Exhibit 10(m)(1)
AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT
AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT (this "AMENDMENT")
dated as of February 28, 2002, among Ferro Finance Corporation (the "SELLER"),
Corporate Asset Funding Company, Inc. (the "INVESTOR"), as assignee of ▇▇▇▇▇▇
▇.▇. pursuant to the Assignment and Acceptance Agreement referred to in Section
2 below, Ferro Electronic Materials, Inc., as an originator, Ferro Corporation,
as an originator (together with Ferro Electronic Materials, Inc., the
"ORIGINATORS") and as collection agent, and Citicorp North America, Inc., as
Agent (in such capacity, the "Agent").
PRELIMINARY STATEMENTS.
(1) Ferro Corporation, as an Originator and as Collection
Agent, Ferro Electronic Materials, Inc., as an Originator, the Seller, ▇▇▇▇▇▇
▇.▇. and the Agent entered into a Receivables Purchase Agreement dated as of
September 28, 2000, as amended by that certain letter amendment dated as of July
31, 2001 (the "AGREEMENT"). Terms not defined herein are used as defined in the
Agreement.
(2) The parties desire to amend certain provisions of the
Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO AGREEMENT. Upon effectiveness of this
Amendment, the Agreement is hereby amended as follows:
(a) The following new definitions are added to Section 1.01,
in proper alphabetical order:
"ALLOCATION PERCENTAGE" means, at any time, the sum of the Receivable
Interest percentages at such time, based on the information in the most
recent Daily Report.
"AMORTIZATION PERIOD" means the period commencing on the day following
the last day of the Revolving Period and ending on the later of the
Facility Termination Date and the date on which no Capital of or Yield
on any Receivable Interest shall be outstanding and all other amounts
owed by the Seller to the Investor, the Agent and the Collection Agent
shall be paid in full.
"CASH COLLATERAL ACCOUNT" has the meaning specified in Section 6.08.
"CASH COLLATERAL AGREEMENT" has the meaning specified in Section 6.08.
"CASH COLLATERAL BANK" has the meaning specified in Section 6.08.
"CURE PERIOD" means the period beginning on and including a Pool
Non-compliance Date and ending on but excluding the earlier of (a) the
first date thereafter on which the Net Receivables Pool Balance equals
or exceeds the Required Net Receivables Pool Balance and (b) the fifth
consecutive Business Day following the occurrence of such Pool
Non-compliance Date.
"DAILY REPORT" means a report, in form and substance satisfactory to
the Agent, containing such information as the Agent may reasonably
request from time to time, furnished by the Collection Agent to the
Agent pursuant to Section 6.02(h).
"DEPOSIT DATE" means each day on which any Collections are deposited in
any of the Lock-Box Accounts or on which the Collection Agent shall
receive Collections of Receivables.
"MONTHLY REPORT" means a report in substantially the form of Annex A
hereto and containing such additional information as the Agent may
reasonably request from time to time, furnished by the Collection Agent
to the Agent pursuant to Section 6.02(g).
"NON-INVESTMENT GRADE EVENT" means any of the long-term public senior
unsecured non-credit-enhanced debt securities of Ferro Corporation are
rated below BBB- by S&P or Baa3 by ▇▇▇▇▇'▇, or if Ferro Corporation
does not have long-term public senior unsecured non-credit-enhanced
debt ratings from both S&P and ▇▇▇▇▇'▇, ▇▇▇▇▇ Corporation is judged by
the Agent, in its sole discretion, to be of credit quality below (with
respect to each missing rating) BBB- by S&P or Baa3 by ▇▇▇▇▇'▇.
"POOL NON-COMPLIANCE DATE" means any day on which the Net Receivables
Pool Balance as shown in the most recent Monthly Report or Daily Report
is less than the Required Net Receivables Pool Balance.
