CREDIT AND SECURITY AGREEMENT
THIS CREDIT AND SECURITY AGREEMENT (the "Agreement") is dated as of
December 5, 2001, by and between BUCKEYE RECEIVABLES INC., a Delaware
corporation ("Purchaser"), and WACHOVIA BANK, N.A., as Lender.
The parties hereto agree as follows:
ARTICLE 1. DEFINITIONS AND RELATED TERMS
Section 1.01. Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Account Debtor" means, with respect to an Account Receivable, the
Person who is obligated to the Obligee of such Account Receivable.
"Account Receivable" means an Obligee's right to the payment of money
from an Account Debtor arising out of goods sold or to be sold, property leased
or to be leased, and services rendered to be rendered, whether secured or
unsecured, whether now existing or hereafter arising, and whether or not
specifically sold or purchased in connection with the Program; provided that the
parties hereto agree that each such right to payment evidenced by a separate,
discrete invoice shall constitute a separate Account Receivable hereunder.
"Adjusted LIBOR" means, as applicable to any Settlement Period, a rate
per annum equal to the quotient obtained (rounded upwards, if necessary, to the
next higher 1/100th of one percent) by dividing (i) the applicable LIBOR for
such Settlement Period by (ii) 1.00 minus the LIBOR Reserve Percentage.
"Advance" means each extension of credit made by Lender to Purchaser or
on Purchaser's behalf under this Agreement or relating to the Program.
"Advance Request" means each request substantially in the form of
Exhibit A, attached hereto and made a part hereof.
"Affiliate" of any relevant Person means (i) any Person that directly,
or indirectly through one or more intermediaries, controls the relevant Person
(a "Controlling Person"); (ii) any Person (other than the relevant Person or a
Subsidiary of the relevant Person) which is controlled by or is under common
control with a Controlling Person; or (iii) any Person (other than a Subsidiary
of the relevant Person) of which the relevant Person owns, directly or
indirectly, five percent or more of the common stock or equivalent equity
interests. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Aggregate Advances" means, at any time of determination, the aggregate
outstanding principal amount of all Advances.
"Aggregate Cash Payment" means, as of any Settlement Date, an amount
equal to the amount of the Advance (if any) being made on such Settlement Date,
plus the collected balance in the Purchaser's Account as of the open of business
on the Preparation Date immediately preceding such Settlement Date (other than
that portion of such collected balance which represents collections which have
been received, but not yet identified and applied to a specific Account Debtor
in an IRPF Receivables Report delivered to Purchaser by Servicer), less the
amounts indicated in items (i) through (xi) of Section 2.08(d) in the Credit
Agreement, as such items are calculated as of such Settlement Date.
"Aggregate Insured Value" means, at the time of determination, the
aggregate Insured Value of all Purchased Receivables of all Account Debtors.
"Agreement" means this Credit and Security Agreement, together with all
amendments, restatements, supplements, and other modifications hereto.
"Authority" has the meaning set forth in Section 7.02.
"Available Proceeds" means, at any time of determination, the
then-total amount of proceeds which remains available for payment of claims
submitted under the Policy.
"Bankruptcy Code" means Title 11 of the United States Code, as it may
be amended from time to time.
"Base Rate" means, as of any day, a rate of interest per annum equal to
the higher as of such day of (i) Prime Rate, less one percent and (ii) one-half
of one percent above the Federal Funds Rate. For purposes of determining the
Base Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall
be effective on the date of each such change.
"▇▇▇▇ of Sale" has the meaning give such term in the Purchase
Agreement.
"Blocked Account Agreement" means a Control Agreement for Notification
and Acknowledgement of Pledge or Security Interest in Accounts substantially in
the form of Exhibit B, attached hereto and made part hereof, with any changes as
may be acceptable to Lender in its sole discretion, executed and delivered by
Purchaser, the depositary institution at which the Purchaser maintains the
Purchaser's Account, and Lender, as required by Lender.
"Books and Records" means, with respect to an Obligee's Accounts
Receivable, all of the Obligee's books, records, computer tapes, programs, and
ledger books arising from or relating to such Accounts Receivable.
"Borrowing Base" means, at any time of determination, the lesser of (a)
the Commitment and (b) an amount equal to 85% of the Aggregate Insured Value.
"Buckeye Technologies" means Buckeye Technologies Inc.
"Business Day" means each day on which dealings in Dollar deposits are
carried out in the London Interbank market and which is not a Saturday, Sunday,
or a day on which banking institutions in the State of Georgia are authorized or
obligated by law, executive order, or governmental decree to be closed.
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"Cash Price" means, with respect to an Account Receivable which is
being purchased on a Settlement Date, an amount equal to the Purchase Price of
such Account Receivable, divided by the Purchase Price of all Accounts
Receivable of all Sellers being sold on such Settlement Date, times the
Aggregate Cash Payment as of such Settlement Date; provided that the Cash Price
for such Account Receivable shall in no event exceed the Purchase Price of such
Account Receivable.
"Change of Law" has the meaning set forth in Section 7.02.
"Closing Certificate" has the meaning set forth in Section 8.01(c).
"Closing Date" means the date of this Agreement as first above written.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Collateral" means the property in which Lender is granted a security
interest pursuant to Section 3.01 or elsewhere in the Program Documents.
"Commitment" means $30,000,000.00, as such amount may be reduced from
time to time as set forth in Section 2.06.
"Commitment Fee" has the meaning set forth in Section 2.05.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any of Purchaser or any Seller, are treated
as a single employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all payment obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable and accrued expenses arising
in the ordinary course of business, (iv) all obligations of such Person as
lessee under capital leases or leases for which such Person retains tax
ownership of the property subject to a lease, (v) all obligations of such Person
to reimburse any bank or other Person in respect of amounts payable under a
banker's acceptance, (vi) all obligations of such Person to reimburse any bank
or other Person in respect of amounts paid or undrawn amounts available to be
paid under a letter of credit or similar instrument, (viii) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person, (ix) all obligations of such Person with respect to
interest rate protection agreements, foreign currency exchange agreements or
other hedging arrangements, other than commodity hedging agreements entered into
by such Person as risk protection rather than as an investment (each valued as
the termination value thereof computed in accordance with a method approved by
the International Swap Dealers Association and agreed to by such Person in the
applicable agreement, if any), and (x) all Debt of others guaranteed, in any
form whatsoever, by such Person.
