<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended May 31, 1999 Commission file number 333-49957-01
------------
EAGLE-PICHER HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3989553
- --------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
250 East Fifth Street, Suite 500, Cincinnati, Ohio 45202
- --------------------------------------------------------------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code 513-721-7010
------------------------------
(Not Applicable)
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark whether the additional registrant, Eagle-Picher
Industries, Inc., has filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes X No
----- -----
625,001 shares of Class A common capital stock, $.01 par value each, were
outstanding at June 24, 1999.
374,999 shares of Class B common capital stock, $.01 par value each, were
outstanding at June 24, 1999.
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TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
Jurisdiction of IRS Employer
Incorporation or Commission File Identification
Name Organization Number Number
---- ------------ ------ ------
<S> <C> <C> <C>
Eagle-Picher Industries, Inc. Ohio 333-49957 31-0268670
Daisy Parts, Inc. Michigan 333-49957-02 38-1406772
Eagle-Picher Development Co., Inc. Delaware 333-49957-03 31-1215706
Eagle-Picher Far East, Inc. Delaware 333-49957-04 31-1235685
Eagle-Picher Fluid Systems, Inc. Michigan 333-49957-05 31-1452637
Eagle-Picher Minerals, Inc. Nevada 333-49957-06 31-1188662
Eagle-Picher Technologies, LLC Delaware 333-49957-09 31-1587660
Hillsdale Tool & Manufacturing Co. Michigan 333-49957-07 38-0946293
Michigan Automotive Research Corp. Michigan 333-49957-08 38-2185909
</TABLE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements........................................... 4
Condensed Consolidated Statements of Income (Loss)(Unaudited)...... 4
Condensed Consolidated Balance Sheets (Unaudited).................. 5
Condensed Consolidated Statements of Cash Flows (Unaudited)........ 7
Notes to Condensed Consolidated Financial Statements (Unaudited)... 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................ 22
Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 29
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 31
Item 6. Exhibits and Reports on Form 8-K............................... 31
Signatures.............................................................. 33
Exhibit Index........................................................... 43
</TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EAGLE-PICHER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)(UNAUDITED)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months
Three Months Ended Six Months Ended
May 31 Ended May 31 February 28
1999 1998 1999 1998
--------- --------- --------- ---------
Predecessor
<S> <C> <C> <C> <C>
Net Sales $ 249,818 $ 219,921 $ 444,261 $ 205,842
--------- --------- --------- ---------
Operating Costs and Expenses:
Cost of Products sold (exclusive
of depreciation) 197,757 169,575 349,503 162,796
Selling and administrative 19,721 20,287 37,985 17,141
Management compensation - special -- 17,321 -- 2,056
Depreciation 11,953 9,773 22,065 8,983
Amortization of intangibles 4,395 4,497 8,415 3,839
Loss (gain) on sales of assets 23 -- (11) --
--------- --------- --------- ---------
233,849 221,453 417,957 194,815
--------- --------- --------- ---------
Operating Income (Loss) 15,969 (1,532) 26,304 11,027
Interest expense (12,107) (12,554) (23,449) (6,940)
Other income 157 326 326 820
--------- --------- --------- ---------
Income (Loss) Before Taxes 4,019 (13,760) 3,181 4,907
Income Taxes (Benefit) 1,650 (4,461) 1,950 4,100
--------- --------- --------- ---------
Net Income (Loss) $ 2,369 $ (9,299) $ 1,231 $ 807
========= ========= ========= =========
Income (Loss) Applicable to
Common Shareholders $ (263) $ (11,834) $ (3,903) $ 807
========= ========= ========= =========
Income (Loss) per Common Share $ (.26) $ (11.83) $ (3.90) $ .08
========= ========= ========= =========
Comprehensive Income (Loss) $ 1,349 $ (8,646) $ (760) $ (1,002)
========= ========= ========= =========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
4
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EAGLE-PICHER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
May 31 November 30
ASSETS 1999 1998
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 11,313 $ 13,681
Receivables, less allowances 139,452 144,844
Inventories:
Raw materials and supplies 56,955 52,384
Work in process 27,513 20,641
Finished goods 16,309 15,848
-------- --------
100,777 88,873
Prepaid expenses 11,524 8,338
Deferred income taxes 12,033 10,851
-------- --------
Total current assets 275,099 266,587
-------- --------
PROPERTY, PLANT AND EQUIPMENT 337,324 279,061
Less accumulated depreciation 50,918 30,524
-------- --------
Net property, plant and equipment 286,406 248,537
-------- --------
EXCESS OF ACQUIRED NET ASSETS OVER COST, net of
accumulated amortization of $20,715 and
$12,300, respectively 243,001 228,910
-------- --------
OTHER ASSETS 77,734 72,293
-------- --------
Total Assets $882,240 $816,327
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 57,250 $ 50,307
Long-term debt - current portion 19,223 25,173
Income taxes 2,887 6,282
Other current liabilities 73,112 74,260
-------- --------
Total current liabilities 152,472 156,022
LONG-TERM DEBT - less current portion 526,516 459,183
DEFERRED INCOME TAXES 11,116 8,304
OTHER LONG-TERM LIABILITIES 25,629 24,819
-------- --------
Total Liabilities 715,733 648,328
-------- --------
11-3/4% CUMULATIVE REDEEMABLE EXCHANGEABLE
PREFERRED STOCK; authorized 50,000 shares;
issued and outstanding 14,191 shares 92,521 87,387
-------- --------
</TABLE>
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EAGLE-PICHER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
May 31 November 30
1999 1998
---- ----
<S> <C> <C>
SHAREHOLDERS' EQUITY
Class A Common stock, authorized 625,001 shares, $.01 par value each; issued
and outstanding 625,001 shares 6 6
Class B Common stock, authorized 374,999 shares, $.01 par value each; issued
and outstanding 374,999 shares 4 4
Additional paid-in capital 99,991 99,991
Deficit (25,649) (21,746)
Other comprehensive income (366) 2,357
--------- ---------
Total Shareholders' Equity 73,986 80,612
--------- ---------
Total Liabilities and Shareholders' Equity $ 882,240 $ 816,327
========= =========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
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EAGLE-PICHER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months
Six Months Three Months Ended
Ended May 31 Ended May 31 February 28
1999 1998 1998
--------- --------- ---------
Predecessor
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,231 $ (9,299) $ 807
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 31,876 14,952 12,822
Changes in assets and liabilities,
net of effect of acquisitions and
divestitures:
Receivables 9,010 14,420 (3,681)
Inventories (6,883) 4,205 (2,235)
Accounts payable (7,755) (2,854) (2,787)
Accrued liabilities (2,352) 14,724 (5,488)
Other (3,645) (298) (8,521)
--------- --------- ---------
Net cash provided by (used in)
operating activities 21,482 35,850 (9,083)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of division 12,400 -- --
Acquisition (60,168) -- --
Capital expenditures (24,400) (9,064) (5,692)
Other (592) 561 (1,042)
--------- --------- ---------
Net cash used in investing
activities (72,760) (8,503) (6,734)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt -- -- 445,000
Reduction of long-term debt (13,469) -- (250,000)
Borrowings (repayments)under revolving
credit agreement 59,175 (35,100) 79,100
Redemption of common stock -- -- (446,638)
Issuance of common stock -- -- 100,001
Issuance of preferred stock -- -- 80,005
Debt issuance cost (54) -- (26,062)
Other 3,258 (236) (360)
--------- --------- ---------
Net cash provided by (used in)
financing activities 48,910 (35,336) (18,954)
--------- --------- ---------
</TABLE>
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EAGLE-PICHER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months
Six Months Three Months Ended
Ended May 31 Ended May 31 February 28
1999 1998 1998
--------- --------- ------------
Predecessor
<S> <C> <C> <C>
Net decrease in cash and cash equivalents (2,368) (7,989) (34,771)
Cash and cash equivalents, beginning of period 13,681 18,968 53,739
-------- -------- --------
Cash and cash equivalents, end of period $ 11,313 $ 10,979 $ 18,968
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Supplemental cash flow information: 1999 1998
---- ----
<S> <C> <C>
Cash paid during the six months ended May 31:
Interest paid $21,559 $13,492
Income taxes paid, net $ 7,998 $ 305
Cash paid during the three months ended May 31:
Interest paid $16,047 $ 7,090
Income taxes paid, net $ 3,220 $ 681
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
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EAGLE-PICHER HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A. BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS
The unaudited financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
("SEC"). Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and notes thereto included for the
fiscal year ended November 30, 1998 presented in the Company's Form 10-K/A filed
with the SEC on June 28, 1999.
The financial statements presented herein reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for the six
months ended May 31, 1999 and the three months ended May 31, 1999 and 1998, and
February 28, 1998. (See Note B.) Results of operations for interim periods are
not necessarily indicative of results to be expected for an entire year.
Effective December 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," which
establishes standards for reporting comprehensive income and its components.
B. ACQUISITION OF THE COMPANY
On February 24, 1998 ("Closing Date"), Eagle-Picher Industries, Inc.
("Subsidiary") was acquired by a subsidiary of Granaria Industries BV,
Eagle-Picher Holdings, Inc. ("Company"), from the Eagle-Picher Industries, Inc.
Personal Injury Settlement Trust ("Trust") (the "Acquisition"). The Trust was
established pursuant to the Subsidiary's Plan of Reorganization upon its
emergence from bankruptcy in November 1996. The Company's results of operations
and cash flows approximate those of the Subsidiary, the operating entity.
References will be to the Company except where it is more appropriate to
specifically refer to the Subsidiary.
The unaudited condensed consolidated financial statements as of and for
the three months ended February 28, 1998 include the effects of the Acquisition
as of February 24, 1998. Accordingly, the condensed consolidated statement of
income (loss) for the three months ended February 28, 1998 includes results of
operations from (1) December 1, 1997 through February 24, 1998 of the Company
prior to the consummation of the Acquisition (for clarity, sometimes referred to
herein as the "Predecessor Company") and (2) February 25 through February 28,
1998 of the Company.
The Acquisition was accounted for using the purchase method of accounting.
The purchase price has been allocated to the assets and liabilities of the
Company based on their respective fair values as determined primarily by
independent appraisals. The excess of the purchase price over the assessed
values of the net assets was allocated to excess of acquired net assets over
cost. As a result, the consolidated financial statements relating to operations
after the Acquisition are not comparable to those prior to the Acquisition.
Accordingly, the period prior to the Acquisition has been labeled "Predecessor."
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C. ACQUISITION
On April 14, 1999, the Company acquired all of the outstanding capital
stock of Charterhouse Automotive Group, Inc. ("Charterhouse"), a holding company
whose only operating subsidiary was Carpenter Enterprises, Ltd. ("Carpenter"), a
manufacturer of precision-machined automotive parts. Immediately following the
acquisition, Charterhouse was merged into Carpenter.
The total consideration paid for Charterhouse was approximately $72.0
million consisting of $37.9 million for the stock of Charterhouse, a $3.1
million payment to the former president of Carpenter under a phantom stock plan
and $31.0 million of existing indebtedness of Carpenter, of which approximately
$18.6 million was refinanced from the Company's Revolving Credit Facility.
The acquisition of Charterhouse was effective as of March 1, 1999 for
accounting purposes and was accounted for as a purchase. The preliminary
allocation of the purchase price has been determined based on estimates of fair
value and is subject to change. Appraisals are currently being completed to
value property, plant and equipment. The excess of the purchase price over the
assessed values of those assets totaling $22,507 has been allocated to goodwill.
The Company expects to finalize the purchase price allocation by November 30,
1999. Adjustments are not expected to be material.
D. BASIC EARNINGS PER SHARE
The calculation of net income (loss) per share is based upon the
average number of common shares outstanding, which was 1,000,000 in the three
months ended May 31, 1999 and 1998 and in the six months ended May 31, 1999 and
9,600,071 in the three months ended February 28, 1998. Prior to the Acquisition,
10,000,000 shares were outstanding. The net loss applicable to common
shareholders represents the net income reduced by, or the net loss increased by,
accreted dividends on preferred stock of $5.1 million for the six months ended
May 31, 1999 and $2.6 million and $2.5 million for the three months ended May
31, 1999 and 1998, respectively. No potential common stock was outstanding
during the six months ended May 31, 1999 or 1998.
E. LONG-TERM DEBT
On May 18, 1999, the Company amended its syndicated secured loan
facility ("Credit Agreement") to provide for a) a securitization transaction
("Securitization"); b) an increase in the revolving credit facility ("Revolving
Credit Facility") provided under the Credit Agreement; and c) the repayment and
cancellation of a portion of the term loan facility ("Term Loan Facility")
provided under the Credit Agreement. The transaction was funded on June 4, 1999.
In connection with the Securitization, the Company will sell its
receivables on an ongoing basis to a wholly-owned, restricted purpose
subsidiary, Eagle-Picher Acceptance Corporation. The receivables are then used
as security for loans made under a separate revolving credit facility of up to
$75.0 million. In addition, the Credit Agreement was amended to increase the
amount available for borrowings under the Revolving Credit Facility from $160.0
million to $220.0 million and allow the Company to repay two of the term loans
under the Term Loan Facility without requiring that the third term loan be
ratably reduced.
Interest rate spreads under the Credit Agreement increased by .25% and
loans outstanding under the Securitization are at variable rates equal to market
rates on commercial paper with fees of .75% on the maximum amount available.
Approximately $120.5 million in term loans were repaid upon closing of this
transaction with the proceeds from the
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Securitization of $65.0 million and additional borrowings under the revolving
Credit Facility.
F. SUPPLEMENTAL GUARANTOR INFORMATION
Upon closing of the Acquisition, the Company's wholly-owned subsidiary,
Eagle-Picher Industries, Inc. (the "Subsidiary") issued $220.0 million in senior
subordinated notes ("Subordinated Notes") in addition to its borrowings under
the Credit Agreement. Both the Credit Agreement and the Subordinated Notes are
guaranteed on a full, unconditional and joint and several basis by the Company
and certain of the Subsidiary's wholly-owned domestic subsidiaries ("Subsidiary
Guarantors") including Carpenter and Eagle-Picher Acceptance Corporation.
Management has determined that full financial statements and other disclosures
concerning the Subsidiary or the Subsidiary Guarantors would not be material to
investors and such financial statements are not presented. The following
supplemental condensed combining financial statements present information
regarding the Subsidiary, the Subsidiary Guarantors and the subsidiaries that
did not guarantee the debt.
The Subsidiary and the Subsidiary Guarantors are subject to
restrictions on the payment of dividends under the terms of both the Credit
Agreement and the Indenture supporting the Subordinated Notes, both of which
were filed with the Company's Form S-4 Registration Statement No. 333-49957-01
filed on April 11, 1998 and both of which were incorporated by reference to the
Company's Form 10-K/A filed on June 28, 1999.
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EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
THREE MONTHS ENDED MAY 31, 1999
<TABLE>
<CAPTION>
GUARANTORS
-------------------------- NON-GUARANTORS
EAGLE-PICHER SUBSIDIARY FOREIGN
ISSUER HOLDINGS, INC. GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- -------------- ---------- -------------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Net Sales
Customers $ 58,820 $ -- $ 164,172 $ 26,826 $ -- $ 249,818
Intercompany 4,033 -- 1,945 2,092 (8,070) --
Operating Costs and Expenses:
Cost of products sold (exclusive
of depreciation) 46,420 -- 134,260 25,190 (8,113) 197,757
Selling and administrative 11,052 -- 6,144 2,565 (40) 19,721
Intercompany charges (2,839) -- 2,838 (46) 47 --
Depreciation 2,921 -- 7,789 1,243 -- 11,953
Amortization of intangibles 1,759 -- 2,393 243 -- 4,395
(Gain) loss on sale of assets (6) -- 12 17 -- 23
--------- --------- --------- --------- --------- ---------
Total 59,307 -- 153,436 29,212 (8,106) 233,849
--------- --------- --------- --------- --------- ---------
Operating Income (Loss) 3,546 -- 12,681 (294) 36 15,969
Other Income (Expense)
Interest expense (11,810) -- (73) (224) -- (12,107)
Other income (expense) 398 -- -- (241) -- 157
Equity in earnings of
consolidated subsidiaries 7,982 2,369 254 -- (10,605) --
--------- --------- --------- --------- --------- ---------
Income (Loss) Before Taxes 116 2,369 12,862 (759) (10,569) 4,019
Income taxes (benefit) (2,471) -- 3,916 205 -- 1,650
--------- --------- --------- --------- --------- ---------
Net Income (Loss) $ 2,587 $ 2,369 $ 8,946 $ (964) $ (10,569) $ 2,369
========= ========= ========= ========= ========= =========
</TABLE>
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EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
SIX MONTHS ENDED MAY 31, 1999
<TABLE>
<CAPTION>
GUARANTORS
------------------------- NON-GUARANTORS
EAGLE-PICHER SUBSIDIARY FOREIGN
ISSUER HOLDINGS, INC. GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- ------------- --------- --------------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Net Sales
Customers $ 109,803 $ -- $ 280,921 $ 53,537 $ -- $ 444,261
Intercompany 7,145 -- 4,579 3,971 (15,695) --
Operating Costs and Expenses:
Cost of products sold (exclusive
of depreciation) 86,826 -- 229,000 49,450 (15,773) 349,503
Selling and administrative 21,469 -- 11,486 5,134 (104) 37,985
Intercompany charges (5,196) -- 5,195 (111) 112 --
Depreciation 5,837 -- 13,835 2,393 -- 22,065
Amortization of intangibles 3,144 -- 4,786 485 -- 8,415
(Gain) loss on sale of assets (16) -- -- 5 -- (11)
--------- --------- --------- --------- --------- ---------
Total 112,064 -- 264,302 57,356 (15,765) 417,957
--------- --------- --------- --------- --------- ---------
Operating Income 4,884 -- 21,198 152 70 26,304
Other Income (Expense)
Interest expense (22,982) -- (73) (394) -- (23,449)
Other income (expense) 545 -- 36 (255) -- 326
Equity in earnings of
consolidated subsidiaries 13,826 1,231 260 -- (15,317) --
--------- --------- --------- --------- --------- ---------
Income (Loss) Before Taxes (3,727) 1,231 21,421 (497) (15,247) 3,181
Income taxes (benefit) (5,148) -- 6,329 769 -- 1,950
--------- --------- --------- --------- --------- ---------
Net Income (Loss) $ 1,421 $ 1,231 $ 15,092 $ (1,266) $ (15,247) $ 1,231
========= ========= ========= ========= ========= =========
</TABLE>
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EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINED BALANCE SHEETS (UNAUDITED)
AS OF MAY 31, 1999
<TABLE>
<CAPTION>
GUARANTORS
-------------------------- NON-GUARANTORS
EAGLE-PICHER SUBSIDIARY FOREIGN
ISSUER HOLDINGS, INC. GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- -------------- ---------- -------------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 4,378 $ 1 $ 2,584 $ 3,964 $ 386 $ 11,313
Receivables, net 35,830 -- 82,418 21,204 -- 139,452
Intercompany accounts receivable 4,702 -- 4,374 109 (9,185) --
Inventories 29,212 -- 54,610 18,330 (1,375) 100,777
Prepaid expenses 3,988 -- 6,108 1,471 (43) 11,524
Deferred income taxes 12,033 -- -- -- -- 12,033
--------- --------- --------- --------- --------- ---------
Total current assets 90,143 1 150,094 45,078 (10,217) 275,099
Property, Plant & Equipment, net 63,191 -- 183,473 39,742 -- 286,406
Investment in Subsidiaries 136,559 166,872 6,677 -- (310,108) --
Excess of Acquired Net Assets Over Cost, net 98,201 -- 131,469 13,331 -- 243,001
Other Assets 54,853 -- 22,516 365 -- 77,734
--------- --------- --------- --------- --------- ---------
Total Assets $ 442,947 $ 166,873 $ 494,229 $ 98,516 $(320,325) $ 882,240
========= ========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 10,901 $ -- $ 35,142 $ 11,207 $ -- $ 57,250
Intercompany accounts payable 116 -- 113 8,609 (8,838) --
Long-term debt - current portion 14,148 -- -- 5,075 -- 19,223
Income taxes 2,474 -- -- 413 -- 2,887
Other current liabilities 44,282 -- 24,576 4,294 (40) 73,112
--------- --------- --------- --------- --------- ---------
Total current liabilities 71,921 -- 59,831 29,598 (8,878) 152,472
Long-term Debt - less current portion 521,601 -- -- 4,915 -- 526,516
Deferred Income Taxes 11,116 -- -- -- -- 11,116
Other Long-Term Liabilities 25,629 -- -- -- -- 25,629
--------- --------- --------- --------- --------- ---------
Total liabilities 630,267 -- 59,831 34,513 (8,878) 715,733
Intercompany Accounts (368,700) -- 351,508 30,913 (13,721) --
11 3/4% Cumulative Redeemable
Exchangeable Preferred Stock -- 92,521 -- -- -- 92,521
Shareholders' Equity 181,380 74,352 82,890 33,090 (297,726) 73,986
--------- --------- --------- --------- --------- ---------
Total Liabilities and Shareholders'
Equity $ 442,947 $ 166,873 $ 494,229 $ 98,516 $(320,325) $ 882,240
========= ========= ========= ========= ========= =========
</TABLE>
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EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED MAY 31, 1999
<TABLE>
<CAPTION>
GUARANTORS
-------------------------- NON-GUARANTORS
EAGLE-PICHER SUBSIDIARY FOREIGN
ISSUER HOLDINGS, INC. GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- -------------- ---------- -------------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 1,421 $ 1,231 $ 15,092 $ (1,266) $(15,247) $ 1,231
Adjustments to reconcile net income
(loss) to cash provided by (used in)
operating activities:
Equity in earnings of consolidated
subsidiaries (13,826) (1,231) (260) -- 15,317 --
Depreciation and amortization 10,377 -- 18,621 2,878 -- 31,876
Changes in assets and liabilities,
net of effect of acquisitions
and divestitures (9,140) -- (1,931) (1,124) 570 (11,625)
-------- -------- -------- -------- -------- --------
Net cash provided by (used in)
operating activities (11,168) -- 31,522 488 640 21,482
-------- -------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of division 12,400 -- -- -- -- 12,400
Acquisition of division -- -- (60,168) -- -- (60,168)
Capital expenditures (2,599) -- (16,165) (5,636) -- (24,400)
Other (682) -- 51 (416) 455 (592)
-------- -------- -------- -------- -------- --------
Net cash provided by (used in)
investing activities 9,119 -- (76,282) (6,052) 455 (72,760)
-------- -------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction of long-term debt (13,469) -- -- -- -- (13,469)
Borrowings (repayments) on revolving
credit agreement 59,175 -- -- -- -- 59,175
Other (54) -- -- 3,258 -- 3,204
-------- -------- -------- -------- -------- --------
Net cash provided by financing activities 45,652 -- -- 3,258 -- 48,910
-------- -------- -------- -------- -------- --------
Increase (decrease) in cash and
cash equivalents 43,603 -- (44,760) (2,306) 1,095 (2,368)
Intercompany accounts (46,689) -- 46,632 1,145 (1,088) --
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 7,464 1 712 5,125 379 13,681
-------- -------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 4,378 $ 1 $ 2,584 $ 3,964 $ 386 $ 11,313
======== ======== ======== ======== ======== ========
</TABLE>
15
<PAGE> 16
EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
THREE MONTHS ENDED MAY 31, 1998
<TABLE>
<CAPTION>
GUARANTORS
---------------------------- NON-GUARANTORS
EAGLE-PICHER SUBSIDIARY FOREIGN
ISSUER HOLDINGS, INC. GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- -------------- ---------- -------------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Net Sales
Customers $ 69,233 $ -- $ 125,525 $ 25,163 $ -- $ 219,921
Intercompany 4,151 -- 2,631 2,329 (9,111) --
Operating Costs and Expenses:
Cost of products sold (exclusive
of depreciation) 54,282 -- 101,847 22,499 (9,053) 169,575
Selling and administrative 12,094 -- 5,796 2,397 -- 20,287
Intercompany charges (2,297) -- 2,297 -- -- --
Depreciation 3,050 -- 5,785 999 (61) 9,773
Amortization of intangibles 863 -- 3,634 -- -- 4,497
Management compensation-special 17,321 -- -- -- -- 17,321
--------- --------- --------- --------- --------- ---------
Total 85,313 -- 119,359 25,895 (9,114) 221,453
--------- --------- --------- --------- --------- ---------
Operating Income (Loss) (11,929) -- 8,797 1,597 3 (1,532)
Other Income (Expense)
Interest expense (12,417) -- -- (137) -- (12,554)
Other income 191 -- 86 49 -- 326
Equity in earnings of
consolidated subsidiaries 6,729 (9,299) 43 -- 2,527 --
--------- --------- --------- --------- --------- ---------
Income (Loss) Before Taxes (17,426) (9,299) 8,926 1,509 2,530 (13,760)
Income taxes (benefit) (8,167) -- 2,825 881 -- (4,461)
--------- --------- --------- --------- --------- ---------
Net Income (Loss) $ (9,259) $ (9,299) $ 6,101 $ 628 $ 2,530 $ (9,299)
========= ========= ========= ========= ========= =========
</TABLE>
16
<PAGE> 17
EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
THREE MONTHS ENDED FEBRUARY 28, 1998
PREDECESSOR
<TABLE>
<CAPTION>
NON-GUARANTORS
SUBSIDIARY FOREIGN
ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- ---------- -------------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Net Sales
Customers $ 61,071 $ 123,181 $ 21,590 $ -- $ 205,842
Intercompany 3,381 2,421 1,451 (7,253) --
Operating Costs and Expenses:
Cost of products sold (exclusive
of depreciation 48,329 102,771 18,772 (7,076) 162,796
Selling and administrative 9,673 5,167 2,301 -- 17,141
Intercompany charges (2,172) 2,172 -- -- --
Depreciation 2,823 5,220 940 -- 8,983
Amortization of intangibles 765 3,064 10 -- 3,839
Management compensation-special 2,056 -- -- -- 2,056
--------- --------- --------- --------- ---------
Total 61,474 118,394 22,023 (7,076) 194,815
--------- --------- --------- --------- ---------
Operating Income (Loss) 2,978 7,208 1,018 (177) 11,027
Other Income (Expense)
Interest expense (6,844) -- (96) -- (6,940)
Other income (expense) 812 333 (325) -- 820
Equity in earnings of
consolidated subsidiaries 4,785 (270) -- (4,515) --
--------- --------- --------- --------- ---------
Income (Loss) Before Taxes 1,731 7,271 597 (4,692) 4,907
Income taxes 1,083 2,486 531 -- 4,100
--------- --------- --------- --------- ---------
Net Income (Loss) $ 648 $ 4,785 $ 66 $ (4,692) $ 807
========= ========= ========= ========= =========
</TABLE>
17
<PAGE> 18
EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINED BALANCE SHEETS (UNAUDITED)
AS OF NOVEMBER 30, 1998
<TABLE>
<CAPTION>
GUARANTORS
-------------------------- NON-GUARANTORS
EAGLE-PICHER SUBSIDIARY FOREIGN
ISSUER HOLDINGS, INC. GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- -------------- ---------- ------------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 7,464 $ 1 $ 712 $ 5,125 $ 379 $ 13,681
Receivables, net 52,197 -- 70,418 22,229 -- 144,844
Intercompany accounts receivable 3,414 -- 3,874 154 (7,442) --
Inventories 30,755 -- 43,708 15,785 (1,375) 88,873
Prepaid expenses 4,073 -- 3,614 651 -- 8,338
Deferred income taxes 10,851 -- -- -- -- 10,851
--------- --------- --------- --------- --------- ---------
Total current assets 108,754 1 122,326 43,944 (8,438) 266,587
Property, Plant & Equipment, net 66,500 -- 143,872 38,165 -- 248,537
Investment in Subsidiaries 113,265 165,641 6,416 -- (285,322) --
Excess of Assets Acquired Over Cost, net 78,838 -- 136,253 13,819 -- 228,910
Other Assets 54,187 -- 17,675 431 -- 72,293
--------- --------- --------- --------- --------- ---------
Total Assets $ 421,544 $ 165,642 $ 426,542 $ 96,359 $(293,760) $ 816,327
========= ========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 15,064 $ -- $ 22,648 $ 10,595 $ -- $ 50,307
Intercompany accounts payable 85 -- 16 7,561 (7,662) --
Long-term debt - current portion 18,777 -- -- 6,396 -- 25,173
Income taxes 5,296 -- -- 986 -- 6,282
Other current liabilities 45,744 -- 24,464 4,052 -- 74,260
--------- --------- --------- --------- --------- ---------
Current liabilities 84,966 -- 49,128 29,590 (7,662) 156,022
Long-term Debt - less current portion 458,848 -- -- 335 -- 459,183
Deferred income taxes 8,304 -- -- -- -- 8,304
Other Long-term Liabilities 24,819 -- -- -- -- 24,819
--------- --------- --------- --------- --------- ---------
Total Liabilities 576,937 -- 49,128 29,925 (7,662) 648,328
Intercompany Accounts (326,706) -- 309,571 29,768 (12,633) --
11 3/4% Cumulative Exchangeable
Preferred Stock -- 87,387 -- -- -- 87,387
Shareholders' Equity 171,313 78,255 67,843 36,666 (273,465) 80,612
--------- --------- --------- --------- --------- ---------
Total Liabilities and Shareholders'
Equity $ 421,544 $ 165,642 $ 426,542 $ 96,359 $(293,760) $ 816,327
========= ========= ========= ========= ========= =========
</TABLE>
18
<PAGE> 19
EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THREE MONTHS ENDED MAY 31, 1998
<TABLE>
<CAPTION>
GUARANTORS
-------------------------- NON-GUARANTORS
EAGLE-PICHER SUBSIDIARY FOREIGN
ISSUER HOLDINGS, INC. GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
-------- -------------- ---------- -------------- ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (9,259) $ (9,299) $ 6,101 $ 628 $ 2,530 $ (9,299)
Adjustments to reconcile net income
(loss) to cash provided by (used in)
operating activities:
Equity in earnings of consolidated
subsidiaries (6,729) 9,299 (43) -- (2,527) --
Depreciation and amortization 4,595 -- 9,419 999 (61) 14,952
Changes in assets and liabilities, 17,996 -- 12,758 1,148 (1,705) 30,197
-------- -------- -------- -------- -------- --------
Net cash provided by (used in)
operating activities 6,603 -- 28,235 2,775 (1,763) 35,850
-------- -------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (3,436) -- (2,620) (3,008) -- (9,064)
Other (1,989) -- 21 397 2,132 561
-------- -------- -------- -------- -------- --------
Net cash provided by (used in)
investing activities (5,425) -- (2,599) (2,611) 2,132 (8,503)
-------- -------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (repayments) on revolving
credit agreement (35,100) -- -- -- -- (35,100)
Other -- -- -- (236) -- (236)
-------- -------- -------- -------- -------- --------
Net cash used in financing activities (35,100) -- -- (236) -- (35,336)
-------- -------- -------- -------- -------- --------
Increase (decrease) in cash and
cash equivalents (33,922) -- 25,636 (72) 369 (7,989)
Intercompany accounts 25,976 -- (25,986) 1,884 (1,874) --
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 12,115 1 1,145 5,513 194 18,968
-------- -------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 4,169 $ 1 $ 795 $ 7,325 $ (1,311) $ 10,979
======== ======== ======== ======== ======== ========
</TABLE>
19
<PAGE> 20
EAGLE-PICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THREE MONTHS ENDED FEBRUARY 28, 1998
PREDECESSOR
<TABLE>
<CAPTION>
GUARANTORS
-------------------------- NON-GUARANTORS
EAGLE-PICHER SUBSIDIARY FOREIGN
ISSUER HOLDINGS, INC. GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
-------- -------------- ---------- -------------- ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 648 $ -- $ 4,785 $ 66 $ (4,692) $ 807
Adjustments to reconcile net income
(loss) to cash provided by (used in)
operating activities:
Equity in earnings of consolidated
subsidiaries (4,785) -- 270 -- 4,515 --
Depreciation and amortization 3,588 -- 8,284 950 -- 12,822
Changes in assets and liabilities,
net of effect of divestitures (16,059) -- (9,247) 2,019 575 (22,712)
--------- --------- --------- --------- --------- ---------
Net cash provided by (used in)
operating activities (16,608) -- 4,092 3,035 398 (9,083)
--------- --------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Subsidiary -- (180,005) -- -- 180,005 --
Capital expenditures (2,300) -- (1,833) (1,559) -- (5,692)
Other (956) -- 65 (846) 695 (1,042)
--------- --------- --------- --------- --------- ---------
Net cash provided by (used in)
investing activities (3,256) (180,005) (1,768) (2,405) 180,700 (6,734)
--------- --------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 445,000 -- -- -- -- 445,000
Reduction of long-term debt (250,000) -- -- -- -- (250,000)
Borrowings under revolving credit
agreement 79,100 -- -- -- -- 79,100
Redemption of common stock (446,638) -- -- -- -- (446,638)
Issuance of common stock 180,005 100,001 -- -- (180,005) 100,001
Issuance of preferred stock -- 80,005 -- -- -- 80,005
Debt issue cost (26,062) -- -- -- -- (26,062)
Other -- -- -- (360) -- (360)
--------- --------- --------- --------- --------- ---------
Net cash provided by (used in)
financing activities (18,595) 180,006 -- (360) (180,005) (18,954)
--------- --------- --------- --------- --------- ---------
Increase (decrease) in cash and
cash equivalents (38,459) 1 2,324 270 1,093 (34,771)
Intercompany accounts 1,740 -- (1,740) 899 (899) --
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 48,834 -- 561 4,344 -- 53,739
--------- --------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 12,115 $ 1 $ 1,145 $ 5,513 $ 194 $ 18,968
========= ========= ========= ========= ========= =========
</TABLE>
20
<PAGE> 21
G. LEGAL MATTERS
For other information on legal proceedings, see Item 3 of the
Company's Annual Report on Form 10-K/A for the fiscal year ended November 30,
1998.
Therma-Tru Corporation ("Therma-Tru") filed suit against Pease
Industries, Inc. ("Pease") in January 1997 (the "Therma-Tru suit"). Therma-Tru
amended its complaint adding the Subsidiary and Cambridge Industries, Inc.
("Cambridge") as additional defendants. Cambridge purchased the Subsidiary's
former Plastics Division and the Subsidiary was obligated to defend the
Therma-Tru suit as it relates to Cambridge. Therma-Tru and Pease have settled
the Therma-Tru suit, and in the Stipulation and Order of Dismissal resolving the
Therma-Tru suit, they have explicitly released both the Subsidiary and Cambridge
without liability to either the Subsidiary or Cambridge as a result of the
Therma-Tru suit.
In addition, the Company is involved in routine litigation,
environmental proceedings and claims pending with respect to matters arising out
of the normal course of business. In management's opinion, the ultimate
liability resulting from all claims, individually or in the aggregate, will not
materially affect the Company's consolidated financial position, results of
operations or cash flows.
21
<PAGE> 22
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
RESULTS OF OPERATIONS
As a result of the Acquisition as of February 24, 1998, which was
accounted for as a purchase, the Company's results of operations and financial
position for periods after February 24, 1998 are not comparable to those of
prior periods. The unaudited condensed consolidated statement of income (loss)
as of February 28, 1998 includes results of operations from (1) December 1, 1997
through February 24, 1998 of the Predecessor Company and (2) February 25 through
February 28, 1998 of the Company. In addition to the effects of the Acquisition,
other factors affecting the comparability of operations are the sale of the Trim
Division in the fourth quarter in 1998 and the acquisition of Carpenter in the
second quarter of 1999.
The following table sets forth certain sales and operating data, net of all
inter-segment transactions, for the Company's businesses for the periods
indicated:
<TABLE>
<CAPTION>
Three Month Six Months Three Months Three Months
Ended Ended Ended Ended
May 31 May 31 May 31 February 28
1999 1999 1998 1998
---- ---- ---- ----
(In millions of dollars)
Predecessor
<S> <C> <C> <C> <C>
Net sales by segment:
Automotive $150.6 $254.3 $114.6 $103.8
Machinery 63.6 116.7 68.9 64.4
Industrial 35.6 73.3 36.4 37.6
----- ----- ----- -----
Total $249.8 $444.3 $219.9 $205.8
===== ===== ===== =====
Operating income by segment:
Automotive $ 13.2 $ 21.5 $ 10.1 $ 8.2
Machinery 4.4 7.8 8.2 5.4
Industrial 4.1 7.6 3.2 3.2
Corporate overhead (5.7) (10.6) (23.0) (5.8)
---- ----- ----- ----
Total $ 16.0 $ 26.3 $ (1.5) $ 11.0
===== ===== ===== =====
</TABLE>
Net Sales. The Company's net sales were $249.8 million for the second
quarter ended May 31, 1999, an increase of $29.9 million or 13.6% from the
comparable period of 1998. Included in the results of the second quarter of 1999
are net sales of Carpenter, which was acquired in the second quarter of 1999,
and included in the second quarter of 1998 are net sales of the Trim Division,
which was sold in the fourth quarter of 1998. If the net sales of the Trim
Division and Carpenter are excluded, the Company's quarterly net sales increased
0.2%. On a year-to-date basis, net sales increased 4.4% in 1999 from the
comparable period in 1998. However if the net sales of the Trim Division and
Carpenter are excluded, net sales decreased 0.9%.
22
<PAGE> 23
The Automotive Group's net sales in the second quarter of 1999,
excluding Carpenter and the Trim Division, increased 6.1% over the same period
in 1998. A substantial part of the increase is due to broader market penetration
of precision-machined components over a wider customer base. The acquisition of
Carpenter is expected to further expand the Company's product lines and its
customer base for precision-machined components. Since the 1980's, original
equipment manufacturers ("OEM's"), such as Ford and General Motors, have been
outsourcing an increasing percentage of their production requirements. OEM's
benefit from outsourcing because outside suppliers generally have significantly
lower cost structures and can assist in shortening development periods for new
products. The benefits of this trend have been somewhat offset by the effects of
intense pricing pressures by the OEM's on their supplier base. Net sales for the
Machinery Group in the second quarter of 1999 decreased 7.7% from the comparable
period in 1998 due primarily to the declines in demand for heavy-duty forklift
trucks and industrial cleaning and finishing systems. Net sales for the
Industrial Group were down 2.1% in the second quarter of 1999. The decrease can
be attributed in part to the timing of large boron shipments.
Cost of Products Sold. Cost of products sold, which excludes
depreciation expense, increased $28.2 million or 16.6% in the second quarter of
1999 from the comparable period in 1998. As a percentage of sales, cost of
products sold was 79.2% for the three months ended May 31, 1999 compared to
77.1% for same period in the prior year. Excluding the results of Carpenter,
which has a different cost structure than many of the other divisions in the
Automotive Group, and the Trim Division, cost of sales as a percentage of sales
was 77.9% and 76.8% in the three month periods ended May 31, 1999 and 1998,
respectively, and 78.0% and 77.8% for the six month periods ended May 31, 1999
and 1998, respectively. Positive trends in the first quarter, such as
productivity improvements and changes in product mix in certain operations in
the Machinery Group, continued into the second quarter, but were offset by the
effects of the decline in shipments of heavy-duty forklift trucks, which
resulted in higher fixed costs on a per unit basis and start-up costs related to
new multi-layer fuel transfer systems programs.
Since the Company expects strong price pressure to continue across all
product lines, particularly in the Automotive Group, the Company will continue
to pursue productivity improvements and material cost reductions to mitigate
such price pressures.
Selling and Administrative. Selling and administrative expenses
decreased $0.6 million or 2.8% in the second quarter of 1999 from the same
period in 1998. Excluding those of Carpenter and the Trim Division, selling and
administrative expenses were stable, decreasing 1.6% from the second quarter of
1998 to the second quarter of 1999. However, on a year to date basis, selling
and administrative expenses, excluding those of Carpenter and the Trim Division,
have increased 4.2%. The increase is due to expenses incurred by the Company as
a result of the Acquisition in February 1998 which were not incurred in the
first quarter of 1998, including management fees to Granaria Holdings B.V. and a
long-term incentive program for managers.
Management Compensation-Special. - The management compensation-special
of $17.3 million in the second quarter of 1998 and $2.1 million in the first
quarter of 1998 is a one-time item related to the Acquisition.
Depreciation. Depreciation expense was $12.0 million and $9.8 million
in the second quarters of 1999 and 1998, respectively, and $22.1 million and
$18.8 million in the six months ended May 31, 1999 and 1998, respectively.
Depreciation is not comparable due to the differences in asset bases as a result
of the Acquisition in February 1998. Purchase accounting allows a company to
take up to a year to allocate the purchase price to its assets and liabilities
based on their fair values. Although the Acquisition took place in February,
final adjustments to the fair values of plant, property and equipment and
depreciation expense in 1998 were not made until November 1998, after appraisals
had been obtained and analyzed. Other factors affecting the comparability of
depreciation expense include the depreciation attributable to Carpenter in 1999
and the Trim Division in 1998.
Amortization. Amortization of intangibles was $4.4 million and $4.5
million in the second quarters of 1999 and 1998, respectively, and $8.4 million
and $8.3 million in the six months ended May 31, 1999 and 1998, respectively.
Amortization is not comparable due to the differences in the asset bases as a
result of the Acquisition in 1998 and the acquisition of Carpenter in 1999. In
the first quarter of 1998, the reorganization value in excess of amounts
allocable to identifiable assets of $65.1 million was being amortized over four
years. In accordance with purchase accounting, this asset was not allocated a
fair value in the Acquisition. The excess of acquired net assets over cost of
$241.1 million, which resulted from the Acquisition, is being amortized over 15
years. However, the final adjustment of the
23
<PAGE> 24
amount of the excess of acquired net assets over cost and amortization thereof
was not made until November 1998.
Operating Income. Operating income (loss) was $16.0 million and $(1.5)
million for the three months ended May 31, 1999 and 1998, respectively. Many
factors affect the comparability of operating income in 1999 and 1998.
Depreciation and amortization have been computed using different asset bases in
1999 than in 1998. Purchase accounting allows up to one year to allocate the
purchase price to assets and liabilities based on fair value of those assets.
The depreciation expense in the second quarter of 1998 was computed based on an
estimate of those values while 1999 deprecation was computed on fair values
based on appraisals. The final adjustments to the fair values of property, plant
and equipment were made in the fourth quarter of 1998. This also affected
amortization of intangible assets. There were management compensation - special
expenses of $17.3 million in the second quarter of 1998 for which there were no
comparable expenses in 1999. In addition, Carpenter was acquired in the second
quarter of 1999 and the Trim Division was sold in the fourth quarter of 1998.
After excluding all of these items, operating income decreased 15.8% in the
second quarter of 1998 compared to the second quarter of 1999.
Operating income of the Automotive Group increased $3.1 million or 31%
in the second quarter of 1999 compared to the same period of the prior year.
Excluding the results of Carpenter and the Trim Division and the effects of the
changes in depreciation and amortization from 1998 to 1999, the increase was
4.0%. Increases in operating income resulting from volume increases due to
increased market penetration were somewhat offset by start-up costs associated
with new multi-layer fuel transfer systems programs. In the Machinery Group,
operating income declined $3.8 million or 46% in the second quarter of 1999 from
the same quarter in 1998. However, the majority of the increased depreciation
resulting from the adjustment to asset bases affected the Machinery Group. In
addition, a greater portion of the intangible asset associated with the
Acquisition was allocated to the Machinery Group than was the intangible asset
associated with the Reorganization. After considering these items, the decline
in operating income in the Machinery Group was approximately 37%. Reasons for
this decline include costs involved in moving production of forklift trucks to
another facility, start-up costs at the second facility and decreases in volumes
of forklift trucks and industrial cleaning and finishing machinery. Operating
income of the Industrial Group increased $0.9 million or 28% in the second
quarter of 1999 from the comparable period in 1998. However, the majority of
this increase is due to the reallocation of intangible assets, which impacted
the Machinery Group. Operating income remained relatively flat in the Industrial
Group, if the affect of the reallocation of the intangible asset is excluded.
Corporate overhead was flat excluding the $17.3 million of management
compensation - special in 1998.
For the six months ended May 31, 1999, operating income was $26.3
million. After excluding the effects of the difference in depreciation and
amortization, the Acquisition of Carpenter, the divestiture of Trim Division and
the management compensation - special, operating income decreased 14.4% from the
comparable period in 1998 for the same reasons discussed above.
Interest Expense. Interest expense for the three months ended May 31,
1999 and 1998 was $12.1 million and $12.6 million, respectively and was $23.4
million and $19.5 million for the six months ended May 31, 1999 and 1998,
respectively. Upon the Acquisition, the Company repaid $250.0 million of
subordinated debentures, and borrowed $524.1 million in new debt, which accounts
for the increase in year-to-date interest expense in 1999. The decrease in
interest expense in the second quarter is due to both a decline in the base rate
of borrowings subject to variable interest rates and low level of borrowing on
the Revolving Credit Facility in March 1999, prior to the acquisition of
Carpenter.
Income Taxes. Income taxes were $1.7 million and $(4.5) million in the
three months ended May 31, 1999 and 1998, respectively, and $2.0 million and
$(.4) million in the six months ended May 31, 1999 and 1998, respectively.
Effective tax rates vary for a number of reasons including: 1) the amortization
of the reorganization value in excess of amounts allocable to identifiable
assets in the first quarter of 1998 was not deductible for tax purposes while a
substantial portion of the amortization of the excess of acquired net assets
over costs created during the Acquisition is deductible; 2) the amortization of
the excess of acquired net assets over costs created upon the acquisition of
Carpenter is not deductible for tax purposes; and 3) the effect of income taxes
in countries with higher tax rates, such as Germany, varies as income in those
countries varies in proportion to the Company's total income.
Net Income. The income (loss) for the three months ended May 31, 1999
and 1998 was $2.4 million and $(9.3) million, respectively, $1.2 million for the
six months ended May 31, 1999
24
<PAGE> 25
and $0.8 million for the three months ended February 28, 1998. However, the
comparability of net income has been significantly affected as discussed above,
by the Acquisition and the application of purchase accounting, the effects of
the Trim Division, which was sold in the fourth quarter of 1998 and the impact
of the Carpenter acquisition in the second quarter of 1999.
Net income (loss) attributable to common share holders was reduced
(increased) by dividends accreted on the 11-3/4% Cumulative Redeemable
Exchangeable Preferred Stock ("Preferred Stock") of $2.6 million and $2.5
million for the three months ended May 31, 1999 and 1998, respectively, to
$(0.3) million and $(11.8) million. Net income applicable to common shareholders
was reduced by preferred stock dividends of $5.1 million in the six months ended
May 31, 1999 to $(3.9) million. Since the Preferred Stock was issued upon the
Acquisition, net income applicable to common shareholders of $0.8 million for
the three months ended February 28, 1998 was not reduced.
LIQUIDITY AND CAPITAL RESOURCES
Other financial data is as follows:
<TABLE>
<CAPTION>
Six Months Three Months Three Months
Ended May 31 Ended May 31 Ended February 28
1999 1998 1998
---- ---- ----
(in million of dollars)
Predecessor
<S> <C> <C> <C>
EBITDA $ 58.1 $ 30.8 $ 27.0
Cash provided by (used
in) operating activities 21.5 35.9 (9.1)
Cash used in investing activities (72.8) (8.5) (6.7)
Cash provided by (used in)
financing activities 48.9 (35.3) (19.0)
Preferred stock dividends accreted 5.1 2.5 --
Earnings/fixed charges and preferred
stock dividends .93x N/M 1.69x
</TABLE>
EBITDA
The Company's EBITDA is defined by the terms of the Preferred Stock and
the Indenture for the 9 3/8% Senior Subordinated Notes as earnings before
interest expense, income taxes, depreciation and amortization, certain one-time
management compensation expenses and other non-cash charges. EBITDA, as defined
herein, may not be comparable to similarly titled measures reported by other
companies and should not be construed as an alternative to operating income or
to cash flows from operating activities, as determined by generally accepted
accounting principles, as a measure of the Company's operating performance or
liquidity, respectively. Funds depicted by EBITDA are not available for
management's discretionary use to the extent they are required for debt service
and other commitments.