"PURCHASER COLLECTIONS" means, as of any Deposit Date, that portion of
the Collections deposited to the Lock-Box Accounts on such date or
received by the Collection Agent on such date equal to the product of
(i) the Allocation Percentage on such date times (ii) the aggregate
amount of such Collections.
"REQUIRED NET RECEIVABLES POOL BALANCE" means, as of any day, the sum
of (i) the aggregate Reserves for all Receivable Interests calculated
as of such day plus (ii) the aggregate outstanding Capital for all
Receivable Interests as of such day. For purposes of such calculation,
Capital shall be reduced by the aggregate amount of funds then held in
the Cash Collateral Account, and (to the extent applicable) the
Reserves shall be computed on such reduced Capital.
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"RESERVES" means, with respect to any Receivable Interest as of any
day, the sum of the Yield and Fee Reserve, the Loss Reserve and the
Dilution Reserve for such Receivable Interest as of such day.
"REVOLVING PERIOD" means the period beginning on the date of the
initial purchase hereunder and terminating at the close of business on
the Business Day immediately preceding the date on which the
Termination Date shall have occurred for all Receivable Interests.
"SELLER COLLECTIONS" means, as of any Deposit Date, that portion of the
Collections deposited to the Lock-Box Accounts on such date or received
by the Collection Agent on such date equal to the product of (i) 100%
minus the Allocation Percentage on such date times (ii) the aggregate
amount of such Collections.
(b) The definition of "Agent's Account" in Section 1.01 is
amended by replacing the words "number 3885-8248" where they appear in the
second line thereof with the words "number 4063-6695."
(c) The definition of "Assignee Rate" in Section 1.01 is
amended by replacing the words "equal to 1.0% per annum" where they appear in
the second line thereof with the words "equal to 1.50% per annum."
(d) The definition of "Dilution Percentage" is amended by
replacing the term "Default Ratio" where it appears in clause (I)(y) thereof
with the term "Dilution Ratio."
(e) The definition of "Seller Report" in Section 1.01 is
amended in its entirety to read as follows:
"SELLER REPORT" means a Monthly Report or a Daily Report.
(f) The definition of "Special Event" in Section 1.01 is
amended by inserting the word "non-credit-enhanced" immediately after the words
"public senior unsecured" in the two places where they appear therein.
(g) The definition of "Transaction Document" in Section 1.01
is amended in its entirety to read as follows:
"TRANSACTION DOCUMENT" means any of this Agreement, the Originator
Purchase Agreement, the Lock-Box Agreements, the Cash Collateral
Agreement, the Fee Agreement and all other agreements and documents
delivered and/or related hereto or thereto.
(h) Section 2.04(b) is amended by inserting the words "So long
as a Non-Investment Grade Event shall not have occurred," immediately prior to
the words "The Collection Agent shall, on each day" appearing at the beginning
of such section and the upper case letter "T" at the beginning of such section
is amended to be a lower case "t."
