Exhibit 10.39
EXECUTION COPY
FORBEARANCE AGREEMENT
This FORBEARANCE
AGREEMENT (this “ Agreement ”) is entered into
as of March 10, 2005 by and among EAGLEPICHER INCORPORATED
(formerly known as Eagle-Picher Industries, Inc.) (the “
Servicer ”), EAGLEPICHER FUNDING CORPORATION (formerly
known as Eagle-Picher Funding Corporation) (“ EPFC
”), the entities listed on the signature pages hereof as
“Originators” (together with the Servicer and EPFC, the
“ EaglePicher Parties ”) and GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, in its separate
capacities as a committed purchaser (in such capacity, the “
Committed Purchaser ”), as administrative agent (in
such capacity, the “ Administrative Agent ”) and
as collateral agent (in such capacity, the “ Collateral
Agent ”) under the “Purchase Agreement”
referred to below. All capitalized terms used in this Agreement and
not otherwise defined herein will have the respective meanings set
forth in the Purchase Agreement.
RECITALS:
WHEREAS, EPFC, the
Servicer, the Committed Purchaser, the Collateral Agent and the
Administrative Agent are parties to a Receivables Purchase and
Servicing Agreement dated as of January 8, 2002 (as amended,
restated, supplemented or otherwise modified from time to time
prior to the date hereof, the “ Purchase Agreement
”);
WHEREAS, as of
November 30, 2004, (i) the ratio of (a) Consolidated
EBITDA to (b) Consolidated Cash Interest Expense for the four
consecutive fiscal quarters ended November 30, 2004 was less
than 2.35 to 1.00, (ii) the Leverage Ratio as of the fiscal
quarter ended November 30, 2004 was greater than 5.00 to 1.00
and (iii) the ratio of (a) Consolidated EBITDA
minus Capital Expenditures to (b) Consolidated Fixed
Charges for the four consecutive fiscal quarters ended
November 30, 2004 was less than 1.00 to 1.00 (collectively,
the “ Specified Financial Test Violations
”);
WHEREAS, each of
Specified Financial Test Violations constitutes an Event of
Servicer Termination pursuant to Section 9.02(l) of the
Purchase Agreement and a Termination Event pursuant to
Section 9.01(n) of the Purchase Agreement;
WHEREAS, EPFC and
the Servicer have failed to deliver the November 30, 2004
audited financial statements, the December 31, 2004 and
January 31, 2005 unaudited financial statements and various
other documents and certificates to be delivered in connection with
the November 30, 2004 audited financial statements and the
December 31, 2004 and January 31, 2005 unaudited
financial statements at the times such financial statements,
certificates and other documents are required to be delivered under
Section 5.02(a) and Annex 5.02(a) of the Purchase Agreement
(collectively, the “ Specified Delivery Violations
” and together with the Specified Financial Test Violations,
the “ Specified Violations ”);
WHEREAS, each of
Specified Delivery Violations constitutes an Incipient Termination
Event pursuant to Section 9.01(a)(iii) of the Purchase
Agreement and, five Business
Days after the date of this
Agreement, each of the Specified Delivery Violations will constiute
a Termination Event pursuant to Section 9.01(a)(iii) of the
Purchase Agreement;
WHEREAS, the
Administrative Agent, the Collateral Agent and the Committed
Purchaser are not willing to waive any of the Specified
Violations;
WHEREAS, the
EaglePicher Parties have requested that the Administrative Agent,
the Collateral Agent and the Committed Purchaser forbear from
enforcing certain rights and remedies under the Purchase Agreement
as a result of the Specified Violations for a limited period of
time (but not waive such Specified Violations); and
WHEREAS, in order
to accommodate the EaglePicher Parties’ request, the
Administrative Agent, the Collateral Agent and the Committed
Purchaser are willing to temporarily forbear from exercising
certain rights and remedies available solely by reason of the
Specified Violations on the terms, conditions, and provisions
contained in this Agreement;
NOW, THEREFORE, in
consideration of the premises set forth above, the terms and
conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the EaglePicher Parties, the Committed
Purchaser, the Collateral Agent and the Administrative Agent hereby
agree as follows.
1.
Forbearance .
1.1
Upon the satisfaction of the conditions precedent set forth in
Section 3 of this Agreement, the Administrative Agent,
the Collateral Agent and the Committed Purchasers hereby agree to
forebear from taking any of the following actions as a result of
the occurrence and continuation of any of the Specified Violations
during the period (such period being referred to herein as the
“ Forbearance Period ”) beginning on the first
date that all of the conditions set forth in Section 3
of this Agreement shall have been satisfied and ending immediately
upon the earliest to occur of (a) the occurrence or
identification of any Termination Event, Incipient Termination
Event, Event of Servicer Termination or Incipient Servicer
Termination Event other than any, or solely with respect to any, of
the Specified Violations, (b) June 10, 2005 and
(c) the occurrence (whether or not declared) of any
“Standstill Termination” (as such term is defined in
the Bank Forbearance Agreement defined below): (1) commence
judicial enforcement proceedings against EPFC or the Servicer with
respect to the payment of the Seller Secured Obligations or any
other obligations under the Purchase Agreement, (2) commence
any foreclosure, enforcement or levy against or seizure of all or
any portion of the Seller Collateral, (3) declare any
commitments to make Capital Purchases or Reinvestment Purchases to
be terminated or otherwise refuse, or assert that it has no
obligation, to make Capital Purchases or Reinvestment Purchases by
reason of the existence of any Specified Violation or
(4) declare that the Facility Termination Date has occurred.