The Company's EBITDA for the six months ended May 31, 1999 was $58.1 million up
from $57.8 million from the same period of the comparable year or 0.6%. The
increases resulting from the Carpenter Acquisition, better market penetration in
the Automotive Group and better product mix of special purpose batteries were
offset by decreases resulting from the costs of moving forklift production to
another facility and start up costs related to certain multi-layer fuel systems.
25
<PAGE> 26
Operating Activities
Cash provided by operating activities was $21.5 million, and $26.8
million for the six months ended May 31, 1999, and 1998 and consisted of the
following:
<TABLE>
<CAPTION>
Six Months Ended May 31,
1999 1998
---- ----
(in millions of dollars)
<S> <C> <C>
Operating income $ 26.3 $ 9.5
Depreciation and amortization,
excluding amortization of
deferred financing costs 30.5 27.1
Income taxes paid (8.0) (.3)
Interest paid (21.6) (13.5)
Working capital and other (5.7) 4.0
------- -------
$ 21.5 $ 26.8
======= =======
</TABLE>
Income taxes paid in 1999 relate primarily to foreign taxes and Federal
income tax payments relating to increasing income. Interest paid in 1999
includes interest relating to the Subordinated Notes, which is due semiannually,
March 1 and September 1. The higher debt level since the Acquisition has
resulted in more interest. The increases in working capital for the six months
ended May 31, 1999 can be attributed in part to the preparation of large boron
shipments scheduled in the third and fourth quarters of 1999. In 1998, a large
boron order was shipped in the first quarter.
Investing Activities
Cash used in investing activities was $72.8 million and $15.2 million
in the six months ended May 31, 1999 and 1998, respectively. Early in the first
quarter of 1999, the Company received $12.4 million in cash relating to the sale
of the Trim Division, which was effective as of October 31, 1998. Capital
expenditures for the six months ended May 31, 1999 were $24.4 million compared
to $14.8 million for the same period in 1998. Besides expenditures to complete a
new plant in Mt. Pleasant, Michigan for Carpenter and a small expansion to a
plant manufacturing bulk pharmaceuticals in 1999, these expenditures generally
related to capital needed for new programs and maintenance. The Company
anticipates capital expenditures will be approximately $24.0 million for the
remaining six months of 1999.
On April 14, 1999, the Company completed the acquisition of Carpenter,
a manufacturer of precision-machined automotive parts. This acquisition is
expected to expand both the Company's product lines and its customer base for
precision-machined automotive products. The total consideration included
approximately $41.0 million in cash, which was financed from the Revolving
Credit Facility and approximately $31.0 million of existing indebtedness of
Carpenter, of which approximately $18.6 million was refinanced from the
Company's Revolving Credit Facility. The remainder of Carpenter's debt was
assumed. The acquisition was accounted for as a purchase and was effective March
1, 1999 for accounting purposes.
Financing Activities
Cash provided from financing activities was $48.9 million in the first
six months of 1999, due primarily to borrowings under the Credit Agreement to
finance the acquisition of Carpenter. Cash used in financing activities was
$54.3 million for the comparable period in 1998 as the Company repaid borrowings
during the second quarter of 1998 and used cash in the issuance of new debt and
stock and cancellation of old issuances in connection with the Acquisition
during the first quarter of 1998.
As of May 31, 1999, letters of credit outstanding against the Revolving
Credit Facility were $50.7 million. This coupled with the $79.0 million in
outstanding borrowings at May 31, 1999, left the Company with available
borrowing capacity of approximately $30.3 million at that date. After the
amendment of the Credit Agreement was completed in June 1999, the available
borrowing capacity was $34.8 million. The Company anticipates the sale of its
Ross Aluminum Division will close in the third quarter of 1999. The proceeds
from this transaction will reduce outstanding borrowings against the Revolving
Credit Facility. The European operations had $16.8 million of borrowing capacity
at May 31, 1999.
26
<PAGE> 27
Earnings to Fixed Charges and Preferred Stock Dividends
The earnings to fixed charges and preferred stock dividends for the six
months ended May 31, 1999 were .93x and earnings were insufficient to cover
fixed charges and preferred stock dividends by $1,953 in that period.
The earnings to fixed charges and preferred stock dividends for the
three months ended May 31, 1998 is not meaningful. Earnings were insufficient to
cover fixed charges and preferred stock dividends by $16,295 in this period.
However, one time management compensation expenses of $17,321 are included in
this period. Excluding this item, earnings would have been insufficient to cover
fixed charges and preferred dividends by $1,026.
YEAR 2000 READINESS DISCLOSURE
The Year 2000 problem arose because many existing computer programs use
only the last two digits to refer to a year. Therefore, these computer programs
do not properly recognize a year that begins with "20." If not corrected, many
computer programs could fail or cause erroneous results. Failures of this nature
could cause interruptions to manufacturing processes, business and financial
functions and communications with customers and suppliers.
Due to the diverse nature of the Company's operations, each operating
division has its own discrete computer systems. The Company currently has a Year
2000 program in place, which includes a comprehensive review to identify the
areas of concern in each of the systems affected by the Year 2000 issue and
follows up with design and implementation of measures to address those issues.
The Company is assessing its information technology systems such as business
computing systems, end user computer systems and technical infrastructure, as
well as embedded systems commonly found in manufacturing and service equipment,
testing equipment and environmental operations. The assessments also include the
Company's products and evaluation of the readiness of its suppliers and service
providers.
The Company's Year 2000 program involves a five step process applied to
each of eight different application areas within each operation and at the
Corporate level. The Company first inventories areas of potential risk based on
comparison to guidelines published by the Automotive Industry Action Group. Each
component identified in the inventory is then evaluated for its risk of failure
and the impact of potential failure to the Company's operations and its
customers. Once the risks are assessed, remediation is commenced. Options for
remediation may include replacement, modification or continued use depending on
information gathered during the inventory and assessment stages. The remediated
system is then tested and reviewed before the determination is made as to the
readiness of the system. A project committee meets regularly to review the
status of the investigation into and resolution of Year 2000 issues.
The Company's divisions have substantially completed the inventory and
assessment phases and are working on remediation and testing. The Company
expects that all divisions will have implemented initial remediation attempts
and testing thereof by September 30, 1999. The final step of the program is
review by the Company's outside consultant for Year 2000 readiness, a review
that is ongoing, to ensure that procedures are properly documented and that
modifications or upgrades will not interfere with the Company's preparedness.
The Company maintains a record of its progress to date, and publishes reports
for each of its divisions on its web site at www.epcorp.com.
The Company's remaining costs to remediate the Year 2000 problem are
not expected to exceed $2.0 million. Of this amount, approximately $0.8 million
will be spent in the form of capital for systems replacement and approximately
$0.6 million will be incremental costs. The remaining costs relate to the
redeployment of the Company's existing resources to assess and remediate the
Year 2000 problem. Projects being deferred by this issue include items such as
system enhancements that would improve performance or functionality. Through May
31, 1999, the Company estimates it has spent approximately $3.8 million in
assessing and remediating the Year 2000 problem, of which $1.0 million was for
capital equipment and $1.8 million related to incremental costs.
27
<PAGE> 28
The Company suspects its greatest risk lies within its financial
computer systems and Electronic Data Interchange ("EDI") capabilities with its
customers and suppliers. The Company relies on customer requirements and outside
services for most of its EDI capabilities and therefore is dependent on such
parties addressing Year 2000 issues. If these systems were to fail, the Company
would encounter difficulty performing functions such as compiling financial
data, invoicing customers, accepting electronic customer orders or informing
customers electronically of shipments. While some of these functions could be
performed manually, the Company presently is not certain what the extent of the
impact on operations would be. There is also risk associated with certain
suppliers, including utility companies, over which the Company has limited
control.
Each Division is presently working on contingency plans on a case by
case basis to address issues related to potential failures of critical systems
due to Year 2000 problems, and most of those plans have been completed. The
Company is in the process of reviewing those plans and summarizing them. The
Company expects to finalize this process by September 30, 1999. The Company
believes that the most likely worst case scenario will be limited to isolated
disruptions that will affect individual business processes, facilities,
suppliers or customers for a relatively short time.
The Company presently believes that through the planned modification to
existing systems and conversion to new systems, as well as ongoing
correspondence with suppliers and customers, the Year 2000 issue will not
materially impair the Company's ability to conduct business.
EURO CONVERSION
On January 1, 1999, eleven members of the European Union adopted the
euro as their common legal currency and established fixed conversion rates
between their existing local currencies and the euro. During the transition
period, which runs from January 1, 1999 through December 31, 2002, transactions
may take place using either the euro or a local currency. However, conversion
rates will no longer be computed directly from one local currency to another,
but be converted from one local currency into an amount denominated in euro,
then be converted from the euro denominated amount into the second local
currency. On July 1, 2002, the local currencies will no longer be legal tender
for any transactions.
The Company has both operating divisions and domestic export customers
located in Europe. In 1998, combined revenues from these sources were
approximately 15% of total revenues. The Company has operations in Germany, the
Netherlands, France and Spain, which are participating in the euro conversion,
and the United Kingdom, which has elected not to participate at this time. The
affected operations plan to make the euro the functional currency sometime
during the transition period, although certain of the Company's European
operations have already entered into euro-based transactions, such as bank
borrowing and collection of accounts receivable.
It is difficult to assess the competitive impact of the euro conversion
on the Company's operations, both in Europe and in the United States. In markets
where sales are made in U.S. dollars, there may be pressures to denominate sales
in the euro, however, exchange risks resulting from these transactions could be
mitigated through hedging. Pressures to price products in euro may be more
urgent for operations located in the United Kingdom, particularly in the
automotive industry, as the European automotive industry is somewhat dominated
by German companies. The currency risk to the operations located in the United
Kingdom could also be hedged, however the risk is greater on a regional level
that the hedging could result in additional costs that could harm the cost
competitiveness of those operations. It is not anticipated that changes to
information technology and other systems which are necessary for the euro
conversion will be material. The Company is currently assessing the impact the
euro conversion may have on items such as taxation and other issues.
RESTRICTIONS ON PAYMENT OF DIVIDENDS
The Subsidiary and the Subsidiary Guarantors are subject to
restrictions on the payment of dividends and other forms of payment in both the
Credit Agreement and the Indenture for the Subordinated Notes. Those
restrictions generally prohibit the payment of dividends to the Company either
directly by the Subsidiary or indirectly through any Subsidiary Guarantor.
Certain limited exceptions are provided allowing for payments to the Company.
Specifically,
28
<PAGE> 29
the Subsidiary is authorized to make payments to the Company in amounts not in
excess of any amounts the Company is required to pay to meet its consolidated
income tax obligations. Additional payments from the Subsidiary to the Company
are permitted commencing September 1,2003 in amounts not in excess of the
Company's obligations to make any cash dividend payments required to be paid
under the Company's Preferred Stock and to make any cash interest payments
required to be paid under any debentures issued by the Company in exchange for
the Company's Preferred Stock ("Exchange Debentures").
ACCOUNTING STANDARDS NOT YET ADOPTED
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which addresses the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value. The accounting for gains and losses
resulting from changes in fair value of a derivative depends on the its intended
use and the resulting designation. The provisions of this statement are not
effective for the fiscal year ending November 30, 1999. The Company has not yet
determined the impact this statement will have on its financial position or the
results of its operations. The FASB has issued two additional pronouncements
since June 1998, neither of which is applicable to the Company.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains statements which, to the extent that they are
not recitations of historical fact, constitute "forward looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934. The
words "estimate," "anticipate," "project," "intend," "believe," "expect," and
similar expressions are intended to identify forward looking statements. Such
forward-looking information involves important risks and uncertainties that
could materially alter results in the future from those expressed in any
forward-looking statements made by, or on behalf of, the Company. These risks
and uncertainties include, but are not limited to, the ability of the Company to
maintain existing relationships with customers, the ability of the Company to
successfully implement productivity improvements, cost reduction initiatives,
facilities expansion and the ability of the Company to develop, market and sell
new products and to continue to comply with environmental laws, rules and
regulations. Other risks and uncertainties include uncertainties relating to
economic conditions, acquisitions and divestitures, government and regulatory
policies, technological developments and changes in the competitive environment
in which the Company operates. Persons reading this Form 10-Q are cautioned that
such forward-looking statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, readers should
specifically consider the various factors which could cause actual events or
results to differ materially from those indicated by such forward-looking
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Both the Company's Term Loan Facility and Revolving Credit Facility
under the Credit Agreement bear interest at a variable rate equal to either (a)
the average daily rate on overnight U.S. federal funds transactions ("Federal
Funds Rate"), or (b) the London Interbank Offered Rate shown on Telerate Page
3750 for the applicable interest period ("LIBOR"), plus, in either case, an
applicable spread.
On February 26, 1998, the Company entered into a three year interest
rate swap agreement with its lead bank to partially hedge its interest rate risk
on loans under the Credit Agreement. Under this agreement, the Company pays a
fixed rate of 5.805% on a notional amount of $150.0 million and receives LIBOR
on that amount. This swap transaction effectively fixes the interest rate on
$150.0 million of debt outstanding under the Credit Agreement at 5.805% plus the
applicable spread for the duration of the interest rate swap.
The Credit Agreement was amended in May 1999 to increase the Revolving
Credit Facility, reduce the Term Loan Facility and provide for the
Securitization. In June 1999, approximately $120.5 million in term loans were
repaid upon the closing of the transaction with the proceeds from the
Securitization of $65.0 million and additional borrowings under the Revolving
Credit Facility. The interest rate swap agreement was not impacted by this
transaction; however, it does not cover debt outstanding under the
Securitization.
29
<PAGE> 30
Loans under the Securitzation bear interest at a variable rate equal to
market rates on commercial paper having similar terms. As of May 31, 1999,
$285.4 million in debt was outstanding under the Credit Agreement, of which
interest on $150.0 million is essentially fixed by the interest rate swap
agreement. The remaining $135.4 million of debt outstanding bears interest at
the variable rates under either the Revolving Credit Agreement or Securitization
as described above. Accordingly a 1% increase in both the applicable index rates
would result in additional interest expense of $1.4 million per year assuming no
change in the level of borrowing.
30
<PAGE> 31
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On June 30, 1999, a Stipulation and Order of Dismissal was entered in the
U.S. District Court for the Eastern District of Michigan (the "Therma-Tru
Order"). The Therma-Tru Order dismissed the suit filed by Therma-Tru Corporation
("Therma-Tru"), initially against only Pease Industries, Inc. ("Pease"), and
which later added the Subsidiary and Cambridge Industries, Inc. ("Cambridge") as
additional defendants. The result of this dismissal is that the Subsidiary and
Cambridge have explicitly been released from liability to Therma-Tru or Pease,
and the Company believes it will have no further liability as a result of this
suit.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.36 Voting Trust Agreement dated as of November 16, 1998, by and among
certain shareholders of Eagle-Picher Holdings, Inc. and Granaria
Holdings B.V.
10.37 Stock Purchase Agreement dated April 8, 1999 between Hillsdale Tool &
Manufacturing Co., Charterhouse Automotive Group Inc. and the
Shareholders of Charterhouse Automotive Group,Inc. *
10.38 Shareholders Agreement dated April 12, 1999 among Granaria Holdings
B.V., Eagle-Picher Holdings, Inc., Eagle-Picher Industries, Inc., and
certain shareholders of Eagle-Picher Holdings, Inc.
10.39 Voting Trust Agreement dated April 13, 1999 between certain
shareholders of Eagle- Picher Holdings, Inc. and Granaria Holdings B.V.
as voting trustee.
10.40 Amendment to Credit Agreement and Consent, dated as of May 18, 1999,
among Eagle- Picher Industries, Inc., the lenders party thereto, ABN
AMRO Bank N.V., as Agent, PNC Bank, National Association, as
Documentation Agent, and NBD Bank, N.A., as Syndication Agent.
10.41 Receivables Loan Agreement dated as of May 18, 1999 among Eagle-Picher
Acceptance Corporation, Eagle-Picher Industries, Inc., ABN AMRO Bank
N.V., the Lender Agents, the Related Bank Lenders, Amsterdam Funding
Corporation and the Other Conduit Lenders.
10.42 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Industries, Inc. and Eagle-Picher Acceptance Corporation.
10.43 Receivables Purchase Agreement dated as of May 18, 1999 between
Carpenter Enterprises Limited and Eagle-Picher Acceptance Corporation.
10.44 Receivables Purchase Agreement dated as of May 18, 1999 between Daisy
Parts, Inc. and Eagle-Picher Acceptance Corporation.
10.45 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Development Company and Eagle-Picher Acceptance
Corporation.
10.46 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Fluid Systems, Inc. and Eagle-Picher Acceptance
Corporation.
10.47 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Minerals, Inc. and Eagle-Picher Acceptance Corporation.
10.48 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Technologies, LLC and Eagle-Picher Acceptance Corporation.
10.49 Receivables Purchase Agreement dated as of May 18, 1999 between
Hillsdale Tool & Manufacturing Co. and Eagle-Picher Acceptance
Corporation.
10.50 Receivables Purchase Agreement dated as of May 18, 1999 between
Michigan Automotive Research Corporation and Eagle-Picher Acceptance
Corporation.
31
<PAGE> 32
27.1 Financial Data Schedule
* Incorporated by reference to Form 8-K filed April 21, 1999.
(b) Reports on Form 8-K
Form 8-K was filed on April 21, 1999 describing the acquisition of the
outstanding stock of Charterhouse Automotive Group, Inc.
("Charterhouse") by the Company's indirectly wholly-owned subsidiary
Hillsdale tool Manufacturing Co. Charterhouse was a holding Company who
was the indirect parent of Carpenter Enterprises Limited, a supplier of
precision-machined components to the automotive industry. Charterhouse
was merged into Carpenter immediately following the acquisition. Form
8-K/A was filed May 25, 1999 and included the following financial
statements.
Financial Statements of Carpenter Enterprises Ltd.
o Condensed Statements of Income for the six months ended December
31, 1998 and 1997 (unaudited)
o Condensed statements of Cash Flow for the six months ended
December 31, 1998 and 1997 (unaudited)
o Condensed Balance Sheet as of December 31, 1998 (unaudited)
o Report of Independent Auditors
o Balance Sheet as of June 30, 1998
o Statement of Operations and Retained Earnings for the year ended
June 30, 1998
o Statement of Cash Flows for the year ended June 30, 1998
o Notes to Financial Statements
Pro Forma Financial Information
o Pro Forma Condensed Combined Financial Statements - Summary
o Pro Forma Condensed Combined Balance sheet as of February 28,
1999 with Notes thereon
o Pro Forma Condensed Combining Statements of Income (Loss) for the
Nine Months ended November 30, 1998 and for the three months
ended February 28, 1998 with Notes thereon
32
<PAGE> 33
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER HOLDINGS, INC.
/s/ Carroll D. Curless
--------------------------------
Carroll D. Curless
Vice President and Controller
(Principal Financial Officer and
Principal Accounting Officer)
DATE June 29, 1999
----------------------
33
<PAGE> 34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER INDUSTRIES, INC.
/s/ Carroll D. Curless
--------------------------------
Carroll D. Curless
Vice President and Controller
(Principal Financial Officer and
Principal Accounting Officer)
DATE June 29, 1999
----------------------
34
<PAGE> 35
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DAISY PARTS, INC.
/s/ Gary M. Freytag
--------------------------------
Gary M. Freytag
Vice President and Treasurer
(Principal Financial Officer)
DATE June 29, 1999
-----------------------
35
<PAGE> 36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER DEVELOPMENT COMPANY, INC.
/s/ Gary M. Freytag
--------------------------------------
Gary M. Freytag
Vice President and Treasurer
(Principal Financial Officer)
DATE June 29, 1999
-----------------------
36
<PAGE> 37
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER FAR EAST, INC.
/s/ Gary M. Freytag
--------------------------------
Gary M. Freytag
Vice President and Treasurer
(Principal Financial Officer)
DATE June 29, 1999
-----------------------
37
<PAGE> 38
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER FLUID SYSTEMS, INC.
/s/ Gary M. Freytag
--------------------------------
Gary M. Freytag
Treasurer
(Principal Financial Officer)
DATE June 29, 1999
-----------------------
38
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER MINERALS, INC.
/s/ Gary M. Freytag
--------------------------------
Gary M. Freytag
Vice President and Treasurer
(Principal Financial Officer)
DATE June 29, 1999
-----------------------
39
<PAGE> 40
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER TECHNOLOGIES, LLC
/s/ R. Doug Wright
--------------------------------
R. Doug Wright
Vice President, Controller
and Chief Financial Officer
DATE June 29, 1999
-----------------------
40
<PAGE> 41
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HILLSDALE TOOL & MANUFACTURING CO.
/s/ Gary M. Freytag
----------------------------------
Gary M. Freytag
Vice President and Treasurer
(Principal Financial Officer)
DATE June 29, 1999
-----------------------
41
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION
/s/ Terence J. Rhoades
----------------------------------------
Terence J. Rhoades
Secretary and Treasurer
(Principal Financial Officer)
DATE June 29, 1999
-----------------------
42
<PAGE> 43
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
10.36 Voting Trust Agreement dated as of November 16, 1998, by and among
certain shareholders of Eagle-Picher Holdings, Inc. and Granaria
Holdings B.V.
10.37 Stock Purchase Agreement dated April 8, 1999 between Hillsdale Tool
& Manufacturing Co., Charterhouse Automotive Group, Inc. and the
Shareholders of Charterhouse Automotive Group, Inc. *
10.38 Shareholders Agreement dated April 12, 1999 among Granaria Holdings
B.V., Eagle-Picher Holdings, Inc., Eagle-Picher Industries, Inc.,
and certain shareholders of Eagle-Picher Holdings, Inc.
10.39 Voting Trust Agreement dated April 13, 1999 between certain
shareholders of Eagle-Picher Holdings, Inc. and Granaria Holdings
B.V. as voting trustee.
10.40 Amendment to Credit Agreement and Consent, dated as of May 18, 1999,
among Eagle-Picher Industries, Inc., the lenders party thereto, ABN
AMRO Bank N.V., as Agent, PNC Bank, National Association, as
Documentation Agent, and NBD Bank, N.A., as Syndication Agent.
10.41 Receivables Loan Agreement dated as of May 18, 1999 among
Eagle-Picher Acceptance Corporation, Eagle-Picher Industries, Inc.,
ABN AMRO Bank N.V., the Lender Agents, the Related Bank Lenders,
Amsterdam Funding Corporation and the Other Conduit Lenders.
10.42 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle- Picher Industries, Inc. and Eagle-Picher Acceptance
Corporation.
10.43 Receivables Purchase Agreement dated as of May 18, 1999 between
Carpenter Enterprises Limited and Eagle-Picher Acceptance
Corporation.
10.44 Receivables Purchase Agreement dated as of May 18, 1999 between
Daisy Parts, Inc. and Eagle-Picher Acceptance Corporation.
10.45 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Development Company and Eagle-Picher Acceptance
Corporation.
10.46 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Fluid Systems, Inc. and Eagle-Picher Acceptance
Corporation.
10.47 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Minerals, Inc. and Eagle-Picher Acceptance Corporation.
10.48 Receivables Purchase Agreement dated as of May 18, 1999 between
Eagle-Picher Technologies, LLC and Eagle-Picher Acceptance
Corporation.
10.49 Receivables Purchase Agreement dated as of May 18, 1999 between
Hillsdale Tool & Manufacturing Co. and Eagle-Picher Acceptance
Corporation.
43
<PAGE> 44
10.50 Receivables Purchase Agreement dated as of May 18, 1999 between
Michigan Automotive Research Corporation and Eagle-Picher Acceptance
Corporation.
27.1 Financial Data Schedule (submitted electronically to the Securities
and Exchange Commission for its information)
* Incorporated by reference to Form 8-K filed April 21, 1999.
44
<PAGE> 1
Exhibit 10.36
VOTING TRUST AGREEMENT, dated as of November 16, 1998, by and
among each of the persons designated as a Shareholder on the
signature pages of this Agreement (each a "Shareholder" and
collectively, the "Shareholders") and Granaria Holdings B.V.,
a Dutch corporation, as TRUSTEE (THE "TRUSTEE").
The Shareholders are respectively owners of shares of the
Class A (Voting) Common Stock, par value $0.01 per share (the "Common Stock"),
of Eagle-Picher Holdings, Inc., a Delaware corporation (the "Company") in the
amount set forth by their signature below.
With a view to the safe and competent management of the
Company in the interests of the Shareholders, and as contemplated by the
Shareholders' Agreement, dated October 15, 1998 (the "Shareholders' Agreement"),
the Shareholders desire to create this Voting Trust.
The Shareholders agree as follows:
1. TRANSFER OF STOCK TO TRUSTEE. Each of the Shareholders
assigns and delivers to the Trustee any certificate held by such Shareholder
representing shares of Common Stock owned by such Shareholder and shall do all
things necessary for the transfer of shares of Common Stock to the Trustee on
the books of the Company.
2. TRUSTEE TO HOLD SUBJECT TO AGREEMENT. The Trustee shall
hold the said shares of Common Stock so transferred to them for the common
benefit of the Shareholders, under the terms and conditions hereinafter set
forth.
3. ISSUANCE OF STOCK CERTIFICATES TO TRUSTEE. The Trustee
shall surrender to the proper officers of the Company for cancellation of all
certificates of Common Stock which shall be assigned and delivered to it as
hereinafter provided, and in their stead shall procure a new certificate(s)
issued to it as Trustee under this Agreement.
4. VOTING TRUST CERTIFICATES. The Trustee shall issue to each
of the Shareholders a Voting Trust Certificate for the number of shares
represented by the certificates of Common Stock by such Shareholder transferred
to the Trustee. Each such Voting Trust Certificate shall state that it is issued
under the Agreement, and shall set forth the nature and proportional amount of
the beneficial interest thereunder of the person to whom it is issued, and shall
be assignable, subject to the provisions of the Shareholders' Agreement, in the
manner of certificates of stock on books to be kept by the Trustee. The Trustee
shall keep a list of the shares of the Trust transferred to them, and shall also
keep a record of all Voting Trust Certificates issued or transferred on its
books, which records shall contain the names of the Voting Trust Certificate
holders and the number of shares of Common Stock represented by each such
certificate. Such list and record shall be open at all reasonable times to the
inspection upon the books of the Trustee by any Voting Trust Certificate holder.
<PAGE> 2
The Voting Trust Certificate shall be substantially in the
following form:
VOTING TRUST CERTIFICATE
This is to certify that the undersigned Trustee has received a
certificate or certificates issued in the name of _______________________,
evidencing the ownership of _______ shares of Class A Common Stock of
Eagle-Picher Holdings, Inc., a Delaware corporation (the "Company"), and that
such shares are held subject to all the terms and conditions of the Voting Trust
Agreement, dated as of November 16, 1998, by and between Granaria Industries
B.V., as Trustee, and certain shareholders of the Company. During the term of
the voting trust, the Trustee, or its successors, shall, as provided in said
agreement, possess and be entitled to exercise the voting power and otherwise
represent all of the said shares for all purposes, being agreed that no voting
right shall pass to the holder hereof by virtue of the ownership of this
certificate.
Upon the termination of said voting trust, this certificate shall
be surrendered to the Trustee by the holder hereof upon delivery to such holder
of a stock certificate representing a like number of shares.
The undersigned Trustee has executed this certificate as of the ___
day of __________________, ____.
GRANARIA HOLDINGS, B.V., Trustee
By: ________________________________
5. RESTRICTION ON TRANSFER. Each of the beneficiaries agrees
that during the term of this Agreement, the Voting Trust Certificates held by
them will not be sold or transferred except in accordance with the terms and
conditions of the Shareholders' Agreement, so long as such Agreement remains in
effect. The Voting Trust Certificates shall be regarded as stock of the Company,
within the meaning of any provision of the By-laws or other agreement (including
the Shareholders' Agreement) of the Company imposing conditions and restrictions
upon the sale of stock of the Company.
6. VOTING. It shall be the duty of the Trustee, and it shall
have full power and authority, and is hereby fully empowered and authorized, to
represent the holders of such Voting Trust Certificates and the Common Stock
transferred to the Trustee as aforesaid, and to vote upon said stock, as in the
judgment of the Trustee may be for the best interest of the Company, at all
meetings of the Shareholders of the Company, in the election of Directors and
upon any and all matters in question, which may be brought before such meetings,
as fully as any Shareholder might do if personally present.
7. LIABILITY. The Trustee shall use its business judgment in
voting upon the stock transferred to it, but shall not be liable for any vote
cast, or consent given, by it in the absence of gross negligence, bad faith,
self-dealing or willful misconduct.
8. DIVIDENDS. The Trustee shall collect and receive all
dividends that may accrue
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<PAGE> 3
upon the shares of Common Stock subject to this Trust,
and shall divide the same among the Voting Trust Certificate holders in
proportion to the number of shares respectively represented by their Voting
Trust Certificates.
9. INDEMNITY. The Trustee shall be entitled to be indemnified
fully against all costs, charges, expenses and other liabilities properly
incurred by it in the exercise of any power conferred upon it by this Agreement;
and the Shareholders, and each of them hereby covenant with the Trustee that in
the event of the monies and securities in its hands being insufficient for that
purpose, the Shareholders and each of them will in proportion to the amount of
their respective shares and interests hold harmless and keep indemnified the
Trustee of and from all loss or damage which it may sustain or be put to by
reason of anything it may lawfully and in accordance with this Agreement do in
the execution of this Trust.
10. VACANCIES. In the event of the Trustee's resigning or
refusing or becoming unable to act, the Trustee shall appoint a Trustee or
Trustees to fill the vacancy or vacancies, and any person so appointed shall
thereupon be vested with all the duties, powers and authority of a Trustee
hereunder as if originally named herein. Prior to the commencement of its
duties, each original Trustee and each Trustee subsequently appointed shall sign
a copy of the Shareholders' Agreement, relating to the shares of the Company and
shall thus signify his consent to be bound thereby and his agreement to perform
the terms thereof. All of the terms, provisions and conditions of the
Shareholders' Agreement shall apply to all Trustees hereof and hereunder with
the same force and effect as if such Trustee had originally signed said
Shareholders' Agreement.
11. CONTINUANCE AND TERMINATION OF TRUST. The Trust hereby
created shall be continued until the later of Ninety-Nine (99) years from the
date hereof or such other term as the Committee of the Second Amended and
Restated Incentive Stock Plan of Eagle-Picher Industries, Inc., as amended,
shall determine, and shall then terminate, provided that this Voting Trust
Agreement shall terminate upon the occurrence of the events for termination set
forth in the Shareholders' Agreement. Upon termination of the Trust, the Trustee
shall, upon surrender of the Voting Trust Certificates by the respective holders
thereof, assign and transfer to them the number of shares thereby represented.
12. LEGEND. All Voting Trust Certificates issued by the
Trustee hereunder shall have endorsed thereon a statement that they are held in
accordance with and subject to the terms of the Shareholders' Agreement.
13. MISCELLANEOUS. (a) This Voting Trust Agreement is entered
into in accordance with the Shareholders' Agreement. In the event of a conflict
in the provisions of said Shareholders' Agreement, the provisions of said
Shareholders' Agreement shall prevail.
(b) An executed copy of this Agreement shall be filed with the
Secretary of the Company. The Shareholders shall cause the Company to furnish
free of charge to any shareholder thereof a copy of this Agreement upon written
request.
(c) Any and all notices, designations, consents, offers,
acceptances or any other communication provided for herein shall be made by hand
delivery, first-class mail (registered or
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<PAGE> 4
certified, return receipt requested), or overnight air courier guaranteeing next
day delivery to the address set forth on the signature page hereof. Any
Shareholder may change the address listed in the foregoing sentence by giving
written notice to the Company and the other Shareholders. Except as otherwise
provided in this Agreement, each such notice shall be deemed effective at the
time delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; and the next business day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
(d) This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.
(f) This Agreement shall be binding upon and shall inure to
the benefit of each of the Shareholders and their respective executors,
administrators and personal representatives and heirs and assigns.
IN WITNESS WHEREOF, the Shareholders and the Trustee have duly
executed this Agreement.
TRUSTEE:
Granaria Industries B.V.
By:
--------------------------------------
Name:
Title:
SHAREHOLDERS:
--------------------------------------
(Signature)
Name:
------------------------------------
Address:
---------------------------------
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<PAGE> 1
Exhibit 10.38
SHAREHOLDERS' AGREEMENT, dated as of April 12, 1999 (the
"Agreement"), among Granaria Holdings B.V., a Dutch
corporation ("Granaria Holdings"), Eagle-Picher Holdings,
Inc., a Delaware corporation ("Issuer"), Eagle-Picher
Industries, Inc., an Ohio corporation (the "Company"), and
each of the persons designated as a Shareholder on the
signature pages of this Agreement and any subsequent holder of
Restricted Stock of the Issuer who shall become a signatory to
this Agreement (collectively, the "Shareholders").
INTRODUCTION
The Issuer has adopted an Incentive Stock Plan for Outside
Directors (the "Plan").
In accordance with the Plan, the Committee (as defined in the
Plan) may grant units (the "Units") from time to time to certain persons. Each
Unit represents the right to receive one share of Restricted Stock. Pursuant to
the Plan, each Shareholder will receive a specified amount of Restricted Stock
upon vesting of the Units, provided such Shareholder enters into this Agreement
and a related Voting Trust Agreement.
Capitalized terms not specifically defined in this Agreement
shall have the definitions given to them in the Plan.
In consideration of the premises and of the mutual covenants
and obligations hereunder set forth, the parties agree as follows:
Section 1. TRANSFER RESTRICTIONS. (a) Except as otherwise
provided in this Agreement, no Shareholder shall transfer, sell, assign or
otherwise dispose of (each, a "Transfer") any shares of Restricted Stock at any
time. A Shareholder may pledge shares of Restricted Stock, PROVIDED that the
pledgee agrees in writing to be bound by and subject to all terms of this
Agreement. No Transfer of shares in violation hereof shall be made or recorded
on the books of the Issuer and any such Transfer shall be void and of no effect.
(b) A Shareholder may Transfer his, her or its shares of
Restricted Stock:
(i) to (A) the spouse, parents, siblings and lineal
descendants of such Shareholder, (B) a trust for the benefit
of any of the foregoing, (C) any corporation (other than the
Company) or partnership controlled by such Shareholder,
members of such Shareholder's immediate family and lineal
descendants or trusts for the benefit of any of the foregoing,
and (D) upon the death of the Shareholder, the Shareholder's
estate, executors, administrators and personal
representatives, and heirs, legatees and distributees;
(ii) if such Shareholder has attained the age of 62;
<PAGE> 2
(iii) if such Shareholder has held the Units and the
associated Restricted Stock for an aggregate period of not
less than 10 years from the Award Date; or
(iv) in the event of an Initial Public Offering.
(c) Any Transfer pursuant to Section 1(b) shall not be
effective until such time as the transferee has agreed in writing to be bound by
and to comply with all provisions of this Agreement.
Section 2. "COME ALONG" OBLIGATION. (a) Each Shareholder
shall, if requested by Granaria Holdings at any time, transfer for value a pro
rata portion of such Shareholder's shares of capital stock to any other person
(the "Proposed Buyer") in the manner set forth in this Section 2 in connection
with the transfer by Granaria Holdings of any of its shares of capital stock of
the Issuer.
(b) If Granaria Holdings elects to exercise its rights under
this Section 2, it shall deliver a notice (the "Come Along Notice") to the
Shareholders. The Come Along Notice shall set forth the principal terms of the
proposed transfer insofar as it relates to the Restricted Stock, including the
number of shares of capital stock to be transferred, the transfer price, the
form of consideration, the name and address of the proposed transferee and the
other principal terms of the proposed transaction (the "Come Along Sale").
(c) Each Shareholder shall be bound and obligated to transfer
his, her or its Restricted Stock in the Come Along Sale on the same terms and
conditions, including price per share (on a proportional basis), as Granaria
Holdings transfers its capital stock (including an agreement containing
customary representations, warranties and indemnities with respect to their
ownership of the shares), provided, however, that if the purchaser is an
Affiliate, then the terms and conditions, including price, shall be at least as
favorable as could be obtained in an arms'-length transaction with an
unaffiliated third party. The amount of capital stock to be transferred by a
Shareholder shall be determined on a pro rata basis according to the proportion
which the number of shares which Granaria Holdings intends to transfer in such
Come Along Sale bears to the total number of shares held by such Shareholder.
Each Shareholder shall also take such actions and execute such documents and
instruments as shall be necessary or desirable in order to consummate the Come
Along Sale expeditiously and on the same terms as Granaria Holdings transfers
its capital stock. On or before the date selected by Granaria Holdings for
consummation of the proposed Come Along Sale, each Shareholder shall instruct
the custodian to deliver the shares of capital stock to be transferred by such
Shareholder, duly endorsed for transfer with signature guaranteed, free and
clear of any claims, with any stock transfer tax stamps affixed, against
delivery of the applicable purchase price.
(d) If more than 120 days elapse from the giving of the Come
Along Notice without the consummation of the Come Along Sale, the Shareholders
shall be released from their obligation under such Come Along Notice, and it
shall be necessary for a separate Come Along Notice to be furnished, and the
terms and provisions of this Section 2 separately complied with, in order to
consummate a Come Along Sale pursuant to this Section 2.
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<PAGE> 3
Section 3. RIGHT OF FIRST REFUSAL. (a) If, at any time, a
Shareholder is able to transfer his, her or its shares of Restricted Stock
pursuant to this Agreement and prior to an Initial Public Offering, a
Shareholder receives a bona fide offer (the "Offer") to purchase any or all of
his, her or its shares of Restricted Stock from a third party (the "Offeror")
which such Shareholder wishes to accept, the Shareholder shall cause the Offer
to be reduced to writing and shall notify Granaria Holdings in writing of such
Shareholder's wish to accept such Offer. Such notice shall contain an
irrevocable offer to sell such shares of Restricted Stock to Granaria Holdings
(in the manner set forth below) at a purchase price equal to the price contained
in, and on the same terms and conditions of, the Offer, and shall be accompanied
by a true copy of the Offer (which shall identify the Offeror). During the
period 30 days (and, if the Offer includes consideration other than cash, such
additional number of days, if any, necessary to determine the equivalent all
cash price pursuant to clause (ii) below) after the date of the receipt by
Granaria Holdings of the Shareholder's notice (the "Option Period"), Granaria
Holdings (or any of its designees) shall have the right and option to purchase,
or to arrange for a third party to purchase, all of the shares of Restricted
Stock covered by the Offer either (i) at the same price and on the same terms
and conditions as the Offer or (ii) if the Offer includes any consideration
other than cash, then at the sole option of Granaria Holdings, at the equivalent
all cash price (which shall be mutually agreed upon by the parties pursuant to
good faith negotiations between the parties within 10 business days after the
receipt of such notice or, if the parties cannot so agree within such 10
business day period, determined by an investment banking firm of national
reputation mutually and reasonably acceptable to, and promptly selected by, the
parties). If such option to purchase is exercised by Granaria Holdings, a
certified bank check or checks in the appropriate amount shall be delivered to
the Shareholder at the principal office of the Company against delivery of
certificates or other instruments representing the shares of Restricted Stock so
purchased, appropriately endorsed by the Shareholder.
(b) If at the end of the Option Period, Granaria Holdings has
not tendered the purchase price for such shares in the manner set forth above,
the Shareholder may during the succeeding 90 day period sell not less than all
of the shares of Restricted Stock covered by the Offer to the Offeror at a price
and on terms no less favorable to the Shareholder than those contained in the
Offer. No sale may be made to any Offeror unless the Offeror agrees in a writing
satisfactory to the Company to be bound by and to comply with the provisions of
this Agreement. Promptly after such sale, the Shareholder shall notify the
Company of the consummation thereof and shall furnish such evidence of the
completion and time of completion of such sale and of the terms thereof as may
reasonably be requested by the Company. If, at the end of 90 days following the
expiration of the Option Period, the Shareholder has not completed the sale of
such shares of Restricted Stock as aforesaid, all the restrictions on sale,
transfer or assignment contained in this Agreement shall again be in effect with
respect to such shares of Restricted Stock.
Section 4. SHAREHOLDERS' PUT RIGHTS. (a) At any time prior to
an Initial Public Offering, each Affected Shareholder (as defined below) shall
have the right (the "Put Right"), in his, her or its sole discretion and on one
occasion, to sell to the Company, and the Company shall be required to purchase
from such Affected Shareholder, all or part of the shares of Restricted Stock
then held by such Shareholder at a price per share equal to the Agreed Share
Price (as defined in the Plan). If an Affected Shareholder wishes to exercise
its Put Right, such Shareholder shall send written notice of such exercise to
the Company and Granaria Holdings, at least 60 days prior to the proposed
closing, which notice shall contain the number of shares of
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<PAGE> 4
Restricted Stock which is the subject of such exercise. During such 60 day
period, Granaria Holdings, in its sole discretion, shall have the right to
purchase from the Affected Shareholder the number of shares subject to the Put
Right at a price per share equal to the Agreed Share Price. If Granaria Holdings
does not purchase such shares, the closing of the Company's purchase shall take
place at the principal office of the Company on the 60th day after the giving of
such notice. Each Put Right shall expire and have no further force and effect if
such right is not exercised by the Affected Shareholder (by sending a notice as
provided above) within 30 days after such Affected Shareholder receives written
notice of its Put Right. An "Affected Shareholder" shall mean: (i) a Beneficiary
or Incapacitated Shareholder, (ii) a Shareholder who is or was a director of the
Issuer and the Company at the time such Shareholder attains the age 62, and
(iii) a Shareholder whose directorship with the Issuer and the Company is
terminated other than for cause.
(b) In addition to the Put Right provided in Section 4(a),
each Shareholder who has held his, her or its Units and the associated
Restricted Stock for an aggregate period of not less than five (5) years from
the Award Date shall have the right (the "Special Put Right"), in his, her or
its sole discretion and at any time, to sell to the Company, and the Company
shall be required to purchase from such Shareholder, all or part of the shares
of Restricted Stock then held by such Shareholder at a price per share equal to
the Agreed Share Price (as defined in the Amended Plan). If a Shareholder wishes
to exercise his, her or its Special Put Right, such Shareholder shall send
written notice of such exercise to the Company and Granaria Holdings, at least
60 days prior to the proposed closing, which notice shall contain the number of
shares of Restricted Stock which is the subject of such exercise. During such 60
day period, Granaria Holdings, in its sole discretion, shall have the right to
purchase from the Shareholder the number of shares subject to the Special Put
Right at a price per share equal to the Agreed Share Price. If Granaria Holdings
does not purchase such shares, the closing of the Company's purchase shall take
place at the principal office of the Company on the 60th day after the giving of
such notice. Each Special Put Right shall expire and have no further force and
effect at the time if and when a Shareholder becomes an Affected Shareholder.
Section 5. GRANARIA HOLDINGS' CALL RIGHTS. (a) Immediately
following the expiration of each Put Right pursuant to the terms of Section 4(a)
of this Agreement, Granaria Holdings (or its designee) shall have the right, in
its sole discretion (the "Call Right"), to purchase any or all of the shares of
Restricted Stock then held by such Affected Shareholder or its transferees, if
applicable, at a price per share equal to the Agreed Share Price. If Granaria
Holdings wishes to exercise its rights under this Section 5, it shall send
written notice (containing the number of shares of Restricted Stock to be
purchased) of such exercise to such Affected Shareholder within the 30-day
period following the expiration of the Affected Shareholder's Put Right. The
closing of such purchase shall occur at the principal office of the Company 30
days after written notice is provided to the Affected Shareholder. The Call
Right shall expire and have no further force and effect if such right is not
exercised by Granaria Holdings or its designees (by sending a notice as provided
above) within the 30-day period following the expiration of the Affected
Shareholder's Put Right.
(b) In the event that a Shareholder has held his, her or its
Units and the associated Restricted Stock for an aggregate period of not less
than five (5) years from the Award Date, Granaria Holdings (or its designee)
shall have the right, from time to time in its sole
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<PAGE> 5
discretion (the "Special Call Right"), to purchase any or all of the shares of
Restricted Stock then held by such Shareholder or his, her or its transferees,
if applicable, at a price per share equal to the Agreed Share Price. If Granaria
Holdings wishes to exercise its rights under this Section 5, it shall send
written notice (containing the number of shares of Restricted Stock to be
purchased) of such exercise to such Shareholder. The closing of such purchase
shall occur at the principal office of the Company 30 days after written notice
is provided to the Shareholder. The Special Call Right shall expire and have no
further force and effect if and when a Shareholder becomes an Affected
Shareholder.
Section 6. SECURITIES LAW COMPLIANCE. (a) Each Shareholder
agrees that it will not Transfer any Restricted Stock, other than pursuant to
Sections 2, 3, 4, or 5, except upon furnishing to the Issuer prior to any such
Transfer: (i) a written opinion of counsel (which counsel and opinion shall be
reasonably satisfactory to the Issuer) to the effect that the proposed Transfer
may be made without registration under the Securities Act of 1933, as amended
(the "Act"); and (ii) either (x) a written opinion of counsel (which counsel and
opinion shall be reasonably satisfactory to the Issuer) to the effect that the
proposed Transfer may be made without registration or qualification under
applicable state securities laws or (y) evidence satisfactory to the Issuer that
all necessary state securities law filings in connection with the proposed
Transfer have been made.
(b) Each certificate or other instrument evidencing the
securities issued upon the Transfer of any Restricted Stock (and each
certificate or other instrument evidencing any securities retained by the
transferor) shall bear the legend set forth in Section 7.
Section 7. LEGEND ON STOCK CERTIFICATES. Each certificate
representing shares of Restricted Stock shall bear the following legend, until
such time as the shares represented thereby are no longer subject to the
provisions hereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS AND CANNOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO REGISTRATION UNDER SAID ACT OR
IN COMPLIANCE WITH AN EXEMPTION THEREFROM AND, IN THE CASE OF
A TRANSACTION NOT SUBJECT TO SUCH REGISTRATION REQUIREMENTS,
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION UNDER THE ACT. ADDITIONALLY, THE SALE,
TRANSFER, ASSIGNMENT, PLEDGE, OR ENCUMBRANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A SHAREHOLDERS' AGREEMENT, DATED AS OF APRIL 12,
1999, AMONG GRANARIA HOLDINGS, B.V., EAGLE-PICHER HOLDINGS,
INC., EAGLE-PICHER INDUSTRIES, INC. (THE "COMPANY") AND THE
SHAREHOLDERS NAMED AS PARTIES THERETO, AND NO TRANSFER OF THE
SECURITIES
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<PAGE> 6
REPRESENTED BY THIS CERTIFICATE IN CONTRAVENTION OF SUCH
AGREEMENT SHALL BE VALID OR EFFECTIVE. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED BY WRITTEN REQUEST MADE BY THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
COMPANY."
Section 8. TERMINATION. This Agreement shall terminate, and
the custodian shall distribute all shares of Restricted Stock to the
Shareholders, upon (i) an Initial Public Offering, (ii) a merger or
consolidation involving the Issuer, or (iii) a sale, lease, exchange or other
transfer of all or substantially all of the assets of the Issuer or the Company.
