure of any Seller Party, as Master Servicer or
     otherwise, to perform its duties or obligations in accordance with the
     provisions of Article III or Article VIII;

          (ix)   any products liability claim arising out of or in connection
     with merchandise or services that are the subject of any Pool Receivable;

          (x)    any claim of breach by any Seller Party of any related Contract
     with respect to any Pool Receivable; or

          (xi)   any tax or governmental fee or charge (but not including taxes
     upon or measured by net income), all interest and penalties thereon or with
     respect thereto, and all out-of-pocket costs and expenses, including the
     reasonable fees and expenses of counsel in defending against the same,
     which may arise by reason of the purchase or ownership of the Asset
     Interest, or any other interest in the Pool Receivables or in any goods
     which secure any such Pool Receivables.

     (b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
have notice of any attempt to impose or collect any tax or governmental fee or
charge for which indemnification will be sought from any Seller Party under
Section 13.1(a)(xi), such Indemnified Party shall give prompt and timely notice
of such attempt to the Seller and the Seller shall have

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<PAGE>

the right, at its expense, to participate in any proceedings resisting or
objecting to the imposition or collection of any such tax, governmental fee or
charge. Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes (including any
deduction) and the receipt of the indemnity provided hereunder or of any refund
of any such tax previously indemnified hereunder, including the effect of such
tax, deduction or refund on the amount of tax measured by net income or profits
which is or was payable by the Indemnified Party.

     (c) Contribution. If for any reason the indemnification provided above in
this Section 13.1 (and subject to the exceptions set forth therein) is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Seller shall contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Seller on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.

     Section 13.2 Indemnities by Master Servicer.

          Without limiting any other rights which any Indemnified Party may have
hereunder or under applicable law, the Master Servicer hereby agrees to
indemnify each of the Indemnified Parties forthwith on demand, from and against
any and all Indemnified Amounts awarded against or incurred by any of them
arising out of or relating to the Master Servicer's performance of, or failure
to perform, any of its obligations under or in connection with any Transaction
Document, or any representation or warranty made by Master Servicer (or any of
its officers) under or in connection with any Transaction Document, any
Settlement Report or any other information or report delivered by or on behalf
of Master Servicer, which shall have been false, incorrect or misleading in any
material respect when made or deemed made or delivered, as the case may be, or
the failure of the Master Servicer to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
awarded any Indemnified Amounts (a) to the extent determined by a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Party or (b) recourse for nonpayment
due to any credit problem of the applicable Obligor.

          If for any reason the indemnification provided above in this Section
13.2 (and subject to the exceptions set forth therein) is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Master Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party on the one hand and the Master Servicer on the other
hand but also the relative fault of such Indemnified Party as well as any other
relevant equitable considerations.

                                  ARTICLE XIV.
                                  MISCELLANEOUS

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<PAGE>

     Section 14.1 Amendments, Etc.

          No amendment or waiver of any provision of this Agreement nor consent
to any departure by any Seller Party therefrom shall in any event be effective
unless the same shall be in writing and signed by (a) each Seller Party, the
Agent and the Purchaser (with respect to an amendment), or (b) the Agent and the
Purchaser (with respect to a waiver or consent by them) or any Seller Party
(with respect to a waiver or consent by it), as the case may be, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. The parties acknowledge that, before entering
into such an amendment or granting such a waiver or consent, the Purchaser may
also be required to obtain the approval of some or all of the Liquidity Banks or
to obtain confirmation from certain rating agencies that such amendment, waiver
or consent will not result in a withdrawal or reduction of the ratings of the
Commercial Paper Notes.

     Section 14.2 Notices, Etc.

          All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by express mail or
courier or by certified mail, postage prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth on Schedule
14.2 or at such other address or facsimile number as shall be designated by such
party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered or sent by
express mail or courier or if sent by certified mail, when received, and (b) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means.

     Section 14.3 No Waiver; Remedies.

          No failure on the part of the Agent, any Affected Party, any
Indemnified Party, the Purchaser or any other holder of the Asset Interest (or
any portion thereof) to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. Without limiting the
foregoing, each of Wachovia, individually, and as Agent, the Collateral Agent,
and each Liquidity Bank is hereby authorized by the Seller at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand provisional or final) at
any time held and other indebtedness at any time owing by Wachovia, the
Collateral Agent and such Liquidity Bank to or for the credit or the account of
the Seller, now or hereafter existing under this Agreement, to the Agent, any
Affected Party, any Indemnified Party or Purchaser, or their respective
successors and assigns.

     Section 14.4 Binding Effect; Survival.

          Upon execution and delivery to the Agent of counterparts of this
Agreement by each of the parties hereto, this Agreement shall be binding upon
and inure to the benefit of each

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<PAGE>

Seller Party, the Agent, the Purchaser and their respective successors and
assigns, and the provisions of Section 4.2 and Article XIII shall inure to the
benefit of the Affected Parties and the Indemnified Parties, respectively, and
their respective successors and assigns; provided, however, nothing in the
foregoing shall be deemed to authorize any assignment not permitted by Section
12.1. This Agreement shall create and constitute the continuing obligations of
the parties hereto in accordance with its terms, and shall remain in full force
and effect until the Final Payout Date. The rights and remedies with respect to
any breach of any representation and warranty made by the Seller pursuant to
Article VI and the indemnification and payment provisions of Article XIII and
Sections 4.2, 14.5, 14.6, 14.7, 14.8 and 14.15 shall be continuing and shall
survive any termination of this Agreement.

     Section 14.5  Costs, Expenses and Taxes.

          In addition to their obligations under Article XIII, the Seller
Parties jointly and severally agree to pay on demand:

     (a)  all costs and expenses incurred by the Agent, the Collateral Agent,
any Liquidity Bank, the Purchaser and their respective Affiliates in connection
with

          (i)   the negotiation, preparation, execution and delivery of the
     Existing Agreement, the other Transaction Documents (other than this
     Agreement) or the Liquidity Agreement, any amendment of or consent or
     waiver under any of the Transaction Documents which is requested or
     proposed by any Seller Party (whether or not consummated), or the
     enforcement by any of the foregoing Persons of, or any actual or claimed
     breach of, this Agreement or any of the other Transaction Documents,
     including, without limitation, the reasonable fees and expenses of counsel
     to any of such Persons incurred in connection with any of the foregoing or
     in advising such Persons as to their respective rights and remedies under
     any of the Transaction Documents in connection with any of the foregoing,
     and

          (ii)  the administration (including periodic auditing as provided for
     herein) of this Agreement and the other Transaction Documents, including,
     without limitation, all reasonable out-of-pocket expenses (including
     reasonable fees and expenses of independent accountants), incurred in
     connection with any review of any Seller Party's books and records either
     prior to the execution and delivery hereof or pursuant to Section 7.2(i) or
     7.1(c)(iii); and

     (b)  all stamp and other taxes and fees payable or determined to be payable
in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents (and the Seller Parties, jointly
and severally agree to indemnify each Indemnified Party against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees).

     Section 14.6 No Proceedings.

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<PAGE>

     The Master Servicer hereby agrees that it will not institute against the
Seller, or join any Person in instituting against the Seller, and each Seller
Party, the Master Servicer and Wachovia (individually or as Agent) each hereby
agrees that it will not institute against the Purchaser, or join any other
Person in instituting against the Purchaser, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Event of Bankruptcy)
so long as any Commercial Paper Notes issued by the Purchaser shall be
outstanding or there shall not have elapsed one year plus one day since the last
day on which any such Commercial Paper Notes shall have been outstanding.

     Section 14.7  Confidentiality of the Seller Information.

     (a)  Confidential Seller Information. Each party hereto (other than Seller
Parties) acknowledges that certain of the information provided to such party by
or on behalf of the Seller Parties in connection with this Agreement and the
transactions contemplated hereby is or may be confidential, and each such party
severally agrees that, unless Cadmus shall otherwise agree in writing, and
except as provided in subsection (b), such party will not disclose to any other
person or entity:

          (i)   any information regarding, or copies of, any nonpublic financial
     statements, reports, schedules and other information furnished by any
     Seller Party to the Purchaser or the Agent (A) prior to October 26, 1999 in
     connection with such party's due diligence relating to the Seller Parties
     and the transactions contemplated hereby, or (B) pursuant to Section 3.1,
     5.1, 6.1(i), 6.1(i), 7.1(c) or 7.2 or otherwise, or

          (ii)  any other information regarding any Seller Party or any
     Originator which is designated by such Seller Party or Originator to such
     party in writing as confidential

(the information referred to in clauses (i) and (ii) above, whether furnished by
any Seller Party, any Originator or any attorney for or other representative
thereof (each a "Seller Information Provider"), is collectively referred to as
the "Seller Information"); provided, however, "Seller Information" shall not
include any information which is or becomes generally available to the general
public or to such party on a nonconfidential basis from a source other than any
Seller Information Provider, or which was known to such party on a
nonconfidential basis prior to its disclosure by any Seller Information
Provider.

     (b)  Disclosure. Notwithstanding subsection (a), each party may disclose
any Seller Information:

          (i)   to any of such party's independent attorneys, consultants and
     auditors, and to any dealer or placement agent for the Purchaser's
     commercial paper, who (A) in the good faith belief of such party, has a
     need to know such Seller Information, and (B) are informed by such party of
     the confidential nature of the Seller Information and the terms of this
     Section 14.7 and has agreed, verbally or otherwise, to be bound by the
     provisions of this Section 14.7;

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<PAGE>

          (ii)  to any Liquidity Bank, any actual or potential assignees of, or
     participants in, any rights or obligations of the Purchaser, any Liquidity
     Bank or the Agent under or in connection with this Agreement who has agreed
     to be bound by the provisions of this Section 14.7;

          (iii) to any rating agency that maintains a rating for the Purchaser's
     commercial paper or is considering the issuance of such a rating, for the
     purposes of reviewing the credit of the Purchaser in connection with such
     rating;

          (iv)  to any other party to this Agreement (and any independent
     attorneys, consultants and auditors of such party), for the purposes
     contemplated hereby,

          (v)   as may be required by any municipal, state, federal or other
     regulatory body having or claiming to have jurisdiction over such party, in
     order to comply with any law, order, regulation, regulatory request or
     ruling applicable to such party,

          (vi)  subject to subsection (c), in the event such party is legally
     compelled (by interrogatories, requests for information or copies,
     subpoena, civil investigative demand or similar process) to disclose such
     Seller Information, or

          (vii) in connection with the enforcement of this Agreement or any
     other Transaction Document.

In addition, the Purchaser and the Agent may disclose on a "no name" basis to
any actual or potential investor in Purchaser's Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of the Purchaser's
commitment and Invested Amount with respect to the Asset Interest and any other
credit enhancement provided by any Seller Party hereunder), the nature, amount
and status of the Pool Receivables, and the current and/or historical ratios of
losses to liquidations and/or outstanding with respect to the Receivables Pool.