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"Deduction" means any credit, allowance, discount, setoff,
counterclaim, settlement, compromise, return, accord and satisfaction,
accommodation, or forgiveness of any nature or type, on, of, or relating to all
Accounts Receivable.
"Default Rate" means, with respect to any of the Obligations, on any
day, a rate of interest per annum equal to the sum of (i) the Interest Rate,
plus (ii) two percent.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Deferred Price" means, with respect to an Account Receivable which is
being purchased on a Settlement Date, an amount equal to the Purchase Price of
such Account Receivable, less the Cash Price of such Account Receivable.
"Discharged Receivable" means any Purchased Receivable (a) the
Uncollected Value of which was fully and finally paid by the Account Debtor or
(b) for which a claim was submitted under the Policy and either (i) initially
rejected (regardless of whether there exists any right to resubmit such
Purchased Receivable or any right to appeal such rejection) or (ii) paid by
Underwriter and the Policy Proceeds received by Lender or deposited into the
Purchaser's Account.
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Effective Date" means the date on which each of the conditions
precedent to closing and conditions precedent to the making of the initial
Advance are satisfied, as determined by Lender.
"Eligible Receivable" means each of the Sellers' Accounts Receivable
which has been specifically identified and offered for sale by a Seller,
accepted or approved for purchase by Purchaser, Lender, and Underwriter, and
satisfies, at any time of determination, each of the following other criteria:
(a) such Seller has the right to sell to Purchaser;
(b) is evidenced by a binding Underlying Contract between
such Seller and the Account Debtor;
(c) the right to payment of which has been fully earned
by such Seller and requires no further performance on
such Seller's part and the Account Receivable is due
and payable by the Account Debtor in Dollars;
(d) the Account Debtor related to such Account Receivable
is not affiliated with such Seller;
(e) arises out of a bona fide sale from such Seller to
the Account Debtor related to such Account Receivable
in a transaction occurring in the ordinary course of
such Seller's business;
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(f) is free from adverse claims, is not subject to any
Deductions other than Deductions of which the
Purchaser has been notified, has not been sold or
pledged to any other Person other than Purchaser or
Lender, and is free and clear of all Liens except
Liens in favor of Lender; and
(g) upon Purchaser's purchase thereof and for so long as
it remains a Purchased Receivable, Purchaser's
ownership thereof and security interest therein will
be evidenced and perfected under the UCC and
applicable financing statements filed in appropriate
offices and will be subject to Lender's
first-priority, perfected security interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Event of Default" has the meaning set forth in Section 6.01.
"Face Value" means, with respect to an Account Receivable, the amount
the Account Debtor is obligated to pay the Obligee on account of the sale of
goods or rendition of services as shown on the face of any related documents
(e.g., the Underlying Contract, invoices, purchase orders, or other shipping
documents), without including any Deductions, interest, shipping charges, or
other extraneous costs and expenses.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to Lender on such day on such transactions, as determined in good
faith by Lender.
"Final Payment Date" means the date which is nine months after the
Purchase Termination Date; provided that, if such date is not a Business Day,
then the Final Payment Date shall be the immediately following Business Day.
"Fiscal Quarter" means any fiscal quarter of Buckeye Technologies.
"Fiscal Year" means any fiscal year of Buckeye Technologies.
"Fleet Agreement" means that Credit Agreement dated as of April 16,
2001, by and among Buckeye Technologies, Fleet National Bank, as "Administrative
Agent" thereunder, and the other banks and financial institutions party thereto
from time to time, as the same is amended, restated, supplemented, or otherwise
modified from time to time.
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"Fleet Default" means any "Event of Default" (as such term is defined
in the Fleet Agreement) under the Fleet Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America applied on a basis consistent with those which, in accordance
with Section 1.02, are to be used in making the calculations for purposes of
determining compliance with the terms of this Agreement.
"Governmental Body" means any court, arbitrator, tribunal, or other
governmental authority, agency, or body or any official thereof.
"Independent Director" has the meaning given such term in Section
5.10(b).
"Insured Value" means, with respect to all Purchased Receivables of a
particular Account Debtor and at any time of determination, that portion of the
Uncollected Value of such Purchased Receivables which (a) does not exceed any
buyer, credit, or other limitation established for such Account Debtor by
Underwriter pursuant to the Policy, as such limitation exists at such time; (b)
is otherwise nominally eligible for payment under the Policy at such time,
without regard to the limitations described in the immediately preceding clause
(a) or any other credit or Policy limitation set forth in or applicable to the
Policy; and (c) was calculated in a manner acceptable to Lender and Purchaser.
In determining the Uncollected Value of a Purchased Receivable for purposes of
this definition, such value shall be calculated as of the date and time of the
most recent IRPF Receivables Report delivered by Servicer or the Lockbox
administrator and shall be calculated based solely on the information contained
in such IRPF Receivables Report, meaning that collections received, but not yet
identified, applied to such Purchased Receivable, or deposited in the
Purchaser's Account, will not be used in determining any part of such
Uncollected Value for purposes of this definition.
"Interest Rate" means (a) a variable rate of interest per annum equal
to Adjusted LIBOR, plus 0.95%, which rate shall be adjusted for each Settlement
Period as set forth herein or (b) such other rate of interest applicable to the
Aggregate Advances as determined from time to time in accordance with Article 7.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person (including,
without limitation, interest rate protection, foreign currency, or other hedging
arrangements to be held by such Person as an investment), capital contribution
to such Person, loan or advance to such Person, making of a time deposit with
such Person, guaranty, suretyship, or assumption of any obligation of such
Person or otherwise.
"IRPF Receivables Report" has the meaning given such term in the
Servicing Agreement.