In its discretion the Committee may delay distribution of Restricted Stock for a
reasonable period of time following an event described in this Section 8.
Section 9. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement contains
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements or understandings between or among any of
the parties hereto.
(b) DEFINITIONS. All defined terms not defined herein
shall have the meanings ascribed to them in the Plan. For purposes of this
Agreement, the following terms shall have the following meanings:
"Affiliate" shall mean any entity if, (i) the
Company, directly or indirectly, owns at least 50% of the combined
voting power of all classes of stock of such entity or at least 50% of
the ownership interests in such entity, (ii) such entity, directly or
indirectly, owns at least 50% of the combined voting power of all
classes of stock of the Company, or (iii) such entity is at least 50%
owned (directly or indirectly) by one or more entities described in (i)
or (ii) above.
"Beneficiary" shall mean the person, persons, trust
or trusts which have been designated by a Shareholder in his or her
most recent written beneficiary designation filed with the Committee to
receive the Shareholder's rights under the Plan upon the such
Shareholder's death, or, if there is no such designation or no such
designated person survives the Shareholder, then the person, persons,
trust or trusts entitled by will or applicable law to receive such
rights or, if no such person has such right, then the executor or
administrator of the Shareholder.
"Incapacitated Shareholder" shall mean a Shareholder
who is or was employed by the Company (or its Affiliates) and who is
permanently and totally disabled within the meaning of Section 22(e)(3)
of the Internal Revenue Code of 1986, as amended.
"Initial Public Offering" shall mean the sale of (i)
the common stock of the Company if, at the time of the offering, the
shares of Restricted Stock are convertible into or exchangeable for
shares of common stock of the Company, or (ii) the Class A Common Stock
of the Issuer, in each case, to the public pursuant to an effective
registration statement under the Act (or an equivalent regulatory
authority) covering the offering and
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<PAGE> 7
sale of such shares for the Company or the Issuer, as applicable, which
shares following the offering will be listed on any significant U.S.
stock exchange.
(c) SEVERABILITY. If any provision of this
Agreement shall be determined to be illegal and unenforceable by any court of
law, the remaining provisions shall be severable and enforceable in accordance
with their terms.
(d) HEADINGS. Descriptive headings are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement.
(e) NOTICES. All notices or other communications
which are required or permitted hereunder shall be in writing and sufficient if
delivered personally, sent by telecopy (with confirmation of receipt) or sent by
overnight courier or registered or certified mail, postage prepaid, return
receipt requested, addressed, (i) if to a Shareholder, to such Shareholder's
address set forth on such Shareholder's signature page hereto; (ii) if to the
Company, to Eagle-Picher Industries, Inc., 250 East Fifth Street, Cincinnati,
Ohio 45202, Attention: David G. Krall, Esq., Fax No.: (513) 629-2572; (iii) if
to Granaria Holdings, to Granaria Holdings B.V., Lange Voorhout 16, P.O. Box
233, 2501 CE The Hague, The Netherlands, Attention: Peter J. Ph. Kortenhorst,
Fax No.: 011 31 70 312 11 99; or to such other address as the party to whom
notice is to be given may have furnished to the other party in writing in
accordance herewith. If mailed as aforesaid, any such communication shall be
deemed to have been given on the third business day following that on which the
piece of mail containing such communication is posted.
(f) COUNTERPARTS. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one agreement. From time to time additional Shareholders may
become parties to this Agreement by executing a counterpart hereof without
necessity of execution by the other parties.
(g) ASSIGNMENT. This Agreement shall not be
assignable by any party without the written consent of the other parties;
PROVIDED, HOWEVER, that the Company shall have the right to assign any or all of
its rights or obligations to purchase shares of Restricted Stock pursuant to
Sections 3, 4 and 5 hereof. Any purported assignment not permitted hereunder
shall be void.
(h) MODIFICATION. Except as otherwise provided
herein, neither this Agreement nor any provision hereof may be modified,
changed, discharged or terminated except by an instrument in writing signed by
the Granaria Holdings, the Issuer, the Company and Shareholders holding 75% or
more of the outstanding Restricted Stock held by all Shareholders.
(i) ADDITIONAL ACTIONS. Each Shareholder
agrees (i) that the Board and officers of the Issuer may take any additional
corporate action necessary to make effective the provisions hereof, including
(without limitation) filing any amendments to the Issuer's charter and other
constitutive documents, and hereby appoints the Issuer's Secretary its
attorney-in-fact for the execution of all such documents, consents and approvals
and (ii) that it will vote its shares of Restricted Stock to approve any such
action.
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<PAGE> 8
(j) RIGHTS TO NEGOTIATE REPURCHASE PRICE.
Nothing in this Agreement shall be deemed to restrict or prohibit the Company,
the Issuer or Granaria Holdings (or its designees) from purchasing shares of
Restricted Stock from a Shareholder, at any time, upon such terms and
conditions, and for such price, as may be mutually agreed upon between the
parties, whether or not at the time of such purchase circumstances exist which
specifically grant the Company or Granaria Holdings (or its designees) the right
to purchase, or the Shareholder the right to sell, shares of Restricted Stock
under the terms of this Agreement.
(k) REMEDIES. In the event of a breach or
threatened breach by a Shareholder of the provisions of this Agreement, the
Company shall be entitled to an injunction restraining such Shareholder from
such breach or compelling compliance with such provision. Nothing contained
herein shall be construed as prohibiting the Company or any Shareholder from
pursuing any other remedies available at law or equity for such breach or
threatened breach of this Agreement.
(l) SPECIFIC ENFORCEMENT. Each Shareholder
expressly agrees that such Shareholder and the Company will be irreparably
damaged if this Agreement is not specifically enforced. Upon a breach or
threatened breach of the terms, covenants or conditions of this Agreement by a
Shareholder, the other Shareholders and the Company shall, in addition to all
other remedies, each be entitled to a temporary or permanent injunction, without
showing any actual damage, or a decree for specific performance, in accordance
with the provisions hereof.
(m) CHOICE OF LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT FOR THOSE MATTERS
REQUIRED TO BE GOVERNED BY THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE.
(n) CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF FEDERAL AND STATE COURTS OF OHIO FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND EACH OF THE PARTIES HERETO AGREES NOT TO
COMMENCE ANY LEGAL PROCEEDING RELATED THERETO EXCEPT IN SUCH COURT. EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING IN ANY SUCH COURT AND
HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
(o) SET-OFF. The Company or any Affiliate
shall have the right to set off any amounts owed by a Shareholder to the Company
or any Affiliate against any amounts
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<PAGE> 9
payable by the Company or any Affiliate to a Shareholder.
(p) TRANSFER DOCUMENTS. In connection
with any put or call right contained herein, a Shareholder shall deliver such
instruments and documents as may be reasonably required by the Company or
Granaria Holdings or their designee, as applicable, to transfer good title to
any Restricted Shares transferred, free and clear of any liens or encumbrances
whatsoever, and shall warrant the same and indemnify the purchaser for any
breach of such warranty, as a condition to receipt of payment therefor.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written or, if such party has dated its
signature, on the date(s) set forth below.
GRANARIA HOLDINGS, B.V. EAGLE-PICHER HOLDINGS, INC.
By: By:
-------------------------------- ------------------------------
Name: Joel P. Wyler Name: Andries Ruijssenaars
Title: Chairman Title: President and CEO
EAGLE-PICHER INDUSTRIES, INC.
By: _________________________
Name: Andries Ruijssenaars
Title: President and CEO
SHAREHOLDERS:
- -----------------------------
Signature
Name:
-------------------------
Please Print
-----------------------
Street Address
-----------------------
City, State, Zip
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<PAGE> 1
Exhibit 10.39
VOTING TRUST AGREEMENT, dated as of April 13, 1999, by and
among each of the persons designated as a Shareholder on the
signature pages of this Agreement (each a "Shareholder" and
collectively, the "Shareholders") and Granaria Holdings B.V.,
a Dutch corporation, as TRUSTEE (THE "TRUSTEE").
-------------------------------------------------------------
The Shareholders are respectively owners of shares of the
Class A (Voting) Common Stock, par value $0.01 per share (the "Common Stock"),
of Eagle-Picher Holdings, Inc., a Delaware corporation (the "Company") under the
Company's Incentive Stock Plan for Outside Directors (the "Plan").
With a view to the safe and competent management of the
Company in the interests of the Shareholders, and as contemplated by the
Shareholders' Agreement, dated April 12, 1999 (the "Shareholders' Agreement"),
the Shareholders desire to create this Voting Trust.
The Shareholders agree as follows:
1. TRANSFER OF STOCK TO TRUSTEE. Each of the Shareholders
assigns and delivers to the Trustee any certificate held by such Shareholder
representing shares of Common Stock owned by such Shareholder and shall do all
things necessary for the transfer of shares of Common Stock to the Trustee on
the books of the Company.
2. TRUSTEE TO HOLD SUBJECT TO AGREEMENT. The Trustee shall
hold the said shares of Common Stock so transferred to them for the common
benefit of the Shareholders, under the terms and conditions hereinafter set
forth.
3. ISSUANCE OF STOCK CERTIFICATES TO TRUSTEE. The Trustee
shall surrender to the proper officers of the Company for cancellation of all
certificates of Common Stock which shall be assigned and delivered to it as
hereinafter provided, and in their stead shall procure a new certificate(s)
issued to it as Trustee under this Agreement.
4. VOTING TRUST CERTIFICATES. The Trustee shall issue to each
of the Shareholders a Voting Trust Certificate for the number of shares
represented by the certificates of Common Stock by such Shareholder transferred
to the Trustee. Each such Voting Trust Certificate shall state that it is issued
under the Agreement, and shall set forth the nature and proportional amount of
the beneficial interest thereunder of the person to whom it is issued, and shall
be assignable, subject to the provisions of the Shareholders' Agreement, in the
manner of certificates of stock on books to be kept by the Trustee. The Trustee
shall keep a list of the shares of the Trust transferred to them, and shall also
keep a record of all Voting Trust Certificates issued or transferred on its
books, which records shall contain the names of the Voting Trust Certificate
holders and the number of shares of Common Stock represented by each such
certificate. Such list and record shall be open at all reasonable times to the
inspection upon the books of the Trustee by any Voting Trust Certificate holder.
<PAGE> 2
The Voting Trust Certificate shall be substantially in the
following form:
VOTING TRUST CERTIFICATE
This is to certify that the undersigned Trustee has received a
certificate or certificates issued in the name of _______________________,
evidencing the ownership of _______ shares of Class A Common Stock of
Eagle-Picher Holdings, Inc., a Delaware corporation (the "Company"), and that
such shares are held subject to all the terms and conditions of the Voting Trust
Agreement, dated as of April 13, 1999, by and between Granaria Holdings B.V., as
Trustee, and certain shareholders of the Company. During the term of the voting
trust, the Trustee, or its successors, shall, as provided in said agreement,
possess and be entitled to exercise the voting power and otherwise represent all
of the said shares for all purposes, being agreed that no voting right shall
pass to the holder hereof by virtue of the ownership of this certificate.
Upon the termination of said voting trust, this certificate shall
be surrendered to the Trustee by the holder hereof upon delivery to such holder
of a stock certificate representing a like number of shares.
The undersigned Trustee has executed this certificate as of the ___
day of __________________, ____.
GRANARIA HOLDINGS B.V., Trustee
By: ________________________________
5. RESTRICTION ON TRANSFER. Each of the beneficiaries agrees
that during the term of this Agreement, the Voting Trust Certificates held by
them will not be sold or transferred except in accordance with the terms and
conditions of the Shareholders' Agreement, so long as such Agreement remains in
effect. The Voting Trust Certificates shall be regarded as stock of the Company,
within the meaning of any provision of the By-laws or other agreement (including
the Shareholders' Agreement) of the Company imposing conditions and restrictions
upon the sale of stock of the Company.
6. VOTING. It shall be the duty of the Trustee, and it shall
have full power and authority, and is hereby fully empowered and authorized, to
represent the holders of such Voting Trust Certificates and the Common Stock
transferred to the Trustee as aforesaid, and to vote upon said stock, as in the
judgment of the Trustee may be for the best interest of the Company, at all
meetings of the Shareholders of the Company, in the election of Directors and
upon any and all matters in question, which may be brought before such meetings,
as fully as any Shareholder might do if personally present.
7. LIABILITY. The Trustee shall use its business judgment in
voting upon the stock transferred to it, but shall not be liable for any vote
cast, or consent given, by it in the absence of gross negligence, bad faith,
self-dealing or willful misconduct.
8. DIVIDENDS. The Trustee shall collect and receive all
dividends that may accrue
2
<PAGE> 3
upon the shares of Common Stock subject to this Trust, and shall divide the same
among the Voting Trust Certificate holders in proportion to the number of shares
respectively represented by their Voting Trust Certificates.
9. INDEMNITY. The Trustee shall be entitled to be indemnified
fully against all costs, charges, expenses and other liabilities properly
incurred by it in the exercise of any power conferred upon it by this Agreement;
and the Shareholders, and each of them hereby covenant with the Trustee that in
the event of the monies and securities in its hands being insufficient for that
purpose, the Shareholders and each of them will in proportion to the amount of
their respective shares and interests hold harmless and keep indemnified the
Trustee of and from all loss or damage which it may sustain or be put to by
reason of anything it may lawfully and in accordance with this Agreement do in
the execution of this Trust.
10. VACANCIES. In the event of the Trustee's resigning or
refusing or becoming unable to act, the Trustee shall appoint a Trustee or
Trustees to fill the vacancy or vacancies, and any person so appointed shall
thereupon be vested with all the duties, powers and authority of a Trustee
hereunder as if originally named herein. Prior to the commencement of its
duties, each original Trustee and each Trustee subsequently appointed shall sign
a copy of the Shareholders' Agreement, relating to the shares of the Company and
shall thus signify his consent to be bound thereby and his agreement to perform
the terms thereof. All of the terms, provisions and conditions of the
Shareholders' Agreement shall apply to all Trustees hereof and hereunder with
the same force and effect as if such Trustee had originally signed said
Shareholders' Agreement.
11. CONTINUANCE AND TERMINATION OF TRUST. The Trust hereby
created shall be continued until the later of Ninety-Nine (99) years from the
date hereof or such other term as the Committee of the Plan, as amended, shall
determine, and shall then terminate, provided that this Voting Trust Agreement
shall terminate upon the occurrence of the events for termination set forth in
the Shareholders' Agreement. Upon termination of the Trust, the Trustee shall,
upon surrender of the Voting Trust Certificates by the respective holders
thereof, assign and transfer to them the number of shares thereby represented.
12. LEGEND. All Voting Trust Certificates issued by the
Trustee hereunder shall have endorsed thereon a statement that they are held in
accordance with and subject to the terms of the Shareholders' Agreement.
13. MISCELLANEOUS. (a) This Voting Trust Agreement is entered
into in accordance with the Shareholders' Agreement. In the event of a conflict
in the provisions of said Shareholders' Agreement, the provisions of said
Shareholders' Agreement shall prevail.
(b) An executed copy of this Agreement shall be filed with the
Secretary of the Company. The Shareholders shall cause the Company to furnish
free of charge to any shareholder thereof a copy of this Agreement upon written
request.
(c) Any and all notices, designations, consents, offers,
acceptances or any other communication provided for herein shall be made by hand
delivery, first-class mail (registered or certified, return receipt requested),
or overnight air courier guaranteeing next day delivery to the
3
<PAGE> 4
address set forth on the signature page hereof. Any Shareholder may change the
address listed in the foregoing sentence by giving written notice to the Company
and the other Shareholders. Except as otherwise provided in this Agreement, each
such notice shall be deemed effective at the time delivered by hand, if
personally delivered; five business days after being deposited in the mail,
postage prepaid, if mailed; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
(d) This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.
(f) This Agreement shall be binding upon and shall inure to
the benefit of each of the Shareholders and their respective executors,
administrators and personal representatives and heirs and assigns.
IN WITNESS WHEREOF, the Shareholders and the Trustee have duly
executed this Agreement.
TRUSTEE:
Granaria Holdings B.V.
By:
-------------------------------------
Name: Joel P. Wyler
Title: Chairman
SHAREHOLDERS:
-------------------------------------
(Signature)
Name:
-----------------------------------
Address:
---------------------------------
---------------------------------
4
<PAGE> 1
Exhibit 10.40
AMENDMENT TO CREDIT AGREEMENT
AND CONSENT
AMENDMENT TO CREDIT AGREEMENT AND CONSENT, dated as of May 18, 1999,
among EAGLE-PICHER INDUSTRIES, INC., a Delaware corporation and successor by
merger to E-P ACQUISITION, INC., a Delaware corporation (together herein
collectively referred to as the "Borrower"), the lenders party hereto (each a
"Lender" and collectively, the "Lenders"), ABN AMRO BANK N.V., as Agent (in such
capacity, the "Agent"), PNC BANK, NATIONAL ASSOCIATION, as Documentation Agent
(in such capacity, the "Documentation Agent") and NBD BANK, N.A., as Syndication
Agent (in such capacity, the "Syndication Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Agent, the Documentation Agent
and the Syndication Agent are parties to that certain Credit Agreement, dated as
of February 19, 1998, as modified by (i) that certain Eagle-Picher Industries,
Inc. Credit Agreement Consent and Waiver among the Borrower, the Agent and the
Lenders party thereto, dated as of November 18, 1998 and (ii) that certain
Eagle-Picher Industries, Inc. Credit Agreement Amendment and Consent among the
Borrower, the Agent and the Lenders party thereto dated as of December 14, 1998,
(together the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Credit Agreement be
further amended in certain respects; and
WHEREAS, the Lenders and the Agents party hereto, are willing to so
further amend the Credit Agreement, subject to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
thereby, covenant and agree as follows:
1. General. All terms used herein which are not otherwise specifically
defined herein shall have the same meaning herein as defined in the Credit
Agreement as further amended hereby.
2. Increase in Total Revolving Credit Commitment. Section 1.01.01(d)
of the Credit Agreement shall be and is hereby amended by deleting the amount of
"$160,000,000" appearing in the last sentence thereof and inserting in its place
the amount of "$220,000,000." Furthermore, Annex I to the Credit Agreement shall
be and is hereby deleted and the Annex I (Amended) attached hereto shall be
inserted in its place.
3. Interest. With respect to the rate of interest provided under
Section 1.08 and the Applicable Base Rate Margin and Applicable Eurodollar Rate
Margin as determined pursuant to the Pricing Grid, Annex II to the Credit
Agreement shall be and is hereby amended by adding
<PAGE> 2
".25" to each amount set forth in such Annex II under the headings "Applicable
Eurodollar Rate Margin" and "Applicable Base Rate Margin."
4. Letter of Credit. Section 2.01(b) of the Credit Agreement shall be
and is hereby amended by inserting after the words "identified on Schedule 2.01"
in line 10 the following wording:
"(or as determined by the Agent with respect to future standby
Letters of Credit)"
5. Mandatory Prepayments and Repayments.
(a) Section 4.02.01(c) of the Credit Agreement shall be and is
hereby amended by (i) deleting the amount of "$25,000,000" appearing
therein and inserting in its place the amount of "$50,000,000," and
(ii) by deleting the phrases "270 days" and "270 day" wherever they
appear therein and inserting in their place, the phrases "360 days" and
"360 day", respectively.
(b) Section 4.02.01(f) of the Credit Agreement shall be and is
hereby amended by (i) deleting the percentage "60%" appearing therein
and inserting in its place, the percentage "50%" and (ii) by deleting
the period at the end thereof and inserting the following language in
its place:
", provided, however, that should the Borrower maintain a
Leverage Ratio of not more than 3.50 to 1.00 on the last day
of four consecutive fiscal quarters of the Borrower, the
requirements of this Section shall thereupon no longer be in
effect as to any Excess Cash Payment Date thereafter
occurring."
6. Use of Proceeds. Section 6.08(a) of the Credit Agreement shall be
and is hereby amended by deleting the following wording in lines 5 and 6
thereof: "(excluding acquisitions)".
7. Year 2000. Section 6 of the Credit Agreement shall be and is hereby
amended by adding a new Section 6.25 reading as follows:
"Section 6.25. Year 2000. The Borrower and its Subsidiaries
have reviewed the areas within their business and operations
which could be adversely affected by, and have developed or
are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower and its Subsidiaries may be
unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after
December 31, 1999), and have made related appropriate inquiry
of material suppliers and vendors. Based on such review and
program, the Borrower believes that the
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<PAGE> 3
"Year 2000 Problem" will not have a material adverse effect on
the business, operations, property or financial or other
condition of the Borrower and its Subsidiaries taken as a
whole."
8. Information Covenants. Section 7.01 of the Credit Agreement shall
be and is hereby amended by (i) deleting from line 6 and 7 of Subsection 7.01(a)
the phrase "and comparable budgeted figures for such fiscal month", (ii)
inserting in line 8 of Subsection 7.01(b) after the word "year" and before the
comma the phrase "and comparable budgeted figures for such quarterly accounting
periods,", (iii) deleting from line 5 and 6 of Subsection 7.01(d) the phrase
"income, and sources and uses of cash and balance sheets" and inserting in its
place the phrase "net sales, Consolidated EBITDA and operating income", (iv)
inserting in line 6 of Subsection 7.01(d) after the word "whole" and before the
parenthesis the phrase "in the format as currently prepared by the Borrower",
(v) deleting from line 12 of Subsection 7.01(d) the reference "(a),", (vi)
adding to line two of Subsection 7.01(e) the words "or other Authorized Officer"
after the words "chief financial officer", (vii) deleting from line 10 of
Subsection 7.01(e) the reference to parens "(i)" and deleting all wording
appearing after the words "fiscal year" in line 12 of Subsection 7.01(e) and
inserting an ending period in place thereof, and (viii) by adding a new
subsection 7.01(l) reading as follows:
"(l) Year 2000. Statements of financial performance and
compliance certificates required to be provided by the Company
and/or its Subsidiaries to the Bank herein shall: (i) include
a statement as to whether the Year 2000 remediation efforts of
the Company and its Subsidiaries are proceeding as scheduled
and (ii) indicate whether an auditor, regulator, or third
party consultant has issued a management letter or other
communication regarding the Year 2000 exposure, program or
progress of the Borrower and/or its Subsidiaries."
9. Maintenance of Property, Insurance, Environmental Matters, etc.
Section 7.03(b) of the Credit Agreement shall be and is hereby amended by
inserting the following wording in line 11 thereof after the words "as set forth
in Schedule 6.13" and before the semi-colon:
"and except for landfills or dumps operated by the Borrower or
its Subsidiaries on their own properties solely for the
disposal of waste filter materials which are not Hazardous
Materials and which are used in the operations of the Borrower
or its Subsidiaries and which landfills or dumps are not used
for the disposal of any waste or materials from Persons other
than the Borrower or its Subsidiaries"
10. Consolidation, Merger, Sale of Assets. Section 8.02 of the Credit
Agreement shall be and is hereby amended by (a) deleting the amount of
"$25,000,000" appearing in clause (iv) thereof and inserting in its place, the
amount of "$50,000,000" and (b) deleting the word "and" at
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<PAGE> 4
the end of clause (vi) and (c) deleting the period after clause (vii) thereof
and replacing it with a semi-colon and (d) adding the following additional
clauses to Section 8.02:
"(viii) transactions permitted by Section 8.05 of this
Agreement; (ix) reinvestments of the proceeds of Asset Sales
pursuant to Section 4.02.01(c), and (x) the sale of
receivables in connection with the Permitted Securitization."
11. Indebtedness. Section 8.04 of the Credit Agreement shall be and is
hereby amended by (i) inserting after the words "Senior Subordinated Note
Indenture" appearing in clause (vi), line 12, the words "or other Senior
Subordinated Note Indentures meeting the requirements of (A) above," (ii)
deleting the amount of "$220,000,000" appearing in such line 12 and inserting in
its place the amount of "$295,000,000", (iii) inserting in front of the word
"Indebtedness" appearing in clause (vii) thereof, the word "unsecured" and by
deleting the amount of "$25,000,000" appearing therein and inserting in its
place, the amount of "$35,000,000" and (iv) deleting the word "and" at the end
of clause (vii) and by deleting the period after clause (viii) thereof and by
replacing it with a semi-colon and by adding the following additional clauses to
Section 8.04:
"(ix) the Permitted Securitization; and
(x) unsecured Indebtedness assumed in connection with
Permitted Acquisitions."
12. Advances, Investments and Loans. Section 8.05 of the Credit
Agreement shall be and is hereby amended by (i) deleting the word "and" after
clause (vii) thereof, by (ii) deleting the period at the end of clause (viii)
thereof and by replacing it with "; and" and (iii) by adding a new clause (ix)
reading as follows:
"(ix) Permitted Acquisitions, Permitted Investments and
Permitted Minority Investments."
13. Capital Expenditures. Section 8.07 shall be and is hereby amended
by deleting the amount of "$40,000,000" set forth in Subsection 8.07(a) and
inserting in its place the amount of "$50,000,000."
14. Limitation on Voluntary Payments and Modifications of Indebtedness;
Modifications of Certificate of Incorporation, By-laws and Certain Other
Agreements; Issuances of Capital Stock, etc. Section 8.11 of the Credit
Agreement shall be and is hereby amended by striking the period at the end
thereof and inserting the following language in its place:
"; provided, however, that, so long as the Leverage Ratio on
the last day of the fiscal quarter most recently ending prior
to each payment or purchase shall be not more than 3.50 to
1.00 and there shall not then exist any Default or Event of
Default hereunder, the
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<PAGE> 5
Borrower may pay or purchase the Senior Subordinated Notes up
to an aggregate principal amount for all such payments and
purchases not exceeding $25,000,000."
15. Limitation on Issuances of Capital Stock by Subsidiaries. Section
8.13 of the Credit Agreement shall be and is hereby amended by deleting the
period at the end thereof and inserting the following language in its place:
"and except that any Subsidiary that is not a Subsidiary
Guarantor may issue shares of capital stock, provided that
such issuance shall be deemed an Asset Sale for purposes of
Section 4.02.01(c) and Section 8.02(iv)."
16. Limitation on the Creation of Subsidiaries. Section 8.14 of the
Credit Agreement shall be and is hereby amended by (i) inserting after the words
"provided that" in line four thereof, the following "(A)" and (ii) deleting the
period at the end of the first sentence of Section 8.14 and adding in its place
the following:
", and (B) the Borrower and its Wholly-Owned Subsidiaries
shall be permitted to create, establish or acquire
Subsidiaries that are not Wholly-Owned Subsidiaries, provided
that any purchase of capital stock of or capital contribution
or loan to any such Subsidiary shall be subject to the
restrictions contained in Section 8.05."
17. Events of Default. Section 9.03 of the Credit Agreement shall be
and is hereby amended by deleting the present wording thereof and inserting in
its place the following:
"Section 9.03. Covenants. The Borrower shall (i)
default in the due performance or observance by it of any
term, covenant or agreement contained in Sections 7.02,
7.09(h), 8.02, 8.03, 8.08 through, and including, 8.13 and
8.16, (ii) default in the due performance or observance by it
of any term, covenant or agreement contained in Sections 7.01,
7.10 or 8.06 and such default shall continue unremedied for a
period of 10 days after written notice to the Borrower by the
Agent or the Required Lenders or (iii) default in the due
performance or observance by it of any term, covenant or
agreement (other than those covered by Sections 9.01 and 9.02
and clauses (i) and (ii) of this Section 9.03) contained in
this Agreement and such default shall continue unremedied for
a period of 30 days after written notice to the Borrower by
the Agent or the Required Lenders; or"
18. Definitions. Section 10.01 of the Credit Agreement shall be and is
hereby amended as follows:
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<PAGE> 6
(a) There shall be added the following new definitions to be
inserted in proper alphabetical order reading as follows:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date hereof, by
which the Borrower or any of its Subsidiaries (i) acquires any
going business or all or substantially all of the assets of
any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority
(in number of votes) of the securities of a corporation which
have ordinary voting power for the election of directors
(other than securities have such power only by reason of the
happening of a contingency) or a majority (by percentage of
voting power) of the outstanding equity, partnership or
membership interests of another Person.
"Permitted Acquisition" means Acquisitions by the Borrower or
any of its Subsidiaries, provided that (A) the total
consideration payable in connection therewith, whether in the
form of cash, notes or indebtedness assumed, together with the
amount of any Permitted Investments, shall not exceed the
aggregate amount of $75,000,000 in any fiscal year of the
Borrower, (B) no Default or Event of Default has occurred and
is continuing or would result therefrom, (C) the Acquisition
shall be consummated pursuant to a negotiated acquisition
agreement on a non-hostile basis, (D) the Borrower can
demonstrate that, on a pro forma basis, after giving effect to
such Acquisition, it will continue to comply with all the
terms and conditions of the Credit Agreement and (E) the
property acquired shall become collateral in accordance with
Section 7.09 hereof, provided further, however, that should
the Borrower maintain a Leverage Ratio of not more than 3.50
to 1.00 on the last day of four consecutive fiscal quarters of
the Borrower, the foregoing proviso (A) shall no longer be in
effect as to any Acquisition occurring thereafter, and the
Borrower need comply only with provisos (B), (C), (D) and (E)
as to any such Acquisition.
"Permitted Investments" means any equity investment in or
capital contribution or loan to any Subsidiary other than a
Wholly-Owned Subsidiary, provided that the aggregate amount of
such equity investments, contributions or loans, together with
the amount of any Permitted Acquisitions, shall not exceed the
aggregate amount of $75,000,000 in any fiscal year of
Borrower.
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<PAGE> 7
"Permitted Joint Ventures" means (A) any joint venture
interests described on Schedule 8.05, and (B) any Subsidiaries
other than Wholly-owned Subsidiaries that are formed or
acquired in accordance with Sections 8.02, 8.05 and 8.14.
"Permitted Minority Investment" means any equity investment in
or capital contribution or loan to any Person not a Subsidiary
so long as the aggregate amount of such equity investments and
capital contributions does not exceed $15,000,000 and any loan
shall be on terms requiring the cash payment of interest at
least annually.
"Permitted Securitization" means any sales from time to time
by the Borrower or its Subsidiaries of its receivables, taking
the form of a "true sale" to a special purpose vehicle ("SPV")
to be formed by the Borrower and a subsequent sale and/or
financing by the SPV to, or with, a Person or Persons who are
not Affiliates of Borrower, provided that the terms and
provisions relative thereto, including, without limitation,
the advance rates against such receivables, shall be
reasonably acceptable to the Agent.
b) The definition of "Asset Sale" shall be and is hereby
amended by (i) deleting the word "and" appearing in front of clause
(ii) thereof, replacing it with a comma, and (ii) by deleting the
period at the end of such definition and inserting in its place the
following:
"and (iii) any sale of receivables pursuant to the Permitted
Securitization."
(c) The definition of "Consolidated EBIT" shall be and is
hereby amended by adding the following language at the end thereof:
"If any Person or assets were acquired during a Test Period in
an Acquisition permitted by Section 8.05, then the
consolidated net income of such Person or attributable to such
assets (adjusted for the foregoing items (i) through (v)) for
the period beginning on the beginning of the Test Period and
ending on the date of the Acquisition shall be included in
Consolidated EBIT, but only to the extent that such items of
such Person or attributable to such assets would have been
available to the Borrower or its Subsidiary had the Borrower
or such Subsidiary acquired such Person or such assets at the
beginning of such period."
(d) The definition of "Consolidated EBITDA" shall be amended
by deleting the period at the end thereof and adding the following
language:
-7-
<PAGE> 8
", in computing Consolidated EBITDA, any of the foregoing
items realized or accrued for any Test Period and which
occurred prior to the date of any acquisition permitted by
Section 8.05(ix) by the Person so acquired, or attributable to
the assets so acquired shall be included in Consolidated
EBITDA, but only to the extent that such items of such Person
or attributable to such assets would have been available to
the Borrower or its Subsidiary had the Borrower or such
Subsidiary acquired such Person or such assets at the
beginning of such period. There shall also be included in
Consolidated EBITDA any cash interest and dividends received
by the Borrower or its Subsidiaries during any Test Period
with respect to investments and loans made by the Borrower or
its subsidiaries to joint ventures permitted by Section 8.05
hereof."
(e) The definition of "Consolidated Interest Expense" shall be
amended by inserting in line 5 thereof after the words "including,
without limitation," the following language:
"all such interest expense, amortization of debt discount,
fees and all debt issuance costs incurred in connection with
the Permitted Securitization and"
(f) The definition of "Indebtedness" shall be and is hereby
amended by (i) deleting the word "and" in front of clause (vii),
inserting in its place a comma and (ii) by deleting the period at the
end thereof and inserting in its place the following wording:
"and (viii) the aggregate face value of outstanding commercial
paper or other obligations issued in respect of the Permitted
Securitization or, in the event of any funding by Persons
providing liquidity support in the form of loans or asset
purchase arrangements, the aggregate principal amount of such
funding."
(g) The definition of "Subsidiary" shall be and is hereby
amended by deleting the period at the end thereof and inserting in its
place the following wording:
"provided, however, that any Permitted Joint Venture described
on Schedule 8.05 or formed or acquired in accordance with
Sections 8.02, 8.05 and 8.14 shall not be included within the
term Subsidiary."
-8-
<PAGE> 9
19. Syndication Agent.
All references in the Credit Agreement to "DLJ Capital Funding, Inc.,
as Syndication Agent" shall be and is hereby deleted and amended and deemed to
be "NBD BANK, N.A., as Syndication Agent".
20. Payment of B and C Lenders and Adjustment of Revolving Loans.
(a) Upon the Effective Date, as hereinafter defined, of this
Amendment, the Borrower shall prepay the B and C Term Loans in full
together with all accrued interest thereon to the date of prepayment
and all other amounts due and payable in respect of the B and C Term
Loans hereunder. The Lenders with outstanding A Term Loans hereby
consent to such prepayment and waive, as to such prepayment, the
requirement of Section 4.01 that prepayments of Term Loans shall be
made pro-rata among the A Term Loans, B Term Loans and C Term Loans.
(b) Upon the Effective Date of this Amendment, the Revolving
Credit Commitment shall be increased as provided in Annex I attached
hereto provided each such new Lender shall execute and deliver to the
Agent a joinder to the Credit Agreement in the form of Exhibit I hereto
(and by such execution and delivery, each such new Lender shall be
deemed to have agreed with the matters set forth in the Credit
Agreement as amended hereby). Such new Lender shall become a Lender
hereunder, and the Agent shall, promptly following the effective date
thereof, provide to the Borrower and the Lenders the revised Revolving
Percentage giving effect to Annex I (Amended) attached hereto. The
Borrower agrees that it shall execute and deliver to Lenders whose
Revolving Credit Commitment has changed, a Revolving Note evidencing
such Lender's revised Revolving Credit Commitment.
(c) If, after giving effect to the Revolving Credit Commitment
Increase, any Lender's revised Revolving Percentage of the Revolving
Credit Commitment is different than its share of the Revolving Loans,
the Revolving Loans shall be reallocated among the Lenders as follows.
On the Effective Date, the Borrower shall be deemed to have prepaid all
outstanding Revolving Loans in accordance with Section 4.01 of the
Credit Agreement and reborrowed all Revolving Credit Loans in
accordance with Section 1.01.01(d) of the Credit Agreement from all
Lenders ratably in accordance with their revised Revolving Percentage.
Each Lender having a decreased Revolving Percentage (a "Selling
Lender") agrees to sell and assign to each other Lender (each a "Buying
Lender"), and each Buying Lender hereby agrees to ratably purchase and
assume, without recourse, from each Selling Lender, a ratable portion
of each Selling Lender's Revolving Loans such that, after giving effect
to such assignments, each Lender's share of all Revolving Loans equals
its revised Revolving Percentage. The Agent shall distribute to each
Selling Lender an amount equal to the difference between its Revolving
Loans so prepaid and the new Revolving Loans deemed to have been made
by it. Such payments shall be deemed to be a payment of the Revolving
Loans by the Borrower on the date such payment is received. With
respect to each portion of the
-9-
<PAGE> 10
Revolving Loans and Letter of Credit Obligations reapportioned as
described above, interest and fees accruing thereon for the period
prior to the date hereof shall be for the account of each Selling
Lender, and interest and fees accruing thereon for the period from and
after the date hereof shall be for the account of each Buying Lender.
The Borrower shall compensate each Lender for any loss, cost or expense
caused by such prepayment in accordance with Section 1.11 of the Credit
Agreement.
21. Technologies Consent. The undersigned Lenders do hereby consent to
(i) the ground lease of a portion of the vacant land owned by Eagle-Picher
Technologies, LLC ("Technologies") in the Joplin Industrial Park, Joplin,
Missouri to Joplin Design & Management, Inc. ("Joplin"), (ii) the lease by
Technologies from Joplin of a building to be constructed on such land and (iii)
the subordination of the mortgage lien on such land in favor of the Agent to the
ground lease, all as described in the Information Memorandum circulated in
connection with this Amendment and Consent and do hereby waive any Default or
Event of Default that may arise under Sections 8.01, 8.02 or 8.04 of the Credit
Agreement as a result thereof.
22. Waiver of Mandatory Repayment. The undersigned Lenders hereby waive
the mandatory repayment requirements of Section 4.02.01(d) of the Credit
Agreement as it relates to the incurrence of additional Indebtedness under the
other Senior Subordinated Note Indentures permitted by this Amendment and
Consent.
23. Conditions. The Effective Date of this Amendment shall be subject
to the satisfaction of the following conditions precedent:
(i) This Amendment shall have been executed by each Credit
Party, each of the Agents and each of the Lenders with outstanding A
Term Loans.
(ii) The Agent shall have received an opinion of counsel
addressed to the Agent and each of the Lenders from Howard, Smith &
Levin relative to the power and authority of the Borrower to enter into
this Amendment and the legal validity thereof.
(iii) A certified copy of resolutions of the Borrower
authorizing this Amendment, together with a certified officer
incumbency and specimen signature certificate.
(iv) The payment of all fees and expenses (including, without
limitation, all legal fees and expenses) due to the Agent and the Banks
and special legal counsel to the Agent.
(v) The Permitted Securitization shall be closed.
(vi) The conditions to each Credit Event as set forth in
Section 5.02 of the Credit Agreement shall have been met.
-10-
<PAGE> 11
24. Effectiveness. Subject to Section 23 hereof, this Amendment shall
become effective on the date on which each Credit Party and each of the Lenders
with outstanding A Term Loans shall have signed a counterpart hereof and shall
have delivered the same to the Agent (herein, the "Effective Date"), provided,
however, that upon the Effective Date of this Amendment, the amendment to the
definition of Consolidated EBIT as provided herein shall be deemed effective as
of the date of the Credit Agreement. The Agent shall give the Borrower and each
Lender prompt written notice of the effective date. This Amendment may be
executed in any number of Counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Agent. This Amendment and the rights and
obligations of the parties hereunder shall be construed in accordance with and
be governed by the law of the State of New York. Except as herein specifically
amended, the Credit Agreement shall be and remain in full force and effect and
wherever reference is made in any note, document, letter or other communication
to the Credit Agreement, such reference shall, without more, be deemed to refer
to the Credit Agreement as amended hereby. The consent and waiver provided in
paragraphs 21 and 22 hereof shall be limited specifically as provided for
therein and this Amendment and Consent shall not constitute a consent to any
other transaction or waiver of the application of the Sections of the Credit
Agreement referred to in paragraphs 21 and 22 hereof to any other transaction
nor shall it be a waiver or modification of any other term, provision or
condition of the Credit Agreement or waiver of any Default or Event of Default
except as expressly set forth herein and shall not prejudice or be deemed to
prejudice any right that the Agent or any Lender may now have or may have in the
future under the Credit Agreement.
[SIGNATURE PAGES TO FOLLOW]
-11-
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment and Consent as of the
date first above written.
Address:
250 East Fifth Street, 5th Floor EAGLE-PICHER INDUSTRIES, INC.
Cincinnati, Ohio 45202
Attention: David Krall By /s/ Gary Freytag
------------------------------------
Tel. (513) 629-2417 Name: Gary Freytag
Fax (513) 629-2572 Title: Treasurer
-12-
<PAGE> 13
<TABLE>
<S> <C>
Address:
One PPG Place, Suite 2950 ABN AMRO BANK N.V., individually and as Agent
Pittsburgh, PA 15222-5401
Attention: Mr. Gregory D. Amoroso By /s/ Gregory D. Illegible
-------------------------------------------
Tel. (412) 566-0983 Name: Gregory D. Illegible
Fax (412) 566-2266 Title:Senior Vice President
By /s/ Illegible
------------------------------------------
Name: RIZZI
Title: SVP
</TABLE>
-13-
<PAGE> 14
Address:
201 East Fifth Street, 3rd Floor PNC BANK, NATIONAL ASSOCIATION
Cincinnati, OH 45202
Attention: David F. Knuth/Bruce A. Kintner By /s/ David F. Knuth
Tel. (513) 651-8675 -------------------------
Fax (513) 651-8952 Name: David F. Knuth
Title: Vice President
-14-
<PAGE> 15
Address:
425 Walnut Street, Mailbox 8160 FIRSTAR BANK, N.A.
Cincinnati, OH 45202
Attention: Mr. Derek S. Roudebush By /s/ Derek Roudelbush
Tel. (513) 632-4010 -------------------------
Fax (513) 632-2068 Name: Derek Roudelbush
Title: Vice President
-15-
<PAGE> 16
Address:
277 Park Avenue, 32nd Floor ARAB BANKING CORPORATION
New York, NY 10172-3299
Attention: Ms. Louise Bilbro By /s/ Louise Bibro
Tel. (212) 583-4758 -------------------------
Fax (212) 583-0935 Name: Louise Bibro
Title: Vice President
-16-
<PAGE> 17
Address:
600 Peachtree Street NE, Suite 2700 THE BANK OF NOVA SCOTIA
Atlanta, Georgia 30308
Attention: Ms. Shannon Dancila By /s/ F.C.H. Ashby
Tel. (404) 877-1561 -------------------------
Fax (404) 888-8998 Name: F.C.H. Ashby
Title: Senior Manager Loan Officer
-17-
<PAGE> 18
Address:
BANK OF TOKYO-MITSUBISHI TRUST
1251 Avenue of the Americas, 12th Floor COMPANY
New York, NY 10020-1104
Attention: Mr. Peter Stearn By /s/ Peter Stearn
Tel. (212) 782-4397 -------------------------
Fax (212) 782-4981 Name: Peter Stearn
Title: Vice President
-18-
<PAGE> 19
Address:
55 E. Monroe Street, Suite 4700 CREDIT AGRICOLE INDOSUEZ
Chicago, IL 60603
Attention: Mr. Jerome Leblond By /s/ Sarah U. Johnson
Tel. (312) 917-7569 --------------------------------
Fax (312) 372-9329 Name: Sarah U. Johnson
Title: Senior Relationship Manager
By /s/ Ernest V. Hodge
Ernest V. Hodge
Senior Relationship Manager
-19-
<PAGE> 20
NBD BANK, N.A.
Address:
One Indiana Square, Suite 7034 By /s/ Scott A. Dvornik
Indianapolis, IN 46266 -------------------------
Attention: Mr. Ed Hathaway Name: Scott A. Dvornik
Tel. (317) 266-6702
Fax (317) 266-6042 Title: Vice President
-20-
<PAGE> 21
Address:
BANK AUSTRIA CREDITANSTALT
Two Greenwich Plaza CORPORATE FINANCE, INC.
Greenwich, CT 06830
Attention: Ms. Maura Connor By /s/ Maura Connor
Tel. (203) 861-6432 ----------------------------------
Fax (203) 861-1475 Maura Connor
Vice President
By /s/ Catherine K. MacDonald
----------------------------------
Catherine K. MacDonald
Vice President
-21-
<PAGE> 22
Address:
One East 4th Street, 5th Floor PROVIDENT BANK
Cincinnati, OH 45202
Attention: Mr. Richard E. Wirthlin By /s/ Richard E. Wirthlin
Tel. (513) 579-2022 -------------------------
Fax (513) 579-2201 Name: Richard E. Wirthlin
Title: Vice President
-22-
<PAGE> 23
Address:
38 Fountain Square Plaza (MD#109054) FIFTH THIRD BANK
Cincinnati, Ohio 45263
Attention: Mr. Thomas G. Welch, Jr. By /s/ Thomas G. Welch, Jr.
Tel. (513) 744-7757 -------------------------
Fax (513) 579-5226 Name: Thomas G. Welch, Jr.