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(i) Section 2.04(c) is amended in its entirety to read as
follows:
(c) If a Non-Investment Grade Event shall have occurred and be
continuing, the Collection Agent shall comply with the following:
(i) If the Collection Agent shall fail to deliver the
Daily Report on any Deposit Date during the Revolving Period, the Collection
Agent shall not be permitted to withdraw any amounts from the Lock-Box Accounts
on such date or any date thereafter unless and until the Collection Agent shall
be in compliance with Section 6.02(h) (but subject to the right of the Agent to
prohibit withdrawals by the Collection Agent from the Lock-Box Accounts in
accordance with the Lock-Box Agreements);
(ii) On the first Business Day following each Deposit Date
during the Revolving Period, following delivery of the Daily Report to the
Agent, if the Daily Report for such date shows that no Cure Period shall have
occurred and be continuing, the Collection Agent shall, in the following order:
(A) based on the Allocation Percentage on such day,
determine the amount of Purchaser Collections
and Seller Collections;
(B) withdraw from the Lock-Box Accounts and from
Collections of Pool Receivables which the
Collection Agent received on such Deposit Date
and set aside on its books and hold in trust
(and, at the request of the Agent, segregate)
for the Investors that hold Receivable
Interests, out of Purchaser Collections, an
amount equal to the Yield, Fees, and Collection
Agent Fee accrued through such day for the
Receivable Interests and not previously set
aside;
(C) withdraw from the Lock-Box Accounts and from
Collections of Pool Receivables which the
Collection Agent received on such Deposit Date
and release to the Seller the remainder of
Purchaser Collections, in each instance to the
extent representing a return of Capital, to be
reinvested with the Seller in Receivable
Interests; PROVIDED that, if immediately
following any such reinvestment such Deposit
Date would be a Pool Non-compliance Date, the
Collection Agent shall retain all such remaining
Collections in (or, to the extent the Collection
Agent has received any such Collections,
redeposit such Collections into) the Lock-Box
Accounts (and deposit the other such remaining
Collections received by it into the Lock-Box
Accounts) to be applied pursuant to Section
2.04(c)(iii)(C); and
(D) remit the Seller Collections to the Seller.
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(iii) On the first Business Day following each Deposit
Date during the Revolving Period, following delivery of the Daily Report to the
Agent, if the Daily Report for such date shows that a Cure Period shall have
occurred and be continuing, the Collection Agent shall, in the following order:
(A) based on the Allocation Percentage on such day,
determine the amount of Purchaser Collections
and Seller Collections;
(B) withdraw from the Lock-Box Accounts and from
Collections of Pool Receivables which the
Collection Agent received on such Deposit Date
and set aside on its books and hold in trust
(and, at the request of the Agent, segregate)
for the Investors that hold the Receivable
Interests, out of Purchaser Collections, an
amount equal to the Yield, Fees, and Collection
Agent Fee accrued through such day for the
Receivable Interests and not previously set
aside;
(C) remit to the Cash Collateral Account from the
Lock-Box Accounts and from Collections of Pool
Receivables which the Collection Agent received
on such Deposit Date an amount equal to the
lesser of (x) the sum of the remaining
Collections in the Lock-Box Accounts (and
Collections received by the Collection Agent
from the Lock-Box Accounts on such Deposit Date)
and the remaining Collections of Pool
Receivables received by it on such Deposit Date
and (y) an amount equal to the excess of the
Required Net Receivables Pool Balance over the
Net Receivables Pool Balance;
(D) withdraw from the Lock-Box Accounts and from
Collections of Pool Receivables which the
Collection Agent received on such Deposit Date
and release to the Seller the remainder of
Purchaser Collections, in each instance to the
extent representing a return of Capital, to be
reinvested with the Seller in Receivable
Interests (for purposes of determining the
remainder of Purchaser Collections, any
Collections which have previously been applied
pursuant to Section 2.04(c)(iii)(C) shall be
deemed to be first Seller Collections and then
Purchaser Collections); and
(E) remit the Seller Collections to the Seller.
(iv) On the first Business Day following each Deposit Date
during the Amortization Period, the Collection Agent shall, by no later than
11:00 A.M. (New York City time), remit to the Agent's Account all Collections in
the Lock-Box Accounts and all
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Collections of Pool Receivables which the Collection Agent received on such
Deposit Date.
(j) Section 2.04(e) is relettered as Section 2.04(f) and all
cross-references to Section 2.04(e) in the Transaction Documents shall be deemed
to refer to Section 2.04(f).
(k) Section 2.04(d) is relettered as Section 2.04(e), all
cross-references to Section 2.04(d) in the Transaction Documents shall be deemed
to refer to Section 2.04(e), and clause (i) of such Section is amended in its
entirety to read as follows:
(i) if such distribution occurs on a day that is not a Liquidation Day,
first to the Investors that hold the relevant Receivable Interest and
to the Agent in payment in full of all accrued Yield and Fees;
PROVIDED, that if such distribution related to Collections remitted
from the Cash Collateral Account, such distribution shall be paid to
the Investors that hold the Receivable Interest in respect thereof, in
reduction of Capital.