"LIBOR" means, for the Aggregate Advances outstanding during any
Settlement Period:
(a) the rate of interest per annum at which U.S. Dollar
deposits are offered in the London interbank market in an amount
approximately equal to the Aggregate Advances for a period of time
comparable to such Settlement Period which appears on the Telerate
Page 3750 as of 11:00 A.M. London time two Business Days prior to the
first Business Day of such Settlement Period; or
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(b) if no such rate appears on the Telerate Page 3750, the
rate of interest per annum determined by Lender to be the average of up
to four interest rates per annum, at which U.S. Dollar deposits are
offered in the London interbank market in an amount approximately equal
to the Aggregate Advances for a period of time comparable to such
Settlement Period, which appear on the ▇▇▇▇▇▇'▇ Screen LIBO Page as of
11:00 ▇.▇.▇▇▇▇▇▇ time two Business Days prior to the first Business Day
of such Settlement Period, if at least two such offered rates so appear
on the ▇▇▇▇▇▇'▇ Screen LIBO Page; or
(c) if no such rate appears on the Telerate Page 3750 and
fewer than two offered rates appear on the ▇▇▇▇▇▇'▇ Screen LIBO Page,
the rate of interest per annum at which deposits in an amount
comparable to the Aggregate Advances and which have a term
corresponding to such Settlement Period are offered to Lender by first
class banks in the London inter-bank market for delivery in immediately
available funds at a non-United States office or international banking
facility of Lender, as selected by Lender, on the first day of such
Settlement Period as determined by Lender approximately 10:00 A.M.
(Atlanta, Georgia, time) two Business Days prior to the date upon which
such Settlement Period is to commence (which determination by such
Lender shall, in the absence of manifest error, be conclusive).
"LIBOR Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on the Aggregate Advances is determined or any category of
extensions of credit or other assets which includes loans by a non-United States
office of Lender to United States residents). Adjusted LIBOR shall be adjusted
automatically on and as of the effective date of any change in the LIBOR Reserve
Percentage.
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement which has the practical effect of constituting a
security interest, encumbrance, or servitude of any kind in respect of such
asset to secure or assure payment of a Debt or a guarantee of Debt of another,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, Purchaser shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease, or other title
retention agreement relating to such asset.
"Lockbox" means a lockbox arrangement on terms, and administered by a
financial institution, satisfactory at all times to Lender.
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"Lockbox Agreement" means a lockbox agreement in form and substance
satisfactory at all times to Lender, which agreement shall be by and among
Lender, Purchaser, and the financial institution which serves as administrator
for the Lockbox.
"Losses" means any liability, damage, costs and expenses, including,
without limitation, any attorneys' fees, disbursements and court costs, in each
case reasonably incurred by a Person, as the case may be, without regard to
whether or not such Losses would be deemed material under this Agreement or any
other Program Document, provided, however, that "Losses" shall not include any
losses based on claims for benefit-of-the bargain (other than with respect to
the Purchase Price), lost opportunity costs or similar claims.
"Management Expenses" means (a) the management fees, rental fees, phone
expenses, and other administrative fees which Purchaser is required to pay under
that certain Service Agreement dated as of November 27, 2001, by and between
Purchaser and ▇▇▇▇▇▇▇ Corporate Services, Inc., and (b) legal and accounting
expenses Purchaser is required to pay to Buckeye Technologies pursuant to that
certain Service Agreement for Accounting Services dated as of November 27, 2001,
by and between Purchaser and Buckeye Technologies.
"Margin Stock" means "margin stock" as defined in Regulations T, U or
X.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination,
or claim or contest by any Person demanding the same, in any litigation,
arbitration, or governmental investigation or proceeding), whether singly or in
conjunction with any other event or events, act or acts, condition or
conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (a) the financial
condition, operations, business, properties or prospects of such Person, or any
of such Person's Subsidiaries, (b) the rights and remedies of Lender under the
Program Documents, Lender's security interest and Lien against the Collateral,
or the ability of any of such Person or any other Person obligated under a
guaranty of the Obligations to perform its obligations with respect to the
Obligations or under the Program Documents to which it is a party (including,
without limitation, the repudiation, revocation or any attempt to do the same by
any Person or other Person obligated under a guaranty of the Obligations or any
other Program Document), as applicable, or (c) the legality, validity or
enforceability of any Program Document.
"Minimum Balance" means, at any time of determination, an amount equal
to the greater of (a) sum of (i) the deductible then existing under the Policy,
plus (ii) the amount of any additional premiums which, though not currently due
and payable, have accrued for payment by Purchaser at the conclusion of the
Policy's term, plus (iii) an amount equal to three month's interest at an
assumed interest rate of five percent per annum on an amount equal to the
initial Commitment and (b) three percent of the initial Commitment hereunder.
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc.
"Multiemployer Plan" has the meaning set forth in Section 4001(a)(3) of
ERISA.
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"Note" means a promissory note substantially in the form attached
hereto as Exhibit D, made by Purchaser and payable to Lender in the principal
amount equal to the Commitment, together with all amendments, consolidations,
modifications, renewals, and supplements thereto.
"Obligations" means all Debts, indebtedness, liabilities, covenants,
duties and other obligations of Purchaser to Lender included or arising from
time to time under this Agreement or any other Program Document, whether
evidenced by any note or other writing, including, without limitation,
principal, interest, fees, costs, attorneys' fees, and indemnification amounts
and any and all extensions or renewals thereof in whole or in part, direct or
indirect, absolute or contingent, due or to become due, primary or secondary, or
joint or several.
"Obligee" means the Person to whom payment of an Account Receivable is
owed.
"Officer's Certificate" has the meaning set forth in Section 8.01(d).
"Original Discount" means, with respect to an Account Receivable
purchased under the Program, two percent, expressed as a decimal, times the Face
Value of such Account Receivable.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means, as to the Collateral, the Liens granted
to Lender under the Program Agreements and any Liens or other claims any Seller
may have to any Recourse Receivable and its Related Rights and Property which
arise after such Seller pays the Repurchase Price for such Recourse Receivable
and any Liens or other claims Underwriter may have in any Purchased Receivable
and its Related Rights and Property on account of having paid Policy Proceeds on
such Purchased Receivable.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an unincorporated association, a trust or any other
entity or organization, including, but not limited to, a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
"Policy" means a receivables insurance policy and all endorsements and
other agreements, documents, and instruments relating thereto, all in form and
substance satisfactory to Lender, issued by Underwriter to Purchaser.