Title: AVP
-23-
<PAGE> 24
Address:
One Wall Street, 22nd Floor THE BANK OF NEW YORK
New York, NY 10286
Attention: Mr. Edward J. Dougherty By /s/ Edward J. Dougherty
Tel. (212) 635-7842 -------------------------
Fax (212) 635-6434 Name: Edward J. Dougherty
Title: Vice President
U.S. Commercial Banking
-24-
<PAGE> 25
Address:
520 Madison Avenue, 37th Floor COMPAGNIE FINANCIERE DE CIC ET DE
New York, NY 10022 L'UNION EUROPEENNE
Attention: Mr. Anthony Rock
Tel. (212) 715-4422 By /s/ Anthony Rock /s/ Brian O'Leary
Fax (212) 715-4535 -----------------------------------
Name: Anthony Rock Brian O'Leary
Title: Vice Presidents
-25-
<PAGE> 26
Address:
500 Woodward Avenue COMERICA BANK
Mail Code 3265
Detroit, MI 48226 By /s/ Nicholas G. Mester
Attention: Mr. Nicholas G. Mester -------------------------
Tel. (313) 222-9168 Name: Nicholas G. Mester
Title: Account Officer
Fax (313) 222-3776
-26-
<PAGE> 27
Address:
9920 South LaCienega Blvd., 14th Floor IMPERIAL BANK
Inglewood, CA 90301
Attention: Mr. Mark Campbell By /s/ Mark Campbell
Tel. (310) 417-5886 -------------------------
Fax (310) 417-5997 Name: Mark Campbell
Title: Senior Vice President
-27-
<PAGE> 28
Address:
520 Madison Avenue, 26th Floor THE MITSUBISHI TRUST AND BANKING
New York, NY 10022 CORPORATION
Attention: Mr. Paul Arzouian
Tel. (212) 891-8425 By /s/ Illegible Mayashi
Fax (212) 644-6825 -------------------------
Name: Illegible Mayashi
Title: Senior Vice President
-28-
<PAGE> 29
Address:
111 W. Monroe Street, Fl. 10W HARRIS TRUST AND SAVINGS BANK
Chicago, IL 60603
Attention: Mr. Peter Krawchuk By /s/ Peter Krawchuk
Tel. (312) 461-2783 -------------------------
Fax (312) 461-5225 Name: Peter Krawchuk
Title: Vice President
-29-
<PAGE> 30
Address:
233 South Wacker Drive THE SUMITOMO BANK, LIMITED, CHICAGO
Sears Tower BRANCH
Chicago, IL 60606
Attention: Mr. Dan Casey
Tel. (312) 879-7672 By /s/
Fax (312) 876-6436 -------------------------
Name:
----------------------
Title:
---------------------
-30-
<PAGE> 31
May 18, 1999
ANNEX 1 (AMENDED)
COMMITMENT
<TABLE>
<CAPTION>
EXISTING NEW
TERM LOAN A REVOLVER TOTAL TERM LOAN A REVOLVER TOTAL
<S> <C> <C> <C> <C> <C> <C>
ABN AMRO Bank N.V $ 6,609,962.49 $ 12,307,692.38 $ 18,917,654.87 $ 13,024,543.05 $ 56,070,514.37 $ 69,095,057.42
PNC Bank $ 6,609,962.49 $ 12,307,692.31 $ 18,917,654.80 $ 3,370,000.00 $ 8,630,000.00 $ 12,000,000.00
Bank of Nova $ 4,693,073.34 $ 8,738,461.54 $ 13,431,534.88 $ 4,693,073.34 $ 15,306,926.66 $ 20,000,000.00
Scotia
Bank of $ 4,693,073.34 $ 8,738,461.54 $ 13,431,534.88 $ 4,823,436.50 $ 15,176,563.50 $ 20,000,000.00
Tokyo-Mitsubishi
NBD Bank One $ 9,386,146.68 $ 17,476,923.08 $ 26,863,069.76 $ 9,386,146.68 $ 15,353,127.02 $ 24,739,273.70
Comerica $ 4,693,073.34 $ 8,738,461.54 $ 13,431,534.88 $ 4,693,073.34 $ 8,738,461.54 $ 13,431,534.88
Credit Agricole $ 6,609,962.43 $ 12,307,692.26 $ 18,917,654.69 $ 6,609,962.43 $ 12,307,692.26 $ 18,917,654.69
Indosuez
Creditanstalt $ 4,693,073.34 $ 8,738,461.54 $ 13,431,534.88 $ 4,693,073.34 $ 10,306,926.66 $ 15,000,000.00
Provident $ 4,693,073.34 $ 8,738,461.54 $ 13,431,534.88 $ 4,693,073.34 $ 8,738,461.54 $ 13,431,534.88
Arab Banking $ 4,957,471.84 $ 9,230,769.23 $ 14,188,241.07 $ 4,957,471.84 $ 9,230,769.23 $ 14,188,241.07
Corporation
Bank of New York $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38 $ 3,304,981.23 $ 11,153,000.00 $ 14,457,981.23
CIC Union $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38 $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38
Fifth Third $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38 $ 3,304,981.23 $ 9,231,000.00 $ 12,535,981.23
Bank
Harris $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38 $ 3,304,981.23 $ 11,695,018.77 $ 15,000,000.00
Imperial $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38 $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38
Mitsubishi $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38 $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38
Trust
Firstar $ 5,155,770.73 $ 9,599,999.99 $ 14,755,770.72 $ 5,155,770.73 $ 9,600,000.00 $ 14,755,770.73
Sumitomo $ 3,304,981.23 $ 6,153,846.15 $ 9,458,827.38
$ 85,929,511.97 $160,000,000.00 $245,929,511.97 $ 85,929,511.97 $220,000,000.00 $305,929,511.97
</TABLE>
<PAGE> 32
EXHIBIT I
JOINDER TO REVOLVING CREDIT AGREEMENT
Dated as of
------, ----
ABN AMRO Bank N.V., as
Administrative Agent for
the Lenders party to the
Credit Agreement dated as
of February 19, 1998, as
amended, among
Eagle-Picher Industries,
Inc. (the "Borrower"), the
Lenders party thereto from
time to time, and ABN AMRO
Bank N.V., as
Administrative Agent, PNC
Bank, National
Association, as
Documentation Agent and
NBD Bank, N.A. as
Syndication Agent (the
"Credit Agreement")
Ladies and Gentlemen:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
Pursuant to that certain Amendment to Credit Agreement dated as of May
___, 1999, the undersigned hereby joins in the Credit Agreement for the purposes
of becoming a party thereto as one of the "Lenders" and agrees to comply with
all of the terms and conditions of the Credit Agreement. The undersigned agrees
(i) to undertake all of the obligations of a Revolving Lender under the Credit
Agreement and (ii) to provide the Revolving Credit Commitment in the amount set
forth below under the terms and conditions in the Credit Agreement. The
undersigned hereby irrevocably appoints the Administrative Agent to act as
Administrative Agent for the undersigned under the Credit Agreement and the
other Credit Documents, all in accordance with Section 11 of the Credit
Agreement and the other provisions of the Credit Agreement and the other Credit
Documents.
<PAGE> 33
IN WITNESS WHEREOF, the undersigned has executed this Joinder as of the
date first above written.
---------------------------------------,
as Lender
By:
-------------------------------------
Title:
-------------------------------
Revolving Credit
Commitment Amount: $
--------------------
Address for Notices:
--------------------------------------
--------------------------------------
--------------------------------------
Attention:
----------------------------
Telephone:
----------------------------
Telecopier:
--------------------------
<PAGE> 1
Exhibit 10.41
===============================================================================
RECEIVABLES LOAN AGREEMENT
DATED AS OF MAY 18, 1999
AMONG
EAGLE-PICHER ACCEPTANCE CORPORATION,
AS THE BORROWER,
EAGLE-PICHER INDUSTRIES, INC.,
AS THE INITIAL COLLECTION AGENT,
ABN AMRO BANK N.V.,
AS THE ADMINISTRATIVE AGENT AND
AS THE AMSTERDAM LENDER AGENT,
THE LENDER AGENTS FROM TIME TO TIME
PARTY HERETO,
THE RELATED BANK
LENDERS FROM TIME TO TIME PARTY HERETO,
AMSTERDAM FUNDING CORPORATION,
AS A CONDUIT LENDER
AND
THE OTHER CONDUIT LENDERS FROM TIME
TO TIME PARTY HERETO
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I LOANS TO BORROWER AND SETTLEMENTS......................................................1
Section 1.1. Loans..................................................................................1
Section 1.2. Interim Liquidations...................................................................3
Section 1.3. Selection of Interest Rates and Periods................................................3
Section 1.4. Interest, Fees and Other Costs and Expenses............................................3
Section 1.5. Maintenance of Secured Interest; Deemed Collection.....................................4
Section 1.6. Reduction in Loan Commitments..........................................................5
Section 1.7. Optional Prepayments...................................................................5
Section 1.8. Assignment of each Purchase Agreement..................................................5
Section 1.9. Extension of Termination Date..........................................................5
ARTICLE II SALES TO AND FROM LENDERS; ALLOCATIONS.................................................6
Section 2.1. Transfer of Conduit Lender Loans.......................................................6
Section 2.2. Lender Reporting.......................................................................6
Section 2.3. Allocations and Distributions..........................................................6
ARTICLE III ADMINISTRATION AND COLLECTIONS.........................................................7
Section 3.1. Appointment of Collection Agent........................................................7
Section 3.2. Duties of Collection Agent.............................................................8
Section 3.3. Reports................................................................................9
Section 3.4. Lock-Box Arrangements..................................................................9
Section 3.5. Enforcement Rights....................................................................10
Section 3.6. Collection Agent Fee..................................................................10
Section 3.7. Responsibilities of the Borrower......................................................11
Section 3.8. Actions by Borrower...................................................................11
Section 3.9. Indemnities by the Collection Agent...................................................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................12
Section 4.1. Representations and Warranties........................................................12
ARTICLE V COVENANTS.............................................................................14
Section 5.1. Covenants of the Borrower.............................................................14
ARTICLE VI INDEMNIFICATION.......................................................................18
Section 6.1. Indemnities by the Borrower...........................................................18
Section 6.2. Increased Cost and Reduced Return.....................................................20
Section 6.3. Other Costs and Expenses..............................................................21
Section 6.4. Withholding Taxes.....................................................................21
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 6.5. Payments and Allocations..............................................................22
ARTICLE VIII CONDITIONS PRECEDENT..................................................................22
Section 7.1. Conditions to Closing.................................................................22
Section 7.2. Conditions to Each Loan...............................................................23
ARTICLE IX THE ADMINISTRATIVE AGENT..............................................................24
Section 8.1. Appointment and Authorization.........................................................24
Section 8.2. Delegation of Duties..................................................................25
Section 8.3. Exculpatory Provisions................................................................25
Section 8.4. Reliance by Agents....................................................................25
Section 8.5. Assumed Payments......................................................................26
Section 8.6. Notice of Termination Events..........................................................26
Section 8.7. Non-Reliance on Administrative Agent and Other Lenders................................27
Section 8.8. Agents and Affiliates.................................................................27
Section 8.9. Indemnification.......................................................................27
Section 8.10. Successor Administrative Agent........................................................28
ARTICLE IX MISCELLANEOUS.........................................................................28
Section 9.1. Termination...........................................................................28
Section 9.2. Notices...............................................................................28
Section 9.3. Payments and Computations.............................................................29
Section 9.4. Sharing of Recoveries.................................................................29
Section 9.5. Right of Setoff.......................................................................29
Section 9.6. Amendments............................................................................29
Section 9.7. Waivers...............................................................................30
Section 9.8. Successors and Assigns; Participations; Assignments...................................30
Section 9.9. Intended Tax Characterization.........................................................31
Section 9.10. Confidentiality.......................................................................31
Section 9.11. Reserved..............................................................................31
Section 9.11. Confidentiality of Agreement..........................................................31
Section 9.12. Agreement Not to Petition.............................................................32
Section 9.13. Excess Funds..........................................................................32
Section 9.14. No Recourse...........................................................................32
Section 9.15. Headings; Counterparts................................................................32
Section 9.16. Cumulative Rights and Severability....................................................33
Section 9.17. Governing Law; Submission to Jurisdiction.............................................33
SECTION 9.18. WAIVER OF TRIAL BY JURY...............................................................33
Section 9.19. Entire Agreement......................................................................33
signature........................................................................................................34
</TABLE>
-ii-
<PAGE> 4
SCHEDULES DESCRIPTION
Schedule I Definitions
Schedule II Related Bank Lenders and Loan Commitments
of Related Bank Lenders
EXHIBITS DESCRIPTION
Exhibit A Form of Incremental Loan Request
Exhibit B-1 Form of Periodic Report
Exhibit B-2 Form of Daily Report
Exhibit C Addresses and Names of Borrower and each Originator
Exhibit D Subsidiaries
Exhibit E Lock-Boxes and Lock-Box Banks
Exhibit F Form of Lock-Box Letter
Exhibit G Compliance Certificate
Exhibit H Credit and Collection Policies
Exhibit I Litigation
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RECEIVABLES LOAN AGREEMENT
RECEIVABLES LOAN AGREEMENT, dated as of May 18, 1999, among
Eagle-Picher Acceptance Corporation, an Ohio corporation, as Borrower (the
"Borrower"), Eagle-Picher Industries, Inc., a Delaware corporation, as Initial
Collection Agent (the "Initial Collection Agent"), ABN AMRO Bank N.V., as the
Amsterdam Lender Agent and as administrative agent for the Lenders (the
"Administrative Agent"), the Lender Agents from time to time party hereto
(collectively with the Amsterdam Lender Agent, the "Lender Agents") the Related
Bank Lenders from time to time party hereto (the "Related Bank Lenders")
Amsterdam Funding Corporation, as a Conduit Lender ("Amsterdam") and the other
Conduit Lenders from time to time party hereto. Certain capitalized terms used
herein, and certain rules of construction, are defined in Schedule I. The
Related Bank Lenders and the Loan Commitments of all Related Bank Lenders are
listed on Schedule II.
The parties hereto agree as follows:
ARTICLE I
LOANS TO BORROWER AND SETTLEMENTS
Section 1.1. Loans.
(a) The Secured Interest. Subject to the terms and conditions hereof,
the Borrower may, from time to time before the Termination Date, request the
Conduit Lenders or, only if an Uncommitted Conduit Lender denies such request or
is unable to fund, ratably request that the Related Bank Lenders make loans
secured by an undivided percentage security interest in the Receivables and all
related Collections. Any such loan made by a Conduit Lender or a Related Bank
Lender (a "Loan") shall be made by each relevant Lender remitting funds to the
Borrower, through each respective Lender Agent, pursuant to Section 1.1(c) or by
the Collection Agent remitting Collections to the Borrower pursuant to Section
1.1(d). The aggregate percentage security interest so acquired by a Lender in
the Receivables and related Collections (its "Loan Interest") shall equal at any
time the following quotient:
LA
--- + LRP
ERB
where:
LA = the outstanding Loan Amount of such Lender at such time;
LRP = the Lender Reserve Percentage at such time; and
ERB = the Eligible Receivables Balance at such time.
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Except during a Liquidation Period for a Lender, such Lender's Loan Interest
will change whenever its Loan Amount, its Lender Reserve Percentage or the
Eligible Receivables Balance changes. During a Liquidation Period for a Lender
its Loan Interest shall remain constant, except for redeterminations of the Loan
Interests of Lenders to reflect Loan Amounts acquired from or transferred to a
Liquidity Bank or an Enhancement Bank under Article II. The sum of all Loan
Interests of the Lenders at any time is referred to herein as the "Secured
Interest", which at any time is the aggregate percentage security interest then
held by such Lenders in the Receivables and Collections.
(b) Uncommitted Conduit Lender Loan Option and Committed Conduit
Related Bank Lenders' Loan Commitments. Subject to Section 1.1(d) concerning
Reinvestment Loans, at no time will an Uncommitted Conduit Lender have any
obligation to make a Loan. Each Committed Conduit Lender and each Related Bank
Lender severally hereby agrees, subject to Section 7.2 and the other terms and
conditions hereof, to make Loans before the Termination Date, based on the
applicable Lender Group's Ratable Share of each Loan (and, in the case of each
Related Bank Lender, its Commitment Percentage of its Lender Group's Ratable
Share of such Loan) to the extent its Loan Amount would not thereby exceed its
Loan Commitment and the Aggregate Loan Amount would not thereby exceed the Loan
Limit. Each Lender's first Loan and each additional Loan by such Lender not made
from Collections pursuant to Section 1.1(d) is referred to herein as an
"Incremental Loan." Each Loan made by a Lender with the proceeds of Collections
in which it has a Loan Interest, which does not increase the outstanding Loan
Amount of such Lender, is referred to herein as a "Reinvestment Loan."
(c) Incremental Loans. In order to request an Incremental Loan from a
Lender, the Borrower must provide to each Lender Agent an irrevocable written
request (including by telecopier or other facsimile communication) substantially
in the form of Exhibit A, by 10:00 a.m. (Chicago time) three Business Days
before the requested date (the "Loan Date") of such Incremental Loan, the
requested Loan Date (which must be a Business Day) and the requested amount of
such Incremental Loan, which must be in a minimum amount of $1,000,000 and
multiples thereof (or, if less, an amount equal to the Maximum Incremental Loan
Amount). An Incremental Loan may only be requested from a Conduit Lender unless,
in the case of an Uncommitted Conduit Lender, such Uncommitted Conduit Lender,
in its sole discretion, determines not to make such Incremental Loan, in which
case the Borrower may request such Incremental Loan from the Related Bank
Lenders. If the Loan is requested from an Uncommitted Conduit Lender and such
Uncommitted Conduit Lender determines, in its sole discretion, to make the
requested Loan, such Uncommitted Conduit Lender shall transfer to the Borrower's
Account the amount of such Incremental Loan by no later than 1:00 p.m. (Chicago
time) on the Loan Date. If the Incremental Loan is requested from a Committed
Conduit Lender or the Related Bank Lenders for a Lender Group, subject to
Section 7.2 and the other terms and conditions hereof, such Committed Conduit
Lender or the Related Bank Lenders for a Lender Group shall transfer the
applicable Lender Group's Ratable Share of each Loan (and, in the case of each
Related Bank Lender, its Commitment Percentage of its Lender Group's Ratable
Share of such Loan) into the Borrower's Account by no later than 1:00 p.m.
(Chicago time) on the Loan Date.
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(d) Reinvestment Loans. Unless an Uncommitted Conduit Lender has
provided to the Administrative Agent, each Lender Agent, the Borrower, and the
Collection Agent a notice still in effect that it no longer wishes to make
Reinvestment Loans (in which case such Uncommitted Conduit Lender's Reinvestment
Loans, but not those of its Related Bank Lenders or any Committed Conduit
Lender, shall cease), at any time before the Termination Date when no Interim
Liquidation is in effect, on each day that any Collections are received by the
Collection Agent a Lender's Loan Interest in such Collections shall
automatically be used to make a Reinvestment Loan by such Lender, but only to
the extent such Reinvestment Loan would not cause the Lender's Loan Amount to
increase above the amount of such Loan Amount at the start of the day plus any
Incremental Loans made by the Lender on that day. An Uncommitted Conduit Lender
may revoke any notice provided under the first sentence of this Section 1.1(d)
by notifying the Administrative Agent, each Lender Agent, the Borrower, and the
Collection Agent that it will make Reinvestment Loans.
(e) Security Interest. To secure all of the Borrower's obligations
under the Transaction Documents, the Borrower hereby grants to the
Administrative Agent (for the benefit of the Lenders) a security interest in all
of the Borrower's rights in the Receivables, the Collections, and the Lock-Box
Accounts.
Section 1.2. Interim Liquidations. (a) Optional. The Borrower may at
any time direct that Reinvestment Loans cease and that an Interim Liquidation
commence for all Lenders by giving the Administrative Agent, each Lender Agent
and the Collection Agent at least three Business Days' written (including
telecopy or other facsimile communication) notice specifying the date on which
the Interim Liquidation shall commence and, if desired, when such Interim
Liquidation shall cease before the Termination Date (identified as a specific
date or as when the Aggregate Loan Amount is reduced to a specified amount). If
the Borrower does not so specify the date on which an Interim Liquidation shall
cease, it may cause such Interim Liquidation to cease at any time before the
Termination Date, subject to Section 1.2(b) below, by notifying the
Administrative Agent and the Collection Agent in writing (including by telecopy
or other facsimile communication) at least three Business Days before the date
on which it desires such Interim Liquidation to cease.
(b) Mandatory. If at any time before the Termination Date any condition
in Section 7.2 is not fulfilled, the Borrower shall immediately notify the
Administrative Agent, each Lender Agent and the Collection Agent, whereupon
Reinvestment Loans shall cease and an Interim Liquidation shall commence, which
shall only cease upon the Borrower confirming to the Administrative Agent that
the conditions in Section 7.2 are fulfilled.
Section 1.3. Selection of Interest Rates and Periods. Selection of
interest rates and related matters for each Lender Group shall be as provided in
the Rate Supplement for each Lender Group (each a "Rate Supplement").
Section 1.4. Interest, Fees and Other Costs and Expenses. (a) Each
Lender Agent shall receive for the ratable benefit of its Lender Group, such
amounts as agreed to with the Lenders in the Fee Letter for such Lender Group.
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<PAGE> 8
(b) Each Loan Amount shall be payable solely from Collections and from
amounts payable under Sections 1.5, 1.7 and 6.1 (to the extent amounts paid
under Section 6.1 indemnify against reductions in or non-payment of
Receivables). The Borrower shall pay, as a full recourse obligation, all other
amounts payable hereunder and under the Rate Supplements and Fee Letters,
including, without limitation, all interest, fees described in clauses (a) and
(b) above and amounts payable under Article VI.
(c) On each Settlement Date, the Borrower shall pay to each Lender
Agent for the account of the Lenders in the applicable Lender Group, accrued
interest on the Loan Amounts of such Lenders as specified in the Rate Supplement
for the applicable Lender Group for the Settlement Period relating to such
Settlement Date.
Section 1.5. Maintenance of Secured Interest; Deemed Collection. (a)
General. If on any day before the Termination Date the Daily Maximum Advance
shown on the Daily Report submitted on such date is less than the Aggregate Loan
Amount (or if a Termination Event exists, the Matured Aggregate Loan Amount),
the Borrower shall (i) notify each Lender Agent of such event by not later than
1:00 p.m. (Chicago time) on such date and (ii) not later than 1:00 p.m. (Chicago
time) on the next Business Day, pay to each Lender Agent each respective Lender
Group's pro rata portion of the amount equal to the nearest multiple of $250,000
that is greater than such deficiency for application to reduce the Loan Amounts
of the Lender Groups ratably in accordance with the principal amount of their
respective Loan Amounts.
(b) Deemed Collections. If on any day the outstanding balance of a
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including any adjustment
resulting from the application of any special refund or other discounts or any
reconciliation), any setoff or credit (whether such claim or credit arises out
of the same, a related, or an unrelated transaction) or other similar reason not
arising from the financial inability of the Obligor to pay undisputed
indebtedness, the Borrower shall be deemed to have received two Business Days
after such day a Collection on such Receivable in the amount of such reduction
or cancellation. If on any day any representation, warranty, covenant or other
agreement of the Borrower related to a Receivable is not true or is not
satisfied, the Borrower shall be deemed to have received two Business Days after
such day a Collection in the amount of the outstanding balance of such
Receivable. All such Collections deemed received by the Borrower under this
Section 1.5(b) shall be remitted by the Borrower to the Collection Agent in
accordance with Section 5.1(i).
(c) Adjustment to Secured Interest. At any time before the Termination
Date that the Borrower is deemed to have received any Collection under Section
1.5(b) ("Deemed Collections") that derive from a Receivable that is otherwise
reported as an Eligible Receivable, so long as no Liquidation Period then
exists, the Borrower may satisfy its obligation to deliver such amount to the
Collection Agent by instead notifying each Lender Agent that the Secured
Interest should be recalculated by decreasing the Eligible Receivables Balance
by the amount of such Deemed Collections, so long as such adjustment does not
cause the Secured Interest to exceed 100%.
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<PAGE> 9
(d) Payment Assumption. Unless an Obligor otherwise specifies or
another application is required by contract or law, any payment received by the
Borrower from any Obligor shall be applied as a Collection of Receivables of
such Obligor (starting with the oldest such Receivable) and remitted to the
Collection Agent as such.
Section 1.6. Reduction in Loan Commitments. The Borrower may, provided
that the Aggregate Loan Commitment is not reduced below the outstanding Loan
Amount, upon 30 days' notice to the Administrative Agent and each Lender Agent,
reduce the unfunded portion of aggregate Loan Commitments of all Lenders in
increments of $1,000,000. Such reduction shall be applied ratably to the
aggregate Commitments of each Lender Group.
Section 1.7. Optional Prepayments. At any time that the Aggregate Loan
Amount is less than 10% of the Aggregate Loan Commitment in effect on the date
hereof, the Borrower may, upon thirty days' notice to the Administrative Agent
and each Lender Agent, prepay the entire Loan Amount at a price equal to the
outstanding Matured Aggregate Loan Amount and all other amounts then owed to the
Lenders hereunder.
Section 1.8. Assignment of each Purchase Agreement. The Borrower hereby
assigns and otherwise transfers to the Administrative Agent as collateral
security for the obligations of the Borrower under the Transaction Documents
(for the benefit of the Administrative Agent, each Lender Agent, each Lender and
any other Person to whom any amount is owed hereunder), all of the Borrower's
right, title and interest in, to and under each Purchase Agreement. The Borrower
shall execute, file and record all financing statements, continuation statements
and other documents required to perfect or protect such collateral assignment.
This collateral assignment includes (a) all monies due and to become due to the
Borrower from each Originator under or in connection with each Purchase
Agreement (including fees, expenses, costs, indemnities and damages for the
breach of any obligation or representation related to such agreement) and (b)
all rights, remedies, powers, privileges and claims of the Borrower against each
Originator under or in connection with each Purchase Agreement. All provisions
of each Purchase Agreement shall inure to the benefit of, and may be relied upon
by, the Administrative Agent, each Lender Agent, each Lender and each such other
Person. At any time that a Termination Event has occurred and is continuing, the
Administrative Agent shall have the sole right to enforce the Borrower's rights
and remedies under each Purchase Agreement to the same extent as the Borrower
could absent this assignment, but without any obligation on the part of the
Administrative Agent, any Lender Agent, any Lender or any other such Person to
perform any of the obligations of the Borrower under each Purchase Agreement (or
any of the promissory notes executed thereunder). All amounts distributed to the
Borrower under each Purchase Agreement from Receivables sold to the Borrower
thereunder shall constitute Collections hereunder and shall be applied in
accordance herewith.
Section 1.9. Extension of Termination Date. The Borrower may advise the
Administrative Agent and each Lender Agent in writing of its desire to extend
the Termination Date for an additional 364 days, provided (i) such request is
made not more than 90 days prior to, and not less than 60 days prior to, the
Termination Date and (ii) not more than one such request for the extension of
the Termination Date may be made in any one calendar year. In the event that the
Lender Agents are all agreeable to such extension, the Administrative Agent
shall so
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notify the Borrower in writing (it being understood that the Lender Agents may
accept or decline such a request in their sole discretion and on such terms as
they may elect) not less than 45 days prior to the Termination Date and the
Borrower, the Administrative Agent, the Lender Agents and the Lenders shall
enter into such documents as the Lenders may deem necessary or appropriate to
reflect such extension, and all reasonable costs and expenses incurred by the
Lenders, the Administrative Agent and the Lender Agents in connection therewith
(including reasonable attorneys' fees) shall be paid by the Borrower. In the
event the Lender Agents decline the request for such extension, the
Administrative Agent shall so notify the Borrower of such determination;
provided, however, that the failure of the Administrative Agent to notify the
Borrower of the determination to decline such extension shall not affect the
understanding and agreement that the Lender Agents shall be deemed to have
refused to grant the requested extension in the event the Administrative Agent
fails to affirmatively notify the Borrower, in writing, of their agreement to
accept the requested extension.
ARTICLE II
SALES TO AND FROM LENDERS; ALLOCATIONS
Section 2.1. Transfer of Conduit Lender Loans. The parties hereto
hereby acknowledge that each Conduit Lender may transfer all or any portion of
its respective Loans to their related Enhancement Bank and Liquidity Bank(s).
Upon any such transfer any such Enhancement Bank or any such Liquidity Bank
shall be deemed to be the "Lender" of such transferred Loan for all purposes
hereof.
Section 2.2. Lender Reporting. On the Business Day preceding each
Settlement Date, each Lender Agent shall provide the Collection Agent a written
statement specifying the amount payable to such Lender Agent on such Settlement
Date pursuant to Section 3.2.
Section 2.3. Allocations and Distributions.
(a) Non-Reinvestment Periods. Before the Termination Date unless an
Interim Liquidation is in effect, on each day during a period that an
Uncommitted Conduit Lender is not making Reinvestment Loans (as established
under Section 1.1(d)), the Collection Agent (i) shall set aside and hold solely
for the benefit of the applicable Uncommitted Conduit Lender (or deliver to the
applicable Lender Agent, if so instructed pursuant to Section 3.2(a)) such
Uncommitted Conduit Lender's Loan Interest in all Collections received on such
day and (ii) shall distribute each Settlement Date to the applicable Lender
Agent (for the benefit of such Uncommitted Conduit Lender) the amounts so set
aside up to the amount of such Uncommitted Conduit Lender's Loan Amount and, to
the extent not already paid in full, all interest thereon and all other amounts
then due from the Borrower in connection with such Loan Amount and the
applicable Settlement Period. As provided in Section 1.4(c) all interest and
other amounts payable hereunder other than the Loan Amount are payable by the
Borrower. If any part of the Secured Interest in any Collections is applied to
pay any such amounts pursuant to this Section 2.3(a), the Borrower shall pay to
the Collection Agent the amount so applied for distribution as part of the Loan
Interest in Collections.
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(b) Termination Date and Interim Liquidations. On each day on and after
the Termination Date, and during any Interim Liquidation, the Collection Agent
shall set aside and hold solely for the account of each Lender Agent, for the
benefit of each Lender Group, to the extent provided below (or deliver to each
Lender Agent, if so instructed pursuant to Section 3.2(a)) and for the account
of the Administrative Agent, the appropriate portion of the aggregate Loan
Interest of all Lenders in such Lender Group in all Collections received on such
day and such Collections shall be allocated as follows:
(i) first, to such Lender Group until all Loan Amounts of,
and interest due but not already paid to, such Lender Group has been
paid in full; and
(ii) second, ratably to such Lender Group until all other
amounts owed to such Lender Group have been paid in full.
All Collections remaining after the allocation described above shall be
allocated as follows:
(x) first, ratably to the Administrative Agent and each Lender
Agent until all amounts owed to such Persons have been paid in full.
(y) second, to any other Person to whom any amounts are owed
under the Transaction Documents until all such amounts have been paid
in full; and
(z) third, to the Borrower (or as otherwise required by
applicable law).
Unless an Interim Liquidation has ended by such date (in which case Reinvestment
Loans shall resume to the extent provided in Section 1.1(d)), on each Settlement
Date (unless otherwise instructed by a Lender Agent pursuant to Section 3.2(a)),
the Collection Agent shall pay to the appropriate parties, from such set aside
Collections, all amounts allocated to the related Settlement Period and all
Settlement Periods that ended before such date, due in accordance with the
priorities in clause (i) above. Except during an Interim Liquidation, no
distributions shall be made to pay amounts under clauses (ii) and (x), (y) and
(z) above until sufficient Collections have been set aside to pay all amounts
described in clause (i) that may become payable for all outstanding Settlement
Periods. All distributions shall be made ratably within each priority level in
accordance with the respective amounts then due each Person (or group of
Persons) included in such level unless otherwise agreed by all Lenders Agents.
As provided in Section 1.4(c) all interest and other amounts payable hereunder
other than Loan Amounts are payable by the Borrower. If any part of the Loan
Interest in any Collections is applied to pay any such amounts pursuant to this
Section 2.3(b), the Borrower shall pay to the Collection Agent the amount so
applied for distribution as part of the Secured Interest in Collections.
ARTICLE III
ADMINISTRATION AND COLLECTIONS
Section 3.1. Appointment of Collection Agent. (a) The servicing,
administering and collecting of the Receivables shall be conducted by a Person
(the "Collection Agent") designated
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to so act on behalf of the Lenders under this Article III. The Parent is hereby
designated as, and agrees to perform the duties and obligations of, the
Collection Agent. The Initial Collection Agent acknowledges that the
Administrative Agent, each Lender Agent and each Lender have relied on the
Initial Collection Agent's agreement to act as Collection Agent (and the
agreement of any of the sub-collection agents to so act) in making the decision
to execute and deliver this Agreement and agrees that it will not voluntarily
resign as Collection Agent nor permit any sub-collection agent to voluntarily
resign as a sub-collection agent. At any time after the occurrence of a
Collection Agent Replacement Event, the Administrative Agent (with the consent
of the Instructing Group or in the case where there are only two Lender Groups
and neither Lender Group has a majority of the Commitments, either Lender Agent)
may designate a new Collection Agent to succeed the Originator (or any successor
Collection Agent).
(b) The Initial Collection Agent may, and if requested by the
Administrative Agent shall, delegate its duties and obligations as Collection
Agent to an Affiliate (acting as a sub-collection agent). Notwithstanding such
delegation, the Initial Collection Agent shall remain primarily liable for the
performance of the duties and obligations so delegated, and the Administrative
Agent, each Lender Agent and each Lender shall have the right to look solely to
the Initial Collection Agent for such performance. The Administrative Agent
(with the consent of the Instructing Group) may at any time after the occurrence
of a Collection Agent Replacement Event remove or replace any sub-collection
agent.
(c) If replaced, the Initial Collection Agent agrees it will terminate,
and will cause each existing sub-collection agent to terminate, its collection
activities in a manner requested by the Administrative Agent to facilitate the
transition to a new Collection Agent. The Initial Collection Agent shall
cooperate with and assist any new Collection Agent (including providing access
to, and transferring, all Records and allowing the new Collection Agent to use
all licenses, hardware or software necessary or desirable to collect the
Receivables). The Initial Collection Agent irrevocably agrees to act (if
requested to do so) as the data-processing agent for any new Collection Agent in
substantially the same manner as the Initial Collection Agent conducted such
data-processing functions while it acted as the Collection Agent.
Section 3.2. Duties of Collection Agent. (a) The Collection Agent shall
take, or cause to be taken, all action necessary or advisable to collect each
Receivable in accordance with this Agreement, the Credit and Collection Policies
and all applicable laws, rules and regulations using the skill and attention the
Collection Agent exercises in collecting other receivables or obligations owed
solely to it; provided, however, that the Collection Agent shall not make any
changes in its payment instructions to any Obligor without prior notification to
the Administrative Agent. The Collection Agent shall, in accordance herewith,
set aside all Collections to which a Lender is entitled. If so instructed by the
appropriate Lender Agent, the Collection Agent shall transfer to the appropriate
Lender Agent the amount of Collections to which appropriate Lender entitled by
the Business Day following receipt. Each party hereto hereby appoints the
Collection Agent to enforce such Person's rights and interests in the
Receivables, but (notwithstanding any other provision in any Transaction
Document) the Administrative Agent (with the consent of the Instructing Group or
in the case where there are only two Lender Groups and neither Lender Group has
a majority of the Commitments, either Lender Agent) shall at all times after the
occurrence of a Collection Agent Replacement Event
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have the sole right to direct the Collection Agent to commence or settle any
legal action to enforce collection of any Receivable.
(b) If no Termination Event exists and the Collection Agent determines
that such action is appropriate in order to maximize the Collections, the
Collection Agent may, in accordance with the Credit and Collection Policies,
extend the maturity of any Receivable (but no such extension shall be for a
period more than thirty (30) days) or adjust the outstanding balance of any
Receivable. Any such extension or adjustment shall not alter the status of a
Receivable as a Defaulted Receivable or Delinquent Receivable or limit any
rights of the Administrative Agent, any Lender Agent or the Lenders hereunder.
If a Termination Event exists, the Collection Agent may make such extensions or
adjustments only with the prior consent of the Instructing Group.
(c) The Collection Agent shall turn over to the Borrower (i) all
Collections that are not required to be remitted to the Agent (for the benefit
of the Lenders) pursuant to the terms of this Agreement, less all reasonable
costs and expenses of the Collection Agent for servicing, collecting and
administering the Receivables and (ii) subject to Section 1.5(d), the
collections and records for any indebtedness owed to the Borrower that is not a
Receivable. The Collection Agent shall have no obligation to remit any such
funds or records to the Borrower until the Collection Agent receives evidence
(satisfactory to the Administrative Agent) that the Borrower is entitled to such
items. The Collection Agent has no obligations concerning indebtedness that is
not a Receivable other than to deliver the collections and records for such
indebtedness to the Borrower when required by this Section 3.2(c).
Section 3.3. Reports. (a) Not later than two Business Days prior to
each Settlement Date, the Collection Agent shall deliver to each Lender Agent a
report reflecting information as of the close of business of the Collection
Agent for the immediately preceding calendar month (each a "Periodic Report"),
containing the information described on Exhibit B-1.
(b) By 1:00 p.m. (Chicago time) on each Business Day, the Collection
Agent shall deliver to the Administrative Agent a report reflecting information
as of the close of business of the Collection Agent two Business Days prior to
such day (each a "Daily Report"), containing the information described on
Exhibit B-2.
Section 3.4. Lock-Box Arrangements. The Administrative Agent is hereby
authorized to give notice at any time after the occurrence of a Collection Agent
Replacement Event to any or all Lock-Box Banks that the Administrative Agent is
exercising its rights under the Lock-Box Letters and to take all actions
permitted under the Lock-Box Letters. The Borrower agrees to take any action
requested by the Administrative Agent to facilitate the foregoing. After the
Administrative Agent takes any such action under the Lock-Box Letters, the
Borrower shall immediately deliver to the Administrative Agent any Collections
received by the Borrower. If the Administrative Agent takes control of any
Lock-Box Account, the Administrative Agent shall distribute Collections it
receives in accordance herewith and shall deliver to the Collection Agent, for
distribution under Section 3.2, all other amounts it receives from such Lock-Box
Account.
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Section 3.5. Enforcement Rights. (a) The Administrative Agent may, at
any time, direct the Obligors and the Lock-Box Banks to make all payments on the
Receivables directly to the Administrative Agent or its designee. The
Administrative Agent may after the occurrence of a Collection Agent Replacement
Event, and the Borrower shall at the Administrative Agent's request, withhold
the identity of the Lenders from the Obligors and Lock-Box Banks. Upon the
Administrative Agent's request after the occurrence of a Collection Agent
Replacement Event, the Borrower (at the Borrower's expense) shall (i) give
notice to each Obligor of the Administrative Agent's ownership of the Secured
Interest and direct that payments on Receivables be made directly to the
Administrative Agent or its designee, (ii) assemble for the Administrative Agent
all Records and collateral security for the Receivables and transfer to the
Administrative Agent (or its designee), or license to the Administrative Agent
(or its designee) the use of, all software useful to collect the Receivables and
(iii) segregate in a manner acceptable to the Administrative Agent all
Collections the Borrower receives and, promptly upon receipt, remit such
Collections in the form received, duly endorsed or with duly executed
instruments of transfer, to the Administrative Agent or its designee.
(b) After the occurrence of a Collection Agent Replacement Event, the
Borrower hereby irrevocably appoints the Administrative Agent as its
attorney-in-fact coupled with an interest, with full power of substitution and
with full authority in the place of the Borrower, to take any and all steps
deemed desirable by the Administrative Agent, in the name and on behalf of the
Borrower to (i) collect any amounts due under any Receivable, including
endorsing the name of the Borrower on checks and other instruments representing
Collections and enforcing such Receivables, and (ii) exercise any and all of the
Borrower's rights and remedies under each Purchase Agreement and the Limited
Guaranty. The Administrative Agent's powers under this Section 3.5(b) shall not
subject the Administrative Agent to any liability if any action taken by it
proves to be inadequate or invalid, nor shall such powers confer any obligation
whatsoever upon the Administrative Agent.
(c) Neither the Administrative Agent, any Lender Agent nor any Lender
shall have any obligation to take or consent to any action to realize upon any
Receivable or to enforce any rights or remedies related thereto.
Section 3.6. Collection Agent Fee. On or before each Settlement Date,
the Borrower shall pay to the Collection Agent a fee for the immediately
preceding calendar month as compensation for its services (the "Collection Agent
Fee") equal to (a) at all times the Initial Collection Agent or an Affiliate of
the Initial Collection Agent is the Collection Agent, such consideration as is
acceptable to it, the receipt and sufficiency of which is hereby acknowledged,
and (b) at all times any other Person is the Collection Agent, a reasonable
amount agreed upon by the Administrative Agent (with the consent of the
Instructing Group) and the new Collection Agent on an arm's-length basis
reflecting rates and terms prevailing in the market at such time. The Collection
Agent may only apply to payment of the Collection Agent Fee the portion of the
Collections in excess of the Secured Interest or Collections that fund
Reinvestment Loans. The Administrative Agent may, with the consent of the
Instructing Group, pay the Collection Agent Fee to the Collection Agent from the
Secured Interest in Collections. The Borrower shall be obligated to reimburse
any such payment to the extent required by Section 1.5.
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Section 3.7. Responsibilities of the Borrower. The Borrower shall, or
shall cause the Parent to, pay when due all Taxes payable in connection with the
Receivables or their creation or satisfaction. The Borrower shall, and shall
cause the Parent to, perform all of its obligations under agreements related to
the Receivables to the same extent as if interests in the Receivables had not
been transferred hereunder or, in the case of each Originator, under each
Purchase Agreement. The Administrative Agent's, any Lender Agent's or any
Lender's exercise of any rights hereunder shall not relieve the Borrower or any
Originator from such obligations. Neither the Administrative Agent, any Lender
Agent nor any Lender shall have any obligation to perform any obligation of the
Borrower or of any Originator or any other obligation or liability in connection
with the Receivables.
Section 3.8. Actions by Borrower. The Borrower shall defend and
indemnify the Administrative Agent, each Lender Agent and each Lender against
all costs, expenses, claims and liabilities for any action taken by the
Borrower, any Originator or any other Affiliate of the Borrower or of any
Originator (whether acting as Collection Agent or otherwise) related to any
Receivable, or arising out of any alleged failure of compliance of any
Receivable with the provisions of any law or regulation. If any goods related to
a Receivable are repossessed, the Borrower agrees to resell, or to have the
applicable Originator or another Affiliate resell, such goods in a commercially
reasonable manner for the account of the Administrative Agent and remit, or have
remitted, to the Administrative Agent the Lenders' share in the gross sale
proceeds thereof net of any out-of-pocket expenses and any equity of redemption
of the Obligor thereon. Any such moneys collected by the Borrower or any
Originator or other Affiliate of the Borrower pursuant to this Section 3.8 shall
be segregated and held in trust for the Administrative Agent and remitted to the
Administrative Agent's Account within one Business Day of receipt as part of the
Secured Interest in Collections for application as provided herein.
Section 3.9. Indemnities by the Collection Agent. Without limiting any
other rights any Person may have hereunder or under applicable law, the
Collection Agent hereby indemnifies and holds harmless the Administrative Agent,
each Lender Agent and each Lender and their respective officers, directors,
agents and employees (each an "Indemnified Party") from and against any and all
damages, losses, claims, liabilities, penalties, Taxes, costs and expenses
(including attorneys' fees and court costs) (all of the foregoing collectively,
the "Indemnified Losses") at any time imposed on or incurred by any Indemnified
Party arising out of or otherwise relating to:
(i) any written representation or warranty made by the
Collection Agent (or any employee or agent of the Collection Agent) in
this Agreement, any other Transaction Document, any Periodic Report,
any Daily Report or any other information or report delivered by the
Collection Agent pursuant hereto, which shall have been false or
incorrect in any material respect when made;
(ii) the failure by the Collection Agent to comply with any
applicable law, rule or regulation related to any Receivable, or the
nonconformity of any Receivable with any such applicable law, rule or
regulation;
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(iii) any loss of a perfected security interest (or in the
priority of such security interest) as a result of any commingling by
the Collection Agent of funds to which the Administrative Agent, any
Lender Agent or any Lender is entitled hereunder with any other funds;
or
(iv) any failure of the Collection Agent, to perform its
duties or obligations in accordance with the provisions of this
Agreement or any other Transaction Document to which the Collection
Agent is a party;
whether arising by reason of the acts to be performed by the Collection Agent
hereunder or otherwise, excluding only Indemnified Losses to the extent (a) such
Indemnified Losses resulted solely from the gross negligence or willful
misconduct of the Indemnified Party seeking indemnification, (b) solely due to
the credit risk of the Obligor and for which reimbursement would constitute
recourse to the Collection Agent for uncollectible Receivables, (c) such
Indemnified Losses include Taxes on, or measured by, the overall net income of
the Administrative Agent, any Lender Agent or any Lender computed in accordance
with the Intended Tax Characterization, or (d) any Originator is the plaintiff
and the Indemnified Party is the defendant unless such Indemnified Party
prevails in such legal action; provided, however, that nothing contained in this
sentence shall limit the liability of the Collection Agent or limit the recourse
of the Administrative Agent, any Lender Agent and each Lender to the Collection
Agent for any amounts otherwise specifically provided to be paid by the
Collection Agent hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties. The Borrower represents
and warrants to the Administrative Agent, each Lender Agent and each Lender
that:
(a) Corporate Existence and Power. Each of the Borrower and
each Originator is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation and has
all corporate power and authority and all governmental licenses,
authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted,
except where failure to obtain such license, authorization, consent or
approval would not have a material adverse effect on (i) its ability to
perform its obligations under, or the enforceability of, any
Transaction Document, (ii) its business or financial condition, (iii)
the interests of the Administrative Agent, any Lender Agent or any
Lender under any Transaction Document or (iv) the enforceability or
collectibility of any Receivable.
(b) Corporate Authorization and No Contravention. The
execution, delivery and performance by each of the Borrower and each
Originator of each Transaction Document to which it is a party (i) are
within its corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) do not contravene or constitute a
default under (A) any applicable law, rule or regulation, (B) its or
any Subsidiary's charter or by-laws or (C) any material agreement,
order or other instrument to which it or any
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Subsidiary is a party or its property is subject and (iv) will not
result in any Adverse Claim on any Receivable or Collection or give
cause for the acceleration of any indebtedness of the Borrower, any
Originator or any Subsidiary.
(c) No Consent Required. No approval, authorization or other
action by, or filings with, any Governmental Authority or other Person
is required in connection with the execution, delivery and performance
by the Borrower or any Originator of any Transaction Document or any
transaction contemplated thereby.
(d) Binding Effect. Each Transaction Document to which the
Borrower or any Originator is a party constitutes the legal, valid and
binding obligation of such Person enforceable against that Person in
accordance with its terms, except as limited by bankruptcy, insolvency,
or other similar laws of general application relating to or affecting
the enforcement of creditors' rights generally and subject to general
principles of equity.
(e) Perfection of Ownership Interest. Immediately preceding
its sale of Receivables to the Borrower, each Originator was the owner
of, and effectively sold, such Receivables to the Borrower, free and
clear of any Adverse Claim. The Borrower owns the Receivables free of
any Adverse Claim other than the interests of the Lenders (through the
Administrative Agent) therein that are created hereby, and each Lender
shall at all times have a valid undivided percentage ownership
interest, which shall be a first priority perfected security interest
for purposes of Article 9 of the applicable Uniform Commercial Code, in
the Receivables and Collections.
(f) Accuracy of Information. All information furnished by the
Borrower, each Originator or any Affiliate of any such Person to the
Administrative Agent, any Lender Agent or any Lender in connection with
any Transaction Document, or any transaction contemplated thereby, is
true and accurate in all material respects (and is not incomplete by
omitting any information necessary to prevent such information from
being materially misleading).
(g) No Actions, Suits. Except as set forth in Exhibit I,
there are no actions, suits or other proceedings (including matters
relating to environmental liability) pending or threatened against or
affecting the Borrower, any Originator or any Subsidiary, or any of
their respective properties, that (i) could reasonably be expected to
have a material adverse effect on the financial condition of the
Borrower, the Originators and the Subsidiaries taken as a whole or on
the collectibility of the Receivables or (ii) involve any Transaction
Document or any transaction contemplated thereby. None of the Borrower,
any Originator or any Subsidiary is in default of any contractual
obligation or in violation of any order, rule or regulation of any
Governmental Authority, which default or violation may have a material
adverse effect upon (i) the financial condition of the Borrower, any
Originator and the Subsidiaries taken as a whole or (ii) the
collectibility of the Receivables.
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(h) No Material Adverse Change. Since November 30, 1998 there
has been no material adverse change in the collectibility of the
Receivables or the Borrower's, any Originator's or any Subsidiary's (i)
financial condition, business, operations or prospects or (ii) ability
to perform its obligations under any Transaction Document.
(i) Accuracy of Exhibits; Lock-Box Arrangements. All
information on Exhibits C-E (listing offices and names of the Borrower
and each Originator and where they maintain Records; the Subsidiaries;
and Lock Boxes) is true and complete, subject to any changes permitted
by, and notified to the Administrative Agent in accordance with,
Article V. The Borrower has delivered a copy of all Lock-Box Agreements
to the Administrative Agent. The Borrower has not granted any interest
in any Lock-Box or Lock-Box Account to any Person other than the
Administrative Agent and, upon delivery to a Lock-Box Bank of the
related Lock-Box Letter, the Administrative Agent will have exclusive
ownership and control of the Lock-Box Account at such Lock-Box Bank.
(j) Sales by the Originator. Each sale by each Originator to
the Borrower of an interest in Receivables and their Collections has
been made in accordance with the terms of the applicable Purchase
Agreement, including the payment by the Borrower to the applicable
Originator of the purchase price described in the applicable Purchase
Agreement. Each such sale has been made for "reasonably equivalent
value" (as such term is used in Section 548 of the Bankruptcy Code) and
not for or on account of "antecedent debt" (as such term is used in
Section 547 of the Bankruptcy Code) owed by any Originator to the
Borrower.
(k) Year 2000 Problem. Each of the Borrower and each
Subsidiary has reviewed the areas within its business and operations
which could be adversely affected by, and have developed or are
developing a program to address on a timely basis, the "Year 2000
Problem" (that is, the risk that computer applications used by such
Person and its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and
any date on or after December 31, 1999), and have made related
appropriate inquiry of material suppliers and vendors. Based on such
review and program, such Person believes that the "Year 2000 Problem"
will not have a material adverse effect on the Borrower and the
Subsidiaries taken as a whole.