     (c)  Legal Compulsion. In the event that any party hereto (other than any
Seller Party) or any of its representatives is requested or becomes legally
compelled (by interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of the Seller
Information, such party will (or will cause its representative to):

          (i)   provide Cadmus with prompt written notice so that (A) Cadmus may
     seek a protective order or other appropriate remedy, or (B) Cadmus may, if
     it so chooses, agree that such party (or its representatives) may disclose
     such Seller Information pursuant to such request or legal compulsion; and

          (ii)  unless Cadmus agrees that such Seller Information may be
     disclosed, make a timely objection to the request or compulsion to provide
     such Seller Information on the basis that such Seller Information is
     confidential and subject to the agreements contained in this Section 14.7.

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<PAGE>

In the event such protective order or remedy is not obtained, or Cadmus agrees
that such Seller Information may be disclosed, such party will furnish only that
portion of the Seller Information which (in such party's good faith judgment) is
legally required to be furnished and will exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be afforded the Seller
Information.

     (d)  This Section 14.7 shall survive termination of this Agreement.

     Section 14.8  Confidentiality of Program Information.

     (a)  Confidential Information. Each party hereto acknowledges that
Wachovia, individually and in its capacity as Agent, regards the structure of
the transactions contemplated by this Agreement to be proprietary, and each such
party agrees that:

          (i)   it will not disclose without the prior consent of Wachovia
     (other than to the directors, employees, auditors, counsel or affiliates
     (collectively, "representatives") of such party, each of whom shall be
     informed by such party of the confidential nature of the Program
     Information (as defined below) and of the terms of this Section 14.8), (A)
     any information regarding the pricing in, or copies of, the Fee Letter, the
     Mandate Letter, the Due Diligence Report and the other confidential or
     proprietary information with respect to the Agent and the Purchaser and
     their respective businesses obtained in connection with the structuring,
     negotiating and execution of the transactions contemplated hereby or
     thereby, (B) any information regarding the organization, business or
     operations of the Purchaser generally or the services performed by Wachovia
     as the Agent for the Purchaser, or (C) any information which is furnished
     by Wachovia to such party and which is designated by Wachovia to such party
     in writing or otherwise as confidential or not otherwise available to the
     general public (the information referred to in clauses (A), (B) and (C) is
     collectively referred to as the "Program Information"); provided, however,
     that such party may disclose any such Program Information (I) to any other
     party to this Agreement (and any independent attorneys, consultants and
     auditors of any such party) for the purposes contemplated hereby, (II) as
     may be required by any municipal, state, federal or other regulatory body
     having or claiming to have jurisdiction over such party, including, without
     limitation, the Securities and Exchange Commission, (III) in order to
     comply with any law, order, regulation, regulatory request or ruling
     applicable to such party, (IV) subject to subsection (c), in the event such
     party is legally compelled (by interrogatories, requests for information or
     copies, subpoena, civil investigative demand or similar process) to
     disclose any such Program Information, or (V) in financial statements as
     required by GAAP;

          (ii)  it will use the Program Information solely for the purposes of
     evaluating, administering and enforcing the transactions contemplated by
     this Agreement and making any necessary business judgments with respect
     thereto; and

          (iii) it will, upon demand, return (and cause each of its
     representatives to return) to Wachovia, all documents or other written
     material received from Wachovia in

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<PAGE>

     connection with (a)(i)(B) or (C) above and all copies thereof made by such
     party which contain the Program Information.

     (b)  Availability of Confidential Information. This Section 14.8 shall be
inoperative as to such portions of the Program Information which are or become
generally available to the public or such party on a nonconfidential basis from
a source other than Wachovia or were known to such party on a nonconfidential
basis prior to its disclosure by Wachovia.

     (c)  Legal Compulsion to Disclose. In the event that any party or anyone to
whom such party or its representatives transmits the Program Information is
requested or becomes legally compelled (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Program Information, such party will:

          (i)   provide Wachovia with prompt written notice so that Wachovia may
     seek a protective order or other appropriate remedy and/or, if it so
     chooses, agree that such party may disclose such Program Information
     pursuant to such request or legal compulsion; and

          (ii)  unless Wachovia agrees that such Program Information may be
     disclosed, make a timely objection to the request or confirmation to
     provide such Program Information on the basis that such Program Information
     is confidential and subject to the agreements contained in this Section
     14.8.

In the event that such protective order or other remedy is not obtained, or
Wachovia agrees that such Program Information may be disclosed, such party will
furnish only that portion of the Program Information which (in such party's good
faith judgment) is legally required to be furnished and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded the Program Information. In the event any Seller Party is required to
file a copy of this Agreement with the SEC or any other governmental authority,
it will (A) provide Wachovia with prompt written notice of such requirement and
(B) exercise reasonable efforts to obtain reliable assurance that such
governmental authority will give confidential treatment to this Agreement;
provided, however, that this clause (B) shall not apply to the ordinary filing
of material agreements with the SEC.

     (d)  Survival. This Section 14.8 shall survive termination of this
Agreement.

     Section 14.9  Captions and Cross References.

          The various captions (including, without limitation, the table of
contents) in this Agreement are provided solely for convenience of reference and
shall not affect the meaning or interpretation of any provision of this
Agreement. Unless otherwise indicated, references in this Agreement to any
Section, Appendix, Schedule or Exhibit are to such Section of or Appendix,
Schedule or Exhibit to this Agreement, as the case may be, and references in any
Section, subsection, or clause to any subsection, clause or subclause are to
such subsection, clause or subclause of such Section, subsection or clause.

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<PAGE>

     Section 14.10 Integration.

          This Agreement and the other Transaction Documents contain a final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire understanding among
the parties hereto with respect to the subject matter hereof, superseding all
prior oral or written understandings.

     Section 14.11 Governing Law.

          THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).

     Section 14.12 Waiver Of Jury Trial.

          EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL NOT BE
TRIED BEFORE A JURY.

     Section 14.13 Consent To Jurisdiction; Waiver Of Immunities.

          EACH SELLER PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:

     (a)  IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED
STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF
ANY NEW YORK STATE COURT, AS APPROPRIATE, IN EITHER CASE SITTING IN NEW YORK
COUNTY, NEW YORK, AS APPROPRIATE IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR
FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING.

     (b)  TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE
OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES

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<PAGE>

SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS
AGREEMENT.

     Section 14.14 Execution in Counterparts.

     This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. Delivery of an executed counterpart
of a signature page to this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.

     Section 14.15 No Recourse Against Other Parties.

     The obligations of the Purchaser under this Agreement are solely the
corporate obligations of the Purchaser. No recourse shall be had for the payment
of any amount owing by the Purchaser under this Agreement or for the payment by
the Purchaser of any fee in respect hereof or any other obligation or claim of
or against the Purchaser arising out of or based upon this Agreement, against
Wachovia or against any employee, officer, director, incorporator or stockholder
of the Purchaser. For purposes of this Section 14.14, the term "Wachovia" shall
mean and include Wachovia Bank, National Association and all affiliates thereof
and any employee, officer, director, incorporator, stockholder or beneficial
owner of any of them; provided, however, that the Purchaser shall not be
considered to be an affiliate of the Bank for purposes of this paragraph. Each
of the Seller, the Master Servicer and the Agent agree that the Purchaser shall
be liable for any claims that such party may have against the Purchaser only to
the extent the Purchaser has excess funds and to the extent such assets are
insufficient to satisfy the obligations of the Purchaser hereunder, the
Purchaser shall have no liability with respect to any amount of such obligations
remaining unpaid and such unpaid amount shall not constitute a claim against the
Purchaser. Any and all claims against the Purchaser or the Agent shall be
subordinate to the claims of the holders of Commercial Paper and the Liquidity
Banks.

     Section 14.16 Existing Agreement Superseded.

     As of the Amendment Closing Date, this Agreement shall amend and restate
the Existing Agreement. The Existing Agreement shall have no effect whatsoever
from and after the Amendment Closing Date. From and after the Amendment Closing
Date, and except as otherwise expressly provided in this Section 14.16, the
rights and obligations of the parties evidenced by the Existing Agreement shall
be evidenced by this Second Amended and Restated Receivables Purchase Agreement
and other Transaction Documents.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                          CADMUS RECEIVABLES CORP., as Seller

                                          By: __________________________________
                                                 Name:
                                                 Title:

                                          CADMUS COMMUNICATIONS CORPORATION,
                                          as Master Servicer

                                          By: __________________________________
                                          Name:
                                          Title:

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<PAGE>

                                          BLUE RIDGE ASSET FUNDING CORPORATION,
                                          as Purchaser

                                                 By Wachovia Securities, Inc.,
                                                  as Attorney-In-Fact

                                          By: __________________________________
                                          Name:
                                          Title:

                                          WACHOVIA BANK, NATIONAL ASSOCIATION
                                          as Agent

                                          By: __________________________________
                                          Name:
                                          Title:

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<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

          This is Appendix A to the Second Amended and Restated Receivables
Purchase Agreement dated as of November 20, 2002, among Cadmus Receivables
Corp., as the Seller, Cadmus Communications Corporation, as the Master Servicer,
Blue Ridge Asset Funding Corporation, as the Purchaser, and Wachovia Bank,
National Association., as the Agent (as amended, supplemented or otherwise
modified from time to time, this "Agreement"). Each reference in this Appendix A
to any Section, Appendix or Exhibit refers to such Section of or Appendix or
Exhibit to this Agreement.

          (a)  Defined Terms. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
below:

          "Adjusted Dilution Ratio": The twelve-month rolling average of the
Dilution Ratios.

          "Advance Rate": An amount equal to 1.0 minus the Required Reserve
Factor.

          "Affected Party": Each of the Purchaser, each Liquidity Bank, any
assignee or participant of the Purchaser or any Liquidity Bank, Wachovia, any
successor to Wachovia, as Agent, or any sub-agent of the Agent.

          "Affiliate": With respect to any Person, any other Person controlling,
controlled by, or under common control with, such Person.

          "Affiliated Obligor": In relation to any Obligor, an Obligor that is
an Affiliate of such Obligor.

          "Agent": As defined in the preamble.

          "Agent's Office": The office of the Agent at 191 Peachtree Street,
GA-8407, Atlanta, Georgia 30303, Attention: [Elizabeth Wagner], Asset Backed
Finance, or such other address as shall be designated by the Agent in writing to
the Seller and the Purchaser.

          "Aggregate Reduction": As defined in Section 3.2(b).

          "Amendment Closing Date": November 20, 2002

          "Amendment Effective Date": As defined in Section 5.3.

          "Amortization Period": The period following the Funding Termination
Date until the date on which all obligations of the Seller hereunder are paid in
full.

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<PAGE>

          "Asset Interest": The Purchaser's undivided percentage ownership
interest, determined from time to time as provided in Section 1.4(b), in (i) all
then outstanding Pool Receivables and (ii) all Related Assets.