“ Bank Forbearance Agreement ” means that
certain Amended and Restated Forbearance Agreement dated as of
February 28, 2005 among EaglePicher Holdings, Inc.,
EaglePicher Incorporated, the lenders party thereto and Harris
Trust and Savings Bank, as agent for such lenders.
1.2
The Administrative Agent, the Collateral Agent and the Committed
Purchaser expressly reserve the right to exercise all remedies
under the Related Documents and
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applicable law with respect to
the Specified Violations immediately upon the expiration of the
Forbearance Period, including, without limitation, the rights and
remedies identified in clauses (1) through (4) of
Section 1.1 above, in respect of all Specified
Violations. The Administrative Agent, the Collateral Agent and the
Committed Purchaser expressly reserve the right to immediately
exercise all remedies under the Related Documents and applicable
law with respect to all Termination Events, Incipient Termination
Events, Events of Servicer Termination or Incipient Servicer
Termination Events now existing or hereafter arising other than the
Specified Violations.
1.3
Except for the forbearance to the extent expressly set forth above
in Section 1.1 , the Administrative Agent, the
Collateral Agent and the Committed Purchaser reserve each and every
right and remedy they have under the Related Documents and under
applicable law with respect to the Specified Violations, including,
without limitation, the Administrative Agent’s and the
Committed Purchaser’s right to continue to charge and collect
interest at the default rate (including, without limitation, the
Daily Default Margin) pursuant to the definition of
“Committed Purchaser Daily Yield” set forth in Annex X
to the Purchase Agreement. Nothing in this Agreement shall be
deemed to constitute a waiver by the Administrative Agent or the
Committed Purchaser of any Termination Event, Incipient Termination
Event, Event of Servicer Termination or Incipient Servicer
Termination Event, whether now existing or hereafter arising, or of
any right or remedy the Administrative Agent, the Collateral Agent
and the Committed Purchaser may have under any of the Related
Documents or applicable law, except to the extent expressly
forborne as set forth above in Section 1.1 .
1.4
Any Capital Purchase or Reimbursement Purchase during the
Forbearance Period shall be subject to the satisfaction of the
conditions precedent set forth in Section 3.02 of the Purchase
Agreement, except to the extent non-compliance with the conditions
set forth therein relate solely to an Specified
Violation.
2.
Amendments to Purchase Agreement . Effective as of
the date hereof and subject to the satisfaction of the condition
precedent set forth in Section 3 below, the Purchase
Agreement is hereby amended as follows:
2.1
The definition of the term “ Per Annum Daily Margin
” set forth in Annex X to the Purchase Agreement shall be
amended and restated to read as follows:
“ Per
Annum Daily Margin ” shall mean (a) with respect to
Capital Investment made by the Conduit Purchaser, 0.90%, and
(b) with respect to Capital Investment made by the Committed
Purchaser, 3.00%.
2.2
The definition of the term “ Purchase Discount Rate
Cap ” set forth in Annex X to the Purchase Agreement
shall be amended and restated to read as follows:
“
Purchase Discount Rate Cap ” shall mean a rate equal
to eighty percent (80%); provided , that the Purchase
Discount Rate Cap may be changed at any time by the Administrative
Agent, using its good faith and commercially reasonable credit
judgment following a detailed analysis of the Transferred
Receivables (or upon receipt of
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additional information with respect thereto);
provided that, as long as no Termination Event has occurred,
the Administrative Agent shall give advance written notice to the
Seller with respect to such modification.
2.3
Annex G of the Receivables Purchase and Servicing Agreement shall
be amended and restated in its entirety as Attachment 1
hereto.
3.
Conditions of Effectiveness of this Agreement . This
Agreement shall become effective as the date first written above
(the “ Effective Date ”) upon the Administrative
Agent’s receipt of (a) counterparts of this Agreement
duly executed each EaglePicher Party, the Committed Purchaser, the
Collateral Agent and the Administrative Agent and (b) an
amendment fee in an amount equal to $100,000 in immediately
available funds (which shall be fully earned and non-refundable as
of the date paid).
4.
Covenants, Representations and Warranties
.
4.1
Upon the effectiveness of this Agreement, each EaglePicher Party
(a) hereby reaffirms all covenants, representations and
warranties made by it in each Related Document as of the date
hereof the same expressly relates solely to an earlier date in
which case such Person remakes such representation and warranty as
of such earlier date and (b) agrees that all such covenants,
representations and warranties shall be deemed to have been re-made
as of the Effective Date.