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Borrower. The Borrower hereby covenants
and agrees to comply with the following covenants and agreements, unless the
Administrative Agent (with the consent of the Instructing Group) shall otherwise
consent:
(a) Financial Reporting. The Borrower will, and will cause each
Originator and each Subsidiary to, maintain a system of accounting established
and administered in accordance with GAAP and will furnish to the Administrative
Agent and each Lender Agent:
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(i) Annual Financial Statements. Within 90 days after each
fiscal year of (A) the Parent, copies of its annual audited financial
statements (including a consolidated balance sheet, consolidated
statement of income and retained earnings and statement of cash flows,
with related footnotes) certified by independent certified public
accountants satisfactory to the Administrative Agent and prepared on a
consolidated basis in conformity with GAAP, and (B) each of the
Borrower and each Originator the annual balance sheet for such Person
(and, additionally for the Borrower, an annual profit and loss
statement) certified by a Designated Financial Officer thereof, in each
case prepared on a consolidated basis in conformity with GAAP as of the
close of such fiscal year for the year then ended;
(ii) Quarterly Financial Statements. Within 45 days after each
(except the last) fiscal quarter of each fiscal year of (A) the Parent,
copies of its unaudited financial statements (including at least a
consolidated balance sheet as of the close of such quarter and
statements of earnings and sources and applications of funds for the
period from the beginning of the fiscal year to the close of such
quarter) certified by a Designated Financial Officer and prepared in a
manner consistent with the financial statements described in part (A)
of clause (i) of this Section 5.l(a) and (B) each of the Borrower and
each Originator, the quarterly balance sheet for such Person (and,
additionally for the Borrower, a profit and loss statement) for the
period from the beginning of such fiscal year to the close of such
quarter, in each case certified by a Designated Financial Officer
thereof and prepared in a manner consistent with part (B) of clause (i)
of Section 5.1(a);
(iii) Officer's Certificate. Each time financial statements are
furnished pursuant to clause (i) or (ii) of Section 5.1(a), a
compliance certificate (in substantially the form of Exhibit G signed
by a Designated Financial Officer, dated the date of such financial
statements, and containing a computation of each of the financial
ratios and restrictions contained herein;
(iv) Public Reports. Promptly upon becoming available, a copy
of each report or proxy statement filed by the Parent with the
Securities Exchange Commission or any securities exchange; and
(v) Other Information. With reasonable promptness, such other
information (including non-financial information) as may be reasonably
requested by the Administrative Agent, any Lender Agent or any Lender
(with a copy of such request to the Administrative Agent).
(b) Notices. Immediately upon becoming aware of any of the following
the Borrower will notify the Administrative Agent and such Lender Agent and
provide a description of:
(i) Potential Termination Events. The occurrence of any
Potential Termination Event;
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(ii) Representations and Warranties. The failure of any
representation or warranty herein to be true (when made or at any time
thereafter) in any materially adverse respect;
(iii) Downgrading. The downgrading, withdrawal or suspension of
any rating by any rating agency of any indebtedness of any Obligor with
a Special Limit or Concentration Limit or of the Borrower;
(iv) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding reasonably likely to
be materially adverse to the Borrower, any Subsidiary or the
collectibility or quality of the Receivables;
(v) Judgments. The entry of any final, non-appealable
judgment or decree against the Borrower, any Originator or any
Subsidiary if the aggregate amount of all judgments then outstanding
against the Borrower, any Originator and the Subsidiaries exceeds
$5,000,000, and all such judgments or decrees shall not have been
satisfied, stayed, annulled or rescinded within 60 days from the entry
thereof; or
(vi) Changes in Business. Any change in, or proposed change
in, the character of the Borrower's or any Originator's business that
could impair the collectibility or quality of any Receivable.
(c) Conduct of Business. The Borrower will perform, and will cause each
Originator and Subsidiary to perform, all actions necessary to remain duly
incorporated, validly existing and in good standing in its jurisdiction of
incorporation and to maintain all requisite authority to conduct its business in
each jurisdiction in which it conducts business.
(d) Compliance with Laws. The Borrower will comply, and will cause each
Originator and Subsidiary to comply, with all material laws, regulations,
judgments and other directions or orders imposed by any Governmental Authority
to which such Person or any Receivable or Collection may be subject.
(e) Furnishing Information and Inspection of Records. The Borrower will
furnish to the Administrative Agent, each Lender Agent and the Lenders such
information concerning the Receivables as the Administrative Agent, each Lender
Agent or a Lender may request. The Borrower will, and will cause each Originator
to, permit, at any time during regular business hours, the Administrative Agent,
any Lender Agent or any Lender (or any representatives thereof) (i) to examine
and make copies of all Records, (ii) to visit the offices and properties of the
Borrower for the purpose of examining the Records and (iii) to discuss matters
relating hereto with any of the Borrower's or any Originator's officers,
directors, employees or independent public accountants having knowledge of such
matters. Once a year, the Administrative Agent or any Lender Agent may (at the
expense of the Borrower) have an independent public accounting firm conduct an
audit of the Records or make test verifications of the Receivables and
Collections.
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(f) Keeping Records. (i) The Borrower will, and will cause each
Originator to, have and maintain (A) administrative and operating procedures
(including an ability to recreate Records if originals are destroyed), (B)
adequate facilities, personnel and equipment and (C) all Records and other
information necessary or advisable for collecting the Receivables (including
Records adequate to permit the immediate identification of each Obligor, each
new Receivable and all Collections of, and adjustments to, each existing
Receivable). The Borrower will give the Administrative Agent prior notice of any
material change in such administrative and operating procedures.
(ii) The Borrower will, (A) at all times from and after the
date hereof, clearly and conspicuously mark its computer and master
data processing books and records with a legend describing the
Administrative Agent's and the Lenders' interest therein and (B) upon
the request of the Administrative Agent, so mark each contract relating
to a Receivable and deliver to the Administrative Agent all such
contracts (including all multiple originals of such contracts), with
any appropriate endorsement or assignment, or segregate (from all other
receivables then owned or being serviced by the Borrower) the
Receivables and all contracts relating to each Receivable and hold in
trust and safely keep such contracts so legended in separate filing
cabinets or other suitable containers at such locations as the
Administrative Agent may specify.
(g) Perfection. (i) The Borrower will, and will cause each Originator
to, at its expense, promptly execute and deliver all instruments and documents
and take all action necessary or reasonably requested by the Administrative
Agent (including the execution and filing of financing or continuation
statements, amendments thereto or assignments thereof) to enable the
Administrative Agent to exercise and enforce all its rights hereunder and to
vest and maintain vested in the Administrative Agent a valid, first priority
perfected security interest in the Receivables, the Collections, each Purchase
Agreement, and proceeds thereof free and clear of any Adverse Claim. The
Administrative Agent will be permitted to sign and file any continuation
statements, amendments thereto and assignments thereof without the Borrower's
signature.
(ii) The Borrower will, and will cause each Originator to,
only change its name, identity or corporate structure or relocate its
chief executive office or the Records following thirty (30) days
advance notice to the Administrative Agent and the delivery to the
Administrative Agent of all financing statements, instruments and other
documents (including direction letters) requested by the Administrative
Agent.
(iii) The Borrower and each Originator will at all times
maintain its chief executive offices within a jurisdiction in the U.S.
(other than in the states of Florida, Maryland and Tennessee) in which
Article 9 of the UCC is in effect. If the Borrower or any Originator
moves its chief executive office to a location that imposes Taxes, fees
or other charges to perfect the Administrative Agent's and the Lenders'
interests hereunder or the Borrower's interests under each Purchase
Agreement, the Borrower will pay all such amounts and any other costs
and expenses incurred in order to maintain the enforceability of the
Transaction Documents, and the interests of the Administrative Agent,
the Lender Agents and the Lenders in the Receivables and Collections.
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(h) Performance of Duties. The Borrower will perform, and will cause
each Originator and Subsidiary and the Collection Agent (if an Affiliate) to
perform, its respective duties or obligations in accordance with the provisions
of each of the Transaction Documents. The Borrower (at its expense) will, and
will cause each Originator to, (i) fully and timely perform in all material
respects all agreements required to be observed by it in connection with each
Receivable, (ii) comply in all material respects with the Credit and Collection
Policies, and (iii) refrain from any action that may impair the rights of the
Administrative Agent, the Lender Agents or the Lenders in the Receivables or
Collections.
(i) Payments on Receivables, Accounts. The Borrower will, and will
cause each Originator to, at all times instruct all Obligors to deliver payments
on the Receivables to a Lock-Box Account. If any such payments or other
Collections are received by the Borrower or any Originator, it shall hold such
payments in trust for the benefit of the Administrative Agent, the Lender Agents
and the Lenders and promptly (but in any event within two Business Days after
receipt) remit such funds into a Lock-Box Account. The Borrower will cause each
Lock-Box Bank to comply with the terms of each applicable Lock-Box Letter. The
Borrower will not permit the funds of any Affiliate to be deposited into any
Lock-Box Account. If such funds are nevertheless deposited into any Lock-Box
Account, the Borrower will promptly identify such funds for segregation. The
Borrower will not, and will not permit any Collection Agent or other Person to,
commingle Collections or other funds to which the Administrative Agent, any
Lender Agent or any Lender is entitled with any other funds. The Borrower shall
only add, and shall only permit each Originator to add, a Lock-Box Bank,
Lock-Box, or Lock-Box Account to those listed on Exhibit E if the Administrative
Agent has received notice of such addition, a copy of any new Lock-Box Agreement
and an executed and acknowledged copy of a Lock-Box Letter substantially in the
form of Exhibit F (with such changes as are acceptable to the Administrative
Agent) from any new Lock-Box Bank. The Borrower shall only terminate a Lock-Box
Bank or Lock-Box, or close a Lock-Box Account, upon 30 days advance notice to
the Administrative Agent.
(j) Sales and Adverse Claims Relating to Receivables. Except with
respect to Permitted Liens, the Borrower will not, and will not permit any
Originator to, (by operation of law or otherwise) dispose of or otherwise
transfer, or create or suffer to exist any Adverse Claim upon, any inventory or
goods (other than in the ordinary course of business) the sale of which may give
rise to a Receivable or any proceeds thereof.
(k) Change in Business or Credit and Collection Policies. The Borrower
will not, and will not permit any Originator to, make any material change in the
character of its business or in its Credit and Collection Policies.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnities by the Borrower. Without limiting any other
rights any such Person may have hereunder or under applicable law, the Borrower
hereby indemnifies and holds harmless, the Administrative Agent, each Lender
Agent and each Lender and their respective officers, directors, agents and
employees (each an "Indemnified Party") from and against any
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and all damages, losses, claims, liabilities, penalties, Taxes, costs and
expenses (including attorneys' fees and court costs) (all of the foregoing
collectively, the "Indemnified Losses") at any time imposed on or incurred by
any Indemnified Party arising out of or otherwise relating to any Transaction
Document, the transactions contemplated thereby or the acquisition of any
portion of the Secured Interest, or any action taken or omitted by any of the
Indemnified Parties (including any action taken by the Administrative Agent as
attorney-in-fact for the Borrower pursuant to Section 3.5(b)), whether arising
by reason of the acts to be performed by the Borrower hereunder or otherwise,
excluding only Indemnified Losses to the extent (a) a final judgment of a court
of competent jurisdiction holds such Indemnified Losses resulted solely from
gross negligence or willful misconduct of the Indemnified Party seeking
indemnification, (b) solely due to the credit risk of the Obligor and for which
reimbursement would constitute recourse to the Borrower or the Collection Agent
for uncollectible Receivables or (c) such Indemnified Losses include Taxes on,
or measured by, the overall net income of the Administrative Agent, any Lender
Agent or any Lender computed in accordance with the Intended Tax
Characterization; provided, however, that nothing contained in this sentence
shall limit the liability of the Borrower or the Collection Agent or limit the
recourse of the Administrative Agent, each Lender Agent and each Lender to the
Borrower or the Collection Agent for any amounts otherwise specifically provided
to be paid by the Borrower or the Collection Agent hereunder. Without limiting
the foregoing indemnification, but subject to the limitations set forth in
clauses (a), (b) and (c) of the previous sentence, the Borrower shall indemnify
each Indemnified Party for Indemnified Losses (including losses in respect of
uncollectible Receivables, regardless for these specific matters whether
reimbursement therefor would constitute recourse to the Borrower or the
Collection Agent) relating to or resulting from:
(i) any representation or warranty made by the Borrower, each
Originator or the Collection Agent (or any employee or agent of the
Borrower, each Originator or the Collection Agent) under or in
connection with this Agreement, any Periodic Report, any Daily Report
or any other information or report delivered by the Borrower, each
Originator or the Collection Agent pursuant hereto, which shall have
been false or incorrect in any material respect when made or deemed
made;
(ii) the failure by the Borrower, any Originator, or the
Collection Agent to comply with any applicable law, rule or regulation
related to any Receivable, or the nonconformity of any Receivable with
any such applicable law, rule or regulation;
(iii) the failure of the Borrower to vest and maintain vested
in the Administrative Agent, for the benefit of the Lender Agents and
the Lenders, a perfected ownership or security interest in the Secured
Interest and the property conveyed pursuant to Section 1.1(e) and
Section 1.8, free and clear of any Adverse Claim;
(iv) any commingling of funds to which the Administrative
Agent, any Lender Agent or any Lender is entitled hereunder with any
other funds;
(v) any failure of a Lock-Box Bank to comply with the terms
of the applicable Lock-Box Letter;
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(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable, or any other claim resulting from the sale or lease
of goods or the rendering of services related to such Receivable or the
furnishing or failure to furnish any such goods or services or other
similar claim or defense not arising from the financial inability of
any Obligor to pay undisputed indebtedness;
(vii) any failure of the Borrower or each Originator, or any
Affiliate of any thereof, to perform its duties or obligations in
accordance with the provisions of this Agreement or any other
Transaction Document to which such Person is a party (as a Collection
Agent or otherwise);
(viii) any action taken by the Administrative Agent as
attorney-in-fact for the Borrower pursuant to Section 3.5(b); or
(ix) any environmental liability claim, products liability
claim or personal injury or property damage suit or other similar or
related claim or action of whatever sort, arising out of or in
connection with any Receivable or any other suit, claim or action of
whatever sort relating to any of the Transaction Documents.
Section 6.2. Increased Cost and Reduced Return. By way of
clarification, and not of limitation, of Section 6.1, if the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Funding
Source, the Administrative Agent, any Lender Agent or any Lender (collectively,
the "Funding Parties") with any request or directive (whether or not having the
force of law) of any such Governmental Authority (a "Regulatory Change") (a)
subjects any Funding Party to any charge or withholding on or in connection with
a Funding Agreement or this Agreement (collectively, the "Funding Documents") or
any Receivable, (b) changes the basis of taxation of payments to any of the
Funding Parties of any amounts payable under any of the Funding Documents
(except for changes in the rate of Tax on the overall net income of such Funding
Party), (c) imposes, modifies or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or any credit extended by, any of the
Funding Parties, (d) has the effect of reducing the rate of return on such
Funding Party's capital to a level below that which such Funding Party could
have achieved but for such adoption, change or compliance (taking into
consideration such Funding Party's policies concerning capital adequacy) or (e)
imposes any other condition, and the result of any of the foregoing is (x) to
impose a cost on, or increase the cost to, any Funding Party of its commitment
under any Funding Document or of purchasing, maintaining or funding any interest
acquired under any Funding Document, (y) to reduce the amount of any sum
received or receivable by, or to reduce the rate of return of, any Funding Party
under any Funding Document or (z) to require any payment calculated by reference
to the amount of interests held or amounts received by it hereunder, then, upon
demand by the Administrative Agent, the Borrower shall pay to the Administrative
Agent for the account of the Person such additional amounts as will compensate
such Person for such increased cost or reduction.
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Section 6.3. Other Costs and Expenses. Also by way of clarification,
and not of limitation, of Section 6.1, the Borrower shall pay to the
Administrative Agent on demand all costs and expenses in connection with (a) the
preparation, execution, delivery and administration (including amendments of any
provision) of the Transaction Documents, (b) the sale of the Secured Interest,
(c) the perfection of the Administrative Agent's rights in the Receivables and
Collections, (d) the enforcement by the Administrative Agent, any Lender Agent
or the Lenders of the obligations of the Borrower under the Transaction
Documents or of any Obligor under a Receivable and (e) the maintenance by the
Administrative Agent of the Lock-Boxes and Lock-Box Accounts, including fees,
costs and expenses of legal counsel for the Administrative Agent and each Lender
Agent relating to any of the foregoing or to advising the Administrative Agent,
any Lender Agent, any Lender and any Funding Source about its rights and
remedies under any Transaction Document or any related Funding Agreement and all
costs and expenses (including counsel fees and expenses) of the Administrative
Agent, each Lender Agent, each Lender and each Funding Source in connection with
the enforcement of the Transaction Documents or any Funding Agreement and in
connection with the administration of the Transaction Documents following a
Termination Event. The Borrower shall reimburse the Administrative Agent and
each Lender Agent for the cost of the Administrative Agent's or each Lender
Agent's auditors (which may be employees of such Person) auditing the books,
records and procedures of the Borrower. The Borrower shall reimburse each Lender
Agent and each Lender for any amounts such Lender Agent or Lender must pay to
any Funding Source pursuant to any Funding Agreement on account of any Tax. The
Borrower shall reimburse each Lender Agent on demand for all other costs and
expenses incurred by such Lender Agent or any shareholder of such Lender Agent
in connection with the Transaction Documents or the transactions contemplated
thereby, including the cost of auditing such Lender Agent's books by certified
public accountants, the cost of the Ratings and the fees and out-of-pocket
expenses of counsel of the Administrative Agent, each Lender Agent or any
shareholder, or administrator, of each Lender Agent for advice relating to such
Lender Agent's operation.
Section 6.4. Withholding Taxes. (a) All payments made by the Borrower
hereunder shall be made without withholding for or on account of any present or
future taxes (other than overall net income taxes on the recipient). If any such
withholding is so required, the Borrower shall make the withholding, pay the
amount withheld to the appropriate authority before penalties attach thereto or
interest accrues thereon and pay such additional amount as may be necessary to
ensure that the net amount actually received by each Lender, Lender Agent and
the Administrative Agent free and clear of such taxes (including such taxes on
such additional amount) is equal to the amount that any Lender, any Lender Agent
or the Administrative Agent (as the case may be) would have received had such
withholding not been made. If the Administrative Agent, any Lender Agent or any
Lender pays any such taxes, penalties or interest the Borrower shall reimburse
the Administrative Agent, such Lender Agent or such Lender for that payment on
demand. If the Borrower pays any such taxes, penalties or interest, it shall
deliver official tax receipts evidencing that payment or certified copies
thereof to the Lender, Lender Agent or Administrative Agent on whose account
such withholding was made (with a copy to the Administrative Agent if not the
recipient of the original) on or before the thirtieth day after payment.
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(b) Before the first date on which any amount is payable hereunder for
the account of any Lender not incorporated under the laws of the U.S. such
Lender shall deliver to the Borrower and the Administrative Agent each two (2)
duly completed copies of United States Internal Revenue Service Form 1001 or
4224 (or successor applicable form) certifying that such Lender is entitled to
receive payments hereunder without deduction or withholding of any United States
federal income taxes. Each such Lender shall replace or update such forms when
necessary to maintain any applicable exemption and as requested by the
Administrative Agent or the Borrower.
Section 6.5. Payments and Allocations. If any Person seeks compensation
pursuant to this Article VI, such Person shall deliver to the Borrower and the
Administrative Agent a certificate setting forth the amount due to such Person,
a description of the circumstance giving rise thereto and the basis of the
calculations of such amount, which certificate shall be conclusive absent
manifest error. The Borrower shall pay to the Administrative Agent (for the
account of such Person) the amount shown as due on any such certificate within
10 Business Days after receipt of the notice.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to Closing. This Agreement shall become
effective on the first date all conditions in this Section 7.1 are satisfied. On
or before such date, the Borrower shall deliver to the Administrative Agent and
each Lender Agent the following documents in form, substance and quantity
acceptable to the Administrative Agent and Lender Agent, as applicable:
(a) A certificate of the Secretary of each of the Borrower,
the Parent and each Originator certifying (i) the resolutions of the
Borrower's, the Parent's and each Originator's board of directors
approving each Transaction Document to which it is a party, (ii) the
name, signature, and authority of each officer who executes on the
Borrower's, the Parent's or each Originator's behalf a Transaction
Document (on which certificate the Administrative Agent, each Lender
Agent and each Lender may conclusively rely until a revised certificate
is received), (iii) the Borrower's, the Parent's and each Originator's
certificate or articles of incorporation certified by the Secretary of
State of its state of incorporation, (iv) a copy of the Borrower's, the
Parent's and each Originator's by-laws and (v) good standing
certificates issued by the Secretaries of State of each jurisdiction
where the Borrower, the Parent and each Originator has material
operations.
(b) All instruments and other documents required, or deemed
reasonably necessary by the Administrative Agent, to perfect the
Administrative Agent's first priority interest in the Receivables and
Collections in all appropriate jurisdictions.
(c) UCC search reports from all jurisdictions the
Administrative Agent or any Lender Agent reasonably requests.
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(d) Executed copies of (i) all consents and authorizations
necessary in connection with the Transaction Documents (ii) direction
letters executed by the Borrower and each Originator authorizing the
Administrative Agent to inspect and make copies from the Borrower's and
each Originator's books and records maintained at any off-site data
processing or storage facilities, (iii) all Lock-Box Letters, (iv) a
compliance certificate in the form of Exhibit G covering the period
ending April 30, 1999, (v) a Periodic Report covering the month ended
April 30, 1999 and (vi) each Transaction Document.
(e) Favorable opinions of counsel to the Borrower, the Parent
and each Originator (and, if requested by any Lender Agent and then at
the expense of the Borrower) covering such matters as any Lender Agent
or the Administrative Agent may reasonably request.
Section 7.2. Conditions to Each Loan. The obligation of each Committed
Conduit Lender and each Related Bank Lender to make any Loan and the right of
the Borrower to request or accept any such Loan, are subject to the conditions
(and each such Loan shall evidence the Borrower's representation and warranty
that clauses (a)-(f) of this Section 7.2 have been satisfied) that on the date
of such Loan before and after giving effect to such Loan:
(a) no Potential Termination Event shall then exist or shall
occur as a result of such Loan;
(b) the Termination Date has not occurred;
(c) after giving effect to the application of the proceeds of
such Loan, the outstanding Aggregate Loan Amount would not exceed the
Loan Limit and the Secured Interest will not exceed 100%;
(d) the representations and warranties in Section 4.1 are true
and correct in all material respects on and as of such date (except to
the extent such representations and warranties relate solely to an
earlier date and then as of such earlier date);
(e) each of the Borrower and each Originator is in full
compliance with the Transaction Documents (including all covenants and
agreements in Article V); and
(f) all legal matters related to such Loan are reasonably
satisfactory to the applicable Lenders.
Nothing in this Section 7.2 limits the obligations of each Liquidity Bank and
Enhancement Bank to its related Conduit Lender.
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ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.1. Appointment and Authorization. (a) Each Lender and Lender
Agent hereby irrevocably designates and appoints ABN AMRO Bank N.V. as the
"Administrative Agent" hereunder and authorizes the Administrative Agent to take
such actions and to exercise such powers as are delegated to the Administrative
Agent hereby and to exercise such other powers as are reasonably incidental
thereto. The Administrative Agent shall hold, in its name, for the benefit of
each Lender, the Loan Interest of the Lender. The Administrative Agent shall not
have any duties other than those expressly set forth herein or any fiduciary
relationship with any Lender or Lender Agent, and no implied obligations or
liabilities shall be read into this Agreement, or otherwise exist, against the
Administrative Agent. The Administrative Agent does not assume, nor shall it be
deemed to have assumed, any obligation to, or relationship of trust or agency
with, the Borrower. Notwithstanding any provision of this Agreement or any other
Transaction Document, in no event shall the Administrative Agent ever be
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to the provision of any Transaction Document or
applicable law.
(b) Each Lender (other than Amsterdam and its Related Bank Lenders)
hereby irrevocably designates and appoints the respective institution identified
in the related Transfer Supplement as its Lender Agent hereunder and Amsterdam
and its Related Bank Lenders designate ABN AMRO as its Lender Agent hereunder,
and each authorizes such Lender Agent to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to such Lender Agent by the terms of this
Agreement, if any, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Lender Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Lender
or other Lender Agent or the Administrative Agent, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of
such Lender Agent shall be read into this Agreement or otherwise exist against
such Lender Agent.
(c) Except as otherwise specifically provided in this Agreement, the
provisions of this Article VIII are solely for the benefit of the Lender Agents,
the Administrative Agent and the Lenders, and none of the Borrower or Servicer
shall have any rights as a third-party beneficiary or otherwise under any of the
provisions of this Article VIII, except that this Article VIII shall not affect
any obligations which any Lender Agent, the Administrative Agent or the Lender
may have to the Borrower or the Servicer under the other provisions of this
Agreement. Furthermore, no Lender shall have any rights as a third-party
beneficiary or otherwise under any of the provisions hereof in respect of a
Lender Agent which is not the Lender Agent for such Lender.
(d) In performing its functions and duties hereunder, the
Administrative Agent shall act solely as the agent of the Lenders and the Lender
Agents and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Borrower or Collection Agent or
any of their successors and assigns. In performing its functions and duties
hereunder, each Lender Agent shall act solely as the agent of its respective
Lender and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or
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agency with or for the Borrower, the Servicer, any other Lender, any other
Lender Agent or the Administrative Agent, or any of their respective successors
and assigns.
Section 8.2. Delegation of Duties. The Administrative Agent may execute
any of its duties through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
Section 8.3. Exculpatory Provisions. None of the Lender Agents, the
Administrative Agent or any of their directors, officers, agents or employees
shall be liable for any action taken or omitted (i) with the consent or at the
direction of the Instructing Group or any Lender Agent, as applicable (ii) in
the absence of such Person's gross negligence or willful misconduct. The
Administrative Agent shall not be responsible to any Lender, Lender Agent or
other Person for (i) any recitals, representations, warranties or other
statements made by the Borrower, any Originator or any of their Affiliates, (ii)
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of any Transaction Document, (iii) any failure of the Borrower, any Originator
or any of their Affiliates to perform any obligation or (iv) the satisfaction of
any condition specified in Article VII. The Administrative Agent shall not have
any obligation to any Lender or Lender Agent to ascertain or inquire about the
observance or performance of any agreement contained in any Transaction Document
or to inspect the properties, books or records of the Borrower, any Originator
or any of their Affiliates.
Section 8.4. Reliance by Agents. Each Lender Agent and the
Administrative Agent shall in all cases be entitled to rely, and shall be fully
protected in relying, upon any document, other writing or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Administrative Agent. Each Lender Agent and the Administrative Agent shall in
all cases be fully justified in failing or refusing to take any action under any
Transaction Document unless it shall first receive such advice or concurrence of
the Lenders, and assurance of its indemnification, as it deems appropriate.
(b) The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement in accordance with a
request of the Lenders or the Lender Agents, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all Lenders, the
Administrative Agent and Lender Agents.
(c) Each Lender Agent (with the consent of the Administrative Agent)
shall determine with its Lender Groups the number of such Lenders (each, a
"Voting Block"), which shall be required to request or direct such Lender Agent
to take action, or refrain from taking action, under this Agreement on behalf of
such Lenders. Such Lender Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement in accordance with a request
of its appropriate Voting Block, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of such Lender Agent's
Lenders.
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(d) Unless otherwise advised in writing by a Lender Agent or by any
Lender on whose behalf such Lender Agent is purportedly acting, each party to
this Agreement may assume that (i) such Lender Agent is acting for the benefit
of each of the Lenders in respect of which such Lender Agent is identified as
being the "Lender Agent" in the definition of "Lender Agent" hereto, as well as
for the benefit of each assignee or other transferee from any such Person, and
(ii) each action taken by such Lender Agent has been duly authorized and
approved by all necessary action on the part of the Lenders on whose behalf it
is purportedly acting. Each initial Lender (or, with the consent of all other
Lenders then existing, any other Lenders) shall have the right to designate a
new Lender Agent (which may be itself) to act on its behalf and on behalf of its
assignees and transferees for purposes of this Agreement by giving to the
Administrative Agent written notice thereof signed by such Lender(s) and the
newly designated Lender Agent. Such notice shall be effective when receipt
thereof is acknowledged by the Administrative Agent, which acknowledgment the
Administrative Agent shall not unreasonably delay giving, and thereafter the
party named as such therein shall be Lender Agent for such Lender under this
Agreement. Each Lender Agent and its Lender(s) shall agree amongst themselves as
to the circumstances and procedures for removal and resignation of such Lender
Agent.
Section 8.5. Assumed Payments. Unless the Administrative Agent shall
have received notice from the applicable Lender Agent before the date of any
Incremental Loan that the applicable Lender Group will not make available to the
Administrative Agent the amount it is scheduled to remit as part of such
Incremental Loan, the Administrative Agent may assume such Lender Group has made
such amount available to the Administrative Agent when due (an "Assumed
Payment") and, in reliance upon such assumption, the Administrative Agent may
(but shall have no obligation to) make available such amount to the appropriate
Person. If and to the extent that any Lender Group shall not have made its
Assumed Payment available to the Administrative Agent, such Lender Group (and
the Borrower in the case of any Incremental Loan) hereby agrees to pay the
Administrative Agent forthwith on demand such unpaid portion of such Assumed
Payment up to the amount of funds actually paid by the Administrative Agent,
together with interest thereon for each day from the date of such payment by the
Administrative Agent until the date the requisite amount is repaid to the
Administrative Agent, at a rate per annum equal to the Federal Funds Rate plus
2%.
Section 8.6. Notice of Termination Events. Neither any Lender Agent nor
the Administrative Agent shall be deemed to have knowledge or notice of the
occurrence of any Potential Termination Event unless such Agent has received
notice from any Lender, Lender Agent or the Borrower stating that a Potential
Termination Event has occurred hereunder and describing such Potential
Termination Event. In the event that the Administrative Agent receives such a
notice, it shall promptly give notice thereof to each Lender Agent whereupon
each Lender Agent shall promptly give notice thereof to its Lenders, Enhancement
Banks and Liquidity Banks. In the event that a Lender Agent receives such a
notice (other than from the Administrative Agent), it shall promptly give notice
thereof to the Administrative Agent and each of its affiliated Enhancement Banks
and Liquidity Banks. The Administrative Agent shall take such action concerning
a Potential Termination Event as may be directed by the Instructing Group (or in
the case where there are only two Lender Groups and neither Lender Group has a
majority of the Commitments, either Lender Agent except if the proposed action
is a waiver of the consequences of the Potential Termination Event, in which
case such waiver shall require the
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consent of the Instructing Group) (or, if otherwise required for such action,
all of the Lenders), but until the Administrative Agent receives such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, as the Administrative Agent
deems advisable and in the best interests of the Lenders and Lender Agents.
Section 8.7. Non-Reliance on Administrative Agent, Lender Agents and
Other Lenders. Each Lender expressly acknowledges that none of the
Administrative Agent, Lender Agents nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Administrative Agent, or Lender Agent
hereafter taken, including any review of the affairs of the Borrower or any
Originator, shall be deemed to constitute any representation or warranty by the
Administrative Agent or Lender Agent, as applicable. Each Lender represents and
warrants to the Administrative Agent and the Lender Agents that, independently
and without reliance upon the Administrative Agent, Lender Agents or any other
Lender and based on such documents and information as it has deemed appropriate,
it has made and will continue to make its own appraisal of and investigation
into the business, operations, property, prospects, financial and other
conditions and creditworthiness of the Borrower, any Originator, and the
Receivables and its own decision to enter into this Agreement and to take, or
omit, action under any Transaction Document. The Administrative Agent shall
deliver each month to any Lender Agent that so requests a copy of the Periodic
Report(s) received covering the preceding calendar month. Except for items
specifically required to be delivered hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender Agent with any
information concerning the Borrower, any Originator or any of their Affiliates
that comes into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
Section 8.8. Agents and Affiliates. Each of the Lenders and the
Administrative Agent and their Affiliates may extend credit to, accept deposits
from and generally engage in any kind of banking, trust, debt, entity or other
business with the Borrower, each Originator or any of their Affiliates and ABN
AMRO may exercise or refrain from exercising its rights and powers as if it were
not the Administrative Agent. With respect to the acquisition of the Eligible
Receivables pursuant to this Agreement, each of the Lender Agents and the
Administrative Agents shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not such an agent, and
the terms "Lender" and "Lenders" shall include each of the Lender Agents and the
Administrative Agent in their individual capacities.
Section 8.9. Indemnification. Each Lender Group shall indemnify and
hold harmless the Administrative Agent and its officers, directors, employees,
representatives and agents (to the extent not reimbursed by the Borrower or any
Originator and without limiting the obligation of the Borrower or any Originator
to do so), ratably in accordance with its Ratable Share from and against any and
all liabilities, obligations, losses, damages, penalties, judgments,
settlements, costs, expenses and disbursements of any kind whatsoever (including
in connection with any investigative or threatened proceeding, whether or not
the Administrative Agent or such Person shall be designated a party thereto)
that may at any time be imposed on, incurred by or asserted against the
Administrative Agent or such Person as a result of, or related to, any of the
transactions contemplated by the Transaction Documents or the execution,
delivery or
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performance of the Transaction Documents or any other document furnished in
connection therewith (but excluding any such liabilities, obligations, losses,
damages, penalties, judgments, settlements, costs, expenses or disbursements
resulting solely from the gross negligence or willful misconduct of the
Administrative Agent or such Person as finally determined by a court of
competent jurisdiction).
Section 8.10. Successor Administrative Agent. The Administrative Agent
may, upon at least five (5) days notice to the Borrower and each Lender and
Lender Agent, resign as Administrative Agent. Such resignation shall not become
effective until a successor agent is appointed by the Instructing Group and has
accepted such appointment. Upon such acceptance of its appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall succeed to and become vested with all the
rights and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Transaction Documents. After any retiring Administrative Agent's resignation
hereunder, the provisions of Article VI and this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Termination. Each Lender shall cease to be a party hereto
when the Termination Date has occurred, each Lender holds no Loan Amount and all
amounts payable to it hereunder have been paid in full. This Agreement shall
terminate following the Related Bank Lender Termination Date when no Loan Amount
is held by a Lender and all other amounts payable hereunder have been paid in
full, but the rights and remedies of the Administrative Agent, each Lender Agent
and each Lender concerning any representation, warranty or covenant made, or
deemed to be made, by the Borrower and under Article VI and Section 8.9 shall
survive such termination.
Section 9.2. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof, in the Transfer
Supplement or at such other address or telecopy number as such Person may
specify, and effective when received at the address specified by such Person.
Each party hereto, however, authorizes the Administrative Agent to act on
telephone notices of Loans from any person the Administrative Agent in good
faith believes to be acting on behalf of the relevant party and, at the
Administrative Agent's option, to tape record any such telephone conversation.
Each party hereto agrees to deliver promptly to the Administrative Agent a
confirmation of each telephone notice given or received by such party (signed by
an authorized officer of such party), but the absence of such confirmation shall
not affect the validity of the telephone notice. The Administrative Agent's
records of all such conversations shall be deemed correct and, if the
confirmation of a conversation differs in any material respect from the action
taken by the Administrative Agent, the records of the Administrative Agent shall
govern absent manifest error. The number of days for any advance notice required
hereunder may be waived (orally or in writing) by the Person receiving such
notice and, in the case of notices to the Administrative
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Agent, the consent of each Person to which the Administrative Agent is required
to forward such notice.
Section 9.3. Payments and Computations. Notwithstanding anything herein
to the contrary, any amounts to be paid or transferred by the Borrower or the
Collection Agent to, or for the benefit of, any Lender or any other Person shall
be paid or transferred to the appropriate Lender Agent. All amounts to be paid
or deposited hereunder shall be paid or transferred on the day when due in
immediately available Dollars (and, if due from the Borrower or Collection
Agent, by 11:00 a.m. (Chicago time), with amounts received after such time being
deemed paid on the Business Day following such receipt). The Borrower hereby
authorizes the Administrative Agent to debit the Borrower Account for
application to any amounts owed by the Borrower hereunder. The Borrower shall,
to the extent permitted by law, pay to each Lender Agent upon demand, for the
account of the applicable Person, interest on all amounts not paid or
transferred by the Borrower or the Collection Agent when due hereunder at a rate
equal to the Prime Rate plus 2%, calculated from the date any such amount became
due until the date paid in full. Any payment or other transfer of funds
scheduled to be made on a day that is not a Business Day shall be made on the
next Business Day, and any interest rate accruing on such amount to be paid or
transferred shall continue to accrue to such next Business Day. All computations
of interest and fees shall be calculated for the actual days elapsed based on a
360-day year (or 365 or 366 days, as the case may be, in the case of Prime Rate
Loans).
Section 9.4. Sharing of Recoveries. Each Lender Group agrees that if it
receives any recovery, through set-off, judicial action or otherwise, on any
amount payable or recoverable hereunder in a greater proportion than should have
been received hereunder or otherwise inconsistent with the provisions hereof,
then the recipient of such recovery shall purchase for cash an interest in
amounts owing to the other Lender Groups (as return of Loan Amount or
otherwise), without representation or warranty except for the representation and
warranty that such interest is being sold by each such other Lender Group free
and clear of any Adverse Claim created or granted by such other Lender Group, in
the amount necessary to create proportional participation by the Lender Group in
such recovery. If all or any portion of such amount is thereafter recovered from
the recipient, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.
Section 9.5. Right of Setoff. During a Termination Event, each Lender
Group is hereby authorized (in addition to any other rights it may have) to
setoff, appropriate and apply (without presentment, demand, protest or other
notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by such Lender Group (including by any branches or
agencies of such Lender Group) to, or for the account of, the Borrower against
amounts owing by the Borrower hereunder (even if contingent or unmatured).
Section 9.6. Amendments. Except as otherwise expressly provided herein,
no amendment or waiver hereof shall be effective unless signed by the Borrower
and the Instructing Group. The amount of any fee or other payment due and
payable from the Borrower to the Administrative Agent (for its own account), any
Lender Agent or any Lender may be changed or otherwise adjusted solely with the
consent of the Borrower and the party to which such payment is payable. Any
amendment hereof shall apply to each Lender equally and shall be binding upon
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the Borrower, the Lenders, the Lender Agents and the Administrative Agent. If
required by the Rating Agencies for the applicable Conduit Lender, no material
amendment hereof or assignment, termination, resignation or removal hereunder
shall be effective unless a statement is obtained from the applicable Rating
Agencies that its Rating will not be downgraded, withdrawn or suspended as a
result of such amendment, assignment, termination, resignation or removal.
Section 9.7. Waivers. No failure or delay of the Administrative Agent
or any Lender in exercising any power, right, privilege or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right, privilege or remedy preclude any other or further
exercise thereof or the exercise of any other power, right, privilege or remedy.
Any waiver hereof shall be effective only in the specific instance and for the
specific purpose for which such waiver was given. After any waiver, the
Borrower, the Lenders, the Lender Agents and the Administrative Agent shall be
restored to their former position and rights and any Potential Termination Event
waived shall be deemed to be cured and not continuing, but no such waiver shall
extend to (or impair any right consequent upon) any subsequent or other
Potential Termination Event. Any additional interest that has accrued after a
Termination Event before the execution of a waiver thereof, solely as a result
of the occurrence of such Termination Event, may be waived by the Administrative
Agent at the direction of the Lender Agent entitled thereto.
Section 9.8. Successors and Assigns; Participations; Assignments.
(a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Except as otherwise provided herein, the Borrower may not assign or
transfer any of its rights or delegate any of its duties without the prior
consent of the Administrative Agent, the Lender Agents and the Lenders.
(b) Participations. Any Lender may sell to one or more Persons (each a
"Participant") participating interests in the interests of such Lender
hereunder; provided, however, that no Lender shall grant any participation under
which the Participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Transaction Document. Such Lender shall remain
solely responsible for performing its obligations hereunder, and the Borrower,
each Lender Agent and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations hereunder. Each Participant shall be entitled to the benefits of
Article VI and shall have the right of setoff through its participation in
amounts owing hereunder to the same extent as if it were a Lender hereunder,
which right of setoff is subject to such Participant's obligation to share with
the Lenders as provided in Section 9.4. A Lender shall not agree with a
Participant to restrict such Lender's right to agree to any amendment hereto,
except amendments described in clause (a) of Section 9.6.
(c) Assignment by Lenders. Upon the consent of the Borrower (which
consent shall not be unreasonably withheld), each party hereto agrees and
consents (i) to any Lender's assignment, participation, grant of security
interests in or other transfers of any portion of, or any of its beneficial
interest in, its Loan Interest and (ii) to the complete assignment by such
Lender of all of its rights and obligations hereunder to any other Person, and
upon such assignment such Lender shall be released from all obligations and
duties hereunder. Each Lender shall promptly
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notify each party hereto of any such assignment. Upon such an assignment of any
portion of any Lender's Loan Interest, the assignee shall have all of the rights
of such Lender hereunder relating to such Loan Interest.
(d) Opinions of Counsel. If required by the Administrative Agent or to
maintain the Ratings, each assignment must be accompanied by an opinion of
counsel of the assignee as to such matters as the Administrative Agent or Lender
Agent may reasonably request.
Section 9.9. Intended Tax Characterization. It is the intention of the
parties hereto that, for the purposes of all Taxes, the transactions
contemplated hereby shall be treated as a loan by the Lenders (through the
Administrative Agent) to the Borrower that is secured by the Receivables (the
"Intended Tax Characterization"). The parties hereto agree to report and
otherwise to act for the purposes of all Taxes in a manner consistent with the
Intended Tax Characterization. As provided in Section 5.1(g), the Borrower
hereby grants to the Administrative Agent, for the ratable benefit of the
Lenders, a security interest in all Receivables and Collections to secure the
payment of all amounts other than Loan Amount owing hereunder and (to the extent
of the Secured Interest) to secure the repayment of all Loan Amount.
Section 9.10. Confidentiality. The parties hereto agree to hold the
Transaction Documents or any other confidential or proprietary information
received in connection therewith in confidence and agree not to provide any
Person with copies of any Transaction Document or such other confidential or
proprietary information other than to (i) any officers, directors, members,
managers, employees or outside accountants, auditors or attorneys thereof, (ii)
any prospective or actual assignee or participant which (in each case) has
signed a confidentiality agreement substantially in the form of the
confidentiality agreement signed by the Agent prior to the date hereof, (iii)
any rating agency, (iv) any surety, guarantor or credit or liquidity enhancer to
the Agent or any Lender which (in each case) has signed a confidentiality
agreement substantially in the form of the confidentiality agreement signed by
the Agent prior to the date hereof, (v) any entity organized to loan, or make
loans secured by, financial assets for which ABN AMRO or PNC Bank, National
Association provides managerial services or acts as an administrative agent
which (in each case) has signed a confidentiality agreement substantially in the
form of the confidentiality agreement signed by the Agent prior to the date
hereof, (vi) any Conduit Lender's administrator, management company, referral
agents, issuing agents or depositaries or commercial paper dealers and (vii)
Governmental Authorities with appropriate jurisdiction. Notwithstanding the
above stated obligations, the parties hereto will not be liable for disclosure
or use of such information which such Person can establish by tangible evidence:
(i) was required by law, including pursuant to a subpoena or other legal
process, (ii) was in such Person's possession or known to such Person prior to
receipt or (iii) is or becomes known to the public through disclosure in a
printed publication (without breach of any obligation hereunder).
Section 9.11. Reserved.
Section 9.11. Confidentiality of Agreement. Unless otherwise consented
to by the Administrative Agent and the Lender Agents the Borrower hereby will
not disclose the contents of any Transaction Document, or any other confidential
or proprietary information furnished by
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<PAGE> 36
the Administrative Agent, any Lender Agent or any Lender, to any Person other
than to its auditors and attorneys or as required by applicable law.
Section 9.12. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for each Conduit Lender, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official for such Conduit
Lender, or any substantial part of its property, or (c) ordering the winding up
or liquidation of the affairs of such Conduit Lender.
Section 9.13. Excess Funds. Other than amounts payable under Section
9.4, each Conduit Lender shall be required to make payment of the amounts
required to be paid pursuant hereto only if such Conduit Lender has Excess Funds
(as defined below). If any Conduit Lender does not have Excess Funds, the excess
of the amount due hereunder (other than pursuant to Section 9.4) over the amount
paid shall not constitute a "claim" (as defined in Section 101(5) of the Federal
Bankruptcy Code) against such Conduit Lender until such time as such Conduit
Lender has Excess Funds. If any Conduit Lender does not have sufficient Excess
Funds to make any payment due hereunder (other than pursuant to Section 9.4),
then such Conduit Lender may pay a lesser amount and make additional payments
that in the aggregate equal the amount of deficiency as soon as possible
thereafter. The term "Excess Funds" means the excess of (a) the aggregate
projected value of a Conduit Lender's assets and other property (including cash
and cash equivalents), over (b) the sum of (i) the sum of all scheduled payments
of principal, interest and other amounts payable on publicly or privately placed
indebtedness of such Conduit Lender for borrowed money, plus (ii) the sum of all
other liabilities, indebtedness and other obligations of such Conduit Lender for
borrowed money or owed to any credit or liquidity provider, together with all
unpaid interest then accrued thereon, plus (iii) all taxes payable by such
Conduit Lender to the Internal Revenue Service, plus (iv) all other
indebtedness, liabilities and obligations of such Conduit Lender then due and
payable, but the amount of any liability, indebtedness or obligation of any
Conduit Lender shall not exceed the projected value of the assets to which
recourse for such liability, indebtedness or obligation is limited. Excess Funds
shall be calculated once each Business Day.
Section 9.14. No Recourse. The obligations of each Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 9.15. Headings; Counterparts. Article and Section Headings in
this Agreement are for reference only and shall not affect the construction of
this Agreement. This Agreement may be executed by different parties on any
number of counterparts, each of which shall
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constitute an original and all of which, taken together, shall constitute one
and the same agreement.
Section 9.16. Cumulative Rights and Severability. All rights and
remedies of the Lenders, Lender Agents and Administrative Agent hereunder shall
be cumulative and non-exclusive of any rights or remedies such Persons have
under law or otherwise. Any provision hereof that is prohibited or unenforceable
in any jurisdiction shall, in such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and without affecting such provision in any other
jurisdiction.
Section 9.17. Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws (and
not the law of conflicts) of the State of New York. The Borrower hereby submits
to the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York, New York for purposes of all legal proceedings arising out of, or relating
to, the Transaction Documents or the transactions contemplated thereby. The
Borrower hereby irrevocably waives, to the fullest extent permitted by law, any
objection it may now or hereafter have to the venue of any such proceeding and
any claim that any such proceeding has been brought in an inconvenient forum.
Nothing in this Section 9.17 shall affect the right of the Administrative Agent,
any Lender Agent or any Lender to bring any action or proceeding against the
Borrower or its property in the courts of other jurisdictions.