          "Asset Tranche": At any time, a portion of the Asset Interest selected
by the Agent pursuant to Section 2.1.

          "Bank Rate": For any Yield Period with respect to any Asset Tranche:

          (a)  in the case of any Yield Period other than a Yield Period
described in clause (b), an interest rate per annum equal to the sum of (x) the
Bank Rate Spread per annum, plus (y) Eurodollar Rate (Reserve Adjusted) for such
Yield Period;

          (b)  in the case of

          (i)  any Yield Period commencing on or after the first day of which
     the Purchaser or any Liquidity Bank shall have notified the Agent that (A)
     the introduction of or any change in or in the interpretation of any law or
     regulation makes it unlawful, or any central bank or other governmental
     authority asserts that it is unlawful, for such Person to fund such Asset
     Tranche at the rate described in clause (a), or (B) due to market
     conditions affecting the interbank eurodollar market, funds are not
     reasonably available to such Person in such market in order to enable it to
     fund such Asset Tranche at the rate described in clause (a) (and in the
     case of subclause (A) or (B), such Person shall not have subsequently
     notified the Agent that such circumstances no longer exist), or

          (ii) any Yield Period as to which the Agent does not receive notice
     pursuant to Section 1.2(a) or determine, by no later than 12:00 noon
     (Atlanta, Georgia time), in each case, on the third Business Day preceding
     the first day of such Yield Period, that the related Asset Tranche will be
     funded by Liquidity Fundings and not by the issuance of Commercial Paper
     Notes,

an interest rate per annum equal to (x) 1.0% per annum, plus (y) the Base Rate
in effect from time to time during such Yield Period; it being understood that,
in the case of paragraph (b)(i) above, such rate shall only apply to the Person
affected by the circumstances described in such paragraph (b)(i).

          "Bank Rate Spread": As defined in the Fee Letter.

          "Base Rate": For any day, the rate per annum equal to the higher as of
such day of (i) the Prime Rate, or (ii) one-half of one percent above the
Federal Funds Rate. For purposes of determining the Base Rate for any day,
changes in the Prime Rate or the Federal Funds Rate shall be effective on the
date of each such change. The Base Rate is not necessarily intended to be the
lowest rate of interest determined by Wachovia in connection with extensions of
credit.

          "Broken Funding Costs": for any Asset Tranche which: (i) has its
Invested Amount reduced without compliance by the Seller with the notice
requirements hereunder or (ii)

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<PAGE>

does not become subject to an Aggregate Reduction following the delivery of any
Reduction Notice or (iii) is assigned by the Purchaser to the Liquidity Banks
under the Liquidity Agreement or terminated prior to the date on which it was
originally scheduled to end; an amount equal to the excess, if any, of (A) the
CP Costs that would have accrued during the remainder of the tranche periods for
Commercial Paper Notes or (as applicable) Earned Discount that would have
accrued during the remainder of the Yield Periods determined by the Agent to
relate to such Asset Tranche (as applicable) subsequent to the date of such
reduction, assignment or termination (or in respect of clause (ii) above, the
date such Aggregate Reduction was designated to occur pursuant to the Reduction
Notice) of the Invested Amount of such Asset Tranche if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been
delivered, over (B) the sum of (x) to the extent all or a portion of such
Invested Amount is allocated to another Asset Tranche, the amount of CP Costs or
Earned Discount actually accrued during the remainder of such period on such
Invested Amount for the new Asset Tranche, and (y) to the extent such Invested
Amount is not allocated to another Asset Tranche, the income, if any, actually
received during the remainder of such period by the holder of such Asset Tranche
from investing the portion of such Invested Amount not so allocated. All Broken
Funding Costs shall be due and payable hereunder upon demand.

          "Business Day": (i) with respect to any matters relating to the
Eurodollar Rate, a day on which banks are open for business in New York, New
York, and in Atlanta, Georgia, and on which dealings in Dollars are carried on
in the London interbank market and (ii) for all other purposes, any day (other
than a Saturday or a Sunday or a day on which banking institutions or trust
companies in New York, New York, or Atlanta, Georgia, are authorized or
obligated by law, executive order or governmental decree to be closed) on which
The Depository Trust Company of New York is open for business.

          "Cadmus": As defined in the preamble.

          "Change in Control":

          (a) in relation to Cadmus, (i) the acquisition by any Person or two or
     more Persons acting in concert of a beneficial ownership (within the
     meaning of Section 13d-3 of the Securities and Exchange Commission under
     the Exchange Act) of 20% or more of the outstanding shares of the voting
     stock of Cadmus; or (ii) the date on which a majority of the board of
     directors of Cadmus consists of individuals who were not either (A)
     directors of Cadmus as of the corresponding date of the previous year, (B)
     selected or nominated to become directors by the board of directors of
     Cadmus of which a majority consisted of individuals described in clause
     (A), or (C) selected or nominated to become directors by the board of
     directors of Cadmus of which a majority consisted of individuals described
     in clause (A) and individuals described in clause (B); and

          (b) in relation to the Seller, the failure of Cadmus to own (directly
     or through one or more wholly-owned Subsidiaries of Cadmus) 100% of the
     issued and outstanding shares of the capital stock (including all warrants,
     options, conversion rights, and other rights to purchase or convert into
     such stock) of the

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<PAGE>

     Seller on a fully diluted basis free and clear of any Lien, except as
     contemplated by the Conditional Waiver.

          "Code": The Internal Revenue Code of 1986, as the same may be amended
from time to time.

          "Collateral": As defined in Section 9.1.

          "Collateral Agent": Such Person as may be appointed as collateral
agent from time to time by the Purchaser.

          "Collection Account": The segregated account number 6260-049964
maintained at Wachovia in the name of Cadmus, in its capacity as Master
Servicer.

          "Collections": With respect to any Receivable, all funds which either
(a) are received by the Seller, the Originators or the Master Servicer from or
on behalf of the related Obligor in payment of any amounts owed (including,
without limitation, purchase prices, finance charges, interest and all other
charges) in respect of such Receivable, or applied to such amounts owed by such
Obligor (including, without limitation, insurance payments that the Seller, the
Originators or the Master Servicer applies in the ordinary course of its
business to amounts owed in respect of such Receivable and net proceeds of sale
or other disposition of repossessed goods or other collateral or property of the
Obligor or any other party directly or indirectly liable for payment of such
Receivable and available to be applied thereon), or (b) are Deemed Collections;
provided that, prior to such time as Cadmus shall cease to be the Master
Servicer, late payment charges, collection fees and extension fees shall not be
deemed to be Collections.

          "Commercial Paper Notes": Commercial paper notes issued by the
Purchaser in the United States commercial paper market.

          "Conditional Waiver" That certain Conditional Waiver dated June 21,
2001 entered into by the Agent, the Purchaser, the Seller and the Master
Servicer.

          "Consolidated EBITDA": As defined in the Credit Agreement.

          "Consolidated Total Assets": As defined in the Credit Agreement.

          "Contract": A contract between the Seller or any Originator and any
Person, or an invoice sent or to be sent by the Seller or any Originator,
pursuant to or under which a Receivable shall arise or be created, or which
evidences a Receivable. A `related Contract' or similar reference means rights
to payment, collection and enforcement, and other rights under a Contract to the
extent directly related to a Receivable in the Receivables Pool, but not any
other rights under such Contract.

          "Controlled Group": All members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with Cadmus, are treated as a single employer under Section 414
of the Code.

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<PAGE>

          "CP Accrual Period": Each Settlement Period during which any Asset
Tranche is funded with Commercial Paper Notes.

          "CP Costs": for each day, the sum of (i) discount or interest accrued
on Pooled Commercial Paper on such day, plus (ii) any and all accrued
commissions in respect of placement agents and Commercial Paper Note dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase or financing facilities
which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual
of income net of expenses received on such day from investment of collections
received under all receivable purchase or financing facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any investment of Purchaser pursuant to the terms of any
receivable purchase or financing facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if Seller shall request
any Purchase during any period of time determined by the Agent in its sole
discretion to result in incrementally higher CP Costs applicable to such
Purchase, the principal associated with any such Purchase shall, during such
period, be deemed to be funded by Purchaser in a special pool (which may include
capital associated with other receivable purchase or financing facilities) for
purposes of determining such additional CP Costs applicable only to such special
pool and charged each day during such period against such principal.
Notwithstanding the foregoing, on any day when any Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, the CP Costs
for each Asset Tranche funded through the issuance of Commercial Paper Notes
shall equal the greater of (a) the amount determined for such day pursuant to
the preceding two sentences, and (b) interest on the Invested Amount associated
with such Asset Tranche a rate per annum equal to the Base Rate plus 2% per
annum.

          "CP Rate": With respect to any CP Accrual Period, the rate per annum
equivalent to the CP Costs accrued with respect to the Invested Amount allocated
to any Asset Tranche funded with Commercial Paper Notes.

          "Credit Agreement": The Credit Agreement dated as of April 1, 1999
among Cadmus, the banks listed therein, Nationsbank, N.A., as Documentation
Agent, First Union National Bank, as Syndication Agent and Wachovia, as Agent,
as the same may be amended from time to time in accordance with the terms
thereof.

          "Credit and Collection Policy": Those credit and collection policies
and practices of the Originators relating to Contracts and Receivables as in
effect on the date of this Agreement, as modified without violating Section
7.3(c), but subject to compliance with applicable tariffs or state regulations
in effect from time to time; provided that if a Liquidation Event has occurred,
at the request of the Agent, the Master Servicer shall provide a detailed
written summary of the Credit and Collection Policy.

          "Cumulative Sales": For each Settlement Period, the amount of
Receivables originated by the Originators and sold to the Seller pursuant to the
Sale Agreement.

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<PAGE>

          "Cut-Off Date": The last day of each Settlement Period.

          "Days Sales Outstanding" or "DSO": As of any day, an amount equal to
the product of (x) 91, multiplied by (y) the amount obtained by dividing (i) the
aggregate Unpaid Balance of Receivables as of the most recent Cut-Off Date, by
(ii) the aggregate amount of Receivables created during the three Settlement
Periods including and immediately preceding such Cut-Off Date.

          "Deemed Collections": As defined in Section 3.2(a).

          "Defaulted Receivable": A Pool Receivable (i) for which a payment is
90 or more days past due, (ii) for which collection proceedings have been
commenced, (iii) the Obligor of which has had an Event of Bankruptcy or (iv)
that has been written off or would be written off in accordance with the Credit
and Collection Policy.