"Policies and Procedures" has the meaning given such term in the
Servicing Agreement.
"Policy Proceeds" means the proceeds paid by Underwriter on a Purchased
Receivable submitted for payment under the Policy.
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"Preparation Date" means each date which is two Business Days before
each Settlement Date; provided that the initial Preparation Date shall be the
Effective Date.
"Prime Rate" refers to that interest rate so denominated and set by
Lender from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Lender. Lender lends at
interest rates above and below the Prime Rate.
"Program" means the program for the Sellers' sale, and Purchaser's
purchase, of certain of the Sellers' Accounts Receivable, and for the funding of
a portion of the Purchase Price thereof by Advances made to Purchaser under this
Agreement, all as contemplated by the Program Documents.
"Program Documents" means each of this Agreement, the Purchase
Agreement, the Note, the Servicing Agreement, the Financing Statements, each
Settlement Report, each IRPF Receivables Report, each Advance Request, the
Subordinated Notes, the Lockbox Agreement (if any), the Blocked Account
Agreement (if any), and all other agreements, documents, or instruments entered
into in connection with any of the foregoing as the same may be amended,
restated, supplemented, or otherwise modified from time to time.
"Program Termination Date" means the date on which the Obligations
shall have been finally paid in full and Lender's commitment to make Advances
has terminated.
"Public Accountants" means nationally recognized certified public
accountants acceptable to Lender.
"Purchase Agreement" means that certain Receivables Purchase Agreement
of even date herewith by and among the Sellers and Purchaser, as amended,
restated, supplemented or otherwise modified from time to time.
"Purchase Notice" has the meaning given such term in the Purchase
Agreement.
"Purchase Price" means, with respect to any Account Receivable
purchased under the Program, the price paid by Purchaser for the purchase of
such Account Receivable, which price shall be an amount equal to its Face Value,
less the Original Discount, and shall be paid in cash to the extent of the Cash
Price and as an accrual on the Subordinated Note to the extent of the Deferred
Price.
"Purchase Termination Date" means the earliest to occur of the
following: (a) the date on which the Policy is initially scheduled to expire;
(b) the date which is 364 days after the Effective Date; and (c) if the Fleet
Agreement has been terminated, is no longer of any force and effect with respect
to Buckeye Technologies, or Lender is no longer a party thereto, any date
determined by Lender and declared in writing to Purchaser after the occurrence
of (i) any default (after the expiration of any applicable cure or grace
periods) by any Seller or Sellers under any note, indenture, loan agreement,
mortgage, lease, deed, guaranty, or other similar agreement relating to any Debt
of such Seller or Sellers in an aggregate amount greater than $5,000,000 or (ii)
any judgment rendered against any Seller or Sellers in an aggregate amount
greater than $5,000,000 (in excess of any insurance coverage), unless such
judgment is within thirty days discharged or stayed pending appeal and, if
stayed, is discharged within thirty days after the expiration of such stay;
provided that, in any of the foregoing cases, if such date is not a Business
Day, the Business Day immediately preceding such date; provided further that the
Purchase Termination Date is subject to extension for an additional 364 days, in
Lender's sole and absolute discretion, upon Purchaser's request made in writing
not more than sixty and not less than thirty days before the then-pending
Purchase Termination Date.
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"Purchased Receivable" means an Account Receivable which was actually
purchased by Purchaser under and in accordance with the terms of the Purchase
Agreement; provided that such Account Receivable shall no longer constitute a
Purchased Receivable immediately upon its becoming a Recourse Receivable or a
Discharged Receivable.
"Purchaser's Account" means a deposit account at a domestic financial
institution reasonably acceptable to Lender at all times, which account will be
owned by Purchaser and into which, inter alia, all collections on all Purchased
Receivables, Policy Proceeds not received directly by Lender, and all proceeds
of either of them will be deposited and all of Purchaser's cash will be
maintained on deposit.
"Recourse Receivable" means any Account Receivable which was purchased
by Purchaser under the Program which (a) becomes subject to any dispute between
its Account Debtor and Seller (or Purchaser by virtue of Purchaser's having
purchased such Account Receivable) regarding such Seller's performance of its
obligations under the Underlying Contract, unless Purchaser and Lender are
notified of such dispute in writing and any disputed amount is excluded from the
calculation of the Borrowing Base until such dispute is settled, or (b) was sold
to Purchaser in violation of any representation, warranty, or covenant contained
in any Program Document.
"Release Agreement" means an agreement, in form and substance
satisfactory to Lender, by and among Lender, Buckeye Technologies, and the
administrative agent of the Fleet Agreement on behalf of the other parties
thereto, in which such agent agrees, inter alia, to release its security
interest in and to the Purchased Receivables and their Related Rights and
Property and the Purchaser's Account, the Lockbox, and all other of Purchaser's
property which constitutes Collateral hereunder.
"Related Rights and Property" means, with respect to an Account
Receivable and in each case whether now existing or hereafter acquired or
arising, (a) all of Obligee's interest in all goods represented by such Account
Receivable and in all goods returned by, or reclaimed, repossessed, or recovered
from, the Account Debtor; (b) all of Obligee's Books and Records relating to
such Account Receivable; (c) all of Obligee's rights in and to (but not its
obligations under) the Underlying Contract; (d) all accounts, instruments,
general intangibles, documents, chattel paper, and letter of credit rights
related to such Account Receivable; (e) all of the collections or payments
received and all of Obligee's rights to receive payment and collections on such
Account Receivable; (f) all of Obligee's rights as an unpaid lienor or vendor of
such goods; (g) all of Obligee's rights of stoppage in transit, replevin, and
reclamation relating to such goods or Account Receivable; (h) all of Obligee's
rights in and to all security for such goods or the payment of such Account
Receivable and guaranties thereof; (i) any collections or casualty insurance
proceeds or proceeds from any trade receivables or other insurance (including,
without limitation, the Policy and Policy Proceeds) collected or paid on account
of such Account Receivable or any of the foregoing; and (j) all of Obligee's
rights against third parties with respect thereto.