Section 9.18. Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 9.19. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
<TABLE>
<S> <C>
ABN AMRO Bank N.V., as the ABN AMRO Bank N.V., as a Related
Administrative Agent Bank Lender for Amsterdam
By: Thomas J. Illegible By: Thomas J. Illegible
------------------------------- -----------------------------
Title: Illegible Title: Illegible
---------------------------- ---------------------------
By: Illegible By: Illegible
------------------------------- -----------------------------
Title: Illegible Title: Illegible
---------------------------- ---------------------------
Address: Structured Finance, Address: Structured Finance,
Asset Securitization Asset Securitization
135 South LaSalle Street 135 South LaSalle Street
Chicago, Illinois 60674-9135 Chicago, Illinois 60674-9135
Attention: Lender Agent- Attention: Enhancer-Amsterdam
Amsterdam Telephone: (312) 904-6263
Telephone: (312) 904-6263 Telecopy: (312) 904-6376
Telecopy: (312) 904-6376
</TABLE>
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<PAGE> 39
<TABLE>
<S> <C>
PNC BANK, NATIONAL ASSOCIATION, AMSTERDAM FUNDING CORPORATION,
as a Related Bank Lender for Amsterdam an Uncommitted Conduit Lender
By: Illegible By: /s/ Andrew Stidd
------------------------------- -----------------------------
Title: VICE PRESIDENT Title: PRESIDENT
---------------------------- ---------------------------
Address: 201 East Fifth St. Address: c/o Global Securitization Services, LLC
3rd Fl. 25 West 43rd Street, Suite 704
Cincinnati, OH 45202 New York, New York 10036
Attention: LARGE CORPORATE BANKING Attention: Andrew Stidd
Telephone: (513) 651-8675 Telephone: (212) 302-8330
Telecopy: (513) 651-8951 Telecopy: (212) 302-8767
with a copy to:
ABN AMRO Bank N.V.
Address: Structured Finance,
Asset Securitization
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attention: Administrator -
Amsterdam
Telephone: (312) 904-6263
Telecopy: (312) 904-6376
</TABLE>
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<PAGE> 40
<TABLE>
<S> <C>
EAGLE-PICHER ACCEPTANCE CORPORATION, EAGLE-PICHER INDUSTRIES, INC.,
as Borrower as Initial Collection Agent
By: Illegible By: Illegible
------------------------------- -----------------------------
Title: Title:
---------------------------- ---------------------------
Address: 250 East Fifth Street, Fifth Floor Address: 250 East Fifth Street, Fifth Floor
Cincinnati, Ohio 45202 Cincinnati, Ohio 45202
Attention: General Counsel Attention: General Counsel
Telephone: (513) 721-7010 Telephone: (513) 721-7010
Telecopy: (513) 629-2572 Telecopy: (513) 629-2572
</TABLE>
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<PAGE> 41
SCHEDULE I
DEFINITIONS
The following terms have the meanings set forth, or referred to, below:
"ABN AMRO" means ABN AMRO Bank N.V. in its individual capacity and not
in its capacity as the Administrative Agent.
"Administrative Agent" is defined in the first paragraph hereof.
"Administrative Agent's Account" means the account designated to the
Borrower and the Lenders by the Administrative Agent.
"Adverse Claim" means, for any asset or property of a Person, a lien,
security interest, charge, mortgage, pledge, hypothecation, assignment or
material encumbrance, or any other material right or claim, in, of or on such
asset or property in favor of any other Person, except those in favor of the
Administrative Agent.
"Affiliate" means, for any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person. For purposes of this definition, "control" means the power,
directly or indirectly, to either (i) vote ten percent (10%) or more of the
securities having ordinary voting power for the election of directors of a
Person or (ii) cause the direction of the management and policies of a Person.
"Aggregate Loan Amount" means the sum of the Loan Amounts of all
Lenders.
"Aggregate Reserve" means, at any time, the sum of the Reserves of all
Lenders at such time.
"Amsterdam" is defined in the first paragraph hereof.
"Bankruptcy Event" means, for any Person, that (a) such Person makes a
general assignment for the benefit of creditors or any proceeding is instituted
by or against such Person seeking to adjudicate it bankrupt or insolvent, or
seeking the liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property or (b) such
Person takes any corporate action to authorize any such action.
"Borrower" is defined in the first paragraph hereof.
"Borrower Account" means the Borrower's account designated by the
Borrower to the Administrative Agent with at least ten (10) days prior notice.
"Borrowing" shall mean the incurrence by the Borrower of a Loan.
<PAGE> 42
"Business Day" means any day other than (a) a Saturday, Sunday or other
day on which banks in New York City, Pittsburgh, Pennsylvania or Chicago,
Illinois are authorized or required to close and (b) a holiday on the Federal
Reserve calendar.
"Charge-Off" means any Receivable that the Borrower deems uncollectible
in accordance with its ordinary practices and procedures and that has or should
have been charged off or written off by the Borrower in accordance with such
practices and procedures; provided, however, that in no event may such
charge-off or write-off occur with respect to a Receivable within 150 days of
the origination of such Receivable unless the related Obligor (a) has suffered a
Bankruptcy Event or (b) has committed fraud with respect to such Receivable.
"Closing Date" shall mean the day (which shall be a Business Day)
specified by the Borrower on which all of the conditions specified in Section
7.1 as conditions precedent to the Closing Date are fulfilled or waived pursuant
to this Agreement.
"Collection" means any amount paid, or deemed paid, on a Receivable,
including from the proceeds of collateral securing, or any guaranty of, such
Receivable or by the Borrower under Section 1.5(b).
"Collection Agent" is defined in Section 3.1(a).
"Collection Agent Fee" is defined in Section 3.6.
"Collection Agent Replacement Event" means the occurrence of any one or
more of the following:
(a) the Collection Agent (or any sub-collection agent) fails
to observe or perform any material term, covenant or agreement under
any Transaction Document;
(b) any written representation, warranty, certification or
statement made by the Collection Agent in, or pursuant to, any
Transaction Document proves to have been incorrect in any material
adverse respect when made;
(c) the Collection Agent suffers a Bankruptcy Event; or
(d) a Termination Event occurs and any Lender Group declares
such Termination Event to be a Collection Agent Replacement Event.
"Committed Conduit Lender" means each Person who becomes a Committed
Conduit Lender pursuant to a Transfer Supplement.
"Commitment Percentage" means, for each Related Bank Lender in a Lender
Group, such Related Bank Lender's Loan Commitment divided by the total of all
Loan Commitments of all Related Bank Lenders in such Lender Group.
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"Concentration Limit" means (i) for any Obligor with long term
unsecured indebtedness rated BBB or higher by S&P or Baa2 or higher by Moody's,
5% of the outstanding principal balance of all Eligible Receivables, (ii) for
all other Obligors (including those not rated by both S&P and Moody's), 3% of
the outstanding principal balance of all Eligible Receivables and (iii) with
respect to each Obligor therein referenced, such Obligor's Special Limit. If the
Moody's rating and the S&P rating assigned to the long term unsecured
indebtedness of any Obligor differ, then the Concentration Limit for such
Obligor shall be based on the lower of such ratings.
"Conduit Lenders" means the Committed Conduit Lenders and the
Uncommitted Conduit Lenders.
"Consolidated Receivables Balance" means an amount equal to the gross
amount of Receivables on any date less the amount of intracompany Receivables
for such date.
"Credit and Collection Policies" means, collectively, the Borrower's
credit and collection policies and practices relating to Receivables attached
hereto as Exhibit H.
"Daily Estimated Consolidated Receivables Balance" means an amount
equal to the gross amount of Receivables on any date less the Daily Intracompany
Estimate for such date.
"Daily Estimated Eligible Receivables Balance" means an amount equal to
the Daily Estimated Consolidated Receivables Balance less the Daily
Ineligible/Concentration Estimate for such date.
"Daily Ineligible/Concentration Estimate" means an amount equal to the
Daily Estimated Consolidated Receivables Balance multiplied by the Daily
Ineligible/Concentration Percentage for such date.
"Daily Ineligible/Concentration Percentage" means a percentage equal
to one minus a percentage equal to the Eligible Receivables Balance as shown on
the most recent Periodic Report divided by the Consolidated Receivables Balance
as shown on the most recent Periodic Report.
"Daily Intracompany Estimate" means an amount equal to the gross amount
of Receivables on any date multiplied by the Daily Intracompany Percentage for
such date.
"Daily Intracompany Percentage" means a percentage equal to the amount
of intracompany Receivables as shown on the most recent Periodic Report divided
by the gross Receivables as shown on the most recent Periodic Report.
"Daily Maximum Advance" means an amount shown on a Daily Report equal
to the gross amount of Receivables on such date less the Daily Intracompany
Estimate, the Daily Ineligible/Concentration Estimate and the Daily Reserve
Estimate.
"Daily Report" is defined in Section 3.3(b).
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<PAGE> 44
"Daily Reserve Estimate" means an amount equal to the Daily Estimated
Eligible Receivables Balance for such date multiplied by the Reserve Percentage
as shown on the most recent Periodic Report.
"Deemed Collections" is defined in Section 1.5(c).
"Default Ratio" means, for any calendar month, the ratio of (a) the
aggregate outstanding balance of all Defaulted Receivables (minus Charge-Offs)
as of the end of such calendar month to (b) the aggregate outstanding balance of
all Receivables (minus Charge-Offs) as of the end of such calendar month.
"Defaulted Receivable" means (1) any Receivable (other than a
Charge-Off) (a) on which any amount is unpaid more than 90 days past its
original invoice date or (b) the Obligor on which has suffered a Bankruptcy
Event and (2) any Receivable which becomes a Charge-Off within 90 days of its
origination.
"Delinquency Ratio" means, for any calendar month, the ratio of (a) the
then aggregate outstanding balance of all Delinquent Receivables as of the end
of such calendar month to (b) the aggregate outstanding balance of all
Receivables as of the end of such calendar month.
"Delinquent Receivable" means any Receivable (other than a Charge-Off
or Defaulted Receivable) on which any amount is unpaid more than 60 days past
its original invoice date.
"Designated Financial Officer" means the Treasurer or Assistant
Treasurer of the Borrower or each Originator, as applicable.
"Dilution Ratio" means, for any calendar month, the ratio of (a) the
aggregate amount of payments owed by the Borrower pursuant to the first sentence
of Section 1.5(b) for such calendar month to (b) the aggregate amount of
Collections received during such calendar month.
"Dilution Reserve" means the greater of (i) 3% and (ii) 3 times the
highest three month rolling average Dilution Ratio (expressed as a percentage)
as of the last day of each of the last twelve calendar months.
"Dollar" and "$" means lawful currency of the United States of America.
"Eagle-Picher Credit Agreement" means that certain Credit Agreement
dated as of February 19, 1998 among Eagle-Picher Industries, Inc., various
Lenders from time to time party thereto, ABN AMRO Bank N.V., as Administrative
Agent, PNC Bank, National Association, as Documentation Agent and DLJ Capital
Funding, Inc., as Syndication Agent, as such agreement is amended, modified or
restated from time to time.
"Eligible Receivable" means, at any time, any Receivable:
(i) the Obligor of which (a) is a resident of, or organized
under the laws of, or with its chief executive office in, the U.S.;
provided (1) Eligible Receivables generated
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<PAGE> 45
by Obligors which are residents of, or organized under the laws of, or
with their chief executive office in, Canada may constitute up to 5% of
Eligible Receivables and (2) Eligible Receivables generated by
Affiliates of Ford Motor Company which are not residents of, or
organized under the laws of, or with their chief executive office in,
the U.S. shall, subject to the Concentration Limit applicable to Ford
Motor Company, constitute Eligible Receivables; (b) is not an Affiliate
of any of the parties hereto or any Originator; (c) is not a government
or a governmental subdivision or agency; (d) has not suffered a
Bankruptcy Event; (e) is a customer of each Originator in good
standing; (f) is not the Obligor of Defaulted Receivables representing
more than 25% of the Obligor's aggregate Eligible Receivables; and (g)
with respect to any Receivable of which Carpenter Enterprises Limited
is the Originator, is not Honda Motor Corporation;
(ii) which is stated to be due and payable within 90 days
after the invoice therefor; provided, however, that not more than 5% of
the Eligible Receivables at any time may consist of Receivables which
are stated to be due and payable within 91 to 360 days after invoice
therefore ("Long-Dated Receivables"), and, if the outstanding balance
of all Long-Dated Receivables that would otherwise be Eligible
Receivables exceeds such limit, Eligible Receivables for purposes
hereof shall be the Long-Dated Receivables with the shortest
maturities;
(iii) which is not a Defaulted Receivable, a Charge-Off or a
Receivable which has been extended, amended, rescinded or cancelled
(except as permitted in Section 3.2(b) and then subject to Section
1.5);
(iv) which is an "account" or "chattel paper" within the
meaning of Section 9-105 and Section 9-106, respectively of the UCC of
all applicable jurisdictions;
(v) which is denominated and payable only in Dollars in the
U.S.;
(vi) which arises under a contract that is in full force and
effect and constitutes the legal, valid and binding obligation of the
related Obligor enforceable against such Obligor in accordance with its
terms subject to no offset, counterclaim, defense or other Adverse
Claim, and is not an executory contract or unexpired lease within the
meaning of Section 365 of the Bankruptcy Code, and which directs
payments be made to a permitted Lock-Box;
(vii) which arises under a contract that (a) contains an
obligation to pay a specified sum of money and is subject to no
contingencies, (b) does not require the Obligor under such contract to
consent to the transfer, sale or assignment of the rights and duties of
the applicable Originator under such contract (unless the Agent is
reasonably satisfied that any restriction to the transfer, sale or
assignment of such rights and duties does not limit or prohibit the
Originator's right to assign its right to receive payment under such
contract) and (c) does not contain a confidentiality provision that
purports to restrict any Lender's exercise of rights under this
Agreement, including, without limitation, the right to review such
contract;
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<PAGE> 46
(viii) which does not, in whole or in part, contravene any law,
rule or regulation applicable thereto (including, without limitation,
those relating to usury, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy);
(ix) which satisfies all applicable requirements of the
applicable Credit and Collection Policy and was generated in the
ordinary course of the applicable Originator's business from the sale
of goods or provision of services to a related Obligor solely by such
Originator;
(x) which is an account receivable representing all or part
of the sales price of merchandise, insurance and services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940;
(xi) the purchase of which with proceeds of notes would
constitute a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act of 1933; and
(xii) which is not part of a price offering reserve, hold back
or exchange rate transaction as reflected on the general ledger of the
applicable Originator.
"Eligible Receivable Balance" means, at any time, the aggregate
outstanding principal balance of all Eligible Receivables less the portion of
the aggregate outstanding principal balance of Eligible Receivables which exceed
the Concentration Limit or the Special Limit.
"Enhancement Agreement" means any agreement between a Lender and any
other Person, entered into to provide credit enhancement to such Lender's
commercial paper facility.
"Enhancement Bank" means any Person providing credit support to a
Lender for such Lender's account under an Enhancement Agreement, including
pursuant to an unfunded commitment.
"Face Amount" means the face amount of any Conduit Lender's commercial
paper issued on a discount basis or, if not issued on a discount basis, the
principal amount of such note and interest scheduled to accrue thereon to its
stated maturity.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal, for each day during such period, to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the immediately preceding Business Day)
by the Federal Reserve Bank of New York or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such
transactions received by ABN AMRO as of approximately 10:00 a.m. (Chicago time)
on such day from three federal funds brokers of recognized standing selected by
it.
"Fee Letter" means, for each Lender Group, the letter agreement among
the Borrower and the Lender Agent for the applicable Lender Group.
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"Funding Agreement" means any agreement or instrument executed by a
Lender and executed by or in favor of any Funding Source or executed by any
Funding Source at the request of a Lender.
"Funding Source" means any insurance company, bank or other financial
institution providing liquidity, back-up purchase or credit support for any
Lender.
"GAAP" means generally accepted accounting principles in the U.S.,
applied on a consistent basis.
"Governmental Authority" means any (a) Federal, state, municipal or
other governmental entity, board, bureau, agency or instrumentality, (b)
administrative or regulatory authority (including any central bank or similar
authority) or (c) court, judicial authority or arbitrator, in each case, whether
foreign or domestic.
"Incremental Loan" is defined in Section 1.1(b).
"Ineligible Receivables Balance" means the aggregate principal balance
of all Receivables that are not Eligible Receivables.
"Initial Collection Agent" is defined in the first paragraph hereof.
"Instructing Group" means Lender Agents representing Lender Groups with
a majority of the Loan Commitments; provided, however that if there are only two
Lender Groups and no one Lender Group has a majority of the Loan Commitments,
then the "Instructing Group" means both Lender Agents.
"Intended Tax Characterization" is defined in Section 9.9.
"Interest Reserve" means, at any time, the product of (a) 1.5
multiplied by (b) the rate announced by ABN AMRO as its "Prime Rate" (which may
not be its best or lowest rate) plus 300 basis points (3.00%) per annum
multiplied by (c) Receivables Turnover Days divided by 360 days.
"Interim Liquidation" means any time before the Termination Date during
which no Reinvestment Loans are made by any Lender, as established pursuant to
Section 1.2.
"Lender Agent" means any of the Amsterdam Lender Agent or any other
person who becomes a party to this Agreement as a Lender Agent pursuant to a
Transfer Supplement.
"Lender Group" means, for each Conduit Lender, such Conduit Lender, its
Related Bank Lenders (if any) and its related Liquidity Banks and Enhancement
Banks.
"Lender Reserve Percentage" means, for each Lender, the Reserve
Percentage multiplied by a fraction, the numerator of which is such Lender's
outstanding Loan Amount and the denominator of which is the aggregate Loan
Amount for all Lenders.
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<PAGE> 48
"Lenders" means the Conduit Lenders and the Related Bank Lenders.
"Limited Guaranty" means the Limited Guaranty, dated the date hereof,
by the Parent in favor of the Administrative Agent.
"Liquidation Period" means, for any Lender only, all times when such
Lender is not making Reinvestment Loans pursuant to Section 1.1(d) and, for all
Lenders, all times (x) during an Interim Liquidation and (y) on and after the
Termination Date.
"Liquidity Agreement" means any agreement entered into in connection
with this Agreement pursuant to which any Person agrees to make loans or
advances to, or purchase assets from, any Lender in order to provide liquidity
for such Lender's Loans.
"Liquidity Bank" means any commercial lending institution that is at
any time a lender or purchaser under any Liquidity Agreement.
"Loan" is defined in Section 1.1(a).
"Loan Amount" means, for each Lender, (a) the sum of (i) all Loans by
such Lender and (ii) the aggregate amount of any payments or exchanges made by,
or on behalf of, such Lender to any other Lender pursuant to the Transfer
Agreements minus (b) all Collections, amounts received from any Lenders, and
other amounts received or exchanged and, in each case, applied by the
Administrative Agent or such Lender to reduce such Lender's Loan Amount. A
Lender's Loan Amount shall be restored to the extent any amounts so received or
exchanged and applied are rescinded or must be returned for any reason.
"Loan Commitment" means, for each Lender Group, the amount set forth on
Schedule II, as adjusted in accordance with Sections 1.6 and 9.8.
"Loan Interest" means, for a Lender, the percentage security interest
in the Receivables and Collections held by such Lender, calculated when and as
described in Section 1.1(a); provided, however, that (except for purposes of
computing a Loan Interest or the Secured Interest in Section 1.5 or 1.7) at any
time the Secured Interest would otherwise exceed 100% each Lender then holding
any Loan Amount shall have its Loan Interest reduced by multiplying such Loan
Interest by a fraction equal to 100% divided by the Secured Interest otherwise
then in effect, so that the Secured Interest is thereby reduced to 100%.
"Loan Limit" means $75,000,000.
"Lock-Box" means each post office box or bank box listed on Exhibit E,
as revised pursuant to Section 5.1(i).
"Lock-Box Account" means each account maintained by the Collection
Agent at a Lock-Box Bank for the purpose of receiving or concentrating
Collections.
I-8
<PAGE> 49
"Lock-Box Agreement" means each agreement between the Collection Agent
and a Lock-Box Bank concerning a Lock-Box Account.
"Lock-Box Bank" means each bank listed on Exhibit E, as revised
pursuant to Section 5.1(i).
"Lock-Box Letter" means a letter in substantially the form of Exhibit F
(or otherwise acceptable to the Administrative Agent) from the Borrower and the
Collection Agent to each Lock-Box Bank, acknowledged and accepted by such
Lock-Box Bank and the Administrative Agent.
"Loss Reserve" means, at any time, the greatest of (a) 12%, (b) 2 times
the highest three-month rolling average Delinquency Ratio (expressed as a
percentage) as of the last day of each of the last twelve calendar months and
(c) 3 times the highest three-month rolling average Default Ratio (expressed as
a percentage) as of the last day of each of the last twelve calendar months.
"Loss-to-Liquidation Ratio" means, for any calendar month, the ratio of
the outstanding balance of Charge-Offs during such calendar month to the
aggregate amount of Collections during such calendar month.
"Matured Aggregate Loan Amount" means, at any time, the Matured Value
of each Lender's Loan Amount plus the total Loan Amounts of all other Lenders
then outstanding.
"Matured Value" means, for any Loan Amount, the sum of such Loan Amount
and all unpaid interest, fees and other amounts scheduled to become due (whether
or not then due) on such Loan Amount during all interest periods to which any
portion of such Loan Amount has been allocated.
"Maximum Incremental Loan Amount" means, at any time the difference
between the Loan Limit and the Aggregate Loan Amount then outstanding.
"Moody's" means Moody's Investors Service, Inc.
"Obligor" means, for any Receivable, each Person obligated to pay such
Receivable and each guarantor of such obligation.
"Originator" means, collectively, Eagle-Picher Industries, Inc.,
Carpenter Enterprises Limited, Daisy Parts, Inc., Eagle-Picher Development
Company, Inc., Eagle-Picher Fluid Systems, Inc., Eagle-Picher Minerals, Inc.,
Eagle-Picher Technologies, LLC, Hillsdale Tool & Manufacturing Co. and Michigan
Automotive Research Corporation.
"Parent" means Eagle-Picher Industries, Inc.
"Periodic Report" is defined in Section 3.3(a).
I-9
<PAGE> 50
"Permitted Investments" shall mean (a) evidences of indebtedness,
maturing not more than thirty (30) days after the date of purchase thereof,
issued by, or the full and timely payment of which is guaranteed by, the full
faith and credit of, the federal government of the United States of America, (b)
repurchase agreements with banking institutions or broker-dealers registered
under the Securities Exchange Act of 1934 fully secured by obligations of the
kind specified in clause (a) above, (c) money market funds denominated in
Dollars rated not lower than A-1 (and without the "r" symbol attached to any
such rating) by S&P and P-1 by Moody's or otherwise acceptable to the Rating
Agencies or (d) commercial paper denominated in Dollars issued by any
corporation incorporated under the laws of the United States or any political
subdivision thereof, provided that such commercial paper is rated at least A-1
(and without any "r" symbol attached to any such rating) thereof by S&P and at
least Prime-1 thereof by Moody's.
"Permitted Liens" means any lien, security interest or encumbrance
granted pursuant to the terms of the Eagle-Picher Credit Agreement or the
Purchase Agreements.
"Person" means an individual, partnership, corporation, association,
joint venture, Governmental Authority or other entity of any kind.
"Potential Termination Event" means any Termination Event or any event
or condition that with the lapse of time or giving of notice, or both, would
constitute a Termination Event.
"Prime Rate" means, for any period, the daily average during such
period of (a) the greater of (i) the floating commercial loan rate per annum of
ABN AMRO (which rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer by ABN AMRO) announced from
time to time as its prime rate or equivalent for Dollar loans in the U.S.,
changing as and when said rate changes and (ii) the Federal Funds Rate plus
0.75% plus (b) during the pendency of a Termination Event, 3.00% for the Loan
Amount of a Liquidity Provider and 5.00% for the Loan Amount of the Enhancer.
"Program Amount" means, for each Lender Group, 102% of the Loan
Commitment of such Lender Group.
"Program LOC" means that certain irrevocable transferable letter of
credit no S79017, dated June 11, 1997, issued by the Enhancer at the request of
Amsterdam, and each letter of credit issued in substitution or replacement
therefor.
"Purchase Agreements" means, collectively, each Receivables Purchase
Agreement dated as of the date hereof among the Borrower and each Originator.
"Ratable Share" means, for each Lender Group, such Lender Group's
aggregate Loan Commitments divided by the aggregate Loan Commitments of all
Lender Groups.
"Rate Supplement" is defined in Section 1.3(a).
"Rating Agency" means Moody's, S&P and any other rating agency any
Conduit Lender chooses to rate its commercial paper notes.
I-10
<PAGE> 51
"Ratings" means the ratings by the Rating Agencies of the indebtedness
for borrowed money of each Conduit Lender.
"Receivable" means each obligation of an Obligor to pay for merchandise
sold or services rendered by the applicable Originator and includes such
Originator's rights to payment of any interest or finance charges and in the
merchandise (including returned goods) and contracts relating to such
Receivable, all security interests, guaranties and property securing or
supporting payment of such Receivable, all Records and all proceeds of the
foregoing. During any Interim Liquidation and on and after the Termination Date,
the term "Receivable" shall only include receivables existing on the date such
Interim Liquidation commenced or Termination Date occurred, as applicable.
Deemed Collections shall reduce the outstanding balance of Receivables
hereunder, so that any Receivable that has its outstanding balance deemed
collected shall cease to be a Receivable hereunder after (x) the Collection
Agent receives payment of such Deemed Collections under Section 1.5(b) or (y) if
such Deemed Collection is received before the Termination Date, an adjustment to
the Secured Interest permitted by Section 1.5(c) is made.
"Receivables Turnover Days" means an amount, expressed in days,
obtained by multiplying (a) a fraction, (i) the numerator of which is equal to
the Eligible Receivables Balance as of the most recent calendar month period and
(ii) the denominator of which is equal to Collections during the same such
calendar month period, times (b) 30.
"Records" means, for any Receivable, all contracts, books, records and
other documents or information (including computer programs, tapes, disks,
software and related property and rights) relating to such Receivable or the
related Obligor.
"Reinvestment Loan" is defined in Section 1.1(b).
"Reinvestment Loans" means the Reinvestment Loans.
"Related Bank Lenders" means the Persons listed as such (and their
respective Loan Commitments) for each Uncommitted Conduit Lender as listed on
Schedule II hereto.
"Reserve" means, for each Lender, an amount equal to the Lender Reserve
Percentage multiplied by the Eligible Receivables Balance.
"Reserve Percentage" means, at any time, the sum of the Loss Reserve,
the Dilution Reserve and the Interest Reserve.
"Secured Interest" is defined in Section 1.1(a).
"Settlement Date" means, prior to the occurrence of a Termination
Event, the twentieth day (or if such twentieth day is not a Business Day, the
next succeeding Business Day) of each calendar month, and on and after the
occurrence of a Termination Event, the second Business Day following the receipt
by the Collection Agent of any Collections.
I-11
<PAGE> 52
"Settlement Period" means, for each Settlement Date (the "Applicable
Settlement Date"), the period commencing on and including the preceding
Settlement Date (or if none, the Closing Date) to but not including the
Applicable Settlement Date.
"Special Limit" means, only for so long as the applicable Obligor
described below has its long term unsecured indebtedness rated not less than A-
by S&P and A3 by Moody's, with respect to (a) Ford Motor Company, 20% of the
outstanding principal balance of all Eligible Receivables, (b) Caterpillar
Corporation, 10% of the outstanding principal balance of all Eligible
Receivables and (c) General Motors Corporation, 10% of the outstanding principal
balance of all Eligible Receivables, unless the Administrative Agent, in its
discretion or at the direction of an Instructing Group, notifies the Borrower of
a different limit.
"S&P" means Standard & Poor's Ratings Group.
"Subordinated Note" means each revolving promissory note issued by the
Borrower to the applicable Originator under each Purchase Agreement.
"Subordination Agreement" means the Subordination Agreement dated as of
the date hereof between the Originators and the Borrower.
"Subsidiary" means any Person of which at least a majority of the
voting stock (or equivalent equity interests) is owned or controlled by the
Parent or by one or more other Subsidiaries of the Parent. The Subsidiaries of
the Parent on the date hereof are listed on Exhibit D.
"Taxes" means all taxes, charges, fees, levies or other assessments
(including income, gross receipts, profits, withholding, excise, property,
sales, use, license, occupation and franchise taxes and including any related
interest, penalties or other additions) imposed by any jurisdiction or taxing
authority (whether foreign or domestic).
"Termination Date" means the earliest of (a) the date of the occurrence
of a Termination Event described in clause (e) of the definition of Termination
Event, (b) the date designated by the Administrative Agent to the Borrower at
any time after the occurrence of any other Termination Event, (c) the Business
Day designated by the Borrower with no less than thirty (30) Business Days prior
notice to the Administrative Agent and (d) May 17, 2000, subject to any
extension pursuant to Section 1.9.
"Termination Event" means the occurrence of any one or more of the
following:
(a) any representation, warranty, certification or statement
made by the Borrower or any Originator in, or pursuant to, any
Transaction Document proves to have been incorrect in any material
respect when made; or
(b) the Collection Agent, any Originator or the Borrower
fails to make any payment or other transfer of funds hereunder when due
(including any payments under Section 1.5(a)), and such failure remains
unremedied for three Business Days; or
I-12
<PAGE> 53
(c) the Borrower fails to observe or perform any covenant or
agreement contained in Sections 3.3, 5.1(b), 5.1(e), 5.1(g), 5.1(i) or
5.1(j) of this Agreement or any Originator fails to perform any
covenant or agreement in Section 4.1(a) of each Purchase Agreement; or
(d) the Borrower or the Collection Agent (or any
sub-collection agent) fails to observe or perform any other term,
covenant or agreement under any Transaction Document, and such failure
remains unremedied for two Business Days; or
(e) the Borrower, any Originator or any Subsidiary suffers a
Bankruptcy Event; or
(f) the average of the Delinquency Ratios as of the end of
each of the most recent three calendar months exceeds 10%, the average
of the Default Ratios as of the end of the most recent three calendar
months exceeds 7.5%, the average of the Dilution Ratios as of the end
of the most recent three calendar months exceeds 5.0%, the average of
the Receivables Turnover Days as of the end of each of the most recent
three calendar months exceeds 75 days or the average of the Loss-to
Liquidation Ratios at the end of each calendar month measured for the
three-month period then ending exceeds 1.0%; or
(g) (i) the Borrower, any Originator or any Affiliate,
directly or indirectly, disaffirms or contests the validity or
enforceability of any Transaction Document or (ii) any Transaction
Document fails to be the enforceable obligation of the Borrower or any
Affiliate party thereto; or
(h) any event occurs or condition exists which constitutes a
default or event of default under (i) the Eagle-Picher Credit Agreement
or (ii) any term, provision or condition contained in any agreement
under which any indebtedness is created or governed; or
(i) the Parent shall fail to own and control, directly or
indirectly, 100% of the outstanding voting stock of the Borrower and
each Originator;
(j) a Collection Agent Replacement Event has occurred and is
continuing; or
(k) a breach of the covenant set forth in Section 8.10 of the
Eagle-Picher Credit Agreement, as modified herein. For purposes of this
Agreement, Section 8.10 of the Eagle-Picher Credit Agreement and all
other provisions thereof to which reference is made therein, together
with related definitions and ancillary provisions, are hereby
incorporated by reference, mutatis mutandis and will be deemed to
continue in effect for the benefit of the Administrative Agent, the
Lender Agents and the Lenders thereunder whether or not the
Eagle-Picher Credit Agreement remains in effect, or any provision
thereof is waived, modified or amended (unless the Administrative Agent
and the Instructing Group agree that such waiver, modification or
amendment to the Eagle-Picher Credit Agreement shall apply to this
Agreement); provided, however that, for purposes hereof, the Test
Period for such covenant shall be deemed to be each calendar month.
I-13
<PAGE> 54
Notwithstanding the foregoing, a failure of a representation or warranty or
breach of any covenant described in clause (a), (c) or (d) above related to a
Receivable shall not constitute a Termination Event if the Borrower has been
deemed to have collected such Receivable pursuant to Section 1.5(b) or, before
the Termination Date, has adjusted the Secured Interest as provided in Section
1.5(c) so that such Receivable is no longer considered to be outstanding.
"Transaction Documents" means this Agreement, the Fee Letters, the
Limited Guaranty, each Purchase Agreement, the Rate Supplements, the
Subordinated Notes, the Subordination Agreement, and all other documents,
instruments and agreements executed or furnished in connection herewith and
therewith.
"Transfer Supplement" means an agreement among the parties hereto and a
new Lender Group pursuant to which such new Lender Group becomes party to this
Agreement.
"UCC" means, for any state, the Uniform Commercial Code as in effect in
such state.
"Uncommitted Conduit Lender" means Amsterdam and each other Person who
becomes an Uncommitted Conduit Lender pursuant to a Transfer Supplement.
"United States" and "U.S." shall each mean the United States of
America.
"Unused Aggregate Loan Commitment" means, at any time, the difference
between the Aggregate Loan Commitment then in effect and the outstanding
Aggregate Loan Amount.
"Unused Loan Commitment" means, for any Related Bank Lender at any
time, the difference between its Loan Commitment and its Loan Amount then
outstanding.
"Written" (whether lower or upper case) or "in writing" shall mean any
form of written communication or a communication by means of telex, facsimile
device, telegraph or cable.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
I-14
<PAGE> 55
Schedule II
Related Bank Lenders and Loan Commitments of Related Bank Lenders
UNCOMMITTED CONDUIT LENDER NAMES OF RELATED LOAN COMMITMENT
BANK LENDERS
Amsterdam ABN AMRO Bank N.V. $37,500,000
PNC Bank, National Association $37,500,000
<PAGE> 56
EXHIBIT A
TO
RECEIVABLES LOAN AGREEMENT
FORM OF INCREMENTAL LOAN REQUEST
______________, 199_
ABN AMRO Bank N.V., as Administrative Agent
Asset Securitization, Structured Finance
Suite 725
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attn: Lender Agent-Amsterdam
Re: Receivables Loan Agreement dated as of May 18, 1999
(the "Loan Agreement") among Eagle-Picher Acceptance Corporation,
as Borrower, Eagle-Picher Industries, Inc., as Initial Collection Agent,
ABN AMRO Bank N.V., as Administrative Agent, the Lender Agents from
time to time party thereto and the Lenders thereunder
Ladies and Gentlemen:
The undersigned Borrower under the above-referenced Loan Agreement
hereby confirms its has requested an Incremental Loan of $___________ by [THE
CONDUIT LENDERS] [NAME OF RELATED BANK LENDER] UNDER THE LOAN AGREEMENT. [THE
INTEREST RATES FOR SUCH INCREMENTAL LOAN WILL BE GOVERNED BY THE RATE SUPPLEMENT
FOR EACH LENDER.]
Attached hereto as Schedule I is information relating to the proposed
Incremental Loan required by the Loan Agreement. If on the date of this
Incremental Loan Request ("Notice"), an Interim Liquidation is in effect, this
Notice revokes our request for such Interim Liquidation so that Reinvestment
Loans shall immediately commence in accordance with Section 1.1(d) of the Loan
Agreement.
<PAGE> 57
The Borrower hereby certifies that both before and after giving effect
to [each of] the proposed Incremental Loan[s] contemplated hereby and the use of
the proceeds therefrom, all of the requirements of Section 7.2 of the Loan
Agreement have been satisfied.
Very truly yours,
EAGLE-PICHER ACCEPTANCE CORPORATION
By
---------------------------------
Title
------------------------------
A-2
<PAGE> 58
SCHEDULE I
TO
INCREMENTAL LOAN REQUESTS
SUMMARY OF INFORMATION RELATING TO PROPOSED LOAN(S)
<TABLE>
<S> <C> <C> <C> <C>
1. Dates, Amounts, Lender(s)
A1 Date of Notice _________
A2 Measurement Date (the date
of the most recent Daily Report) _________
A3 Proposed Loan _________ _________ _________ _________
Dates (each of which is a
Business Day)
A4 Respective Proposed
Incremental Loan on
each such Loan $_________ $_________ $_________ $_________
Date (each Incremental (A4A) (A4B) (A4C) (A4D)
Loan must be in a
minimum amount of
$1,000,000 and multiples
thereof, or, if less, an
amount equal to the
Maximum Incremental
Loan Amount)
A5 Allocation among
Lenders (Pro Rata)
Conduit Lenders $_________ $_________ $_________ $_________
Name of Related
Bank
Lender $_________ $_________ $_________ $_________
A6 Used Aggregate
Commitment Amount
(after such Incremental Purchase): $______________
</TABLE>
A-3
<PAGE> 59
Each proposed Loan Date must be a Business Day and must occur no later than two
weeks after the Measurement Date set forth above. The choice of Measurement Date
is a risk undertaken by the Borrower. If a selected Measurement Date is not the
applicable Loan Date, the Borrower's choice and disclosure of such date shall
not in any manner diminish or waive the obligation of the Borrower to assure the
Lenders that, after giving effect to the proposed Loan, the actual Secured
Interest as of the date of such proposed Loan does not exceed 100%.
A-4
<PAGE> 60
EXHIBIT B-1
FORM OF PERIODIC REPORT
<PAGE> 61
Exhibit B-1
EAGLE-PICHER INDUSTRIES
MONTHLY RECEIVABLES SUMMARY
APRIL-99
--------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Consolidated Receivables Activity:
- ----------------------------------
Beginning Receivables Balance Schedule 1 121,791,029
Plus: Gross Sales Billings 80,573,779
Less: Cash Collections (68,885,460)
Less: Non-Dilution Items (12,808,196)
Less: Other Adjustments (573,206)
Less: Charge Offs (6,982)
Ending Receivables Balance 120,090,965
Less: Intracompany (5,571,658) 4.64%
Subtotal (Consolidated Receivables Balance) 114,519,307
Less: Ineligible Receivables Schedule 2 (24,597,795) 21.48%
Less: Excess Concentrations Schedule 3 - 0.00%
----------- ------
Eligible Receivables Balance 89,921,512 78.52%
=========== ======
Consolidated Receivables Aging: Schedule 4
- -------------------------------
Current to 30 Days 78,366,079 68%
31-60 Days 26,792,320 23%
61-90 Days 5,325,778 5%
91+ Days 4,035,129 4%
--------------------------
Total Consolidated Receivables 114,519,307 100%
Ownership Interest:
- -------------------
Loss Reserve Schedule 5 16,207,711 18.0%
Dilution Reserve Schedule 6 2,697,645 3.0%
Discount Reserve Schedule 7 1,697,376 1.9%
--------------------------
Total Reserves 20,602,734 22.9%
Maximum Advance 69,318,778
Aggregate Net Investment 69,000,000
Ownership Interest 99.5%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Covenant Compliance: Covenant Level Ratio Compliance
- -------------------- -------------- ----- ----------
Delinquency Ratio* Schedule 5 10.0% 6.5% YES
Default Ratio* Schedule 5 7.5% 4.2% YES
Dilution Ratio Schedule 6 5.0% 0.8% YES
Loss to Liquidation Ratio* Schedule 6 1.0% -0.1% YES
Turnover Ratio* Schedule 7 75 54.34% YES
Coverage Ratio 100.0% 100.5% YES
</TABLE>
*Three month trailing average.
The undersigned hereby represents and warrants that the foregoing is a true and
accurate accounting with respect to outstandings of April 30,1999 in accordance
with the Receivables Purchase Agreement dated as of May 1999 and that all
representations and warranties are restated and reaffirmed.
Signed by:
-------------------------
Title: Treasurer
<PAGE> 62
EXHIBIT B-2
FORM OF DAILY REPORT
<PAGE> 63
Exhibit B-2
EAGLE-PICHER INDUSTRIES
DAILY RECEIVABLES REPORT
Today's Date: May 26, 1999
Reporting Date: May 24, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
RECEIVABLES BALANCE
Beginning Balance 130,509,319.48
Billings 2,041,615.86
Cash Collections 3,053,790.49
Adjustments (131,234.08)
Non AR Cash 24,412.06
-------------------------------------------
Ending Balance 129,390,322.83
RESERVES
Gross Receivables 129,390,322.83
Intracompany 6,003,710.98 4.64%
--------------
Consol. Rec. Bal. 123,386,611.85
Ineligible & Concentration 26,503,444.23 21.48%
--------------
El. Rec. Bal. 96,883,167.63
Reserves 22,186,245.39 22.90%
-------------------------------------------
Maximum Advance 74,896,922.24
Current Advance 60,000,000.00
Potential Change 14,000,000.00
</TABLE>
The undersigned hereby represents and warrants that the foregoing is a true and
accurate accounting with respect to outstandings of the above date in accordance
with the Receivables Purchase Agreement dates as of March 1999 and that all
representations and warranties are restated and reaffirmed.
Signed by:
--------------------------------
Title: Treasurer
<PAGE> 64
EXHIBIT C
ADDRESSES AND NAMES OF BORROWER AND EACH ORIGINATOR
1. Locations. (a) The chief executive office of the Borrower and each
Originator are located at the following address:
Carpenter Enterprises Limited
1867 Cass-Hartmann Court
Traverse City, Michigan 49684
Daisy Parts, Inc.
135 East South Street
Hillsdale, Michigan 49242
Eagle-Picher Acceptance Corporation
250 East Fifth Street
Suite 500
Cincinnati, Ohio 45202
Eagle-Picher Development Company, Inc.
250 East Fifth Street
Suite 500
Cincinnati, Ohio 45202
Eagle-Picher Fluid Systems, Inc.
7854 Lochlin Drive
Brighton, Michigan 48116
Eagle-Picher Industries, Inc.
250 East Fifth Street
Suite 500
Cincinnati, Ohio 45202
Eagle-Picher Minerals, Inc.
6110 Plumas Street
Reno, Nevada 89509-6060
Eagle-Picher Technologies, LLC
"C" and Porter Streets
Joplin, Missouri 64801
Hillsdale Tool & Manufacturing Co.
135 East South Street
Hillsdale, Michigan 49242
<PAGE> 65
Michigan Automotive Research Corporation
1254 North Main Street
Ann Arbor, Michigan 48104
No such address was different at any time since January 1, 1999
(b) The following are all the locations where the Borrower and each
Originator directly or through its agents maintain any Records:
Carpenter Enterprises Limited
1867 Cass-Hartmann Court
Traverse City, Michigan 49684
Daisy Parts, Inc.
135 East South Street
Hillsdale, Michigan 49242
Eagle-Picher Acceptance Corporation
250 East Fifth Street
Suite 500
Cincinnati, Ohio 45202
Eagle-Picher Development Company, Inc.
250 East Fifth Street
Suite 500
Cincinnati, Ohio 45202
Eagle-Picher Fluid Systems, Inc.
7854 Lochlin Drive
Brighton, Michigan 48116
Eagle-Picher Industries, Inc.
250 East Fifth Street
Suite 500
Cincinnati, Ohio 45202
Cincinnati Industrial Machinery Division
3280 Hageman Street
Cincinnati, Ohio 45241
Construction Equipment Division
1802 East 50th Street
Lubbock, Texas 79404
C-2
<PAGE> 66
Ross Aluminum Foundries Division
815 North Oak Avenue
Sidney, Ohio 45365
Rubber Molding Division
19 Ohio Avenue
Norwich, Connecticut 06360
Wolverine Gasket Division
2638 Princess Street
Inkster, Michigan 48141
Eagle-Picher Minerals, Inc.
6110 Plumas Street
Reno, Nevada 89509-6060
Eagle-Picher Technologies, LLC
"C" and Porter Streets
Joplin, Missouri 64801
Boron Department
798 Highway 69A
Quapaw, Oklahoma 74363
Chemicals Department
"C" and Porter Streets
Joplin, Missouri 64801
Chemsyn Science Laboratories
13605 West 96th Terrace
Lenexa, Kansas 66215-1297
Commercial Products Department
North Bethel Road
Seneca, Missouri 64865
Electro-Optic Materials Department
737 Highway 69A
Quapaw, Oklahoma 74363
Environmental Science and Technology Department
200 B.J. Tunnell Boulevard
Miami, Oklahoma 74354
C-3
<PAGE> 67
Federal Systems & Power Subsystems Departments
"C" and Porter Streets
Joplin, Missouri 64801
Power Systems Department
3820 South Hancock Expressway
Colorado Springs, Colorado 80911-1231
Precision Products Department
1927 West 4th Street
Joplin, Missouri 64801
Hillsdale Tool & Manufacturing Co.
135 East South Street
Hillsdale, Michigan 49242
Michigan Automotive Research Corporation
1254 North Main Street
Ann Arbor, Michigan 48104
2. Names. The following is a list of all names (including trade names
or similar appellations) used by the Borrower and each Originator or any of its
divisions or other business units that generate Receivables:
Eagle-Picher Industries, Inc.
Carpenter Enterprises Limited
Cincinnati Industrial Machinery Division
Construction Equipment Division
Daisy Parts, Inc.
Eagle-Picher Development Company, Inc.
Eagle-Picher Fluid Systems, Inc.
Eagle-Picher Minerals, Inc.
Eagle-Picher Technologies, LLC
Hillsdale Tool & Manufacturing Co.
Michigan Automotive Research Corporation
Ross Aluminum Foundries Division
Rubber Molding Division
Wolverine Gasket Division
Boron Department
Chemicals Department
Chemsyn Science Laboratories
Commercial Products Department
Electro-Optic Materials Department
Environmental Science and Technology Department
Federal Systems & Power Subsystems Departments
C-4
<PAGE> 68
Power Systems Department
Precision Products Department
C-5
<PAGE> 69
EXHIBIT D
SUBSIDIARIES
Carpenter Enterprises limited
Daisy Parts, Inc.
Eagle-Picher Acceptance Corporation
Eagle-Picher Development Company, Inc.
Eagle-Picher Far East, Inc.
Eagle-Picher Fluid Systems, Inc.
Eagle-Picher Minerals, Inc.
Hillsdale Tool & Manufacturing Co.
Michigan Automotive Research Corporation
Eagle-Picher Automotive GmbH
Eagle-Picher Rubber Molding, S.A.
Eagle-Picher Fluid Systems Ltd.
Eagle-Picher Hillsdale Limited
Eagle-Picher Industries Europe B.V.
Eagle-Picher Technologies LLC
Eagle-Picher Technologies GmbH
Eagle-Picher Industries of Canada Limited
Eagle-Picher Minerals International S.A.R.L.
Eagle-Picher UK Limited
Eagle-Picher Wolverine GmbH
Eagle-Picher, Inc.
EPTEC, S.A. de C.V.
Equipos de Acuna, S.A. de C.V.
United Minerals GmbH & Co. KG
United Minerals Verwaltungs-und Beteiligungs GmbH
Cincinnati Industrial Machinery Sales Company
<PAGE> 70
EXHIBIT E
LOCK BOXES AND LOCK-BOX BANKS
<TABLE>
<CAPTION>
RELEVANT ORIGINATOR COLLECTION
BANK LOCK-BOX NUMBER ACCOUNT
<S> <C> <C> <C>
NBD Bank Eagle-Picher Industries, Inc. 77456 (Detroit, MI) 723673
Eagle-Picher Fluid Systems, Inc. 77202 (Detroit, MI) 723673
Hillsdale Tool & Manufacturing 77632 (Detroit, MI) 723673
Co.
Eagle-Picher Industries, Inc. 771073 (Detroit, MI) 723673
Eagle-Picher Minerals, Inc. 771118 (Detroit, MI) 723673
Carpenter Enterprises Limited 78115 (Detroit, MI) 723673
Eagle-Picher Industries, Inc. 77138 (Detroit, MI) 723673
RELEVANT ORIGINATOR COLLECTION
BANK LOCK-BOX NUMBER ACCOUNT
PNC Bank, Eagle-Picher Technologies, 664 (Pittsburgh, PA) 4000627434
National Association LLC
Eagle-Picher Technologies, 666 (Pittsburgh, PA) 4000627434
LLC
Eagle-Picher Technologies, 890319 (Dallas, TX) 4000627434
LLC
Eagle-Picher Industries, Inc. 1202 (Cincinnati, OH) 4000627434
Eagle-Picher Industries, Inc. 960588 (Cincinnati, OH) 4000627434
Michigan Automotive Research [TO BE PROVIDED POST-CLOSING] [TO BE PROVIDED
Corporation POST-CLOSING]
</TABLE>
<PAGE> 71
EXHIBIT F
TO RECEIVABLES LOAN AGREEMENT
FORM OF LOCK BOX LETTER
[Name of Lock Box Bank]
Ladies and Gentlemen:
Reference is made to the lock-box numbers _______________ in __________
and the associated lock-box demand deposit account number ____________
maintained with you (such lock-boxes and associated lock-box demand deposit
account, collectively, the "Accounts"), each in the name of Eagle-Picher
Industries, Inc. ("Eagle-Picher"). Eagle-Picher hereby confirms it has sold all
Receivables (as defined below) to Eagle-Picher Acceptance Corporation (the
"Borrower").