          "Default Horizon Ratio": As of any Cut-Off Date, the ratio (expressed
as a percentage) of (i) the sum of (A) the Cumulative Sales of the Originators
during the Settlement Period ending on such Cut-Off Date, (B) the Cumulative
Sales of the Originators during the immediately preceding Settlement Period, (C)
the Cumulative Sales of the Originators during the second immediately preceding
Settlement Period, (D) the Cumulative Sales of the Originators during the third
immediately preceding Settlement Period and (E) one half of the Cumulative Sales
of the Originators during the fourth immediately preceding Settlement Period
divided by (ii) the Net Pool Balance as of the most recent Cut-Off Date.

          "Default Ratio": At any time, the ratio (expressed as a percentage)
computed as of the Cut-Off Date for the immediately preceding Settlement Period
by dividing (x) the aggregate Unpaid Balance of all Pool Receivables that became
Defaulted Receivables during such immediately preceding Settlement Period by (y)
Cumulative Sales generated during the Settlement Period four months prior to the
most recent Settlement Period.

          "Default Trigger Ratio": At any time, the ratio (expressed as a
percentage) computed as of the Cut-Off Date for the immediately preceding
Settlement Period by dividing (x) the aggregate Unpaid Balance of all Pool
Receivables that are Defaulted Receivables on such Cut-Off Date by (y) the
Cumulative Sales generated during the Settlement Period four months prior to the
most recent Settlement Period.

          "Delinquency Ratio": At any time, the ratio (expressed as a
percentage) computed as of the Cut-Off Date for the immediately preceding
Settlement Period by dividing (x) the aggregate Unpaid Balance of all Pool
Receivables that are Delinquent Receivables on such Cut-Off Date by (y) the
aggregate Unpaid Balance of Pool Receivables on such Cut-Off Date.

          "Delinquent Receivable": A Pool Receivable (a) that is not a Defaulted
Receivable and (b) as to which any payment, or part thereof, remains unpaid for
61-90 days or more from the original due date for such payment.

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         "Dilution": The amount of any reduction or cancellation of the Unpaid
Balance of a Pool Receivable as described in Section 3.2(a).

         "Dilution Horizon Ratio": As of any date, an amount (expressed as a
percentage) calculated by dividing Cumulative Sales for the immediately
preceding two Settlement Periods by the Unpaid Balance of all Eligible
Receivables as of the most recent Cut-Off Date.

         "Dilution Ratio": As of any date, an amount (expressed as a percentage)
equal to a fraction, the numerator of which is the total amount of Dilution
during the previous Settlement Period, and the denominator of which is the
Cumulative Sales generated during the Settlement Period one months prior to the
most recent Settlement Period.

         "Dilution Reserve": An amount (expressed as a percentage) equal to the
product of (a) the sum of (i) 2.25 times the Adjusted Dilution Ratio and (ii)
the Dilution Volatility Component and (b) the Dilution Horizon Ratio.

         "Dilution Volatility Component": An amount (expressed as a percentage)
equal to the product of (a) the difference between (i) the highest three month
rolling average Dilution Ratio over the past 12 months and (ii) the Adjusted
Dilution Ratio and (b) a fraction, the numerator of which is the highest three
month rolling average Dilution Ratio over the past 12 months and the denominator
of which is the Adjusted Dilution Ratio.

         "Downgraded Liquidity Bank": A Liquidity Bank which has been the
subject of a Downgrading Event.

         "Downgrading Event": With respect to any Person means the lowering of
the rating with regard to the short-term securities of such Person to below (i)
A-1 by S&P, or (ii) P-1 by Moody's.

         "Due Diligence Report": As defined in Section 5.1(k).

         "Earned Discount": For any Yield Period, as applicable, for any Asset
Tranche funded with a Liquidity Funding:

               PTI x ER x ED + LF
               -------------
                    360

         where:

         PTI   =   the daily average (calculated at the close of business each
                   day) of the Purchaser's Tranche Investment in such Asset
                   Tranche during such Yield Period, as applicable,

         ER    =   the Earned Discount Rate for such Yield Period,

         ED    =   the actual number of days elapsed during such Yield Period,
                   and

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<PAGE>

         LF  =  the Liquidation Fee, if any, during such Yield Period.

         "Earned Discount Rate": For any Yield Period for any Asset Tranche
funded by a Liquidity Funding the Bank Rate for such Asset Tranche and such
Yield Period; provided, however, that on any day when any Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, the Earned
Discount Rate for each Asset Tranche (including, without limitation, Asset
Tranches funded through the issuance of Commercial Paper Notes) shall mean a
rate per annum equal to the Base Rate plus 2% per annum.

         "Eligible Originator": Any direct or indirect wholly-owned Subsidiary
of Cadmus with respect to which the Agent has received satisfactory opinions of
counsel (i) concerning the existence of a "true sale" of the Receivables and the
proceeds thereof from such Originator to the Seller under the Sale Agreement;
(ii) concerning the inapplicability of the doctrine of substantive consolidation
of the Seller and in connection with any bankruptcy proceeding involving such
Originator, (iii) to the effect that the Seller has obtained a valid and
perfected ownership or security interest in such Originator's Receivables and
the Agent is satisfied that such Originator's Receivables are subject to no
other Liens of record, except as otherwise permitted under the Transaction
Documents and (iv) as to enforceability of the Transaction Documents against
such Originator, corporate matters and such other matters as the Agent may
reasonably request.

         "Eligible Receivable": At any time, a Receivable:

         (a) which is a Pool Receivable representing goods that have been
shipped or services that have been performed and which arises out of the sale by
the Originators in the ordinary course of its business that has been sold to the
Seller pursuant to the Sale Agreement in a "true sale" transaction;

         (b) as to which the perfection of the Purchaser's undivided ownership
interest therein is governed by the laws of a jurisdiction where the Uniform
Commercial Code - Secured Transactions is in force, and which constitutes an
"account" as defined in the Uniform Commercial Code as in effect in such
jurisdiction;

         (c) the Obligor of which is (i) a resident of the United States, or any
of its possessions or territories, (ii) not an Affiliate of any Seller Party and
(iii) not a Governmental Authority;

         (d) which is not a Defaulted Receivable or owing from an Obligor as to
which more than 50% of the aggregate Unpaid Balance of all Receivables owing
from such Obligor are Defaulted Receivables;

         (e) with regard to which the representations and warranties of the
Seller are true and correct;

         (f) the sale of an undivided interest in which does not contravene or
conflict with any applicable federal, state or local law or regulation;

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<PAGE>

         (g) which is denominated and payable only in U.S. Dollars in the United
States;

         (h) which arises under a Contract that has been duly authorized and
executed and that, together with such Receivable, is in full force and effect
and constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms and is
not subject to any dispute, offset, counterclaim or defense whatsoever;
provided, however, that if such dispute, offset, counterclaim or defense affects
only a portion of the Unpaid Balance of such Receivable then such Receivable may
be deemed an Eligible Receivable to the extent of the portion of such Unpaid
Balance which is not so affected, and provided, further, that Receivables of any
Obligor which has any accounts payable by any Originator (thus giving rise to a
potential offset against such Receivables) may be treated as Eligible
Receivables to the extent that the Obligor of such Receivables has agreed
pursuant to a written agreement in form and substance satisfactory to the Agent,
that such Receivables shall not be subject to such offset;

         (i) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury, truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and with respect
to which no party to the Contract related thereto is in violation of any such
law, rule or regulation in any material respect if such violation would impair
the collectibility of such Receivable;

         (j) which satisfies in all material respects all applicable
requirements of the Credit and Collection Policy;

         (k) which, according to the Contract related thereto, is due and
payable within 60 days from the invoice date of such Receivable;

         (1) which is not the result of a finance charge; and

         (m) the original term of which has not been extended and the Unpaid
Balance of which has not been adjusted more than once.

         "Environmental Laws": Any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
petroleum or petroleum products, chemicals or industrial, toxic or hazardous
substances or wastes or the clean-up or other remediation thereof.

         "ERISA": The U.S. Employee Retirement Income Security Act of 1974, as
amended from time to time.

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<PAGE>

         "ERISA Affiliate": Any trade or business (whether or not incorporated)
that is a member of a group of which Cadmus is a member and which is treated as
a single employer under Section 414 of the Code.

         "Eurodollar Business Day": A day of the year as defined in clause (i)
of the definition of Business Day.

         "Eurodollar Rate": For any Yield Period, the rate per annum determined
on the basis of the offered rate for deposits in Dollars of amounts equal or
comparable to the principal amount of the related Liquidity Funding offered for
a term comparable to such Yield Period, which rate appears on the Telerate Page
3750 effective as of 11:00 A.M., London time, two Eurodollar Business Days prior
to the first day of such Yield Period, provided that if no such offered rates
appear on such page, the Eurodollar Rate for such Yield Period will be the
arithmetic average (rounded upwards, if necessary, to the next higher 1/100th of
1%) of rates quoted by not less than two major banks in New York City, selected
by the Agent, at approximately 10:00 A.M., New York City time, two Eurodollar
Business Days prior to the first day of such Yield Period, for deposits in
Dollars offered by leading European banks for a period comparable to such Yield
Period in an amount comparable to the principal amount of such Liquidity
Funding.

         "Eurodollar Rate (Reserve Adjusted)": With respect to any Yield Period
means a rate per annum equal to the quotient obtained (rounded upwards, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
Eurodollar Rate for such Interest Period by (ii) 1.0 minus the Eurodollar
Reserve Percentage.

         "Eurodollar Reserve Percentage": With respect to any Yield Period, the
maximum reserve percentage, if any, applicable to the Liquidity Bank under
Regulation D during such Yield Period (or if more than one percentage shall be
applicable, the daily average of such percentages for those days in such Yield
Period during which any such percentage shall be applicable) for determining the
Liquidity Bank's reserve requirement (including any marginal, supplemental or
emergency reserves) with respect to liabilities or assets having a term
comparable to such Yield Period consisting or included in the computation of
"Eurocurrency Liabilities" pursuant to Regulation D. Without limiting the effect
of the foregoing, the Eurodollar Reserve Percentage shall reflect any other
reserves required to be maintained by the Liquidity Bank by reason of any
Regulatory Change against (a) any category of liabilities which includes
deposits by reference to which the "London Interbank Offered Rate" or "LIBOR" is
to be determined or (b) any category of extensions of credit or other assets
which include LIBOR-based credits or assets.

         "Event of Bankruptcy": With respect to a Person if either:

         (a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or substantially all of its assets, or any similar action with respect to such
Person under any

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<PAGE>

law relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 60 consecutive days; or
an order for relief in respect of such Person shall be entered in an involuntary
case under the federal bankruptcy laws or other similar laws now or hereafter in
effect; or

         (b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall be adjudicated insolvent, or admit in
writing its inability to pay its debts generally as they become due, or, if a
corporation or similar entity, its board of directors shall vote to implement
any of the foregoing.

         "Excess Concentration Amount": As of any date, the sum of the amounts
by which the aggregate Unpaid Balance of Receivables of each Obligor exceeds the
Obligor Concentration Limit for such Obligor.

         "Exchange Act": The Securities Exchange Act of 1934.