11
"Repurchase Price" means, with respect to any Recourse Receivable, the
amount Seller of such Recourse Receivable is required to pay in repurchasing
such Recourse Receivable, which amount shall be equal to (a) the Purchase Price
paid by Purchaser for such Recourse Receivable, less (b) any amounts which
Purchaser is required to convey to such Seller as Related Rights and Property
upon such Seller's repurchase of such Recourse Receivable, less (c) any
Deductions on such Recourse Receivable to the extent Purchaser was actually
reimbursed for such Deductions under the provisions of 2.08(d) or 2.08(e).
"Restricted Payment" means (a) any dividend or other distribution on
any shares of Purchaser's equity securities (except dividends payable solely in
shares of its equity securities); (b) any payment on account of the purchase,
redemption, retirement, defeasance, or other acquisition of or sinking fund for
(i) any shares of Purchaser's equity securities (except shares acquired upon the
conversion thereof into other of Purchaser's equity securities), or (ii) any
option, capital appreciation rights, stock appreciation rights, warrant, or
other right to acquire Purchaser's equity securities; or (c) any payment prior
to the scheduled maturity of any of Purchaser's subordinated debt or other Debt
(other than the Obligations), provided that payment on the Subordinated Notes in
accordance with the terms of this Agreement shall not constitute a Restricted
Payment.
"S&P" means Standard & Poor's Rating Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc.
"Seller" means each of, and "Sellers" means collectively, Buckeye
Technologies, Buckeye Florida, Limited Partnership, and Buckeye Lumberton Inc.
"Seller Percentage" means, as to each Seller, a fraction, expressed as
a percentage, the numerator of which is the principal amount owing to such
Seller on such Seller's Subordinated Note, and the denominator of which is
aggregate principal amount owing on all the Subordinated Notes.
"Senior Officer" means, with respect to any Person, such Person's
president, vice president, treasurer, secretary, general counsel, controller,
chief executive officer, chief financial officer, and all other executive
officers, regardless of title.
"Servicer" means Buckeye Technologies or any successor servicer
acceptable to Lender.
"Servicing Agreement" means the Servicing Agreement dated as of even
date herewith between Servicer and Purchaser, as amended, restated, supplemented
or otherwise modified from time to time.
"Servicing Agreement Event of Default" has the meaning given such term
in the Servicing Agreement.
"Servicing Fee" has the meaning given such term in the Servicing
Agreement.
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"Settlement Date" means the last Business Day of each calendar week,
the day which is two Business Days after the Effective Date, and any other
Business Day agreed to by Lender.
"Settlement Period" means each period commencing on a Settlement Date
and ending on the next occurring Settlement Date; provided that the initial
Settlement Period shall commence on the Effective Date and end on the next
occurring Settlement Date and the last Settlement Period shall end on the
Purchase Termination Date.
"Settlement Report" means a report substantially in the form of Exhibit
C, as the same may be amended, restated, supplemented, or otherwise modified
from time to time, or such other form acceptable to Lender.
"Standard Terms" means those terms and conditions related to the
Sellers' selling and shipping of their respective products which have been
approved by Underwriter and are in accordance with the Policy.
"Subordinated Note" means each of, and "Subordinated Notes" means
collectively, the promissory notes, each substantially in the form of Exhibit E,
attached hereto and made a part hereof, executed and delivered by Purchaser to
each of the Sellers.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by the
such Person.
"UCC" shall mean the Uniform Commercial Code Secured Transactions of
Georgia (O.C.G.A. Art. 11-9), as amended from time to time.
"Uncollected Value" means, with respect to a Purchased Receivable, the
Face Value of such Purchased Receivable, less any payments which have been made
on the principal portion of such Purchased Receivable, less any Deductions on
such Purchased Receivable to the extent Purchaser has not been actually
reimbursed in accordance with the provisions of Sections 2.08(d) or 2.08(e),
less any portion of the Face Value of any Purchased Receivable which has been
placed in dispute by the related Account Debtor (but only until such dispute is
settled), but excluding for purposes of calculating its Uncollected Value any
unaccrued, accrued, paid, or unpaid interest, shipping charges, or other
extraneous costs and expenses relating to such Purchased Receivable.
"Underlying Contract" means, with respect to an Account Receivable, any
contract or agreement, in whatever form, existing between the Seller of such
Account Receivable and the Account Debtor to which such Account Receivable
relates.
"Underwriter" means the Person issuing the Policy, which Person must be
acceptable to Lender at all times.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.
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"Unused Commitment" means, at the time of determination, the amount, if
any, by which the Commitment exceeds the Aggregate Advances.
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Public Accountants or otherwise required by a change in
GAAP) with the most recent audited consolidated financial statements of Buckeye
Technologies and its Subsidiaries delivered to Lender.
Section 1.03. References. Unless otherwise indicated, references
in this Agreement to "articles," "exhibits," "schedules," "sections," and other
subdivisions are references to articles, exhibits, schedules, sections and other
subdivisions hereof.
Section 1.04. Use of Defined Terms. All terms defined in this Agreement
shall have the same defined meanings when used in any of the other Program
Documents, unless otherwise defined therein or unless the context shall require
otherwise. The terms "accounts," "chattel paper," "instruments,"
"general intangibles," "inventory," "equipment," and "fixtures," as and when
used herein and in the other Program Documents, shall have the same meanings
given such terms under the UCC.
Section 1.05. Terminology. The terms "herein," "hereof," and "hereunder"
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision. Any pronoun used shall be
deemed to cover all genders. In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding." All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations. All references to any of the
Program Documents shall include any and all amendment or modifications thereto
and any and all restatements, extensions or renewals thereof. All references to
any Person shall mean and include the successors and permitted assigns of such
Person. All references to "including" and "include" shall be understood to mean
"including, without limitation." All references to the time of day shall mean
the time of day on the day in question in Atlanta, Georgia, unless otherwise
expressly provided in this Agreement. A Default or an Event of Default shall be
deemed to exist at all times during the period commencing on the date that such
Default or Event of Default occurs to the date on which such Default or Event of
Default is waived in writing pursuant to this Agreement or, in the case of a
Default, is cured within any period of cure expressly provided in this
Agreement; and an Event of Default shall "continue," be "continuing," or "in
existence" until such Event of Default has been waived in writing by Lender.