In connection with the Receivables Loan Agreement, dated as of May 18,
1999 (as amended, supplemented or otherwise modified from time to time, the
"Receivables Loan Agreement"), among the Borrower, the Initial Collection Agent,
the Administrative Agent, the Lender Agents from time to time party thereto and
the Lenders thereunder, the Borrower has assigned to the Administrative Agent
for the benefit of the Lenders an undivided percentage interest in the accounts,
chattel paper, instruments or general intangibles (collectively, the
"Receivables") under which payments are or may hereafter be made to the
Accounts, and has granted to the Administrative Agent for the benefit of the
Lenders a security interest in its retained interest in such Receivables. As is
the customary practice in this type of transaction, we hereby request that you
execute this letter agreement. All references herein to "we" and "us" refer to
Eagle-Picher and the Borrower, jointly and severally. Your execution hereof is a
condition precedent to our continued maintenance of the Accounts with you.
We hereby transfer exclusive dominion and control of the Accounts to
the Administrative Agent, subject only to the condition subsequent that the
Administrative Agent shall have given you notice that a "Collection Agent
Replacement Event" has occurred and is continuing under the Receivables Loan
Agreement and of its election to assume such dominion and control, which notice
shall be in substantially the form attached hereto as Annex A (the
"Administrative Agent's Notice").
At all times prior to the receipt of the Administrative Agent's Notice
described above, all payments to be made by you out of, or in connection with
the Accounts, are to be made in accordance with the instructions of the Borrower
or its agent.
We hereby irrevocably instruct you, at all times from and after the
date of your receipt of the Administrative Agent's Notice as described above, to
make all payments to be made by you out of, or in connection with, the Accounts
directly to the Administrative Agent, at its address set
<PAGE> 72
forth below its signature hereto or as the Administrative Agent otherwise
notifies you, or otherwise in accordance with the instructions of the
Administrative Agent.
We also hereby notify you that, at all times from and after the date of
your receipt of the Administrative Agent's Notice as described above, the
Administrative Agent shall be irrevocably entitled to exercise in our place and
stead any and all rights in connection with the Accounts, including, without
limitation, (a) the right to specify when payments are to be made out of, or in
connection with, the Accounts and (b) the right to require preparation of
duplicate monthly bank statements on the Accounts for the Administrative Agent's
audit purposes and mailing of such statements directly to an address specified
by the Administrative Agent. At all times from and after the date of your
receipt of the Administrative Agent's Notice, neither we nor any of our
affiliates shall be given any access to the Accounts.
The Administrative Agent's Notice may be personally served or sent by
telex, facsimile or U.S. mail, certified return receipt requested, to the
address, telex or facsimile number set forth under your signature to this letter
agreement (or to such other address, telex or facsimile number as to which you
shall notify the Administrative Agent in writing). If the Administrative Agent's
Notice is given by telex or facsimile, it will be deemed to have been received
when the Administrative Agent's Notice is sent and the answerback is received
(in the case of telex) or receipt is confirmed by telephone or other electronic
means (in the case of facsimile). 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 Administrative Agent's right to dominion and control of the Accounts and its
ownership of and security interest in the amounts from time to time on deposit
therein and agree that from the date hereof the Accounts shall be maintained by
you for the benefit of, and amounts from time to time therein held by you as
agent for, the Administrative Agent on the terms provided herein. The Accounts
are to be entitled "Eagle-Picher Acceptance Corporation and ABN AMRO Bank N.V.,
as Administrative Agent for the Lenders" with the subline "Eagle-Picher
Industries, Inc.". Except as otherwise provided in this letter agreement,
payments to the Accounts are to be processed in accordance with the standard
procedures currently in effect. All service charges and fees in connection with
the Accounts shall continue to be payable by us under the arrangements currently
in effect.
By executing this letter agreement, you (a) irrevocably waive and agree
not to assert, claim or endeavor to exercise, (b) irrevocably bar and estop
yourself from asserting, claiming or exercising and (c) acknowledge that you
have not heretofore received a notice, writ, order or other form of legal
process from any other party asserting, claiming or exercising, any right of
set-off, banker's lien or other purported form of claim with respect to the
accounts or any funds from time to time therein. Except for your right to
payment of your service charge and fees and to make deductions for returned
items, you shall have no rights in the Accounts or funds therein, except
deductions for service charges, fees and returned or misplaced items. To the
extent you may ever have any additional rights, you hereby expressly subordinate
all such rights to all rights of the Administrative Agent.
F-2
<PAGE> 73
You may terminate this letter agreement by cancelling the Accounts
maintained with you, which cancellation and termination shall become effective
only upon thirty (30) days prior written notice thereof from you to the
Administrative Agent in the absence of fraud or abuse. Incoming mail addressed
to the Accounts (including, without limitation, any direct funds transfer to the
Accounts) received after such cancellation shall be forwarded in accordance with
the Administrative Agent's instructions. This letter agreement may also be
terminated upon written notice to you by the Administrative Agent stating that
the Receivables Loan Agreement is no longer in effect. Except as otherwise
provided in this paragraph, this letter agreement may not be terminated without
the prior written consent of the Administrative Agent.
This letter agreement contains the entire agreement between the parties
with respect to the subject matter hereof, and may not be altered, modified or
amended in any respect, nor may any right, power or privilege of any party
hereunder be waived or released or discharged, except upon execution by you, us
and the Administrative Agent of a written instrument so providing. The terms and
conditions of any agreement between us and you (a "Lock-Box Service Agreement")
(whether now existing or executed hereafter) with respect to the lock-box
arrangements, to the extent not inconsistent with this letter agreement, will
remain in effect between you and us. In the event that any provision in this
letter agreement is in conflict with, or inconsistent with, any provision of any
such Lock-Box Service Agreement, this letter agreement will exclusively govern
and control. Each party agrees to take all actions reasonably requested by any
other party to carry out the purposes of this letter agreement or to preserve
and protect the rights of each party hereunder.
Eagle-Picher agrees to indemnify, defend and hold harmless you and your
affiliates, directors, officers, employees, agents, successors and assigns
(each, an "Indemnitee") from and against any and all liabilities, losses,
claims, damages, demands, costs and expenses of every kind (including but not
limited to costs incurred as a result of items being deposited in the Account
and being unpaid for any reason, reasonable attorney's fees and the reasonable
charges of your in-house counsel) incurred or sustained by any Indemnitee
arising out of your performance of the services contemplated by this Lock-Box
Letter, except to the extent such liabilities, losses, claims, damages, demands,
costs and expenses are the direct result of your gross negligence or willful
misconduct. The provisions of this paragraph shall survive the termination of
this Lock-Box Letter.
In the event Eagle-Picher becomes subject to a voluntary or involuntary
proceeding under the United States Bankruptcy Code, or if you are otherwise
served with legal process which you in good faith believe affects funds in the
Account you may suspend disbursements from the Account otherwise required by the
terms hereof until such time as you receive an appropriate court order or other
assurances satisfactory to you establishing that the funds may continue to be
disbursed according to the instructions contained in this Lock-Box Letter.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. This letter agreement may be executed in any
number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument.
F-3
<PAGE> 74
Please indicate your agreement to the terms of this letter agreement by
signing in the space provided below. This letter agreement will become effective
immediately upon execution of a counterpart of this letter agreement by all
parties hereto.
Very truly yours,
EAGLE-PICHER INDUSTRIES, INC.
By:
-------------------------------------
Title:
----------------------------------
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
-------------------------------------
Title:
----------------------------------
F-4
<PAGE> 75
Accepted and confirmed as of
the date first written above:
By: ABN AMRO Bank N.V., as Administrative Agent
By:
------------------------------
Title:
---------------------------
By:
------------------------------
Title:
---------------------------
Address of notice:
ABN AMRO Bank N.V.
Structured Finance, Asset Securitization
135 South LaSalle Street
Chicago, Illinois 60674
Attention: Lender Agent-Amsterdam
Telephone Number: (312) 904-6263
Telecopy Number: (312) 904-6376
Acknowledged and agreed to as of the date first written above:
[NAME OF BANK]
By:
------------------------------
Title:
---------------------------
Address for notice:
- ----------------------------------
- ----------------------------------
- ----------------------------------
F-5
<PAGE> 76
ANNEX A TO
LOCK-BOX LETTER
[Name of Bank]
Re: Eagle-Picher Acceptance Corporation
Lock Box Numbers ______________
Lock-Box Account Number ____________
Ladies and Gentlemen:
Reference is made to the letter agreement dated _________________ (the
"Letter Agreement") among Eagle-Picher Industries, Inc., Eagle-Picher Acceptance
Corporation, the undersigned, as Administrative Agent, and you concerning the
above-described lock-boxes and lock-box account (collectively, the "Accounts").
We hereby give you notice that a "Collection Agent Replacement Event" has
occurred and is continuing under the Receivables Loan Agreement (as defined in
the Letter Agreement) and of our assumption of dominion and control of the
Accounts as provided in the Letter Agreement.
We hereby instruct you not to permit any other party to have access to
the Accounts and to make all payments to be made by you out of or in connection
with the Accounts directly to the undersigned upon our instructions, at our
address set forth above.
Very truly yours,
ABN AMRO Bank N.V.
By:
------------------------------------
Title:
---------------------------------
By:
-------------------------------------
Title:
----------------------------------
cc: Eagle-Picher Acceptance Corporation
F-6
<PAGE> 77
EXHIBIT G
TO RECEIVABLES LOAN AGREEMENT
COMPLIANCE CERTIFICATE
To: ABN AMRO Bank N.V., as Administrative Agent, and
each Lender
This Compliance Certificate is furnished pursuant to Section
5.1(a)(iii) of the Receivables Loan Agreement, dated as of May 18, 1999 (as
amended, supplemented or otherwise modified through the date hereof, the "Loan
Agreement"), among the Borrower, the Initial Collection Agent, the
Administrative Agent, the Lender Agents from time to time party thereto and the
Lenders thereunder. Terms used in this Compliance Certificate and not otherwise
defined herein shall have the respective meanings ascribed thereto in the Loan
Agreement.
The undersigned hereby represents, warrants, certifies and confirms
that:
1. The undersigned is a duly elected Designated Financial
Officer of the undersigned.
2. Attached hereto is a copy of the financial statements
described in Section 5.1(a)(i) or 5.1(a)(ii) of the Loan Agreement.
3. The undersigned has reviewed the terms of the Transaction
Documents and has made, or caused to be made under his/her supervision,
a detailed review of the transactions and the conditions of the
Borrower and each Originator during and at the end of the accounting
period covered by the attached financial statements.
4. The examinations described in paragraph 3 hereof did not
disclose, and the undersigned has no knowledge of, the existence of any
condition or event which constitutes a Potential Termination Event,
during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Compliance Certificate,
except as set forth below.
5. Based on the examinations described in paragraph 3 hereof,
the undersigned confirms that the representations and warranties
contained in Article IV of the Loan Agreement are true and correct as
though made on the date hereof, except as set forth below.
6. The undersigned confirms that Year 2000 remediation efforts
are proceeding as scheduled.
<PAGE> 78
7. [INDICATE WHETHER AN AUDITOR, REGULATOR OR THIRD PARTY
CONSULTANT OF THE UNDERSIGNED HAS ISSUED A MANAGEMENT LETTER OR OTHER
COMMUNICATION REGARDING YEAR 2000 EXPOSURE, PROGRAM OR PROGRESS].
Described below are the exceptions, if any, to paragraphs 4 and 5
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action the undersigned has taken, is taking or
proposes to take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this ____ day of
___________, 199__.
[NAME OF BORROWER OR PARENT]
By:
-----------------------------
Designated Financial Officer
G-2
<PAGE> 79
EXHIBIT H
CREDIT AND COLLECTION POLICIES
[TO BE PROVIDED NOT LATER THAN JUNE 18, 1999]
<PAGE> 80
EXHIBIT I
LITIGATION, CLAIMS & PROCEEDINGS
PENDING LITIGATION
<TABLE>
<CAPTION>
- ---------------------------------------- -------------------------------------------- -------------------------------
CASE NAME COURT CASE NUMBER
- ---------------------------------------- -------------------------------------------- -------------------------------
<S> <C> <C>
McGraw v. Eagle-Picher Industries, Inc. Jefferson County Circuit Court (Ala.) CV-95-03557
- ---------------------------------------- -------------------------------------------- -------------------------------
People's Qui Tam Suit U.S. District Court (W.D. Mo.) 96-5009-CV-SW-1
- ---------------------------------------- -------------------------------------------- -------------------------------
Parish Chemical Company v.
Eagle-Picher Industries, Inc. Utah County Dist. Court (4th Dist.) 970400119CV
- ---------------------------------------- -------------------------------------------- -------------------------------
Hunter Blanco v. Eagle-Picher
Industries, Inc. Lubbock County, Dist. Court (TX) 97-500-523
- ---------------------------------------- -------------------------------------------- -------------------------------
Anstett, et. al. v. Eagle-Picher
Industries, Inc. U.S. District Court (N.D. Indiana) 97-CV-0458
- ---------------------------------------- -------------------------------------------- -------------------------------
State of Michigan, Dept. of the Michigan Court of Appeals (petition for
Treasury v. Michigan Automotive certiorari filed with Supreme Court of
Research Corp. Michigan) 184-497
- ---------------------------------------- -------------------------------------------- -------------------------------
Caradon Doors & Window Inc. v.
Eagle-Picher Industries, Inc. U.S. District Court (N.D. Georgia) 1-97-CV-1331
- ---------------------------------------- -------------------------------------------- -------------------------------
Therma-Tru Corporation v. Pease
Industries U.S. District Court (E.D. Michigan) 97-CV-70916 4DT
- ---------------------------------------- -------------------------------------------- -------------------------------
Leach, Virgil v. Eagle-Picher U.S. District Court Northern District of
Industries, Inc. et. al. Indiana 98-CV-0038
- ---------------------------------------- -------------------------------------------- -------------------------------
U.S. Bankruptcy Court Southern
Fibrex Inc. Dist. of Ohio 98-1810-RLB-11
- ---------------------------------------- -------------------------------------------- -------------------------------
Lawhorn, Ruby v. U.S. Dist. Court
Eagle-Picher Industries, Inc. Northern Dist. Indiana 1:99-CV-0075
- ---------------------------------------- -------------------------------------------- -------------------------------
Vadus, Cornett v.
Eagle-Picher Industries, Inc. U.S. Dept. of Labor 95-BLA-1651
- ---------------------------------------- -------------------------------------------- -------------------------------
</TABLE>
<PAGE> 81
<TABLE>
<S> <C> <C>
Adams, Otis v.
Eagle-Picher Industries, Inc. U.S. Dept. of Labor ###-##-####
- ---------------------------------------- -------------------------------------------- -------------------------------
Dal-Fab Machine, Inc. v.
Eagle-Picher Industries, Inc., et.al. Malheur Court
Cir. Court (OR) 99-01-302592
- ---------------------------------------- -------------------------------------------- -------------------------------
Llewellyn v.
Eagle-Picher Industries, Inc., et. al. U.S. Dist. Court N.D. TX - N/A -
Dallas Div. EPI not yet served
- ---------------------------------------- -------------------------------------------- -------------------------------
</TABLE>
THREATENED LITIGATION
1. $40,000 property damage claim by James Amendola and Erie Insurance
Group arising from fire in toy car allegedly caused by Eagle-Pitcher
battery.
2. Claim for possible remediation of property owned by Block 260, Ltd.
that is adjacent to Eagle-Picher's Colorado Springs facility.
3. $20,000 property damage claim by Hazel Ferguson and Doris Johnson
arising from fire in toy car allegedly caused by Eagle-Picher battery.
4. Property damage claim by John Lemay arising from fire in toy car
allegedly caused by Eagle-Picher battery.
5. Personal injury claim by Reuben Olivas for injury while operating
Eagle-Picher forklift.
6. Personal injury claim by Richard Matt, an independent contractor, for
ankle injury while working at the Lovelock NV facility of Eagle-Picher
Minerals, Inc.
7. Potential claim by M&Q Plastics against Eagle-Picher Fluid Systems U.K.
for wrongful termination of manufacturing/supply agreement.
I-2
<PAGE> 1
Exhibit 10.42
[Execution Copy]
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Eagle-Picher Industries, Inc. (the "Originator") and Eagle-Picher
Acceptance Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator all
monies then held by the Company,
<PAGE> 2
solely to the extent such monies do not constitute (x) Collections
thereon required to be distributed to the Agent under the Receivables
Loan Agreement or (y) necessary as part of a reserve for liabilities of
the Company established by the Company in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant any security interest or lien in, or
otherwise encumber, the Purchased Receivables; except the Company may grant
security interests in the Purchased Receivables to any of Originator's
Affiliates; provided that such security interests rank PARI PASSU to the
Originator's Security
-2-
<PAGE> 3
Interest. In addition to the rights set forth in this Section 1.2(d), the
Originator shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee equal to (x) 0.5% divided by twelve multiplied by
(y) the average daily amount of Purchased Receivables for the immediately
preceding month, payable on the Monthly Settlement Date for the immediately
preceding month. The parties hereto agree such servicing fee is a fair market
value fee for the servicing functions required hereby.
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly
-3-
<PAGE> 4
executed instruments of transfer in the case of checks or other
instruments, to the Company (or any replacement Collection Agent
appointed by the Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all
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Purchased Receivables, and, other than the Originator's Security Interest, the
Originator shall not have any interest of any kind in or to any such Collections
thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed
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made) with respect to any Purchased Receivable or (ii) in the case of a covenant
or agreement, is not satisfied for a Purchased Receivable, the Company shall
sell such Purchased Receivable to the Originator for an amount equal to the
amount paid by the Company for such Purchased Receivable, such amount to be paid
by reducing the outstanding principal balance of the Note by such amount;
provided that to the extent such reduction would reduce the Note to zero, the
Originator shall pay to the Company in cash on such day any remaining amount due
to purchase such Purchased Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
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documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and
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warranties set forth in Section 2.1 are true and correct on and as of such day
as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The
Company represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
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(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
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<PAGE> 10
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has assigned
all of its right, title and interest in, to and under this Agreement to the
Agent for the benefit of the Lenders pursuant to the Receivables Loan Agreement
and that the Agent and the Lenders are third party beneficiaries hereof. The
Originator hereby further acknowledges that all provisions of this Agreement
shall inure to the benefit of the Agent and the Lenders, including in the
enforcement of any provision hereof to the extent set forth in the Receivables
Loan Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. No purchases shall take place
hereunder at any time that the Agent has exercised its right to enforce the
Company's rights hereunder pursuant to Section 1.8 of the Receivables Loan
Agreement. The Originator hereby further acknowledges that the execution and
performance of this Agreement are conditions precedent for the Agent and the
Lenders to enter into the Receivables Loan Agreement and that the agreement of
the Agent and the Lenders to enter into the Receivables Loan Agreement will
directly or indirectly benefit the Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Lender with
respect hereto.
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Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are
for convenience and reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under any federal or state
bankruptcy or similar law prior to the date which is one year and one day after
the last day on which occurred the later of (i) the Company purchased any
Purchased Receivables hereunder or (ii) all of the commercial paper notes issued
by the Conduit Lenders were paid in full. The provisions of this Section 5.12
shall survive the termination of this Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the
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Agent or any Lender, (iv) any entity organized to purchase, or make loans
secured by, financial assets for which ABN AMRO provides managerial services or
acts as an administrative agent, (v) each Conduit Lender's administrator,
management company, referral agents, issuing agents or depositaries or CP
Dealers and (vi) Governmental Authorities with appropriate jurisdiction. Each
recipient of any Confidential Information shall execute, prior to receipt of
such information, a confidentiality agreement in a form satisfactory to the
Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official for any Conduit
Lender, or any substantial part of its property, or (c) ordering the winding up
or liquidation of the affairs of any Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or
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contemporaneous agreements, whether written or oral, concerning such matters are
superseded thereby.
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
-------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
EAGLE-PICHER INDUSTRIES, INC.
By:
-------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) (x) the average CP Rate (as defined in
the Amsterdam Rate Supplement) for the immediately preceding month plus 1.0%
multiplied by (y) 55 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
-17-
<PAGE> 18
EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the
<PAGE> 20
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demands hereunder. Borrower and, by its acceptance of this Note,
Originator also assent to extension of the time of payment, forbearance or other
indulgence without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
-----------------------------------
Name:
Title:
-20-
<PAGE> 21
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
<TABLE>
<CAPTION>
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- -------------------------------
(1) Describe or use appropriate code specified below:
A = increase in lieu of cash payment of interest
B = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
C = decrease due to payment of principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
Eagle-Picher Industries, Inc.
250 East Fifth Street
Suite 500
Cincinnati, OH 45202
Eagle-Picher Industries, Inc.
Construction Equipment Division
1802 East 50th Street
Lubbock, TX 79404
Eagle-Picher Industries, Inc.
Rubber Molding Division
19 Ohio Avenue
Norwich, CT 06360
Eagle-Picher Industries, Inc.
Wolverine Gasket Division
2638 Princess Street
Inkster, MI 48141
Eagle-Picher Industries, Inc.
Cincinnati Industrial Machinery Division
3280 Hageman Street
Cincinnati, OH 45241
Eagle-Picher Industries, Inc.
Ross Aluminum Foundries Division
815 North Oak Avenue
Sidney, OH 45365
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
Eagle-Picher Industries, Inc.
Construction Equipment Division
Rubber Molding Division
Wolverine Gasket Division
Cincinnati Industrial Machinery Division
Ross Aluminum Foundries Division
<PAGE> 24
===============================================================================
RECEIVABLES PURCHASE AGREEMENT
dated as of May 18, 1999
Among
EAGLE-PICHER INDUSTRIES, INC.
And
EAGLE-PICHER ACCEPTANCE CORPORATION
===============================================================================
<PAGE> 1
Exhibit 10.43
[Execution Copy]
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Carpenter Enterprises Limited (the "Originator") and Eagle-Picher
Acceptance Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
The Originator is a wholly-owned subsidiary of Eagle-Picher Industries,
Inc.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
<PAGE> 2
(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator all
monies then held by the Company, solely to the extent such monies do
not constitute (x) Collections thereon required to be distributed to
the Agent under the Receivables Loan Agreement or (y) necessary as part
of a reserve for liabilities of the Company established by the Company
in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant any security interest or lien in, or
otherwise encumber, the Purchased Receivables; except the
-2-
<PAGE> 3
Company may grant security interests in the Purchased Receivables to any of
Originator's Affiliates; provided that such security interests rank PARI PASSU
to the Originator's Security Interest. In addition to the rights set forth in
this Section 1.2(d), the Originator shall be entitled to the rights of a
"Recipient" under Section 1.7 hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee equal to (x) 0.5% divided by twelve multiplied by
(y) the average daily amount of Purchased Receivables for the immediately
preceding month, payable on the Monthly Settlement Date for the immediately
preceding month. The parties hereto agree such servicing fee is a fair market
value fee for the servicing functions required hereby.
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
-3-
<PAGE> 4
(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly executed
instruments of transfer in the case of checks or other instruments, to
the Company (or any replacement Collection Agent appointed by the
Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
-4-
<PAGE> 5
Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all Purchased Receivables, and, other than the
Originator's Security Interest, the Originator shall not have any interest of
any kind in or to any such Collections thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
-5-
<PAGE> 6
Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed made) with respect to any Purchased
Receivable or (ii) in the case of a covenant or agreement, is not satisfied for
a Purchased Receivable, the Company shall sell such Purchased Receivable to the
Originator for an amount equal to the amount paid by the Company for such
Purchased Receivable, such amount to be paid by reducing the outstanding
principal balance of the Note by such amount; provided that to the extent such
reduction would reduce the Note to zero, the Originator shall pay to the Company
in cash on such day any remaining amount due to purchase such Purchased
Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
-6-
<PAGE> 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
-7-
<PAGE> 8
(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and warranties set forth in Section 2.1 are
true and correct on and as of such day as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The
Company represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
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<PAGE> 9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
-9-
<PAGE> 10
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
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<PAGE> 11
ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has assigned
all of its right, title and interest in, to and under this Agreement to the
Agent for the benefit of the Lenders pursuant to the Receivables Loan Agreement
and that the Agent and the Lenders are third party beneficiaries hereof. The
Originator hereby further acknowledges that all provisions of this Agreement
shall inure to the benefit of the Agent and the Lenders, including in the
enforcement of any provision hereof to the extent set forth in the Receivables
Loan Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. No purchases shall take place
hereunder at any time that the Agent has exercised its right to enforce the
Company's rights hereunder pursuant to Section 1.8 of the Receivables Loan
Agreement. The Originator hereby further acknowledges that the execution and
performance of this Agreement are conditions precedent for the Agent and the
Lenders to enter into the Receivables Loan Agreement and that the agreement of
the Agent and the Lenders to enter into the Receivables Loan Agreement will
directly or indirectly benefit the Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Lender with
respect hereto.
Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
-11-
<PAGE> 12
Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are
for convenience and reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy,
-12-
<PAGE> 13
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law prior to the
date which is one year and one day after the last day on which occurred the
later of (i) the Company purchased any Purchased Receivables hereunder or (ii)
all of the commercial paper notes issued by the Conduit Lenders were paid in
full. The provisions of this Section 5.12 shall survive the termination of this
Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the Agent or any Lender, (iv) any entity organized to
purchase, or make loans secured by, financial assets for which ABN AMRO provides
managerial services or acts as an administrative agent, (v) each Conduit
Lender's administrator, management company, referral agents, issuing agents or
depositaries or CP Dealers and (vi) Governmental Authorities with appropriate
jurisdiction. Each recipient of any Confidential Information shall execute,
prior to receipt of such information, a confidentiality agreement in a form
satisfactory to the Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a
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<PAGE> 14
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for any Conduit Lender, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of any
Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
-14-
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
---------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
CARPENTER ENTERPRISES LIMITED
By:
---------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
[Receivables Purchase Agreement]
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) (x) the average CP Rate (as defined in
the Amsterdam Rate Supplement) for the immediately preceding month plus 1.0%
multiplied by (y) 55 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
-17-
<PAGE> 18
EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the
<PAGE> 20
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demands hereunder. Borrower and, by its acceptance of this Note,
Originator also assent to extension of the time of payment, forbearance or other
indulgence without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By :_______________________________
Name:
Title:
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<PAGE> 21
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
<TABLE>
<CAPTION>
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- --------
(1) Describe or use appropriate code specified below:
A = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
B = decrease due to payment of principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
Carpenter Enterprises Limited
1867 Cass-Hartman Court
Traverse City, Michigan 49684
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
Carpenter Enterprises Limited
<PAGE> 24
================================================================================
Receivables Purchase Agreement
dated as of May 18, 1999
Among
Carpenter Enterprises Limited
And
Eagle-Picher Acceptance Corporation
===============================================================================
<PAGE> 1
Exhibit 10.44
[Execution Copy]
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Daisy Parts, Inc. (the "Originator") and Eagle-Picher Acceptance
Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
The Originator is a wholly-owned subsidiary of Eagle-Picher Industries,
Inc.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
<PAGE> 2
(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator all
monies then held by the Company, solely to the extent such monies do
not constitute (x) Collections thereon required to be distributed to
the Agent under the Receivables Loan Agreement or (y) necessary as part
of a reserve for liabilities of the Company established by the Company
in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant any security interest or lien in, or
otherwise encumber, the Purchased Receivables; except the
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Company may grant security interests in the Purchased Receivables to any of
Originator's Affiliates; provided that such security interests rank PARI PASSU
to the Originator's Security Interest. In addition to the rights set forth in
this Section 1.2(d), the Originator shall be entitled to the rights of a
"Recipient" under Section 1.7 hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee equal to (x) 0.5% divided by twelve multiplied by
(y) the average daily amount of Purchased Receivables for the immediately
preceding month, payable on the Monthly Settlement Date for the immediately
preceding month. The parties hereto agree such servicing fee is a fair market
value fee for the servicing functions required hereby.
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
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(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly executed
instruments of transfer in the case of checks or other instruments, to
the Company (or any replacement Collection Agent appointed by the
Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
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Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all Purchased Receivables, and, other than the
Originator's Security Interest, the Originator shall not have any interest of
any kind in or to any such Collections thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
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Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed made) with respect to any Purchased
Receivable or (ii) in the case of a covenant or agreement, is not satisfied for
a Purchased Receivable, the Company shall sell such Purchased Receivable to the
Originator for an amount equal to the amount paid by the Company for such
Purchased Receivable, such amount to be paid by reducing the outstanding
principal balance of the Note by such amount; provided that to the extent such
reduction would reduce the Note to zero, the Originator shall pay to the Company
in cash on such day any remaining amount due to purchase such Purchased
Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
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(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and warranties set forth in Section 2.1 are
true and correct on and as of such day as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The Company
represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
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ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
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ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has assigned
all of its right, title and interest in, to and under this Agreement to the
Agent for the benefit of the Lenders pursuant to the Receivables Loan Agreement
and that the Agent and the Lenders are third party beneficiaries hereof. The
Originator hereby further acknowledges that all provisions of this Agreement
shall inure to the benefit of the Agent and the Lenders, including in the
enforcement of any provision hereof to the extent set forth in the Receivables
Loan Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. No purchases shall take place
hereunder at any time that the Agent has exercised its right to enforce the
Company's rights hereunder pursuant to Section 1.8 of the Receivables Loan
Agreement. The Originator hereby further acknowledges that the execution and
performance of this Agreement are conditions precedent for the Agent and the
Lenders to enter into the Receivables Loan Agreement and that the agreement of
the Agent and the Lenders to enter into the Receivables Loan Agreement will
directly or indirectly benefit the Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Lender with
respect hereto.
Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
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Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are for
convenience and reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy,
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reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law prior to the
date which is one year and one day after the last day on which occurred the
later of (i) the Company purchased any Purchased Receivables hereunder or (ii)
all of the commercial paper notes issued by the Conduit Lenders were paid in
full. The provisions of this Section 5.12 shall survive the termination of this
Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the Agent or any Lender, (iv) any entity organized to
purchase, or make loans secured by, financial assets for which ABN AMRO provides
managerial services or acts as an administrative agent, (v) each Conduit
Lender's administrator, management company, referral agents, issuing agents or
depositaries or CP Dealers and (vi) Governmental Authorities with appropriate
jurisdiction. Each recipient of any Confidential Information shall execute,
prior to receipt of such information, a confidentiality agreement in a form
satisfactory to the Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a
-13-
<PAGE> 14
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for any Conduit Lender, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of any
Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
-14-
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
---------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
DAISY PARTS, INC.
By:
---------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
[Receivables Purchase Agreement]
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) (x) the average CP Rate (as defined in
the Amsterdam Rate Supplement) for the immediately preceding month plus 1.0%
multiplied by (y) 55 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
-17-
<PAGE> 18
EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the
<PAGE> 20
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demands hereunder. Borrower and, by its acceptance of this Note,
Originator also assent to extension of the time of payment, forbearance or other
indulgence without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By :_______________________________
Name:
Title:
-20-
<PAGE> 21
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
<TABLE>
<CAPTION>
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- --------
(1) Describe or use appropriate code specified below:
A = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
B = decrease due to payment of principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
Daisy Parts, Inc.
135 East South Street
Hillsdale, MI 49242
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
Daisy Parts, Inc.
<PAGE> 24
===============================================================================
RECEIVABLES PURCHASE AGREEMENT
dated as of May 18, 1999
Among
DAISY PARTS, INC.
And
EAGLE-PICHER ACCEPTANCE CORPORATION
==============================================================================
<PAGE> 1
Exhibit 10.45
[Execution Copy]
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Eagle-Picher Development Company, Inc. (the "Originator") and
Eagle-Picher Acceptance Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
The Originator is a wholly-owned subsidiary of Eagle-Picher Industries,
Inc.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
<PAGE> 2
(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator all
monies then held by the Company, solely to the extent such monies do
not constitute (x) Collections thereon required to be distributed to
the Agent under the Receivables Loan Agreement or (y) necessary as part
of a reserve for liabilities of the Company established by the Company
in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant any security interest or lien in, or
otherwise encumber, the Purchased Receivables; except the
-2-
<PAGE> 3
Company may grant security interests in the Purchased Receivables to any of
Originator's Affiliates; provided that such security interests rank PARI PASSU
to the Originator's Security Interest. In addition to the rights set forth in
this Section 1.2(d), the Originator shall be entitled to the rights of a
"Recipient" under Section 1.7 hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee equal to (x) 0.5% divided by twelve multiplied by
(y) the average daily amount of Purchased Receivables for the immediately
preceding month, payable on the Monthly Settlement Date for the immediately
preceding month. The parties hereto agree such servicing fee is a fair market
value fee for the servicing functions required hereby.
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
-3-
<PAGE> 4
(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly executed
instruments of transfer in the case of checks or other instruments, to
the Company (or any replacement Collection Agent appointed by the
Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
-4-
<PAGE> 5
Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all Purchased Receivables, and, other than the
Originator's Security Interest, the Originator shall not have any interest of
any kind in or to any such Collections thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
-5-
<PAGE> 6
Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed made) with respect to any Purchased
Receivable or (ii) in the case of a covenant or agreement, is not satisfied for
a Purchased Receivable, the Company shall sell such Purchased Receivable to the
Originator for an amount equal to the amount paid by the Company for such
Purchased Receivable, such amount to be paid by reducing the outstanding
principal balance of the Note by such amount; provided that to the extent such
reduction would reduce the Note to zero, the Originator shall pay to the Company
in cash on such day any remaining amount due to purchase such Purchased
Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
-6-
<PAGE> 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
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<PAGE> 8
(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and warranties set forth in Section 2.1 are
true and correct on and as of such day as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The Company
represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
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<PAGE> 9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
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<PAGE> 10
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
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<PAGE> 11
ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has assigned
all of its right, title and interest in, to and under this Agreement to the
Agent for the benefit of the Lenders pursuant to the Receivables Loan Agreement
and that the Agent and the Lenders are third party beneficiaries hereof. The
Originator hereby further acknowledges that all provisions of this Agreement
shall inure to the benefit of the Agent and the Lenders, including in the
enforcement of any provision hereof to the extent set forth in the Receivables
Loan Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. No purchases shall take place
hereunder at any time that the Agent has exercised its right to enforce the
Company's rights hereunder pursuant to Section 1.8 of the Receivables Loan
Agreement. The Originator hereby further acknowledges that the execution and
performance of this Agreement are conditions precedent for the Agent and the
Lenders to enter into the Receivables Loan Agreement and that the agreement of
the Agent and the Lenders to enter into the Receivables Loan Agreement will
directly or indirectly benefit the Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Lender with
respect hereto.
Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
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<PAGE> 12
Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are for
convenience and reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in
this Agreement shall be deemed or construed by the parties hereto or by any
third person to create the relationship of principal and agent or of partnership
or of joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy,
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<PAGE> 13
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law prior to the
date which is one year and one day after the last day on which occurred the
later of (i) the Company purchased any Purchased Receivables hereunder or (ii)
all of the commercial paper notes issued by the Conduit Lenders were paid in
full. The provisions of this Section 5.12 shall survive the termination of this
Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the Agent or any Lender, (iv) any entity organized to
purchase, or make loans secured by, financial assets for which ABN AMRO provides
managerial services or acts as an administrative agent, (v) each Conduit
Lender's administrator, management company, referral agents, issuing agents or
depositaries or CP Dealers and (vi) Governmental Authorities with appropriate
jurisdiction. Each recipient of any Confidential Information shall execute,
prior to receipt of such information, a confidentiality agreement in a form
satisfactory to the Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a
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<PAGE> 14
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for any Conduit Lender, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of any
Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
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<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
----------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
EAGLE-PICHER DEVELOPMENT COMPANY, INC.
By:
---------------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
[Receivables Purchase Agreement]
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) (x) the average CP Rate (as defined in
the Amsterdam Rate Supplement) for the immediately preceding month plus 1.0%
multiplied by (y) 55 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
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<PAGE> 18
EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the
<PAGE> 20
full extent permitted by law, the right to plead any statute of limitations as
a defense to any demands hereunder. Borrower and, by its acceptance of this
Note, Originator also assent to extension of the time of payment, forbearance
or other indulgence without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By :_______________________________
Name:
Title:
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<PAGE> 21
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
<TABLE>
<CAPTION>
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- ------------
1 Describe or use appropriate code specified below:
A=increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
B=decrease due to payment principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
Eagle-Picher Development Company, Inc.
250 East Fifth Street
Suite 500
Cincinnati, OH 45202
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
Eagle-Picher Development Company, Inc.
<PAGE> 24
==============================================================================
RECEIVABLES PURCHASE AGREEMENT
dated as of May 18, 1999
Among
EAGLE-PICHER DEVELOPMENT COMPANY, INC.
And
EAGLE-PICHER ACCEPTANCE CORPORATION
==============================================================================
<PAGE> 1
Exhibit 10.46
[Execution Copy]
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Eagle-Picher Fluid Systems, Inc. (the "Originator") and
Eagle-Picher Acceptance Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
The Originator is a wholly-owned subsidiary of Eagle-Picher Industries,
Inc.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
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(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator all
monies then held by the Company, solely to the extent such monies do
not constitute (x) Collections thereon required to be distributed to
the Agent under the Receivables Loan Agreement or (y) necessary as part
of a reserve for liabilities of the Company established by the Company
in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant any security interest or lien in, or
otherwise encumber, the Purchased Receivables; except the
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Company may grant security interests in the Purchased Receivables to any of
Originator's Affiliates; provided that such security interests rank PARI PASSU
to the Originator's Security Interest. In addition to the rights set forth in
this Section 1.2(d), the Originator shall be entitled to the rights of a
"Recipient" under Section 1.7 hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee equal to (x) 0.5% divided by twelve multiplied by
(y) the average daily amount of Purchased Receivables for the immediately
preceding month, payable on the Monthly Settlement Date for the immediately
preceding month. The parties hereto agree such servicing fee is a fair market
value fee for the servicing functions required hereby.
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
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(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly executed
instruments of transfer in the case of checks or other instruments, to
the Company (or any replacement Collection Agent appointed by the
Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
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Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all Purchased Receivables, and, other than the
Originator's Security Interest, the Originator shall not have any interest of
any kind in or to any such Collections thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
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Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed made) with respect to any Purchased
Receivable or (ii) in the case of a covenant or agreement, is not satisfied for
a Purchased Receivable, the Company shall sell such Purchased Receivable to the
Originator for an amount equal to the amount paid by the Company for such
Purchased Receivable, such amount to be paid by reducing the outstanding
principal balance of the Note by such amount; provided that to the extent such
reduction would reduce the Note to zero, the Originator shall pay to the Company
in cash on such day any remaining amount due to purchase such Purchased
Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
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(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and warranties set forth in Section 2.1 are
true and correct on and as of such day as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The Company
represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
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ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
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ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has assigned
all of its right, title and interest in, to and under this Agreement to the
Agent for the benefit of the Lenders pursuant to the Receivables Loan Agreement
and that the Agent and the Lenders are third party beneficiaries hereof. The
Originator hereby further acknowledges that all provisions of this Agreement
shall inure to the benefit of the Agent and the Lenders, including in the
enforcement of any provision hereof to the extent set forth in the Receivables
Loan Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. No purchases shall take place
hereunder at any time that the Agent has exercised its right to enforce the
Company's rights hereunder pursuant to Section 1.8 of the Receivables Loan
Agreement. The Originator hereby further acknowledges that the execution and
performance of this Agreement are conditions precedent for the Agent and the
Lenders to enter into the Receivables Loan Agreement and that the agreement of
the Agent and the Lenders to enter into the Receivables Loan Agreement will
directly or indirectly benefit the Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Lender with
respect hereto.
Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
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Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are for
convenience and reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in
this Agreement shall be deemed or construed by the parties hereto or by any
third person to create the relationship of principal and agent or of partnership
or of joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy,
-12-
<PAGE> 13
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law prior to the
date which is one year and one day after the last day on which occurred the
later of (i) the Company purchased any Purchased Receivables hereunder or (ii)
all of the commercial paper notes issued by the Conduit Lenders were paid in
full. The provisions of this Section 5.12 shall survive the termination of this
Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the Agent or any Lender, (iv) any entity organized to
purchase, or make loans secured by, financial assets for which ABN AMRO provides
managerial services or acts as an administrative agent, (v) each Conduit
Lender's administrator, management company, referral agents, issuing agents or
depositaries or CP Dealers and (vi) Governmental Authorities with appropriate
jurisdiction. Each recipient of any Confidential Information shall execute,
prior to receipt of such information, a confidentiality agreement in a form
satisfactory to the Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a
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<PAGE> 14
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for any Conduit Lender, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of any
Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
-14-
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
------------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
EAGLE-PICHER FLUID SYSTEMS, INC.
By:
------------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
[Receivables Purchase Agreement]
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) (x) the average CP Rate (as defined in
the Amsterdam Rate Supplement) for the immediately preceding month plus 1.0%
multiplied by (y) 55 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
-17-
<PAGE> 18
EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the
<PAGE> 20
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demands hereunder. Borrower and, by its acceptance of this Note,
Originator also assent to extension of the time of payment, forbearance or other
indulgence without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By :_______________________________
Name:
Title:
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<PAGE> 21
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
<TABLE>
<CAPTION>
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- --------
(1) Describe or use appropriate code specified below:
A = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
B = decrease due to payment of principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
Eagle-Picher Fluid Systems, Inc.
17854 Lochlin Drive
Brighton, MI 48116
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
Eagle-Picher Fluid Systems, Inc.
<PAGE> 24
===============================================================================
RECEIVABLES PURCHASE AGREEMENT
dated as of May 18, 1999
Among
EAGLE-PICHER FLUID SYSTEMS, INC.
And
EAGLE-PICHER ACCEPTANCE CORPORATION
===============================================================================
<PAGE> 1
Exhibit 10.47
[Execution Copy]
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Eagle-Picher Minerals, Inc. (the "Originator") and Eagle-Picher
Acceptance Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
The Originator is a wholly-owned subsidiary of Eagle-Picher Industries,
Inc.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
<PAGE> 2
(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator all
monies then held by the Company, solely to the extent such monies do
not constitute (x) Collections thereon required to be distributed to
the Agent under the Receivables Loan Agreement or (y) necessary as part
of a reserve for liabilities of the Company established by the Company
in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant any security interest or lien in, or
otherwise encumber, the Purchased Receivables; except the
-2-
<PAGE> 3
Company may grant security interests in the Purchased Receivables to any of
Originator's Affiliates; provided that such security interests rank PARI PASSU
to the Originator's Security Interest. In addition to the rights set forth in
this Section 1.2(d), the Originator shall be entitled to the rights of a
"Recipient" under Section 1.7 hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee equal to (x) 0.5% divided by twelve multiplied by
(y) the average daily amount of Purchased Receivables for the immediately
preceding month, payable on the Monthly Settlement Date for the immediately
preceding month. The parties hereto agree such servicing fee is a fair market
value fee for the servicing functions required hereby.
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
-3-
<PAGE> 4
(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly executed
instruments of transfer in the case of checks or other instruments, to
the Company (or any replacement Collection Agent appointed by the
Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
-4-
<PAGE> 5
Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all Purchased Receivables, and, other than the
Originator's Security Interest, the Originator shall not have any interest of
any kind in or to any such Collections thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
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Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed made) with respect to any Purchased
Receivable or (ii) in the case of a covenant or agreement, is not satisfied for
a Purchased Receivable, the Company shall sell such Purchased Receivable to the
Originator for an amount equal to the amount paid by the Company for such
Purchased Receivable, such amount to be paid by reducing the outstanding
principal balance of the Note by such amount; provided that to the extent such
reduction would reduce the Note to zero, the Originator shall pay to the Company
in cash on such day any remaining amount due to purchase such Purchased
Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
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<PAGE> 8
(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and warranties set forth in Section 2.1 are
true and correct on and as of such day as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The Company
represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
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ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
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ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has assigned
all of its right, title and interest in, to and under this Agreement to the
Agent for the benefit of the Lenders pursuant to the Receivables Loan Agreement
and that the Agent and the Lenders are third party beneficiaries hereof. The
Originator hereby further acknowledges that all provisions of this Agreement
shall inure to the benefit of the Agent and the Lenders, including in the
enforcement of any provision hereof to the extent set forth in the Receivables
Loan Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. No purchases shall take place
hereunder at any time that the Agent has exercised its right to enforce the
Company's rights hereunder pursuant to Section 1.8 of the Receivables Loan
Agreement. The Originator hereby further acknowledges that the execution and
performance of this Agreement are conditions precedent for the Agent and the
Lenders to enter into the Receivables Loan Agreement and that the agreement of
the Agent and the Lenders to enter into the Receivables Loan Agreement will
directly or indirectly benefit the Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Lender with
respect hereto.
Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
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<PAGE> 12
Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are for
convenience and reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in
this Agreement shall be deemed or construed by the parties hereto or by any
third person to create the relationship of principal and agent or of partnership
or of joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy,
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reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law prior to the
date which is one year and one day after the last day on which occurred the
later of (i) the Company purchased any Purchased Receivables hereunder or (ii)
all of the commercial paper notes issued by the Conduit Lenders were paid in
full. The provisions of this Section 5.12 shall survive the termination of this
Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the Agent or any Lender, (iv) any entity organized to
purchase, or make loans secured by, financial assets for which ABN AMRO provides
managerial services or acts as an administrative agent, (v) each Conduit
Lender's administrator, management company, referral agents, issuing agents or
depositaries or CP Dealers and (vi) Governmental Authorities with appropriate
jurisdiction. Each recipient of any Confidential Information shall execute,
prior to receipt of such information, a confidentiality agreement in a form
satisfactory to the Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a
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<PAGE> 14
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for any Conduit Lender, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of any
Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
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<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
--------------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
EAGLE-PICHER MINERALS, INC.
By:
--------------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
[Receivables Purchase Agreement]
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) (x) the average CP Rate (as defined in
the Amsterdam Rate Supplement) for the immediately preceding month plus 1.0%
multiplied by (y) 55 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
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EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any
<PAGE> 20
demands hereunder. Borrower and, by its acceptance of this Note, Originator also
assent to extension of the time of payment, forbearance or other indulgence
without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By :_______________________________
Name:
Title:
-20-
<PAGE> 21
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
<TABLE>
<CAPTION>
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- --------
(1) Describe or use appropriate code specified below:
A = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
B = decrease due to payment of principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
Eagle-Picher Minerals, Inc.
6110 Plumas Street
Reno, NV 89509-6060
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
Eagle-Picher Minerals, Inc.
<PAGE> 24
===============================================================================
RECEIVABLES PURCHASE AGREEMENT
dated as of May 18, 1999
Among
EAGLE-PICHER MINERALS, INC.