4.2
Each of the EaglePicher Parties represents and warrants that
(a) this Agreement constitutes a legal, valid and binding
obligation of such Person and is enforceable against such Person in
accordance with its terms, (b) it is a corporation or limited
liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of , in each case as
set forth opposite such EaglePicher Party’s name on
Schedule 1 hereto (which is such EaglePicher
Party’s only state of organization) and (c) that the
information set forth on Schedule 1 is true, complete
and correct for each of the EaglePicher Parties.
4.3
Each of EPFC and the Servicer represents and warrants that
(a) the Purchase Agreement, as amended hereby, constitutes a
legal, valid and binding obligation of such Person and is
enforceable against such Person in accordance with its terms and
(b) as of the Effective Date and after giving effect hereto,
except for the Specified Violations, no Termination Event,
Incipient Termination Event, Event of Servicer Termination or
Incipient Servicer Termination Event has occurred and is
continuing.
4.4
EPFC and the Servicer represents and warrants that EPFC has not
purchased Receivables from any Person besides the Persons
identified as “Originators” on the signature pages to
this Agreement.
4.5
Within five Business Days of its receipt thereof, each EaglePicher
Party hereby covenants to deliver (or cause to be delivered) to the
Administrative Agent a copy of (a) any final report prepared
by or on behalf of Giuliani Capital Advisors LLC related to
EaglePicher Automotive, Inc. or (b) any final offering
memorandum or final preliminary offering memorandum distributed to
potential investors (or comparable documents) prepared by or
on
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behalf of any investment banking
firm relating to the sale of the equity or substantially all the
assets of any EaglePicher Party or any Affiliate
thereof.
5.
Reference to and Effect on Related Documents
.
5.1
Upon and after the Effective Date, each reference to the Purchase
Agreement in any of the Related Documents shall mean and be a
reference to the Purchase Agreement as amended hereby.
5.2
Except as specifically set forth above, the Purchase Agreement and
all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and
effect, and are hereby ratified and confirmed.
5.3
Except to the extent expressly forborne as set forth above in
Section 1.1 , the execution, delivery and effectiveness
of this Agreement shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of EPFC, the
Committed Purchaser, the Collateral Agent or the Administrative
Agent, nor constitute a waiver of any provision of any of the
Related Documents, or any other documents, instruments and
agreements executed and/or delivered in connection
therewith.
6.
Headings . Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other
purpose.
7.
Counterparts . This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.
Entire Agreement . This Agreement, taken together
with the Purchase Agreement and all of the other Related Documents,
embodies the entire agreement and understanding of the parties
hereto and supersedes all prior agreements and understandings,
written and oral, relating to the subject matter hereof.
9.
Governing Law . THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES).
10. No
Course of Dealing . The Committed Purchaser, the Collateral
Agent and the Administrative Agent have entered into this Agreement
on the express understanding with the EaglePicher Parties that in
entering into this Agreement the Committed Purchaser, the
Collateral Agent and the Administrative Agent are not establishing
any course of dealing with any EaglePicher Party. The rights of the
Committed Purchaser, the Collateral Agent and the Administrative
Agent to require strict performance with all the terms and
conditions of the Purchase Agreement as amended by this Agreement
and the other Related Documents shall not in any way be impaired by
the execution of this Agreement. None of the Collateral Agent,
the
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Committed Purchaser or the
Administrative Agent shall be obligated in any manner to execute
any further Agreements or waivers, and if such waivers or
Agreements are requested in the future, assuming the terms and
conditions thereof are acceptable to them, the Committed Purchaser,
the Collateral Agent and the Administrative Agent may require the
payment of fees in connection therewith.
11.
Waiver of Claims .
11.1 Each
EaglePicher Party hereby (a) ratifies and reaffirms all of its
payment and performance obligations, contingent or otherwise, and
each grant of security interests and liens granted under each
Related Document to which it is a party, (b) agrees and
acknowledges that such ratification and reaffirmation is not a
condition to the continued effectiveness of such Related Documents,
and (c) agrees that neither such ratification and
reaffirmation, nor any Person’s solicitation of such
ratification and reaffirmation, constitutes a course of dealing
giving rise to any obligation or condition requiring a similar or
any other ratification or reaffirmation from each EaglePicher Party
with respect to any subsequent modifications consent or waiver with
respect to the Purchase Agreement or other Related Documents. The
Purchase Agreement and each other Related Document is in all
respects hereby ratified and confirmed and neither the execution,
delivery nor effectiveness of this Agreement shall operate as a
waiver of any Termination Event, Incipient Termination Event, Event
of Servicer Termination or Incipient Servicer Termination Event
(whether or not known to the Administrative Agent, the Collateral
Agent or the Committed Purchaser) or any right, power or remedy of
the Administrative Agent, the Collateral Agent or the Committed
Purchaser of any provision contained in the Purchase Agreement or
any other Related Document, whether as a result of any Termination
Event, Incipient Termination Event, Event of Servicer Termination
or Incipient Servicer Termination Event o