         "Existing Agreement": As defined in the preamble.

         "Federal Funds Rate": For any day, the rate per annum (rounded upwards,
if necessary, to the next higher 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Domestic Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
determined is not a Domestic Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent on such day on such transactions,
as reasonably determined by the Agent.

         "Federal Reserve Board": The Board of Governors of the Federal Reserve
System, or any successor thereto or to the functions thereof.

         "Fee Letter": As defined in Section 4.1.

         "Final Payout Date": The date following the Termination Date on which
the Invested Amount shall have been reduced to zero and all other amounts
payable by the Seller under the Transaction Documents shall have been paid in
full.

         "Fiscal Quarter": A fiscal quarter of Cadmus and its Subsidiaries
ending on the dates specified in Schedule B attached hereto.

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<PAGE>

                  "Fiscal Year": A fiscal year of Cadmus and its Subsidiaries
ending on June 30 of the applicable year.

                  "Funding Termination Date": The earliest of the following:

                  (a)   October 22, 2003;

                  (b)   the Agent declares a Funding Termination Date in a
         notice to the Seller in accordance with Section 10.2(a); or

                  (b)   in accordance with Section 10.2(b), the Funding
         Termination Date occurs automatically.

                  "GAAP": Generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such accounting profession, which are applicable to the
circumstances as of the date of determination.

                  "Governmental Authority": Any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, any court or arbitrator and any accounting board or authority
(whether or not part of government) which is responsible for the establishment
or interpretation of national or international accounting principles, in each
case whether foreign or domestic.

                  "Guarantee": With respect to any person, any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness; provided, however that
the term Guarantee shall not include endorsements for collection or deposit, in
either case, in the ordinary course of business.

                  "Indebtedness": With respect to any person means at any date,
without duplication, (a) all obligations of such person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services (except trade accounts payable arising in the
ordinary course of business that are not overdue by 90 days or more or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted),

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<PAGE>

(d) all obligations of such Person as lessee under capital leases, (e) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts payable under a banker's acceptance, (f) all redeemable preferred stock
of such Person (in the event such Person is a corporation), (g) all obligations
of such Person to reimburse any bank or other Person in respect of amounts under
a letter of credit or similar instrument, (h) all Indebtedness (as defined in
clauses (a) through (g)) secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person and (i) all Indebtedness (as
defined in clauses (a) through (i)) of others Guaranteed by such Person.

                  "Indemnified Amounts": As defined in Section 13.1.

                  "Indemnified Party": As defined in Section 13.1.

                  "Initial Due Diligence Auditor":  Such person designated by
the Agent as the initial due diligence auditor.

                  "Invested Amount": means at any time with respect to the Asset
Interest an amount equal to (a) the aggregate of the amounts theretofore paid to
the Seller for Purchases pursuant to Section 1.1 and 1.2, less (b) the aggregate
amount of Collections theretofore received and actually distributed to the
Agent, on behalf of the Purchaser, on account of the Invested Amount pursuant to
Section 1.3.

                  "Investors": The Purchaser and the Liquidity Banks.

                  "Letter Agreement": The letter of Cadmus dated June 16, 1999
to Wachovia Securities, Inc.

                  "Lien": A lien, security interest, charge or encumbrance or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person.

                  "Liquidation Event": As defined in Section 10.1.

                  "Liquidation Fee": For each Asset Tranche (or portion thereof)
funded through a Liquidity Funding for each day in any Yield Period, the amount,
if any, by which:

                  (a)  the additional Earned Discount (calculated without taking
         into account any Liquidation Fee) which would have accrued on the
         reductions of the Purchaser's Tranche Investment with respect to such
         Asset Tranche during such Yield Period (as so computed) if such
         reductions had not been made, exceeds

                  (b)  the income, if any, received by the Purchaser from
         investing the proceeds of such reductions of the Purchaser's Tranche
         Investment.

                  "Liquidation Period": The period commencing on the date on
which the conditions precedent to Purchases and Reinvestment set forth in
Section 5.2 are not satisfied (or expressly waived by the Purchaser) and the
Agent shall have notified the Seller and the Master

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<PAGE>

Servicer in writing that the Liquidation Period has commenced, and ending on the
Final Payout Date.

                  "Liquidity Agent": Wachovia, as agent for the Liquidity Banks
under the Liquidity Agreement, or any successor to Wachovia in such capacity.

                  "Liquidity Agreement": The Liquidity Asset Purchase Agreement
dated as of October 26, 1999 among Purchaser, Wachovia, as Agent, Wachovia, as
Liquidity Agent, and Wachovia and/or one or more other banks or other financial
institutions, as Liquidity Banks, and any other agreement hereafter entered into
by the Purchaser providing for the making of loans, purchase of assets or other
extensions of credit to the Purchaser secured by a direct or indirect security
interest in the Asset Interest (or any portion thereof), to support all or part
of the Purchaser's payment obligations under the Commercial Paper Notes or to
provide an alternate means of funding Purchaser's investments in accounts
receivable or other financial assets, and under which the amount available from
such extensions of credit is limited to an amount calculated by reference to the
value or eligible unpaid balance of such accounts receivable or other financial
assets or any portion thereof or the level of deal-specific credit enhancement
available with respect thereto, as such Liquidity Agreement or other agreement
may be amended, supplemented or otherwise modified from time to time.

                  "Liquidity Bank": The commercial lending institutions that are
at any time parties to the Liquidity Agreement as liquidity providers
thereunder.

                  "Liquidity Funding": A purchase made by the Liquidity Bank (or
simultaneous purchases made by the Liquidity Banks) pursuant to the Liquidity
Agreement.

                  "Lock-Box": Any post office box, as listed on Schedule 6.1(o),
to which Collections are remitted for retrieval by a Lock-Box Bank and deposited
by such Lock-Box Bank into the Collection Account.

                  "Lock-Box Agreement": A letter agreement, in substantially the
form of Exhibit A-1, among the Master Servicer, the Originators, the Purchaser,
the Agent, the Seller and any Lock-Box Bank.

                  "Lock-Box Bank": Any of the banks holding one or more
Lock-Boxes or the Collection Account receiving Collections from Pool
Receivables.

                  "Lock-Box Notice": A notice, in substantially the form
attached to Exhibit A-1, from the Agent to the Lock-Box Bank.

                  "Loss Reserve": At any time, means (expressed as a percentage)
the product of (i) two, (ii) the highest rolling three month average Default
Ratio to have occurred during the most recently ended twelve consecutive month
period and (iii) the most recently calculated Default Horizon Ratio.

                  "Mandate Letter": That certain letter agreement dated February
 8, 1999 between Cadmus and Wachovia.

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<PAGE>

                  "Master Servicer": As defined in the preamble.

                  "Material Adverse Effect": With respect to any event or
circumstance, an effect caused or resulting from such event or circumstance
which has or would reasonably be expected to have a material adverse effect on:

                  (i)    (A) the assets, operations, business or financial
         condition of the Seller or (B) the business, assets, operations or
         financial condition of Cadmus and its Subsidiaries, taken as a whole;

                  (ii)   the ability of any Seller Party or any Originator to
         perform in all material respects its obligations under this Agreement
         or any other Transaction Document; or

                  (iii)  the status, existence, perfection, priority or
         enforceability of the Secured Parties' interest in the Receivables
         Pool.

                  "Moody's": Moody's Investors Service, Inc.

                  "Net Pool Balance": On any date, an amount equal to (i) the
aggregate Unpaid Balance of all Eligible Receivables in the Receivables Pool on
such date, minus (ii) the Excess Concentration Amount on such date.

                  "Obligor": A Person obligated to make payments with respect to
a Receivable, including any guarantor thereof.

                  "Obligor Concentration Limit": At any time, in relation to the
aggregate Unpaid Balance of Receivables owed by any single Obligor and its
Affiliated obligors (if any):

                  (a)   for Obligors who have a short term unsecured debt rating
currently assigned to them by either S&P or Moody's, the applicable
concentration limit shall be determined according to the following table (and,
if such Obligor is rated by both agencies and has a split rating, the applicable
rating will be the lower of the two):

                                                               Allowable
                                              Moody's        % Of Eligible
                      S&P Rating   or         Rating          Receivables

                      --------------------------------------------------------
                          A-1+                  P-1              10%
                      --------------------------------------------------------
                          A-1                   P-1               8%
                      --------------------------------------------------------
                          A-2                   P-2               6%
                      --------------------------------------------------------
                          A-3                   P-3               3%; or
                      --------------------------------------------------------

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                  (b)   for Obligors who do not have a debt rating listed above,
2% of the aggregate Unpaid Balance of Eligible Receivables at such time;

provided, however, that at the Originator's request and in the Agent's sole
discretion, the Agent may permit certain obligors to have an Obligor
Concentration Limit in excess of those described in clauses (a) and (b) above.

                  "Original Receivable":  As defined in Section 8.2(h).

                  "Originator": Each Person (1) listed as an Originator on
Schedule A hereto, as such Schedule A may be modified from time to time pursuant
to this Agreement, (2) who is an Eligible Originator and (3) who is listed as a
"Seller" under the Sale Agreement (as such agreement may be modified from time
to time) in its capacity as Seller of Receivables under the Sale Agreement.

                  "Person": An individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.

                  "Plan": Any pension plan subject to the provisions of Title IV
of ERISA or Section 412 of the Code which is maintained for employees of Cadmus
or any ERISA Affiliate.

                  "Pool Receivable":  A Receivable in the Receivables Pool.

                  "Pooled Commercial Paper": Commercial Paper Notes of Purchaser
subject to any particular pooling arrangement by Purchaser, but excluding
Commercial Paper Notes issued by Purchaser for a tenor and in an amount
specifically requested by any Person in connection with any agreement effected
by Purchaser.

                  "Prime Rate": Refers to that interest rate so denominated and
set by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.

                  "Program Information": As defined in Section 14.8(a)(i).

                  "Proposed Reduction Date":  As defined in Section 3.2(b).

                  "Purchase": As defined in Section 1.1.

                  "Purchase Limit": As defined in Section 1.1.

                  "Purchaser": As defined in the preamble.

                  "Purchaser's Share":  With respect to any amount, on any day,
the lesser of (i) the most recently calculated Asset Interest and (ii) 100%.

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                  "Purchaser's Tranche Investment": In relation to any Asset
Tranche, the amount of the Invested Amount allocated by the Agent to that Asset
Tranche pursuant to Section 2.1, provided, that at all times the aggregate
amounts allocated to all Asset Tranches shall equal the Invested Amount.

                  "Qualifying Liquidity Bank": A Liquidity Bank with a rating of
its short-term securities equal to or higher than (i) A-1 by S & P and (ii) P-1
by Moody's.

                  "Rebilled Receivable": As defined in Section 8.2(h).