(l) A new Section 2.04(d) is inserted lo read as follows:
(d) The Collection Agent shall deposit into the Agent's Account, on the
Settlement Date for each Receivable Interest, Collections held for the
Investors that relate to such Receivable Interest pursuant to Sections
2.04(b), 2.04(c)(ii)(B) or 2.04(c)(iii)(B). The Collection Agent shall
pay to itself on each Settlement Date which is not a Liquidation Day
Collections set aside with respect to each Receivable Interest on
account of accrued Collection Agent Fee. On any Business Day on which
funds are on deposit in the Cash Collateral Account, the Collection
Agent (i) shall, upon written notice from the Agent, and may (if the
funds in the Cash Collateral Account exceed $10,000,000), upon written
notice to the Agent, remit such funds from the Cash Collateral Account
to the Agent's Account or (ii) may, following delivery of the Daily
Report to the Agent, withdraw from the Cash Collateral Account and
remit to the Seller all or a portion of the funds in the Cash
Collateral Account; PROVIDED, that such Daily Report shall state that,
after taking account of the proposed withdrawal, the Net Receivables
Pool Balance on such day will be equal to or greater than the Required
Net Receivables Pool Balance, and such Daily Report shall set forth the
calculation supporting such statement.
(m) Section 2.06(a) is amended in its entirety to read as
follows:
(a) All amounts to be paid or deposited by the Seller or the Collection
Agent hereunder shall be paid or deposited no later than 11:00 A.M.
(New York City time) on the day when due in same day funds to the
Agent's Account; PROVIDED, that all amounts to be deposited into the
Cash Collateral Account shall be deposited no later than 11:00 A.M.
(New York City time) on the date when due, and in any event such
amounts shall be deposited into the Cash Collateral Account prior to
any withdrawal from a Lock-Box Account (other than to directly fund a
deposit into the Cash Collateral Account).
(n) Clause (C) of Section 2.10 is relettered as clause (D),
and a new clause (C) is added which shall read as follows:
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(C) the Lock-Box Accounts and the Cash Collateral Account and
(o) Clauses (a) and (b) of Section 3.02 are amended in their
entirety to read as follows:
(a) in the case of each purchase, the Collection Agent shall have
delivered to the Agent at least one Business Day prior to such purchase
(in the case of a Monthly Report) and on the same day of (but prior to)
such purchase (in the case of a Daily Report) a completed Monthly
Report or, if required by Section 6.02(h), a completed Daily Report,
containing information covering the most recently ended reporting
period for which information is required pursuant to Sections 6.02(g)
or 6.02(h), as the case may be, and demonstrating that after giving
effect to such purchase no Pool Non-Compliance Date, Event of
Termination or Incipient Event of Termination under Section 7.01(i)
would occur, (b) in the case of each reinvestment, the Collection Agent
shall have delivered to the Agent on or prior to the date of such
reinvestment a completed Monthly Report or, if required by Section
6.02(h), a completed Daily Report, containing information covering the
most recently ended reporting period for which information is required
pursuant to Section 6.02(g) or Section 6.02(h), as the case may be,
(p) Each of the following Sections is amended by replacing the term
"Special Event" with the term "Non-Investment Grade Event": Section 5.01(i),
Section 6.02(d), Section 6.03(b) and Section 6.05(iii).
(q) Section 6.02(c) is amended by deleting the term "Special Event"
in the first line thereof.
(r) A new Section 6.02(h) is added to the Agreement, reading in its
entirety as follows:
(h) If a Non-Investment Grade Event shall have occurred and be
continuing, by no later than 11:00 A.M. (New York City time) on each
Business Day, the Collection Agent shall prepare and forward to the
Agent a Daily Report which shall contain information relating to the
Receivables current as of the close of business on the immediately
prior Business Day.