Whenever the phrase "to the best of Purchaser's knowledge" or words of similar
import relating to the knowledge or the awareness of any Purchaser are used
herein, such phrase shall mean and refer to (i) the actual knowledge of a Senior
Officer of Purchaser or (ii) the knowledge that a Senior Officer would have
obtained if he had engaged in a good faith and diligent performance of his
duties, including the making of such reasonable specific inquiries as may be
necessary of the officers, employees or agents of Purchaser and a good faith
attempt to ascertain the existence or accuracy of the matter to which such
phrase relates. All calculations of money values shall be in Dollars, all
Advances made hereunder shall be funded in Dollars, and all amounts payable in
respect of any of the Obligations shall be paid in Dollars.
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ARTICLE 2. ADVANCES
Section 2.01. Commitment to Make Advances. Lender agrees, subject to the
terms and conditions set forth herein, to make Advances to Purchaser (each of
which shall be evidenced by the Note) from time to time on a Settlement Date and
before the Purchase Termination Date, so long as no Default or Event of Default
shall be in existence on such Settlement Date; provided that, immediately after
each such Advance is made, the Aggregate Advances will not exceed the Borrowing
Base. Lender shall have no obligation to make any Advance in an amount less than
the lesser of (a) $500,000.00 and (b) the Unused Commitment.
Section 2.02. Method of Borrowing. No later than 11:00 A.M., Atlanta,
Georgia, time, at least two Business Days before a Settlement Date on which
Purchaser desires Lender to make an Advance, Purchaser shall deliver, or cause
to be delivered, to Lender an Advance Request, which Advance Request need not be
executed when first delivered on such date provided Lender receives a duly
executed Advance Request no later than 9:00 A.M., Atlanta, Georgia, time, on the
Settlement Date on which such Advance is to be made. On the Settlement Date
indicated in such Advance Request, Lender will make an Advance in the amount
described in the Advance Request (subject to all other conditions set forth
herein) and will pay the proceeds of such Advance by wire transfer in accordance
with instructions provided by Purchaser in writing from time to time in such
Advance Request.
Section 2.03. Final Payment of Aggregate Advances. All of the
Obligations shall mature, and the principal amount thereof will be due and
payable, no later than the Final Payment Date, unless the Obligations will be
due and payable prior thereto by reason of the provisions of this Agreement. To
the extent not repaid on any Settlement Date, the Aggregate Advances, plus the
Advance being made in such Settlement Date (if any), shall automatically be
deemed to have been reborrowed at the Interest Rate for the following Settlement
Period, and the Aggregate Advances (plus any additional Advances accruing
thereto) shall continue to be automatically reborrowed for successive Settlement
Periods at the Interest Rate until paid, except as set forth in Article 7.
Section 2.04. Interest Rate.
(a) The Aggregate Advances outstanding from time to time shall bear
interest until paid at a variable rate of interest per annum equal to the
Interest Rate. Except as provided in Article 7, the Interest Rate shall be fixed
during each Settlement Period, but shall be subject to increase or decrease on
each Settlement Date in accordance with the definition of "LIBOR." Interest
shall be calculated on an assumed year of 360 days for the actual number of days
elapsed. Accrued but unpaid interest shall be due and payable, in arrears, on
each Settlement Date. In no event may the Interest Rate, or the amount of
interest paid on the Aggregate Advances, exceed the maximum rate of interest
permitted by law.
15
(b) Any overdue principal of and, to the extent permitted by law,
overdue interest on the Aggregate Advances shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the Default Rate.
After the occurrence and during the continuance of a Default or an Event of
Default, the Aggregate Advances (and, to the extent permitted by applicable law,
all accrued interest thereon) shall bear interest at the Default Rate from the
date of such Default or Event of Default, which date shall be deemed to be the
date on which such Default or Event of Default occurred and not the date such
Default or Event of Default is discovered or otherwise made known to any Person.
Section 2.05. Fees. On each Settlement Date for the Settlement Period
then ending, Purchaser shall pay to Lender, in arrears, a commitment fee (the
"Commitment Fee") equal to 0.25% per annum, times the average daily amount of
the Unused Commitment during such Settlement Period. The Commitment Fee shall be
determined on an assumed year of 360 days for the actual number of days elapsed.
Purchaser shall pay, or cause to be paid, all fees which are due and payable
under that certain mandate letter by and between Lender and Buckeye Technologies
dated October 2, 2001, and all other fees, charges, and expenses required to be
paid to Lender from time to time under the Program Documents.
Section 2.06. Termination or Reduction of Commitment.
(a) Purchaser may, with thirty days prior written notice to Lender,
terminate the Commitment in its entirety as of any Settlement Date. In any
event, the Commitment shall terminate no later than the Purchase Termination
Date.
(b) The Commitment shall be reduced from time to time without notice to
Purchaser so that it is at no time greater than the Available Proceeds.
Section 2.07. Repayment of the Aggregate Advances.
(a) Before the Purchase Termination Date, Purchaser shall have no
obligation to repay any principal amount of the Aggregate Advances, except as
otherwise provided herein.
(b) On any date on which the Commitment is reduced or terminated,
Purchaser shall (i) repay such amounts on the Aggregate Advances which are
necessary so that the Aggregate Advances, after giving effect to such payment,
shall not exceed the Borrowing Base, as reduced on account of the reduction or
termination of the Commitment, and (ii) pay all accrued but unpaid fees and
interest.
(c) If on any Settlement Date the Aggregate Advances exceed the
Borrowing Base, Purchaser shall repay such amounts on the Aggregate Advances
which are necessary so that the Aggregate Advances, after giving effect to such
payment, shall not exceed the Borrowing Base.
(d) All Policy Proceeds shall be paid directly to Lender and the
Commitment reduced, without prior notice to Purchaser, by the amount of such
Policy Proceeds.
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(e) All cash or cash equivalent amounts received by Purchaser on account
of a Seller's repurchase of any Recourse Receivable shall be deposited directly
into the Purchaser's Account, without setoff, counterclaim, or any other
deduction, and applied in accordance with Section 2.08.