                  "Rebill Termination Date": The earliest to occur of (i) the
Sale Termination Date, (ii) the date on which an Unmatured Liquidation Event
occurs, and (iii) the insolvency or bankruptcy of the Originator of the related
Rebilled Receivable.

                  "Receivable": Any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising from the sale of goods or rendering of services by any Originator and
includes the right to payment of any interest or finance charges and other
amounts with respect thereto, other than those reconveyed to such Originator
pursuant to Section 3.5 of the Sale Agreement.

                  "Receivables Pool": At any time all then outstanding
Receivables which have been sold or contributed as capital, or purported to have
been sold or contributed as capital, by any Originator to the Seller, other than
those reconveyed to such Originator pursuant to Section 3.5 of the Sale
Agreement.

                  "Reduction Notice": As defined in Section 3.2(b).

                  "Regulation": Any specified Regulation of the Federal Reserve
Board, as the same may be amended or supplemented from time to time.

                  "Regulatory Change": The adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency.

                  "Reinvestment": As defined in Section 1.3(a)(iii).

                  "Related Assets": (a) all rights to, but not any obligations
under, all Related Security related to any Pool Receivables, (b) all rights and
interests of the Seller under the Sale Agreement in relation to any Pool
Receivables, (c) all books and records evidencing or otherwise relating to any
Pool Receivables, (d) all Lock-Boxes and the Collection Account and all cash and
investments therein, to the extent constituting or representing the items in the
following clause (e) and (e) all Collections in respect of, and other proceeds
of, any Pool Receivables or any other Related Assets.

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<PAGE>

                  "Related Security": With respect to any Pool Receivable, all
of the Seller's (in the case of usage in this Agreement or the applicable
Originator's (in the case of usage in the Sale Agreement) right, title and
interest in and to: (a) all Contracts that relate to such Pool Receivable; (b)
all merchandise (including returned merchandise), if any, relating to the sale
which gave rise to such Pool Receivable; (c) all security deposits and other
security interests or liens and property subject thereto from time to time
purporting to secure payment of such Pool Receivable, whether pursuant to the
Contract related to such Pool Receivable or otherwise; (d) all UCC financing
statements covering any collateral securing payment of such Pool Receivable (but
only to the extent of the interest of the Purchaser in the respective Pool
Receivable); (e) all guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Pool
Receivable whether pursuant to the Contract related to such Pool Receivable or
otherwise; and (f) all insurance policies, and all claims thereunder, related to
such Pool Receivable, in each case to the extent directly related to rights to
payment, collection and enforcement, and other rights with respect to such Pool
Receivable. The interest of the Purchaser in any Related Security is only to the
extent of the Purchaser's undivided percentage interest, as more fully described
in the definition of Asset Interest.

                  "Reportable Event": Any reportable event as defined in Section
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate which is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

                  "Reporting Date": (a) The fifteenth day of each month, or, if
such day is not a Business Day, the next succeeding Business Day or (b) such
other day as the Agent may request; provided, however that the Agent shall not
request a Reporting Date to occur more frequently than weekly.

                  "Required Notice Period": The number of days required notice
set forth below applicable to the Aggregate Reduction indicated below:

                    Aggregate Reduction                   Required Notice Period
                    -------------------                   ----------------------
                  less than 25% of the Purchase              2 Business Days
                  Limit

                  greater than 25% but less than             5 Business Days
                  50% of the Purchase Limit

                  greater than 50% of the                    10 Business Days
                  Purchase Limit

                  "Required Reserves": On any day, an amount equal to the
product of (a) the Required Reserve Factor and (b)the Net Pool Balance.

                  "Required Reserve Factor": On any day during the Settlement
Period, an amount equal to the greater of (x) the Required Reserve Factor Floor
and (y) the sum of (i) the Loss Reserve, (ii) the Dilution Reserve, (iii) the
Yield Reserve, and (iv) the Servicing Reserve.

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                  "Required Reserve Factor Floor": On any day during the
Settlement Period, the amount (expressed as a percentage) equal to the sum of
(i) the product of (a) the Adjusted Dilution Ratio and (b) the Dilution Horizon
Ratio and (ii) the greater of (a) four times the Obligor Concentration Limit
applicable to Obligors which are unrated or noninvestment grade, (b) two times
the Obligor Concentration Limit applicable to Obligors which are A-3/P-3 rated
or (c) one times the Obligor Concentration Limit applicable to Obligors which
are A-2/P-2 rated and (iii) 2%.

                  "Revolving Period": The period from October 26, 1999until the
Funding Termination Date or such other date consented to in writing by the Agent
on behalf of the Purchaser.

                  "S&P": Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.

                  "Sale Agreement": The Amended and Restated Purchase and Sale
Agreement dated as of May 17, 2000 among the Originators and the Seller, as
purchaser thereunder, as it may be amended, supplemented or otherwise modified
in accordance with Section 7.3(f).

                  "SEC": The Securities and Exchange Commission.

                  "Secured Parties": The Purchaser, the Agent, the Liquidity
Banks and their successors and assigns.

                  "Seller": As defined in the preamble.

                  "Seller Information": As defined in Section 14.7(a).

                  "Seller Information Provider": As defined in Section 14.7(a).

                  "Seller Notes": As defined in the Sale Agreement.

                  "Seller Party": As defined in the preamble.

                  "Seller's Share": With respect to amount, on any day, 100%
minus the Purchaser's Share on such day.

                  "Senior Officer": With respect to any Person, the chief
executive officer, chief financial officer or president of such Person.

                  "Servicer": Initially, each Servicer identified in Schedule B
to this Agreement, and after any Servicer Transfer Event, the Successor Servicer
with respect to such Servicer.

                  "Servicer Advance": As defined in Section 8.3.

                  "Servicer Default. As defined in Section 8.4.

                  "Servicer Transfer Event": As defined in Section 8.1(b)

                                       80

<PAGE>

                  "Servicer's Fee": For any day in a Settlement Period, an
amount equal to the product of (x) the Servicer's Fee Rate, (y) the aggregate
Unpaid Balance of the Pool Receivables at the close of business on the first day
of such Settlement Period, and (z) 1/360.

                  "Servicer's Fee Rate":  1.0% per annum.

                  "Servicing Reserve": On any day, the product of (a) the
Servicer's Fee Rate and (b) a fraction, the numerator of which is the highest
Days Sales Outstanding calculated for each of the most recent 12 monthly periods
and the denominator of which is 360.

                  "Settlement Date":  The second Business Day following each
Reporting Date.

                  "Settlement Period":

                  (a)   The period beginning on the date of the initial Purchase
        to and including the last day of the calendar month in which such date
        occurs; and

                  (b)   thereafter each period, beginning on, but excluding the
        last day of the immediately preceding Settlement Period to and including
        the last day of the next following calendar month;

provided, however, that the last Settlement Period shall end on the Final Payout
Date.

                  "Settlement Report": As defined in Section 3.1(a).

                  "Significant Subsidiary": (a) Each Subsidiary that is a member
of the Significant Subsidiary Group and (b) in addition to the Subsidiaries
described in clause (a), each Subsidiary that at any time Guarantees all or any
part of the Subordinated Debt (as defined in the Credit Agreement). As used
herein, "Significant Subsidiary Group" as at any date means one or more
Subsidiaries which account for (or in the case of a recently formed or acquired
Subsidiary would so account for on a pro forma historical basis) at least (i)
90% of Consolidated Total Assets as measured as at the end of the most recently
ended Fiscal Year or (ii) 90% of Consolidated EBITDA for either of the two most
recently ended Fiscal Years. A Subsidiary shall be a "Significant Subsidiary" if
such Subsidiary is included in the group of Subsidiaries, determined in
accordance with the terms of the following sentence, accounting for either: (A)
the Consolidated Total Assets measured under part (i) of the preceding sentence,
but not the Consolidated EBITDA measured under part (ii) of the preceding
sentence or (B) the Consolidated EBITDA measured under part (ii) of the
preceding sentence, but not the Consolidated Total Assets measured under part
(i) of the preceding sentence or (C) the Consolidated EBITDA measured under part
(ii) of the preceding sentence and the Consolidated Total Assets measured under
part (i) of the preceding sentence. The determination of the Significant
Subsidiary or the Significant Subsidiaries comprising the Significant Subsidiary
Group as of any date shall be made on the basis of a group consisting of the
smallest number of Subsidiaries necessary to comprise the Significant Subsidiary
Group as of such date.

                  "Structuring Fee": The structuring fee described in that
certain fee letter dated October 26, 1999 by and among the Seller, the Purchaser
and the Agent.

                                       81

<PAGE>

                  "Subsidiary": With respect to any Person means (i) a
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned or controlled by such
Person, directly or indirectly through Subsidiaries, and (ii) any partnership,
association, joint venture or other entity in which such Person, directly or
indirectly through Subsidiaries, has more than a 50% equity interest at the
time.

                  "Successor Notice": As defined in Section 8.1(b).

                  "Termination Date": The earliest of:

                  (a)  the date of termination (whether by scheduled expiration,
termination on default or otherwise) of the Liquidity Bank's commitments under
the Liquidity Agreement (unless such commitments are renewed, extended or
replaced on or before such date);

                  (b)  the Funding Termination Date;

                  (c)  the date designated by the Seller as the "Termination
Date" on not less than five (5) Business Days' notice to the Agent, provided
that on or prior to such date the Invested Amount has been reduced to zero, all
accrued Earned Discount, CP Costs, Broken Funding Costs and fees have been paid
in full and all other amounts due to the Purchaser and the Agent have been paid
in full;

                  (d)  the date on which any of the following shall occur:

                        (i)    Failure to obtain a Liquidity Agreement in
         substitution for the then existing Liquidity Agreement on or before 30
         days prior to the expiration of the commitments of the Liquidity Banks
         thereunder; or

                        (ii)   A Downgrading Event with respect to a Liquidity
         Bank shall have occurred and been continuing for not less than 45 days,
         (ii) the Downgraded Liquidity Bank shall not have been replaced by a
         Qualifying Liquidity Bank pursuant to a Liquidity Agreement in form and
         substance acceptable to the Purchaser and the Agent, and (iii) the
         commitment of such Downgraded Liquidity Bank under the Liquidity
         Agreement shall not have been funded or collateralized in such a manner
         that such Downgrading Event will not result in a reduction or
         withdrawal of the credit rating applied to the Commercial Paper Notes
         by any of the rating agencies then rating the Commercial Paper Notes;
         or

                        (iii)  Purchaser shall become an "investment company"
         within the meaning of the Investment Company Act of 1940, as amended.

                                       82

<PAGE>

                  "Transaction Documents": This Agreement, the Lock-Box
         Agreements, the Sale Agreement, the Fee Letter, the Mandate Letter and
         the other documents to be executed and delivered in connection
         herewith.