(s) A new Section 6.08 is added to Article VI, reading in its
entirety as follows:
Section 6.08. CASH COLLATERAL ACCOUNT. On or prior to the
earlier of (a) March 29, 2002 or (b) two Business Days after the
occurrence of a Non-Investment Grade Event, the Collection Agent shall
establish and thereafter shall maintain or cause to be maintained in
the name of the Seller, for the benefit of the Investors and under the
sole dominion and control of the Agent, with a financial institution
acceptable to the Agent a segregated interest bearing deposit account
(the "CASH COLLATERAL ACCOUNT," and such financial institution holding
such account a "CASH COLLATERAL BANK"). Such Cash Collateral Account
shall be subject to a Cash Collateral Agreement in form and substance
satisfactory to the
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Agent, the Seller, the Collection Agent and the Cash Collateral Bank
(the "CASH COLLATERAL AGREEMENT").
(t) Section 7.01(a) is amended in its entirety to read as follows:
(a) The Collection Agent (if Ferro Corporation or any of its
Affiliates) (i) shall fail to perform or observe any term, covenant or
agreement under this Agreement (other than as referred to in clauses
(ii), (iii) or (iv) of this subsection (a)) and such failure shall
remain unremedied for five Business Days, or (ii) shall fail to make
when due any payment or deposit to be made by it under this Agreement,
or (iii) shall fail to deliver any Monthly Report when due pursuant to
Section 6.02(g) and such failure shall remain unremedied for three
Business Days, or (iv) shall fail to deliver any Daily Report when due
pursuant to Section 6.02(h) and such failure shall remain unremedied
for more than one Business Day, or shall fail to deliver when due more
than two Daily Reports in any calendar week; or
(u) Section 7.01(i) is amended in its entirety to read as follows:
(i) (A) Prior to the occurrence of a Non-Investment Grade Event, the
sum of the Receivable Interests shall on any Business Day be greater
than 100%, or (B) after the occurrence and during the continuation of a
Non-Investment Grade Event, the Net Receivables Pool Balance shall be
less than 100% of the Required Net Receivables Pool Balance as of the
close of business on any Business Day and the Net Receivables Pool
Balance shall remain less than 100% of the Required Net Receivables
Pool Balance for a period of four consecutive Business Days after the
delivery of the Daily Report for such Business Day; or
(v) Section 7.01(l) is amended by inserting the words
"non-credit-enhanced" immediately after the words "public senior unsecured" in
the two places where they appear therein, by replacing the rating "BBB-" in the
two places it appears therein with the rating "BB" and by replacing the rating
"Baa3" in the two places it appears therein with the rating "Ba2."
(w) Each reference to "Seller Report" in each of the following
provisions of the Agreement is replaced with the term "Monthly Report": the
description of the Annexes in the Table of Contents, the definition of Average
Maturity in Section 1.01, and Section 6.02(g).
SECTION 2. EFFECTIVENESS. This Amendment shall become effective at
such time that: (i) executed counterparts of this Amendment have been delivered
by each party hereto to the other party hereto, (ii) an Amendment to Purchase
and Contribution Agreement, dated as of the date hereof, between the Originators
and the Seller, in form and substance satisfactory to the Agent, shall have
become effective, (iii) the Assignment and Acceptance Agreement, dated as of the
date hereof, pursuant to which ▇▇▇▇▇▇ ▇.▇. assigns to Corporate Asset Funding
Company, Inc. all of its outstanding interest in the Agreement, shall have
become effective, (iv) an executed amended Fee Agreement, dated as of the date
hereof, between the Agent and the Seller (the "AMENDED FEE AGREEMENT"), in form
and substance satisfactory to the Agent, shall have been delivered by the Seller
to the Agent, (v) payment of the structuring fee pursuant to the Amended Fee
Agreement by the Seller to the Agent shall have been received by the Agent, and
(vi) payment
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by the Seller shall have been received by the Agent or ▇▇▇▇ ▇▇▇▇▇▇▇ LLP for all
of the outstanding counsel fees and expenses of the Agent incurred and invoiced
through the date of this Amendment.