Section 2.08. General Provisions as to Payments.
(a) Purchaser shall make each payment of principal of, and interest on,
the Aggregate Advances and of fees hereunder, without any setoff, counterclaim
or any deduction whatsoever, not later than 11:00 A.M. (Atlanta, Georgia, time)
on the date when due, in Federal or other funds immediately available in
Atlanta, Georgia, to Lender at its address referred to in Section 9.01. All
payments received by Lender after 11:00 A.M. (Atlanta, Georgia, time) on any
Business Day shall be deemed to be received on the following Business Day.
(b) Whenever any payment of principal of, or interest on, the Aggregate
Advances or fees or interest hereunder shall be due on a day which is not a
Business Day, the date for payment thereof shall be due and payable on the
immediately following Business Day.
(c) All payments of principal, interest, fees, and all other amounts to
be made by Purchaser with respect to the Obligations or otherwise pursuant to
this Agreement shall be paid without deduction for, and free from, any tax,
imposts, levies, duties, deductions, or withholdings of any nature now or at
anytime hereafter imposed by any Governmental Body thereon or therein.
(d) Except as set forth in Section 2.08(e), on each Settlement Date the
amount of the Advance (if any) being made on such Settlement Date, plus the
collected balance in the Purchaser's Account as of the open of business on the
Preparation Date immediately preceding such Settlement Date (other than that
portion of such collected balance which represents collections which have been
received, but not yet identified and applied to a specific Account Debtor in an
IRPF Receivables Report delivered to Purchaser by Servicer) shall be applied in
the following order (and in no other order without Lender's prior written
consent until the amounts owing in each category are fully paid): (i) first, to
Underwriter for payment of any premiums and other fees necessary to keep the
Policy in full force and effect; (ii) second, to Servicer in payment of all
Servicing Fees; (iii) third, toward the payment of all fees and expenses related
to the Lockbox and the administration thereof; (iv) fourth, towards payment of
the Management Expenses and other reasonable business costs and expenses,
including without limitation, reasonable attorneys' fees; (v) fifth, to Lender
in payment of accrued interest then due and payable in respect of the Aggregate
Advances; (vi)sixth, to Lender in payment of principal of the Aggregate
Advances, but only to the extent necessary to reduce the Aggregate Advances to
an amount less than or equal to the Borrowing Base; (vii) seventh, to Lender to
pay the amount of expenses that have not been reimbursed to Lender by Purchaser
in accordance with the terms of this Agreement, together with any interest
accrued thereon; (viii) eighth, to Lender to reimburse Lender for any
indemnities owed by Purchaser to Lender under this Agreement or the other
Program Documents; (ix) ninth, to Lender to pay any fees due and payable to
Lender and arising under this or any other Program Document, including, without
limitation, the Commitment Fee; (x) tenth, to Purchaser as reimbursement for any
Deductions on any Purchased Receivables; (xi) eleventh, to Purchaser to
replenish or maintain the Minimum Balance in the Purchaser's Account;
(xii) twelfth, to each of the Sellers as payment on the Purchaser's obligations
under the Subordinated Notes, pro rata in accordance with the Seller Percentage
for each Seller; and (xiii) lastly, to Purchaser or such other Person who is
lawfully entitled thereto for proper disposition (in accordance with this
Agreement) as such Person determines; provided that, in the event any Accounts
Receivable are to be purchased by Purchaser on such Settlement Date, the
payments described in this Section 2.08(d)(xii) and (xiii) shall be made only
after Purchaser pays each of the Sellers the Cash Price for all Accounts
Receivable being so purchased.
17
(e) During the existence of any Default or Event of Default or at all
times after the Purchase Termination Date or at all times after the Obligations
have become due and payable for whatever reason, all monies in the Purchaser's
Account on any Business Day shall be applied in the following order (and in no
other order without Lender's prior written consent until all amounts owing
within each category are fully paid): (i) first, to Underwriter for payment of
any premiums and other fees necessary to keep the Policy in full force and
effect; (ii) second, to Servicer in payment of all Servicing Fees; (iii) third,
toward the payment of all fees and expenses related to the Lockbox and the
administration thereof; (iv) fourth, towards payment of the Management Expenses;
(v) fifth, to Lender in payment of accrued interest then due and payable in
respect of the Aggregate Advances; (vi) sixth, to Lender to pay the amount of
expenses that have not been reimbursed to Lender by Purchaser in accordance with
the terms of this Agreement, together with any interest accrued thereon; (vii)
seventh, to Lender to reimburse Lender for any indemnities owed by Purchaser to
Lender under this Agreement or the other Program Documents; (viii) eighth, to
Lender to reimburse Lender for any expenses owed by Purchaser to Lender under
this Agreement or the other Program Documents; (ix) ninth, to Lender to pay any
fees due and payable to Lender and arising under this or any other Program
Document, including, without limitation, the Commitment Fee; (x) tenth, to
Lender in payment of principal of the Aggregate Advances; (xi) eleventh, to
Purchaser as reimbursement for any Deductions on any Purchased Receivables;
(xii) twelfth, other business costs and expenses, including without limitation
reasonable attorneys' fees; (xiii) thirteenth, to Sellers as payment on the
Purchaser's obligations under the Subordinated Notes, pro rata in accordance
with the Seller Percentages; and (xiv) lastly, to Purchaser or such other Person
who is lawfully entitled thereto for proper disposition (in accordance with this
Agreement) as such Person determines.
(f) In the event any funds are, through mistake or misdirection (such
that Purchaser was not the intended or rightful recipient of such funds),
deposited into the Purchaser's Account, Lender will cooperate with Purchaser in
causing the depository institution at which the Purchaser's Account is
maintained to disburse such funds to the proper Person; provided Lender must
receive from Purchaser evidence of the mistake or misdirection and wire
instructions for the Person to whom such funds should be directed.
Section 2.09. Lockbox; Purchaser's Account; Blocked Account Agreement.