                  "Transactions Fees": All reasonable expenses of the Agent
incurred in connection with the consummation of this Agreement and each other
Transaction Document, including but not limited to (i) the legal fees of
Kilpatrick Stockton LLP, counsel to the Agent, (ii) expenses incurred in
connection with any due diligence audit and (iii) out-of-pocket expenses of the
Agent.

                  "UCC":  The Uniform Commercial Code, as from time to time in
effect in the applicable jurisdiction or jurisdictions.

                  "Unmatured Liquidation Event": Any event which with the giving
of notice or lapse of time, or both, would become a Liquidation Event.

                  "Unpaid Balance": With respect to any Receivable means at any
time the unpaid amount thereof, but excluding all late payment charges,
delinquency charges and extension or collection fees.

                  "Unused Fee":  As defined in the Fee Letter.

                  "Usage Fee":  As defined in the Fee Letter.

                  "U.S. Dollars":  Dollars in lawful money of the United States
of America.

                  "Wachovia":  As defined in the preamble.

                  "Yield Period":  With respect to any Asset Tranche funded by a
Liquidity Funding:

                  (a) the period commencing on the date of the initial Purchase
         of the Asset Interest, the making of such Liquidity Funding or the
         creation of such Asset Tranche pursuant to Section 2.1 (whichever is
         latest) and ending such number of days thereafter as the Agent shall
         select; and

                  (b) each period commencing on the last day of the immediately
         preceding Yield Period for the related Asset Tranche and ending such
         number of days thereafter as the Agent shall select;

provided, however, that:

                  (i) any such Yield Period (other than a Yield Period
         consisting of one day) which would otherwise end on a day that is not a
         Business Day shall be extended to the next succeeding Business Day
         (unless the related Asset Tranche shall be accruing Earned Discount at
         a rate determined by reference to the Eurodollar Rate (Reserve
         Adjusted), in which case if such succeeding Business

                                       83

<PAGE>

         Day is in a different calendar month, such Yield Period shall instead
         be shortened to the next preceding Business Day);

                  (ii)   in the case of Yield Periods of one day for any Asset
         Tranche, (A) the initial Yield Period shall be the date such Yield
         Period commences as described in clause (a) above; and (B) any
         subsequently occurring Yield Period which is one day shall, if the
         immediately preceding Yield Period is more than one day, be the last
         day of such immediately preceding Yield Period, and if the immediately
         preceding Yield Period is one day, shall be the next day following such
         immediately preceding Yield Period; and

                  (iii)  in the case of any Yield Period for any Asset Tranche
         which commences before the Termination Date and would otherwise end on
         a date occurring after such Termination Date, such Yield Period shall
         end on such Termination Date and the duration of each such Yield Period
         which commences on or after the Termination Date for such Asset Tranche
         shall be of such duration as shall be selected by the Agent.

                  "Yield Reserve": On any day, an amount equal to the product of
(a) 1.5, (b) the Base Rate and (c) by a fraction, the numerator of which is the
12-month high Days Sales Outstanding and the denominator of which is 360.

                  (b)    Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.

                  (c)    Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."

                                       84

<PAGE>

                                 SCHEDULE 6.1(i)
                     Description Of Material Adverse Changes

                  Effective July 1, 2002, Cadmus adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
As a result, Cadmus recorded an impairment charge of $56.3 million in the first
quarter of fiscal 2003, which is reflected as a cumulative effect of a change in
accounting principle on the Condensed Consolidated Statements of Income for the
quarter ended September 30, 2002. Additional information and disclosures are
contained in Cadmus' Form 8-K filed on October 24, 2002 and Form 10-Q filed on
November 13, 2002, both of which have been previously provided to the Agent.

On November 4, 2002, Cadmus announced several actions to rationalize capacity
and improve utilization in its special-interest magazine operation, including
the closure of the East Stroudsburg, Pennsylvania facility. Cadmus plans to
record an after-tax charge to net income in the range of $5 million to $8
million, predominantly in the second fiscal quarter of fiscal 2003. Additional
information and disclosures are contained in Cadmus' Form 8-K filed on November
5, 2002 and Form 10-Q filed on November 13, 2002, both of which have been
previously provided to the Agent.

                                       85

<PAGE>

                                 SCHEDULE 6.1(n)
  List Of Offices Of The Master Servicer And The Seller Where Records Are Kept

                  MASTER SERVICER:

Cadmus Communications Corporation
1801 Bayberry Court, Suite 200
Richmond, VA 23226
P.O. Box 27367
Richmond, VA 23261-7367

                  SELLER:

Cadmus Receivables Corp.
1801 Bayberry Court, Suite 200
Richmond, VA 23226

                                       86

<PAGE>

                                 SCHEDULE 6.1(o)
                             List of Lock-Box Banks

<TABLE>
<CAPTION>
Lock-Box Bank                 Collection Account Number         Lock-Boxes
-------------                 -------------------------         ----------
<S>                           <C>                               <C>
Wachovia Bank, National       6260-049964                       Cadmus Journal Services, Inc.
Association                                                     P.O. Box 751898
100 North Main Street                                           Charlotte, NC 28275-1898
Winston-Salem, NC 27150
                                                                Mack Printing Company
                                                                P.O. Box 752014
                                                                Charlotte, NC 28275-2014

                                                                Port City Press, Inc.
                                                                P.O. Box 751899
                                                                Charlotte, NC 28275-1899

                                                                Washburn Graphics, Inc.
                                                                P.O. Box 751896
                                                                Charlotte, NC 28275-1896
</TABLE>

                                       87

<PAGE>

                                  SCHEDULE 14.2
                                Notice Addresses

CADMUS RECEIVABLES CORP.

1801 Bayberry Court, Suite 200
Richmond, VA 23226
Attention: Bruce Willis

CADMUS COMMUNICATIONS CORPORATION

1801 Bayberry Court, Suite 200
Richmond, VA 23226
Attention: Bruce Willis

BLUE RIDGE ASSET FUNDING CORPORATION

c/o Wachovia Bank, National Association.
301 S. College Street, TW-10
Charlotte, NC 28288
Attention: Douglas Wilson

WACHOVIA BANK, NATIONAL ASSOCIATION

191 Peachtree Street, N.E.; GA-8047
Atlanta, GA  30303
Attention: Elizabeth Wagner

                                       88

<PAGE>

                                   SCHEDULE A
                        Initial Originators and Servicers

Originators and Servicers

Cadmus Journal Services, Inc.

Mack Printing Company

Port City Press, Inc.

Washburn Graphics, Inc.

                                       89

<PAGE>

                                   SCHEDULE B
                                 Fiscal Periods

        Fiscal Quarter                                  Last Day of Quarter
        --------------                                  -------------------

        First Quarter                                   September 30

        Second Quarter                                  December 31

        Third Quarter                                   March 31

        Fourth Quarter                                  June 30

                                       90

<PAGE>

                                 EXHIBIT 1.2(a)
                            Form of Purchase Request

                            CADMUS RECEIVABLES CORP.

                                PURCHASE REQUEST

                                 For Purchase On __________________

Wachovia Bank, National Association
191 Peachtree Street, N.E., GA-423
Atlanta, Georgia 30303
Attention:

Ladies and Gentlemen:

                  Reference is made to the Second Amended and Restated
Receivables Purchase Agreement dated as of November 20, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Purchase Agreement")
among Cadmus Receivables Corp., as Seller, Cadmus Communications Corporation, as
initial Master Servicer (and together with Seller, collectively referred to as
the "Seller Parties"), Blue Ridge Asset Funding Corporation, as purchaser (the
"Purchaser"), and Wachovia Bank National Association, as agent for Purchaser
(the "Agent"). Capitalized terms defined in the Purchase Agreement are used
herein with the same meanings.

I.       Each of the Seller Parties hereby certifies, represents and warrants to
the Purchaser, and the Agent that on and as of the Purchase Date (as hereinafter
defined):

                  (a)   all applicable conditions precedent set forth in Article
         V of the Purchase Agreement have been satisfied;

                  (b)   each of its respective representations and warranties
         contained in Section 6.1 of the Purchase Agreement will be true and
         correct, in all material respects, as if made on and as of the Purchase
         Date;

                  (c)   no event will have occurred and is continuing, or would
         result from the requested Purchase, that constitutes a Liquidation
         Event or an Unmatured Liquidation Event; and

                  (d)   the Termination Date shall not have occurred.

II.      The undersigned, as Seller hereby irrevocably requests that the Agent,
on behalf of the Purchaser, make the following Purchase:

                                       91

<PAGE>

             (a)  Proposed Purchase Date:______________________ (which is a
Business Day)

             (b)  Purchase Price: $_____________________ (which is at least
$10,000)

III.  Please credit the Purchase Price, in immediately available funds, to:

             Account Name:___________________________________
             Account Number__________________________________
             Bank Name and Address:____________________
                                _______________________
             ABA#:_____________________________________
             Reference:______________________________________

             IN WITNESS WHEREOF, the Seller has caused this Purchase Request to
be executed and delivered as of this ____ day of _________, ______.

                                                     CADMUS RECEIVABLES CORP.,
                                                      as Seller

                                                     By:________________________
                                                     Name:
                                                     Title:

                                       92

<PAGE>

                                EXHIBIT 3.1(a-1)
                            Form of Settlement Report

                                 [see attached]

                                       93

<PAGE>

                                EXHIBIT 3.1(a-2)
                        Form of Interim Settlement Report

                                 [see attached]

                                       94

<PAGE>

                                 EXHIBIT 5.1(h)
            Form of Opinion of Special Counsel for the Seller Parties

                                 [see attached]

                                       95

<PAGE>

                                   EXHIBIT A-1
                          [FORM OF LOCK-BOX AGREEMENT]

                                     [Date]

[Lock-Box Bank]

Ladies and Gentlemen:

                  Reference is made to our collection account no. ______
maintained with you (the "Account") pursuant to a lockbox agreement between each
of the undersigned and you, the terms and conditions of which are incorporated
herein by reference (the "Lockbox Agreement"). Pursuant to an Amended and
Restated Purchase and Sale Agreement, dated as of May 17, 2000 as amended,
restated supplemented or otherwise modified from time to time, among Cadmus
Journal Services, Inc. ("Cadmus Journal"), Washburn Graphics, Inc. ("Washburn
Graphics"), Mack Printing Company ("Mack") and Port City Press, Inc. ("Port
City"), as sellers, Cadmus Communications Corporation (together, with Cadmus
Journal, Washburn Graphics, Mack and Port City, the "Lock-Box Parties") and
Cadmus Receivables Corp. ("Cadmus Receivables"), as purchaser, we have sold
and/or may hereafter sell to Cadmus Receivables certain of the accounts, chattel
paper, instruments or general intangibles (collectively, "Receivables") with
respect to which payments are or may hereafter be made to the Account. Pursuant
to a Second Amended and Restated Receivables Purchase Agreement, dated as of
November 20, 2002 (as amended, supplemented or otherwise modified from time to
time, the "Purchase Agreement"), among Cadmus Receivables, as seller, Cadmus
Communications Corporation, as master servicer, Blue Ridge Asset Funding
Corporation, as purchaser ("Blue Ridge"), as purchaser and Wachovia Bank,
National Association as Agent (the "Agent") for Blue Ridge, Cadmus Receivables
has assigned and/or may hereafter assign to the Agent on behalf of Blue Ridge an
undivided percentage interest in the Receivables.