SECTION 3. CONDITIONS SUBSEQUENT. The Seller agrees that (i)
failure to deliver any Daily Report when due following the occurrence of a
Non-Investment Grade Event, or (ii) failure to establish the Cash Collateral
Account, in form and substance satisfactory to the Agent, on or prior to the
earlier of (a) March 29, 2002 and (b) two Business Days after the occurrence of
a Non-Investment Grade Event, or (iii) failure to deliver an audit report
pursuant to Section 6.06(a)(i), in form and substance satisfactory to the Agent,
on or prior to March 29, 2002, shall cause the "Liquidity Fee" and the "Program
Fee" (each as defined in the Amended Fee Agreement) to increase to "Level IV"
(as set forth on Annex A to the Amended Fee Agreement), for such period that any
such failure shall continue.
SECTION 4. ACKNOWLEDGMENT OF ASSIGNMENT. The Seller and the Agent
hereby acknowledge that each of them has been notified that ▇▇▇▇▇▇ ▇.▇. is
concurrently assigning all of its rights and obligations under the Agreement to
Corporate Asset Funding Company, Inc. in accordance with the terms and
conditions of Section 10.03(a) of the Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Each of the Seller and
the Collection Agent makes each of the representations and warranties contained
in Sections 4.01 and 4.02, respectively, of the Agreement (after giving effect
to this Amendment), and for the purpose of making such representations and
warranties, (i) each reference in Section 4.01 to "the Transaction Documents"
shall include this Amendment, (ii) each reference in Section 4.02 to "this
Agreement" shall be deemed to be a reference to both the Agreement and this
Amendment, (iii) the references in Sections 4.01(e) and 4.02(e) to the Seller's
and the Collection Agent's balance sheets and related financial statements shall
be deemed to refer to the Seller's and the Collection Agent's balance sheets and
related financial statements for the quarter ended September 30, 2001 and (iv)
the bring-down on no material adverse change in Sections 4.01(e) and 4.02(e)
shall in each case run from September 30, 2001.
SECTION 6. CONFIRMATION OF AGREEMENT. Each reference in the
Agreement to "this Agreement" or "the Agreement" shall mean the Agreement as
amended by this Amendment, and as hereafter amended or restated. Except as
herein expressly amended, the Agreement is ratified and confirmed in all
respects and shall remain in full force and effect in accordance with its terms.
SECTION 7. COSTS AND EXPENSES. The Seller agrees to pay on demand
all reasonable costs and expenses in connection with the preparation, execution,
delivery and administration of this Amendment and any other documents to be
delivered hereunder including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent and the Investors with respect
thereto and with respect to advising the Agent and the Investors as to the
rights and remedies of each under this Amendment, and all reasonable costs and
expenses, if any (including reasonable counsel fees and expenses), in connection
with the enforcement of this Amendment and any other documents to be delivered
hereunder.
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SECTION 8. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Amendment by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment.
SECTION 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF).
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written,
ORIGINATOR AND FERRO CORPORATION
COLLECTION AGENT:
By: /s/ D. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: D. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
ORIGINATOR: FERRO ELECTRONIC MATERIALS, INC.
By: /s/ ▇▇▇▇▇ ▇. Campiano
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Name: ▇▇▇▇▇ ▇. Campiano
Title: Vice President
SELLER: FERRO FINANCE CORPORATION
By: /s/ D. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: D. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
INVESTOR: CORPORATE ASSET FUNDING COMPANY, INC.
By: Citicorp North America,
Inc., as Attorney-in-Fact
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
AGENT: CITICORP NORTH AMERICA, INC., as Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