And
EAGLE-PICHER ACCEPTANCE CORPORATION
===============================================================================
<PAGE> 1
Exhibit 10.48
Execution Copy
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Eagle-Picher Technologies, LLC (the "Originator") and Eagle-Picher
Acceptance Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
The Originator is a wholly-owned subsidiary of Eagle-Picher Industries,
Inc.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
<PAGE> 2
(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator a PRO
RATA portion of all monies then held by the Company, solely to the
extent such monies do not constitute (x) Collections thereon required
to be distributed to the Agent under the Receivables Loan Agreement or
(y) necessary as part of a reserve for liabilities of the Company
established by the Company in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note. For purposes of
clause (a)(i) above, the PRO RATA portion of all monies then held by the Company
shall equal the aggregate face amount of the Receivables to be purchased from
the Originator divided by the aggregate face amount of the Receivables to be
purchased from all Originators (including this Originator) at such time.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the
-2-
<PAGE> 3
Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant any security interest or lien in, or
otherwise encumber, the Purchased Receivables; except the Company may grant
security interests in the Purchased Receivables to any of Originator's
Affiliates; provided that such security interests rank PARI PASSU to the
Originator's Security Interest. In addition to the rights set forth in this
Section 1.2(d), the Originator shall be entitled to the rights of a "Recipient"
under Section 1.7 hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee of $500 per month payable on the Monthly Settlement
Date for the immediately preceding month. The parties hereto agree such
servicing fee is a fair market value fee for the servicing functions required
hereby.
-3-
<PAGE> 4
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly executed
instruments of transfer in the case of checks or other instruments, to
the Company (or any replacement Collection Agent appointed by the
Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
-4-
<PAGE> 5
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all Purchased Receivables, and, other than the
Originator's Security Interest, the Originator shall not have any interest of
any kind in or to any such Collections thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
-5-
<PAGE> 6
Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed made) with respect to any Purchased
Receivable or (ii) in the case of a covenant or agreement, is not satisfied for
a Purchased Receivable, the Company shall sell such Purchased Receivable to the
Originator for an amount equal to the amount paid by the Company for such
Purchased Receivable, such amount to be paid by reducing the outstanding
principal balance of the Note by such amount; provided that to the extent such
reduction would reduce the Note to zero, the Originator shall pay to the Company
in cash on such day any remaining amount due to purchase such Purchased
Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
-6-
<PAGE> 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
-7-
<PAGE> 8
(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and warranties set forth in Section 2.1 are
true and correct on and as of such day as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The Company
represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
-8-
<PAGE> 9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
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<PAGE> 10
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
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<PAGE> 11
ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has
collaterally assigned all of its right, title and interest in, to and under this
Agreement to the Agent for the benefit of the Lenders pursuant to the
Receivables Loan Agreement and that, to the extent of such collateral grant, the
Agent and the Lenders are third party beneficiaries hereof. The Originator
hereby further acknowledges that all provisions of this Agreement shall inure to
the benefit of the Agent and the Lenders, including in the enforcement of any
provision hereof to the extent set forth in the Receivables Loan Agreement, but
that neither the Agent nor any Lender shall have any obligations or duties under
this Agreement. No purchases shall take place hereunder at any time that the
Agent has exercised its right to enforce the Company's rights hereunder pursuant
to Section 1.8 of the Receivables Loan Agreement. The Originator hereby further
acknowledges that the execution and performance of this Agreement are conditions
precedent for the Agent and the Lenders to enter into the Receivables Loan
Agreement and that the agreement of the Agent and the Lenders to enter into the
Receivables Loan Agreement will directly or indirectly benefit the Originator
and constitutes good and valuable consideration for the rights and remedies of
the Agent and each Lender with respect hereto.
Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
-11-
<PAGE> 12
Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are for
convenience and reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in
this Agreement shall be deemed or construed by the parties hereto or by any
third person to create the relationship of principal and agent or of partnership
or of joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy,
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<PAGE> 13
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law prior to the
date which is one year and one day after the last day on which occurred the
later of (i) the Company purchased any Purchased Receivables hereunder or (ii)
all of the commercial paper notes issued by the Conduit Lenders were paid in
full. The provisions of this Section 5.12 shall survive the termination of this
Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the Agent or any Lender, (iv) any entity organized to
purchase, or make loans secured by, financial assets for which ABN AMRO provides
managerial services or acts as an administrative agent, (v) each Conduit
Lender's administrator, management company, referral agents, issuing agents or
depositaries or CP Dealers and (vi) Governmental Authorities with appropriate
jurisdiction. Each recipient of any Confidential Information shall execute,
prior to receipt of such information, a confidentiality agreement in a form
satisfactory to the Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a
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<PAGE> 14
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for any Conduit Lender, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of any
Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
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<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
--------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
EAGLE-PICHER TECHNOLOGIES, LLC
By:
--------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
[Receivables Purchase Agreement]
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) the CP Rate (as determined pursuant to
the Amsterdam Rate Supplement with reference to the CP Rate as a discount rate)
multiplied by 75 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
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<PAGE> 18
EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any
<PAGE> 20
demands hereunder. Borrower and, by its acceptance of this Note, Originator also
assent to extension of the time of payment, forbearance or other indulgence
without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By :_______________________________
Name:
Title:
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<PAGE> 21
<TABLE>
<CAPTION>
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- --------
(1) Describe or use appropriate code specified below:
A = increase in lieu of cash payment of interest
B = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
C = decrease due to payment of principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
<PAGE> 24
===============================================================================
RECEIVABLES PURCHASE AGREEMENT
dated as of May 18, 1999
Among
EAGLE-PICHER TECHNOLOGIES, LLC
And
EAGLE-PICHER ACCEPTANCE CORPORATION
===============================================================================
-i-
<PAGE> 1
Exhibit 10.49
[Execution Copy]
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Hillsdale Tool & Manufacturing Co. (the "Originator") and
Eagle-Picher Acceptance Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
The Originator is a wholly-owned subsidiary of Eagle-Picher Industries,
Inc.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
<PAGE> 2
(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator all
monies then held by the Company, solely to the extent such monies do
not constitute (x) Collections thereon required to be distributed to
the Agent under the Receivables Loan Agreement or (y) necessary as part
of a reserve for liabilities of the Company established by the Company
in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant any security interest or lien in, or
otherwise encumber, the Purchased Receivables; except the
-2-
<PAGE> 3
Company may grant security interests in the Purchased Receivables to any of
Originator's Affiliates; provided that such security interests rank PARI PASSU
to the Originator's Security Interest. In addition to the rights set forth in
this Section 1.2(d), the Originator shall be entitled to the rights of a
"Recipient" under Section 1.7 hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee equal to (x) 0.5% divided by twelve multiplied by
(y) the average daily amount of Purchased Receivables for the immediately
preceding month, payable on the Monthly Settlement Date for the immediately
preceding month. The parties hereto agree such servicing fee is a fair market
value fee for the servicing functions required hereby.
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
-3-
<PAGE> 4
(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly executed
instruments of transfer in the case of checks or other instruments, to
the Company (or any replacement Collection Agent appointed by the
Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
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Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all Purchased Receivables, and, other than the
Originator's Security Interest, the Originator shall not have any interest of
any kind in or to any such Collections thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
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Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed made) with respect to any Purchased
Receivable or (ii) in the case of a covenant or agreement, is not satisfied for
a Purchased Receivable, the Company shall sell such Purchased Receivable to the
Originator for an amount equal to the amount paid by the Company for such
Purchased Receivable, such amount to be paid by reducing the outstanding
principal balance of the Note by such amount; provided that to the extent such
reduction would reduce the Note to zero, the Originator shall pay to the Company
in cash on such day any remaining amount due to purchase such Purchased
Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
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<PAGE> 8
(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and warranties set forth in Section 2.1 are
true and correct on and as of such day as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The Company
represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
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ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
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ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
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ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has assigned
all of its right, title and interest in, to and under this Agreement to the
Agent for the benefit of the Lenders pursuant to the Receivables Loan Agreement
and that the Agent and the Lenders are third party beneficiaries hereof. The
Originator hereby further acknowledges that all provisions of this Agreement
shall inure to the benefit of the Agent and the Lenders, including in the
enforcement of any provision hereof to the extent set forth in the Receivables
Loan Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. No purchases shall take place
hereunder at any time that the Agent has exercised its right to enforce the
Company's rights hereunder pursuant to Section 1.8 of the Receivables Loan
Agreement. The Originator hereby further acknowledges that the execution and
performance of this Agreement are conditions precedent for the Agent and the
Lenders to enter into the Receivables Loan Agreement and that the agreement of
the Agent and the Lenders to enter into the Receivables Loan Agreement will
directly or indirectly benefit the Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Lender with
respect hereto.
Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
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Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are for
convenience and reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in this
Agreement shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy,
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reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law prior to the
date which is one year and one day after the last day on which occurred the
later of (i) the Company purchased any Purchased Receivables hereunder or (ii)
all of the commercial paper notes issued by the Conduit Lenders were paid in
full. The provisions of this Section 5.12 shall survive the termination of this
Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the Agent or any Lender, (iv) any entity organized to
purchase, or make loans secured by, financial assets for which ABN AMRO provides
managerial services or acts as an administrative agent, (v) each Conduit
Lender's administrator, management company, referral agents, issuing agents or
depositaries or CP Dealers and (vi) Governmental Authorities with appropriate
jurisdiction. Each recipient of any Confidential Information shall execute,
prior to receipt of such information, a confidentiality agreement in a form
satisfactory to the Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a
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<PAGE> 14
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for any Conduit Lender, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of any
Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
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<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By:
--------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
HILLSDALE TOOL & MANUFACTURING CO.
By:
--------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
[Receivables Purchase Agreement]
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) (x) the average CP Rate (as defined in
the Amsterdam Rate Supplement) for the immediately preceding month plus 1.0%
multiplied by (y) 55 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
-17-
<PAGE> 18
EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the
<PAGE> 20
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demands hereunder. Borrower and, by its acceptance of this Note,
Originator also assent to extension of the time of payment, forbearance or other
indulgence without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By :_______________________________
Name:
Title:
-20-
<PAGE> 21
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
<TABLE>
<CAPTION>
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- --------
(1) Describe or use appropriate code specified below:
A = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
B = decrease due to payment of principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
Hillsdale Tool & Manufacturing Co.
135 East South Street
Hillsdale, MI 49242
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
Hillsdale Tool & Manufacturing Co.
<PAGE> 24
===============================================================================
RECEIVABLES PURCHASE AGREEMENT
dated as of May 18, 1999
Among
HILLSDALE TOOL & MANUFACTURING CO.
And
EAGLE-PICHER ACCEPTANCE CORPORATION
===============================================================================
<PAGE> 1
Exhibit 10.50
[Execution Copy]
RECEIVABLES PURCHASE AGREEMENT
RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of May 18,
1999, between Michigan Automotive Research Corporation (the "Originator") and
Eagle-Picher Acceptance Corporation, an Ohio corporation (the "Company").
The Purchased Receivables were, immediately prior to the execution of
this Agreement, subject of security interests granted in favor of ABN AMRO Bank
of N.V., as agent for the lenders under a Credit Agreement, dated as of February
19, 1998 (the "Credit Agreement"), among E-P Acquisition, Inc., various lenders,
ABN AMRO Bank N.V., as agent (the "Prior Liens") and financing statements
perfecting the Prior Liens had been duly filed.
The Originator is a wholly-owned subsidiary of Eagle-Picher Industries,
Inc.
Contemporaneous with the execution of this Agreement, the Originator
and ABN AMRO Bank N.V., as agent (the "Credit Agreement Agent") for the lenders
under the Credit Agreement shall execute and deliver an Intercreditor Agreement
(the "Intercreditor Agreement"), pursuant to which the security interests
granted under the Security Agreement, dated as of February 19, 1998, between the
Originator and the Credit Agreement Agent, shall be expressed subordinated to
the security interests granted under this Agreement and the Receivables Loan
Agreement (as defined below). Capitalized terms used herein and not otherwise
defined are defined in Schedule I hereto.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SETTLEMENTS
Section 1.1. Sale. Subject to the terms and conditions hereof, the
Originator hereby sells to the Company, and the Company hereby acquires from the
Originator, all of the Originator's right, title and interest in the Purchased
Receivables of the Originator and all Collections thereon. The Originator
intends such sale to be a true sale of all rights and interests of the
Originator in the Purchased Receivables of the Originator in existence on the
Initial Purchase Date and of each Purchased Receivable thereafter generated by
the Originator as it is created until the Originator Termination Date.
Section 1.2. Purchase Price. (a) On the Initial Purchase Date and each
Business Day thereafter until the Originator Termination Date, the Company shall
pay to the Originator a purchase price for each Purchased Receivable of the
Originator equal to the Fair Market Value Discount Factor of the outstanding
principal balance of such Purchased Receivable in existence on the Determination
Date for such Receivable. The purchase price for each Purchased Receivable shall
be paid by the following method:
<PAGE> 2
(i) First, the Company may pay to the Originator a
portion of such purchase price by transferring to the Originator all
monies then held by the Company, solely to the extent such monies do
not constitute (x) Collections thereon required to be distributed to
the Agent under the Receivables Loan Agreement or (y) necessary as part
of a reserve for liabilities of the Company established by the Company
in its sole judgment; and
(ii) Second, the Company shall pay the remaining
purchase price by crediting to the Note such remaining amount of the
purchase price payable to the Originator.
On the Initial Purchase Date, the Company shall pay a percentage of the purchase
price equal to a fraction, the numerator of which is the aggregate Loan Amount
(as defined in the Receivables Loan Agreement) received by the Company pursuant
to the Receivables Loan Agreement on the Initial Purchase Date and the
denominator of which is the aggregate amount of Receivables purchased by the
Company from the Originator and its affiliates on the Initial Purchase Date. On
each Monthly Settlement Date occurring after the Initial Purchase Date, the
difference between (x) the total purchase price payable to the Originator for
all Purchased Receivables originated by the Originator during the Settlement
Period ending on such Monthly Settlement Date that were not in existence on the
Initial Purchase Date and (y) the amount of such purchase price paid in cash
during that Settlement Period shall be credited to the Note. For any Settlement
Period that the amount of such cash payments to the Originator exceeds the
aggregate purchase price payable for Purchased Receivables during the Settlement
Period, such excess shall be applied on the Monthly Settlement Date for such
Settlement Period to reduce the principal amount of the Note.
(b) The Originator and the Company shall each independently take
all necessary action to properly record the sales contemplated by this Agreement
to reflect the Company's ownership of all Purchased Receivables. To the extent
the sale of any Purchased Receivable or Collection under this Agreement is
deemed to be a financing for any applicable legal purpose, the Originator hereby
grants to the Company a security interest in all of the Originator's rights in
the Purchased Receivables it originated and all Collections thereon to secure
the claims of the Company to such Purchased Receivables and all Collections
thereon and other proceeds.
(c) None of the Company, the Agent, nor any Lender shall have
any obligation or liability to any Obligor or other customer or client of the
Originator to perform any of the obligations of the Originator in connection
with any Receivable or otherwise.
(d) The Company hereby grants to the Originator a continuing
security interest (the "Originator's Security Interest") in all the Company's
right, title and interest in and to the Purchase Receivables (and all
Collections thereon and other proceeds) to secure all obligations of the Company
under the Note. The Company hereby agrees to execute and delivery to Originator
all documents presented by the Originator to the Company as necessary to perfect
the Originator's Security Interest, including, without limitation, Uniform
Commercial Code financing statements. Other than any security interests granted
by the Company in favor of the Administrative Agent pursuant to the Receivables
Loan Agreement, the Company shall not grant
-2-
<PAGE> 3
any security interest or lien in, or otherwise encumber, the Purchased
Receivables; except the Company may grant security interests in the Purchased
Receivables to any of Originator's Affiliates; provided that such security
interests rank PARI PASSU to the Originator's Security Interest. In addition to
the rights set forth in this Section 1.2(d), the Originator shall be entitled to
the rights of a "Recipient" under Section 1.7 hereof.
Section 1.3. Administration of Receivables. (a) Consistent with the
Company's ownership of the Purchased Receivables of the Originator, the Company
shall have all rights to and shall be solely responsible for servicing,
administering and collecting the Purchased Receivables. Until the Company (or
the Agent pursuant to the Receivables Loan Agreement) gives contrary notice, the
Company hereby appoints Eagle-Picher Industries and its sub-agents as its agent
(and as Collection Agent under the terms of the Receivables Loan Agreement) for
the servicing, administering and collecting of the Purchased Receivables (the
"Servicing Agent"), and the Originator hereby accepts such appointment and
agrees to perform such duties in accordance with the applicable terms and
conditions of the Receivables Loan Agreement. The Originator hereby further
agrees not to voluntarily resign as Servicing Agent.
(b) As Servicing Agent, the Originator shall take all actions
necessary or advisable to collect each Purchased Receivable with care and
diligence and shall perform all other servicing activities related to such
Receivables as are required by the Collection Agent pursuant to the Receivables
Loan Agreement, including providing reports and other information concerning the
Purchased Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Loan Agreement and segregating into a separate account all
cash, checks and other instruments received by it, in its capacity as Servicing
Agent, and, as may be required by the terms of Receivables Loan Agreement,
remitting immediately all such Collections thereon to the Company (including the
due endorsement or execution of instruments of transfer in the case of checks or
other instruments).
(c) In consideration for the Originator's services as Servicing
Agent, for so long as the Originator performs such duties, the Company shall pay
to the Originator a cash fee equal to (x) 0.5% divided by twelve multiplied by
(y) the average daily amount of Purchased Receivables for the immediately
preceding month, payable on the Monthly Settlement Date for the immediately
preceding month. The parties hereto agree such servicing fee is a fair market
value fee for the servicing functions required hereby.
(d) The Company may replace the Originator as Servicing Agent at
any time for any reason and upon such replacement, the Originator shall:
(i) on the date each new Purchased Receivable is
originated by it, deliver to the Company (or any replacement Servicing
Agent appointed by the Company) all Records and evidence of the
creation of each Purchased Receivable;
(ii) direct all Obligors to make all payments on all
Purchased Receivables to the Company (or any replacement Servicing
Agent appointed by the Company).
-3-
<PAGE> 4
(iii) in the case that the Originator receives any
such payments on account of a Purchased Receivable, segregate all
cash, checks and other instruments received by it and immediately
remit all such Collections, duly endorsed or with duly executed
instruments of transfer in the case of checks or other instruments, to
the Company (or any replacement Collection Agent appointed by the
Company).
(e) The Originator hereby authorizes the Company (or the
Company's agent or assignee, including the Originator in its capacity as
Servicing Agent) to notify the Obligors on the Purchased Receivables, or any of
them, of the Company's ownership of the Purchased Receivables. The Originator
also hereby authorizes the Company (or the Company's agent or assignee,
including the Originator in its capacity as Servicing Agent) to notify such
Obligors, or any of them, of the Company's assignment of interests in the
Purchased Receivables to the Agent, for the benefit of the Lenders, in
accordance with the terms of Article III of the Receivables Loan Agreement.
(f) The Originator hereby agrees that the Company has the
absolute and unlimited right, itself or through its agent (including the
Collection Agent under the Receivables Loan Agreement and the Originator in its
capacity as Servicing Agent hereunder), to commence and settle any legal action
to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.
(g) The Originator hereby grants to the Company an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any item constituting proceeds of any
Purchased Receivable. Without limiting the generality of the foregoing, the
Originator hereby authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator on checks and other instruments representing Collections thereon and
enforcing any such Purchased Receivable.
(h) Unless an Obligor otherwise specifies or another application
is required by contract or law, any payment received by the Originator from an
Obligor shall be applied as a Collection of Purchased Receivables of such
Obligor (starting with the oldest such Purchased Receivable) and remitted to the
Collection Agent as such.
(i) In connection with the creation, servicing, administering
and collecting of the Purchased Receivables, the Originator shall exercise the
same care and diligence it would exercise in handling similar matters for its
own account and will comply at all times and in all material respects with the
terms of the Transaction Documents, applicable laws, rules and regulations and
good business policies and practices.
(j) Prior to exercising, directly or indirectly, any rights
provided to the Company with respect to the Obligors, the Company shall provide
written notice to the Originator of the Company's intention exercise such rights
at least five days prior to the exercise of such rights.
-4-
<PAGE> 5
Section 1.4. The Company's Rights. (a) The Company (or its successors
or assigns) shall retain, and use for its own benefit, the Collections thereon
and other proceeds of all Purchased Receivables, and, other than the
Originator's Security Interest, the Originator shall not have any interest of
any kind in or to any such Collections thereon or other proceeds.
(b) Subject to Section 1.6 (b), the Company shall have no
obligation to account for, to replace, or to return all or any portion of the
Purchased Receivables to the Originator, without regard to whether the
Collections thereon and other proceeds derived from such Purchased Receivables
are in excess of the purchase price paid for such Purchased Receivables.
(c) Subject to Section 1.2(d) hereof, the Company shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with all or any portion of the Purchased Receivables.
Section 1.5. Protection of Ownership Interest of the Company. The
Originator will, at its expense, promptly execute and deliver all instruments
and documents and take all action necessary or that the Company may reasonably
request to protect the Company's ownership of the Purchased Receivables and
Collections thereon or to enable the Company to exercise and enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will, on or before the date hereof (and promptly upon any changes or
additions at any time), mark its books and records relating to the Purchased
Receivables in a manner that clearly and conspicuously identifies the Company's
ownership of such Purchased Receivables (and the Company's transfer to the
Agent, for the benefit of the Lenders, of security interests therein) and, upon
the Company's request, will so mark each contract evidencing a Purchased
Receivable. At the request of the Company, the Originator shall also execute and
file financing statements, amendments thereto, and continuation or assignments
thereof and deliver to the Company or its designee all contracts and Records
(including all multiple originals of any such contract) relating to the
Purchased Receivables, with any appropriate endorsement or assignment requested
by the Company. In addition to the rights set forth in this Section 1.5, the
Company shall be entitled to the rights of a "Recipient" under Section 1.7
hereof.
-5-
<PAGE> 6
Section 1.6. Contractual Payment Obligations. Notwithstanding any
limitation on recourse contained in this Agreement, the Originator hereby agrees
as follows:
(a) If on any day the outstanding balance of a Purchased
Receivable is reduced or cancelled as a result of any defective or rejected
goods or services, any cash discount or adjustment (including as a result of the
application of any special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the same, a related
or an unrelated transaction) or other similar reason not arising from the
financial inability of the Obligor to pay undisputed indebtedness, the
outstanding principal balance of the Note shall be reduced by the amount of such
reduction or cancellation in the outstanding balance of such Purchased
Receivable; provided that to the extent such reduction would reduce the Note to
zero, the Originator shall pay to the Company in cash on such day any remaining
amount due on account of such reduction or cancellation.
(b) If on any day (i) any representation, warranty, covenant or
other agreement of the Originator is not true (as of the date such
representation or warranty is made or deemed made) with respect to any Purchased
Receivable or (ii) in the case of a covenant or agreement, is not satisfied for
a Purchased Receivable, the Company shall sell such Purchased Receivable to the
Originator for an amount equal to the amount paid by the Company for such
Purchased Receivable, such amount to be paid by reducing the outstanding
principal balance of the Note by such amount; provided that to the extent such
reduction would reduce the Note to zero, the Originator shall pay to the Company
in cash on such day any remaining amount due to purchase such Purchased
Receivable.
Section 1.7. Rights of Parties under Uniform Commercial Code. To the
fullest extent permitted by applicable law, the Company (pursuant to its rights
set forth in Section 1.5) and the Originator (pursuant to its rights set forth
in Section 1.2(d)) (each in such capacity, a "Recipient") shall be permitted to
sign and file continuation statements relating to such Recipient's interest in
the Purchased Receivables and Collections thereon and amendments thereto and
assignments thereof without the signature of the other party (in such capacity,
the "Grantor"); provided that, in the case of amendments and assignment, the
Grantor shall have delivered its prior written consent to such amendment or
assignment. The Grantor shall not change its name, identity or corporate
structure (within the meaning of Section 9-402(7) of any applicable UCC) or
relocate its chief executive office or any office or location where Records are
kept unless it shall have: (i) given the Recipient (and, in the case of the
Company as Recipient, the Agent), at least 30 days' advance notice and (ii)
delivered to the Recipient (and, in the case of the Company as Recipient, the
Agent), all financing statements, instruments and other documents requested by
the Recipient (or, in the case of the Company as Recipient, the Agent) in
connection with such change or relocation. The Grantor shall at all times
maintain its chief executive offices within a jurisdiction in the USA (other
than the states of Florida, Maryland and Tennessee) in which Article 9 of the
UCC is in effect. If the Grantor moves its chief executive office to a location
that imposes Taxes, fees or other charges to perfect the interests of the
Recipient in the Purchased Receivables and Collections thereon, the Grantor
shall pay all such amounts and any other costs or expenses incurred to maintain
the enforceability of this Agreement and (x) in the case of the Company, the
ownership of the Company in the Purchased Receivables and (y) in the case of the
Originators, the Originator's Security Interest.
-6-
<PAGE> 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Originator. The
Originator represents and warrants that each representation and warranty
concerning it or the Receivables that is contained in the Receivables Loan
Agreement is true and correct and that:
(a) Title. Except for the security interests contemplated herein
and the Prior Liens, if any, immediately preceding its sale of each Purchased
Receivable hereunder, the Originator was the owner of such Purchased Receivable
purported to be sold, free and clear of any lien, security interest,
hypothecation, assignment or material encumbrance, and each such sale hereunder
constitutes a valid sale, transfer and assignment of all of the Originator's
right, title and interest in, to and under the Purchased Receivables, free and
clear of any lien, security interest, hypothecation, assignment or material
encumbrance. On or before the date hereof and before the generation by the
Originator of any new Purchased Receivable, all financing statements and other
documents required to be recorded or filed in order to protect the Company's
ownership interest in the Purchased Receivables of the Originator against all
creditors of and purchasers from the Originator will have been duly filed in
each filing office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.
(b) Creation of Receivables. The Originator has exercised at
least the same degree of care and diligence in the creation of the Purchased
Receivables as it has exercised in connection with the creation of receivables
originated by it prior to the date of this Agreement and not sold hereunder.
(c) Credit and Collection Policy. The Originator has complied in
all material respects with its Credit and Collection Policy in regard to each
Purchased Receivable.
(d) Enforceability of Contracts. To the Originator's knowledge,
each contract related to any Purchased Receivable is effective to create, and
has created, a legal, valid and binding obligation of the related Obligor to pay
the outstanding balance of the Purchased Receivable created thereunder,
enforceable against the Obligor in accordance with its material terms (without
being subject to any material defense, deduction, offset or counterclaim),
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors' rights
generally and subject to general principles of equity. The Originator has fully
performed its obligations under such contract in all material respects.
(e) Compliance with Laws. No Purchased Receivable contravenes
any material laws, rules or regulations applicable thereto or to the Originator.
(f) Place of Business. The chief place of business and chief
executive office of the Originator is located at the address set forth beneath
it's signature hereto, and such offices have been so located for at least six
months before the date hereof. The offices where the Originator keeps all
Records are located at the addresses described on Exhibit C or such other
locations of which the Company has been given notice in accordance with Section
1.5 and where all actions required by Section 2.5 have been completed.
-7-
<PAGE> 8
(g) Good Title. Upon the sale to the Company pursuant to this
Agreement of each new Receivable and on the Initial Purchase Date for then
existing Receivables, the Company shall have valid ownership interest in each
Purchased Receivable at the time of such creation or purchase, free and clear of
any lien, security interest, hypothecation, assignment or material encumbrance,
other than liens and security interests contemplated in this Agreement or the
Receivables Loan Agreement.
(h) Names. Except as described in Exhibit D, the Originator has
not used any corporate names, tradenames or assumed names other than its name
set forth on the signature pages of this Agreement.
Section 2.2. Reaffirmation of Representations and Warranties by the
Originator. On each day that a new Purchased Receivable is sold to the Company
hereunder pursuant to Section 1.2, the Originator shall be deemed to have
certified that all representations and warranties set forth in Section 2.1 are
true and correct on and as of such day as to such Purchased Receivable.
Section 2.3. Representations and Warranties of the Company. The
Company represents and warrants that:
(a) Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, except
where failure to obtain such licenses, authorizations, consents and approvals
would not have (i) a material adverse effect on its ability to perform its
obligations hereunder or (ii) a material adverse effect on the enforceability
hereof.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Company of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any governmental
body, agency or official (except as contemplated by Section 1.5) and do not
contravene, or constitute a default under, any provision of applicable law, rule
or regulation or of the Company's certificate or articles of incorporation or
by-laws or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or result in the creation or
imposition of any lien or other Adverse Claim on assets of the Company other
than any Adverse Claim created pursuant to, or contemplated by, this Agreement.
(c) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that such enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
-8-
<PAGE> 9
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions to Closing. On or before the date of execution
hereof, each of the following documents and instruments shall be delivered, all
of which shall be in form and substance acceptable to the Company and the
Originator:
(a) A copy of the resolutions of the board of directors of each
of the Company and the Originator, certified by its secretary or assistant
secretary, approving this Agreement and the other documents to be delivered by
it hereunder;
(b) The certificate or articles of incorporation of each of the
Company and the Originator certified by the Secretary of State of its state of
incorporation;
(c) Good standing certificates for each of the Company and the
Originator issued by the Secretaries of State of each jurisdiction where it has
material operations and its state of incorporation;
(d) A certificate of the secretary or assistant secretary of
each of the Company and the Originator certifying (i) the names and signatures
of the officers authorized on its behalf to execute this Agreement and any other
documents to be delivered by it hereunder (on which certificate the other
parties may conclusively rely until such time as the other parties shall receive
from it a revised certificate meeting the requirements of this subsection (d))
and (ii) a copy of its by-laws;
(e) Originals of proper UCC-1 financing statements naming the
Originator as "seller" and "debtor," the Company as "purchaser" and "secured
party," and the Agent as "assignee" for filing in all appropriate jurisdictions;
(f) UCC search reports from National Research Corporation
covering the Originator;
(g) Originals of proper UCC-1 financing statements naming the
Company as "debtor," the Originator as "secured party," for filing in all
appropriate jurisdictions; and
(h) The Intercreditor Agreement, duly executed by ABN AMRO Bank
of N.V., as agent for the lenders under the Credit Agreement;
Section 3.2. Other Transaction Documents. All conditions precedent to
the execution, delivery and effectiveness of the other Transaction Documents
have been fulfilled.
-9-
<PAGE> 10
ARTICLE IV
COVENANTS
Section 4.1. Affirmative Covenants of the Originator. The Originator
hereby covenants and agrees with the Company that at all times on and after the
date hereof, unless compliance is waived pursuant to Section 5.4:
(a) Furnishing of Information and Inspection of Records. The
Originator will furnish to the Company from time to time such information
concerning the Receivables as the Company shall request, including listings
identifying the Obligor and the outstanding balance for each Receivable. The
Originator will permit, at any time and from time to time during regular
business hours, the Company and the Agent and any Lender or agents or
representatives of any of the foregoing, (i) to examine and make copies of and
abstracts from all Records in its possession as agent for the Company pursuant
to Section 1.3 and (ii) to visit the offices and properties of each of the
Originator for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Originator's performance hereunder with any of
the officers or employees of the Originator having knowledge of such matters.
(b) Keeping of Records and Books. The Originator will have and
maintain (i) administrative and operating procedures (including an ability to
recreate Records if originals are destroyed), (ii) adequate facilities,
personnel and equipment and (iii) all Records and other information reasonably
necessary for collection of the Receivables originated by the Originator
(including Records adequate to permit the daily identification of each new such
Receivable and all Collections thereon of, and adjustments to, each existing
such Receivable). The Originator will give the Company and the Agent prior
notice of any change in such administrative and operating procedures that causes
them to be materially different from the procedures described to the Company and
Agent on or before the date hereof as the Originator's then existing or planned
administrative and operating procedures for collecting Receivables.
(c) Performance and Compliance with Receivables and Contracts.
The Originator will at its expense timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it under all
contracts material to the creation of the Receivables.
(d) Credit and Collection Policy. The Originator will comply
with its Credit and Collection Policy in regard to each Receivable originated by
it and any related contract.
(e) Receivable Loan Agreement. The Originator will perform and
comply with each covenant and other undertaking in the Receivable Loan Agreement
that the Company undertakes to cause the Originator to perform, subject to any
grace periods for such performance provided for in the Receivables Loan
Agreement.
-10-
<PAGE> 11
ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Agreement. This Agreement shall terminate upon the
later to occur of (i) the termination of the Receivables Loan Agreement or (ii)
the payment in full in cash of all obligations owed by the Originator and the
Company to the other hereunder.
Section 5.2. Assignment of Receivables Purchase Agreement. The
Originator hereby acknowledges that on the date hereof the Company has assigned
all of its right, title and interest in, to and under this Agreement to the
Agent for the benefit of the Lenders pursuant to the Receivables Loan Agreement
and that the Agent and the Lenders are third party beneficiaries hereof. The
Originator hereby further acknowledges that all provisions of this Agreement
shall inure to the benefit of the Agent and the Lenders, including in the
enforcement of any provision hereof to the extent set forth in the Receivables
Loan Agreement, but that neither the Agent nor any Lender shall have any
obligations or duties under this Agreement. No purchases shall take place
hereunder at any time that the Agent has exercised its right to enforce the
Company's rights hereunder pursuant to Section 1.8 of the Receivables Loan
Agreement. The Originator hereby further acknowledges that the execution and
performance of this Agreement are conditions precedent for the Agent and the
Lenders to enter into the Receivables Loan Agreement and that the agreement of
the Agent and the Lenders to enter into the Receivables Loan Agreement will
directly or indirectly benefit the Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Lender with
respect hereto.
Section 5.3. No Waiver; Remedies. No failure or delay on the part of
any party in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies provided
in this Agreement are cumulative and nonexclusive of any rights or remedies
provided by law. Any waiver of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
Section 5.4. Amendments, etc. No amendment, supplement, modification or
waiver of any provision of this Agreement nor consent to any departure by any
party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Originator and the Company and consented to by the
Agent and the Instructing Group.
Section 5.5. Notices. Unless otherwise specified, all notices and other
communications hereunder shall be in writing (including by telecopier or other
facsimile communication), given to the appropriate Person at its address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy number as such Person may specify, and effective when received at
the address specified by such Person. The number of days for any advance notice
required hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.
-11-
<PAGE> 12
Section 5.6. Governing Law; Submission to Jurisdiction; Integration.
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York. Each of
the Originator and the Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the Originator and the Company hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Nothing in this Section 5.6
shall affect the right of any Person to bring any action or proceeding against
the Originator or the Company or its respective property in the courts of other
jurisdictions. This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written
understandings.
Section 5.7. Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 5.8. Assignment. This Agreement shall (i) be binding upon the
Company and the Originator and their respective successors and assigns and (ii)
inure to the benefit of and be enforceable by the Agent for the benefit of the
Lenders to the extent set forth in the Receivables Loan Agreement and their
respective successors, transferees and assigns; provided, however, that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing Group, and any such
purported assignment or delegation absent such consent shall be void.
Section 5.9. Headings. Article and Section headings used herein are
for convenience and reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
Section 5.10. Costs and Expenses. The Originator shall pay its costs
and expenses hereunder.
Section 5.11. No Partnership or Joint Venture. Nothing contained in
this Agreement shall be deemed or construed by the parties hereto or by any
third person to create the relationship of principal and agent or of partnership
or of joint venture.
Section 5.12. No Proceedings. The Originator agrees that it will not
institute against the Company, or join any other Person in instituting against
the Company, any bankruptcy,
-12-
<PAGE> 13
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law prior to the
date which is one year and one day after the last day on which occurred the
later of (i) the Company purchased any Purchased Receivables hereunder or (ii)
all of the commercial paper notes issued by the Conduit Lenders were paid in
full. The provisions of this Section 5.12 shall survive the termination of this
Agreement.
Section 5.13. Withdrawal of Originator. The Originator may terminate
further sales of interests in its Receivables hereunder for any reason by
providing at least thirty days' notice to the Company and Agent of such
withdrawal. On the date set forth in such notice (the "Withdrawal Date"), the
Originator shall discontinue any further sale of interests in Receivables and
shall only be party to this Agreement to the extent that the Company continues
to have an interest in the Purchased Receivables acquired from the Originator or
any amounts remain payable by the Company (including all amounts due under the
Note) or the Originator to the other hereunder. No such withdrawal shall affect
the Originator's representations or agreements concerning Purchased Receivables
in which the Company retains an interest or any related Collections.
Section 5.14. Waiver of Confidentiality. Subject to the obligations of
each Lender and the Agent under Section 9.10 of the Receivables Loan Agreement
and the last sentence of this paragraph, the Originator hereby consents to the
disclosure of any nonpublic information relating thereto ("Confidential
Information") among the Agent and the Lenders and by the Agent or the Lenders to
(i) any officers, directors, members, managers, employees or outside
accountants, auditors or attorneys thereof, (ii) any prospective or actual
assignee or participant (provided, that such prospective or actual assignee or
participant executes an agreement with the Company containing provisions
substantially identical to those contained in Section 9.10 of the Receivables
Loan Agreement), (iii) any rating agency, surety, guarantor or credit or
liquidity enhancer to the Agent or any Lender, (iv) any entity organized to
purchase, or make loans secured by, financial assets for which ABN AMRO provides
managerial services or acts as an administrative agent, (v) each Conduit
Lender's administrator, management company, referral agents, issuing agents or
depositaries or CP Dealers and (vi) Governmental Authorities with appropriate
jurisdiction. Each recipient of any Confidential Information shall execute,
prior to receipt of such information, a confidentiality agreement in a form
satisfactory to the Originator.
Section 5.15. Confidentiality of Agreement. The Originator agrees it
will use its best efforts not to disclose without the prior written consent of
the Agent the contents of any Transaction Document, or any other confidential or
proprietary information furnished by the Agent or any Lender, to any Person
other than to its officers, directors, members, managers, employees, outside
accountants, auditors and attorneys or as required by applicable law or
Governmental Authorities with appropriate jurisdiction.
Section 5.16. Agreement Not to Petition. Each party hereto agrees, for
the benefit of the holders of the privately or publicly placed indebtedness for
borrowed money for the Conduit Lenders, not, prior to the date which is one (1)
year and one (1) day after the payment in full of all such indebtedness, to
acquiesce, petition or otherwise, directly or indirectly, invoke, or cause any
Conduit Lender to invoke, the process of any Governmental Authority for the
purpose of (a) commencing or sustaining a case against any Conduit Lender under
any federal or state bankruptcy, insolvency or similar law (including the
Federal Bankruptcy Code), (b) appointing a
-13-
<PAGE> 14
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for any Conduit Lender, or any substantial part of its
property, or (c) ordering the winding up or liquidation of the affairs of any
Conduit Lender.
Section 5.17. No Recourse. The obligations of each Conduit Lender, its
management company, its administrator and its referral agents (each a "Program
Administrator") under any Transaction Document or other document (each, a
"Program Document") to which a Program Administrator is a party are solely the
corporate obligations of such Program Administrator and no recourse shall be had
for such obligations against any Affiliate, director, officer, member, manager,
employee, attorney or agent of any Program Administrator.
Section 5.18. Limitation of Liability. No Person shall make a claim
against the Agent or any Lender (or their respective Affiliates, directors,
officers, members, managers, employees, attorneys or agents) for any special,
indirect, consequential or punitive damages under any claim for breach of
contract or other theory of liability in connection with the Transaction
Documents or the transactions contemplated thereby, and the Originator (for
itself and all other Persons claiming by or through it) hereby waives any claim
for any such damages.
Section 5.19. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 5.20. Entire Agreement. The Transaction Documents constitute the
entire understanding of the parties thereto concerning the subject matter
thereof. Any previous or contemporaneous agreements, whether written or oral,
concerning such matters are superseded thereby.
-14-
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
EAGLE-PICHER ACCEPTANCE CORPORATION
By: ------------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION
By: ------------------------------------
Name:
Title:
Address:
Telephone:
Telecopy:
[Receivables Purchase Agreement]
<PAGE> 16
SCHEDULE I
DEFINITIONS
Capitalized terms used herein that are defined in the Receivables Loan
Agreement have the same meaning herein as in the Receivables Loan Agreement. In
addition, the following terms have the meanings set forth, or referred to,
below:
"Fair Market Value Discount Factor" means, with respect to any
Receivable, the face amount of such Receivable multiplied by a percentage
calculated to equal (i) 100% minus (ii) (x) the average CP Rate (as defined in
the Amsterdam Rate Supplement) for the immediately preceding month plus 1.0%
multiplied by (y) 55 divided by 360; provided that if the CP Rate may not be
determined for any reason under the Amsterdam Rate Supplement, the Prime Rate
(as defined in the Amsterdam Rate Supplement) shall be used in place of the CP
Rate in the foregoing calculation.
"Initial Purchase Date" means June 4, 1999.
"Lender" means each "Lender" under the Receivables Loan Agreement.
"Monthly Settlement Date" means the fifteenth (15th) day of each month
(or, if such day is not a Business Day, the following Business Day).
"Note" means the revolving promissory note in substantially the form of
Exhibit B issued by the Company to the Originator.
"Originator Termination Date" means the earliest to occur of (i) the
date of the occurrence of a Bankruptcy Event affecting the Originator, (ii) the
Business Day designated by the Originator as its Withdrawal Date pursuant to
Section 5.13 and (iii) the Business Day designated by the Company as the
Originator Termination Date upon at least thirty days' notice to the Originator
and the Agent.
"Purchased Receivables" means each and every Receivable originated by
the Originator now existing or hereafter prior to the Originator Termination
Date.
"Receivables Loan Agreement" means the Receivables Loan Agreement,
dated as of May 18, 1999, among the Company, Eagle-Picher Industries, Inc. as
the initial collection agent, various lender agents from time to time party
thereto, ABN AMRO Bank N.V., as administrative agent and Amsterdam lender agent,
Amsterdam Funding Corporation, as a conduit lender, the Related Bank Lenders
from time to time party thereto, and other conduit lenders from time to time
party thereto.
"Settlement Period" means, for any Monthly Settlement Date, the
immediately preceding calendar month.
"Withdrawal Date" is defined in Section 5.13.
<PAGE> 17
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Unless otherwise inconsistent
with the terms of this Agreement, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP. Amounts to be calculated hereunder shall be continuously
recalculated at the time any information relevant to such calculation changes.
For purposes of this Agreement, all terms used in Article 9 of the UCC
and not specifically defined in this Agreement shall be defined herein as such
terms are defined in the UCC as in effect in the State of New York.
-17-
<PAGE> 18
EXHIBIT A
CREDIT AND COLLECTION POLICY
<PAGE> 19
EXHIBIT B
FORM OF REVOLVING SUBORDINATED PROMISSORY NOTE
May 18, 1999
FOR VALUE RECEIVED, Eagle-Picher Acceptance Corporation, a Ohio
corporation ("Borrower"), hereby promises to pay to the order of
_____________________. ("Originator"), at the principal office of Originator at
__________ _______________________, or at such other place as Originator may
designate from time to time, the unpaid principal amount hereof, in lawful money
of the United States of America and in immediately available funds, on the
sixtieth (60th) day after the "Termination Date" described in the Receivables
Purchase Agreement referred to below or, if such sixtieth (60th) day is not a
Business Day, on the first Business Day thereafter (such sixtieth (60th) day or
later Business Day being referred to as the "Maturity Date"), together with
costs of collection and reasonable attorney's fees incurred by Originator in the
collection of the indebtedness evidenced hereby all without relief from
valuation and appraisement laws. Except as otherwise defined herein, capitalized
terms used herein and defined in the Receivables Purchase Agreement (as amended,
modified or supplemented from time to time the "Receivables Purchase
Agreement"), dated as of May 18, 1999, between Borrower and Originator, shall be
used herein as so defined. This note is the "Note" referred to in the
Subordination Agreement, dated as of May 18, 1999 (the "Subordination
Agreement"), between Borrower and Originator.
The principal amount of this Note shall be initially established and
thereafter adjusted from time to time in accordance with the terms and
conditions of the Receivables Purchase Agreement (the terms and conditions of
which are hereby incorporated in this Note by this reference) and the terms of
this Note. Originator shall record the initial principal amount of this Note,
all adjustments thereto and all payments thereof on Schedule 1 annexed hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, and any such recordation shall, absent manifest
error, constitute prima facie evidence of the information so recorded; provided,
however, that the failure to so record shall not limit the obligations of
Borrower hereunder or under the Receivables Purchase Agreement.
Borrower and, by its acceptance of this Note, Originator hereby
acknowledge and agree that any and all payments made in respect of this Note are
and shall remain subordinate and junior in right of payment to the Senior
Indebtedness, as that term is defined in the Subordination Agreement. Borrower
shall, subject to the terms of the Subordination Agreement, have the right to
pay all or any part of the unpaid principal amount of this Note without premium
or penalty at any time.
All amounts outstanding under this Note are secured by a security
interest granted in favor of Originator pursuant to Section 1.2(d) of the
Receivables Purchase Agreement.
Borrower hereby waives presentment, diligence, notice of dishonor,
payment, demand, protest, notice of protest, notice of nonpayment and all other
demands and notices of every kind in connection with the delivery, acceptance,
performance and enforcement of this Note and, to the
<PAGE> 20
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demands hereunder. Borrower and, by its acceptance of this Note,
Originator also assent to extension of the time of payment, forbearance or other
indulgence without notice.
This Note applies to, inures to the benefit of, and binds the
successors and assigns of, Borrower and Originator. Originator may not assign
any duties or obligations hereunder without the prior written consent of
Borrower. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
On the first Business Day after the Maturity Date at the close of
business of which all principal owing on this Note have been paid in full, this
Note will be surrendered to Borrower for cancellation.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note by
its duly authorized officer as of the day hereof.
EAGLE-PICHER ACCEPTANCE CORPORATION
By: _______________________________
Name:
Title:
-20-
<PAGE> 21
SCHEDULE 1
TO REVOLVING PROMISSORY NOTE
<TABLE>
<CAPTION>
UNPAID
INCREASE IN DECREASE IN PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT AFTER REASON FOR NOTATION
DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT(1) MADE BY
<S> <C> <C> <C> <C> <C>
$ Initial Balance
</TABLE>
- --------
(1) Describe or use appropriate code specified below:
A = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
Agreement
B = decrease due to payment of principal
<PAGE> 22
EXHIBIT C
LOCATION OF RECORDS
Michigan Automotive Research Corporation
1254 North Main Street
Ann Arbor, MI 48104
<PAGE> 23
EXHIBIT D
CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES
Michigan Automotive Research Corporation
<PAGE> 24
===============================================================================
RECEIVABLES PURCHASE AGREEMENT
dated as of May 18, 1999
Among
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION
And
EAGLE-PICHER ACCEPTANCE CORPORATION
===============================================================================
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) AND THE CONDENSED CONSOLIDATED
BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0001059364
<NAME> EAGLE PICHER HOLDINGS INC.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> MAY-31-1999
<EXCHANGE-RATE> 1
<CASH> 11,313
<SECURITIES> 0
<RECEIVABLES> 136,323
<ALLOWANCES> 1,492
<INVENTORY> 100,777
<CURRENT-ASSETS> 275,099
<PP&E> 337,324
<DEPRECIATION> 50,918
<TOTAL-ASSETS> 882,240
<CURRENT-LIABILITIES> 152,472
<BONDS> 526,516
92,520
0
<COMMON> 10
<OTHER-SE> 73,976
<TOTAL-LIABILITY-AND-EQUITY> 882,240
<SALES> 444,261
<TOTAL-REVENUES> 444,261
<CGS> 349,503
<TOTAL-COSTS> 349,503
<OTHER-EXPENSES> 68,454
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,440
<INCOME-PRETAX> 3,181
<INCOME-TAX> 1,950
<INCOME-CONTINUING> 1,231
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,231
<EPS-BASIC> 3.90
<EPS-DILUTED> 3.90
</TABLE>