                  For purposes of this letter agreement, Wachovia Bank, National
Association is acting as Agent for Blue Ridge. We hereby transfer exclusive
ownership and control of the Account to the Agent, for the benefit of Blue
Ridge, subject only to the condition subsequent that the Agent shall have given
you notice of its election to assume such ownership and control, which notice
shall be substantially in the form attached hereto as Annex A.

                  We hereby irrevocably instruct you, at all times from and
after the date of your receipt of notice from the Agent of its assumption of
control of the Account as described above, (i) to make all payments to be made
by you out of or in connection with the Account directly to the Agent in
accordance with the instructions of the Agent, (ii) to hold all moneys and
instruments delivered to the Account or any lockbox administered by you for the
order of the Agent (for the benefit of Blue Ridge), (iii) to refrain from
initiating any transfer from the Account to any Lock-Box Party and (iv) to
change the name of the Account to "Wachovia Bank, National Association as Agent
for Blue Ridge". The Agent agrees to execute standard wire

                                       96

<PAGE>

transfer documentation in effect from time to time, or other customary
documentation related to wire transfers, prior to the initiation of any wire
transfers.

                  We also hereby notify you that, at all times from and after
the date of your receipt of notice from the Agent as described above, the Agent
shall be irrevocably entitled to exercise in our place and stead any and all
rights in respect of or in connection with the Account, including, without
limitation, (a) the right to specify when payments are to be made out of or in
connection with the Account and (b) the right to require preparation of
duplicate monthly bank statements on the Account for the Agent's audit purposes
and mailing of such statements directly to the Agent at an address specified by
the Agent.

                  Notices from the Agent and other notices or communications
under this letter agreement may be personally served or sent by facsimile or by
certified mail, return receipt requested, or by express mail or courier, to the
address or facsimile number set forth under the signature of the relevant party
to this letter agreement (or to such other address or facsimile number as the
relevant party shall have designated by written notice to the party giving the
aforesaid notice or other communication). Notwithstanding the foregoing, any
notice delivered by you may be delivered by regular mail. If notice is given by
facsimile, it will be deemed to have been received when the notice is sent and
receipt is confirmed by telephone or other electronic means. All other notices
will be deemed to have been received when actually received or, in the case of
personal delivery, delivered.

                  By executing this letter agreement, you acknowledge the
existence of the Agent's right to ownership and control of the Account and its
ownership (on behalf of Blue Ridge and Cadmus Receivables as the parties having
interests in such amounts) of the amounts from time to time on deposit therein,
and agree that from the date of the Existing Agreement, the Account shall be
maintained by you for the benefit of, and amounts from time to time therein held
by you for, the Agent (on behalf of Blue Ridge and Cadmus Receivables) on the
terms provided herein. Except as otherwise provided in this letter agreement,
payments to the Account are to be processed in accordance with the standard
procedures currently in effect. All service charges and fees with respect to the
Account shall continue to be payable by us under the arrangements currently in
effect.

                  By executing this letter agreement, you irrevocably waive and
agree not to assert, claim or endeavor to exercise, irrevocably bar and stop
yourself from asserting, claiming or exercising, and acknowledge that you have
not heretofore received a notice, writ, order or any form of legal process from
any other party asserting, claiming or exercising, any rights of set-off,
banker's lien or other purported form of claim with respect to the Account or
any funds from time to time therein. Except for your right to payment of your
service charges and fees and your right to make deductions for returned items,
you shall have no rights in the Account or funds therein. To the extent you may
ever have such rights, you hereby expressly subordinate all such rights to all
rights of the Agent.

                  You may terminate this letter agreement by canceling the
Account maintained with you, which cancellation and termination shall become
effective only upon 90 days' prior written notice thereof from you to the Agent.
Incoming mail addressed to the Account received

                                       97

<PAGE>

after such cancellation shall be forwarded in accordance with the Agent's
instructions. This letter agreement may also be terminated upon written notice
to you by the Agent stating that the Purchase Agreement is no longer in effect.
Except as otherwise provided in this paragraph, this letter agreement may not be
terminated or amended without the prior written consent of the Agent.

                  Notwithstanding any other provision of this letter agreement,
it is agreed by the parties hereto that you shall not be liable to Blue Ridge or
the Agent for any action taken by you or any of your directors, officer, agents
or employees in accordance with this letter agreement at the request of the
Agent, except for your or such person's own gross negligence or willful
misconduct.

                  This letter agreement may be executed by the signatories
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall together constitute but one and the same letter
agreement. This letter agreement shall be governed by and interpreted under the
laws of the State of North Carolina.

                  Please acknowledge your agreement to the terms set forth in
this letter agreement by signing the six copies of this letter agreement
enclosed herewith in the space provided below and returning each of such signed
copies to the Agent.

                                               Very truly yours,

                                               CADMUS COMMUNICATIONS CORPORATION

                                               By:______________________________
                                               Title:___________________________

                                               Address for notice:

                                               Attention:
                                               Facsimile No.:

                                               CADMUS JOURNAL SERVICES, INC.

                                               By:______________________________
                                               Title:___________________________

                                               Address for notice:

                                               Attention:
                                               Facsimile No.:
                                               Lock-Box Address:

                                       98

<PAGE>

                                               WASHBURN GRAPHICS, INC.

                                               By:______________________________
                                               Title:___________________________

                                               Address for notice:

                                               Attention:
                                               Facsimile No.:
                                               Lock-Box Address

                                               MACK PRINTING COMPANY

                                               By:______________________________
                                               Title:___________________________

                                               Address for notice:

                                               Attention:
                                               Facsimile No.:
                                               Lock-Box Address

                                               PORT CITY PRESS, INC.

                                               By:______________________________
                                               Title:___________________________

                                               Address for notice:

                                               Attention:
                                               Facsimile No.:
                                               Lock-Box Address

                                       99

<PAGE>

                                    Accepted and confirmed as of
                                    the date first written above:

                                    BLUE RIDGE ASSET FUNDING CORPORATION
                                      as Purchaser

                                    By: _________________________________
                                    Title: ______________________________

                                    Address for notice:

                                    Attention:
                                    Facsimile No.:

                                    WACHOVIA BANK, NATIONAL ASSOCIATION
                                      as Agent

                                    By: _________________________________
                                    Title: ______________________________

                                    Address for notice:

                                    Attention:
                                    Facsimile No.:

                                    Acknowledged and agreed to as of
                                    the date first written above:

                                    CADMUS RECEIVABLES CORP.

                                    By: _________________________________
                                    Title: ______________________________

                                    Address for notice:

                                    Attention:
                                    Facsimile No.:

                                       100

<PAGE>

                                         [LOCKBOX BANK]

                                         By: _______________________________
                                         Title: ____________________________

                                         Address for notice:

                                         ___________________________________
                                         ___________________________________
                                         ___________________________________
                                         Attention: ________________________
                                         Facsimile No.: ____________________

                                       101

<PAGE>

                                                                      ANNEX A to
                                                              Lock-Box Agreement

              [FORM OF NOTICE OF ASSUMPTION OF CONTROL OF ACCOUNT]

                            [Letterhead of Wachovia]

                                     [Date]

_____________________________________
_____________________________________
_____________________________________
_____________________________________

                            Re:     Cadmus Communications Corporation
                                    Cadmus Journal Services, Inc.
                                    Washburn Graphics, Inc.
                                    Mack Printing Company
                                    Port City Press, Inc.
                                    Lock-Box Account No.
                                    ----------------------------------

Ladies and Gentlemen:

                  Reference is made to the letter agreement dated _________ (as
amended, supplemented or otherwise modified from time to time, the "Letter
Agreement") among Cadmus Journal Services, Inc., Washburn Graphics, Inc., Mack
Printing Company, Port City Press, Inc., Cadmus Communications Corporation,
Cadmus Receivables Corp., Blue Ridge Asset Funding Corporation (the
"Purchaser"), Wachovia Bank, National Association, as Agent for the Purchaser,
and you, concerning the above described lock-box account (the "Account").

                  We hereby give you notice of our assumption of ownership and
control of the Account as provided in the Letter Agreement.

                  We hereby instruct you to make all payments to be made by you
out of or in connection with the Account [directly to the undersigned, at [our
address set forth above], for the account of [Blue Ridge Asset Funding
Corporation (account no.____________________ )].

                  [other instructions]

                                   Very truly yours,

                                   Wachovia Bank, National Association, as Agent

                                   By: ___________________________
                                   Name:
                                   Title:

                                       102

<PAGE>

                                    EXHIBIT B
                    Form of Certificate of Financial Officer

                    FORM OF CERTIFICATE OF FINANCIAL OFFICER

                  In accordance with Section 5.1(a)(xvi) of that certain Second
Amended and Restated Receivables Purchase Agreement, dated as of November 20,
2002 (the "Receivables Purchase Agreement"), among Cadmus Receivables Corp., as
seller, Cadmus Communications Corporation., as master servicer, Blue Ridge Asset
Funding Corporation, as purchaser and Wachovia Bank, National Association, as
agent, I, ___________, in my capacity as ____________ of [Cadmus Receivables
Corp.][Cadmus Communications Corporation] , a Virginia corporation (the
"Company") (terms defined in the Receivables Purchase Agreement being used
herein as therein defined), DO HEREBY CERTIFY that:

                  1. Each of the representations and warranties of the Company
contained in Article VI of the Receivables Purchase Agreement is true and
correct in all material respects on and as of the date hereof as if made on and
as of such date.

                  2. [Attached hereto as Exhibit A is a true and correct copy of
the Company's consolidated balance sheet, income statement and statement of
shareholders' equity as at June 30, 2002]. [Attached hereto as Exhibit A is a
true and correct copy of the Company's balance sheet as at September 30, 2002.]
Such financial statements fairly present, in conformity with GAAP, the
[consolidated] financial position of the Company [and its Consolidated
Subsidiaries] as of such dates and [its] [their consolidated] results of
operations and cash flows for such periods stated, and there are no material
liabilities or unusual forward obligations that are not set forth therein.

                  3. No Liquidation Event or Unmatured Liquidation Event has
occurred and is continuing on the date hereof.

                  4. [Since June 30, 2002 there has been no material adverse
change in the Company's financial condition, business or operations.] [Since
September 30, 2002 there has been no material adverse change in the Company's
financial condition, business or operations.]

                  IN WITNESS WHEREOF, I have signed this certificate as of this
____ day of _____________________.

                                             ____________________________
                                             [Name]
                                             [Title]

                                      103

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