(a) Purchaser shall establish and, until the Program Termination Date,
continuously maintain, the Purchaser's Account and the Lockbox into which the
Sellers, Servicer, and/or Purchaser shall cause all Account Debtors of the
Purchased Receivables to remit all cash, checks, drafts, items and other
instruments for the payment of money which it now has or may at any time
hereafter receive in full or partial payment on or collection of the Purchased
Receivables or the proceeds of the Purchased Receivables. In the event such
items of payment are inadvertently received by Purchaser or any other Person,
whether or not in accordance with the terms of this Agreement or any other
Program Document, Purchaser or such other Person shall be deemed to hold the
same in trust for the benefit of Lender and promptly forward them to Lender for
deposit in the Purchaser's Account without setoff, counterclaim, or other
deduction. Servicer shall cause the Lockbox administrator to remove all payment
items from the Lockbox on each Business Day and deposit such items in the
Purchaser's Account, all without setoff, counterclaim, or other deduction.
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(b) If the Lockbox administrator is different from the bank at which the
Purchaser's Account is maintained or if the Lockbox is not administered by
Lender, the Purchaser shall cause the Lockbox administrator to execute and
deliver, and Purchaser shall execute and deliver, a Lockbox Agreement governing
the disposition of collections received in such Lockbox and granting Lender a
security interest in and to Purchaser's rights in and to such Lockbox. If the
Purchaser's Account is not maintained at Lender, Purchaser shall execute and
deliver, and shall cause the bank at which the Purchaser's Account is maintained
to execute and deliver, a Blocked Account Agreement. If the Lockbox
administrator is the same Person at which the Purchaser's Account is maintained,
the Lockbox Agreement and the Blocked Account Agreement may be combined into a
single document in form and substance satisfactory to Lender.
ARTICLE 3. COLLATERAL
Section 3.01. Grant of Security Interest. As security for the payment of
all Obligations, Purchaser hereby grants to Lender a continuing, general lien
upon and security interest and security title in and to all of the Purchaser's
assets and properties, whether real, personal, mixed, or tangible or intangible,
including, without limitation, the Purchaser's Account, the Lockbox, all of the
Purchased Receivables and their Related Rights and Property, and all of the
following described property, wherever located, whether now existing or
hereafter acquired or arising, namely, all of Purchaser's (a) "accounts" (as
this and all other terms in quotations in this Section 3.01 are defined in the
UCC), (b) "general intangibles," (c) "instruments," (d) "goods," (e) "chattel
paper," (f) "documents," (g) "letter of credit rights," (h) "deposit accounts,"
(i) "investment property," and (j) all products and/or proceeds of any and all
of the foregoing, and the proceeds of such proceeds, including, without
limitation, insurance proceeds, Policy Proceeds, and all Related Rights and
Property.
Section 3.02. Further Assurances. Purchaser shall duly execute and/or
deliver (or cause to be duly executed and/or delivered) to Lender any
instrument, agreement, invoice, document, document of title, dock warrant, dock
receipt, warehouse receipt, ▇▇▇▇ of lading, order, financing statement,
assignment, waiver, consent or other writing which may be reasonably necessary
to Lender to carry out the terms of this Agreement and any of the other Program
Documents and to perfect its security interest or intended security interest in
and facilitate the collection of the Collateral, the proceeds thereof, and any
other property at any time constituting security or intended to constitute
security to Lender. Purchaser shall perform or cause to be performed such acts
as Lender may request to establish and maintain for Lender a valid and perfected
security interest in and security title to the Collateral, free and clear of
any Liens.
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES
Purchaser represents and warrants to Lender that:
Section 4.01. Corporate Existence and Power. Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, is duly qualified to transact business in every jurisdiction
where, by the nature of its business, such qualification is necessary, and has
all corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except where any
such failure to qualify or have all required governmental licenses,
authorizations, consents and approvals does not have and could not reasonably be
expected to cause a Material Adverse Effect.
Section 4.02. Corporate and Governmental Authorization; No
Contravention. Purchaser's execution, delivery, and performance of this
Agreement, the Note, and the other Program Documents (i) are within Purchaser's
corporate powers, (ii) have been duly authorized by all necessary corporate
action, and have been executed on behalf of Purchaser by duly authorized
officers, (iii) require no action by or in respect of or filing with, any
Governmental Body, (iv) do not contravene, or constitute a default under, any
provision of applicable law or regulation or of Purchaser's charter documents or
by-laws or of any agreement, judgment, injunction, order, decree, or other
instrument binding upon Purchaser, and (v) do not result in the creation or
imposition of any Lien on any asset of Purchaser except as created by the
Program Documents.
Section 4.03. Litigation. There is no action, suit, or proceeding
pending or threatened against or affecting Purchaser before any Governmental
Body which could reasonably be expected to have a Material Adverse Effect.
Section 4.04. Binding Effect. This Agreement constitutes a valid and
binding agreement of Purchaser enforceable in accordance with its terms, and
the Note and the other Program Documents, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
Purchaser and the other parties thereto enforceable in accordance with their
respective terms.
Section 4.05. Financial Information.
(a) The (i) audited consolidated financial statements (including the
balance sheet and statements of income, shareholders' equity, and cash flows) of
Buckeye Technologies and its consolidated Subsidiaries (including, without
limitation, each of the Sellers) for the Fiscal Year ending June 30, 2001,
copies of which have been delivered to Lender, and (ii) unaudited consolidated
financial statements (including the balance sheet and statements of income and
cash flows) of Buckeye Technologies and its consolidated Subsidiaries
(including, without limitation, each of the Sellers) for the interim period
ended September 30, 2001, copies of which have been delivered to Lender, fairly
present, in conformity with GAAP, the consolidated financial position of Buckeye
Technologies and its consolidated Subsidiaries (including, without limitation,
each of the Sellers) as of such dates and their consolidated results of
operations and cash flows for such periods stated.
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(b) Except as set forth in Schedule 4.05 or otherwise disclosed to
Lender in writing by virtue of Lender's being party to the Fleet Agreement,
attached hereto and made a part hereof, since June 30, 2001, there has been no
event, act, condition, or occurrence having a Material Adverse Effect.
Section 4.06. Margin Stock. Purchaser is not engaged principally, or as
one of its important activities, in the business of purchasing or carrying any
Margin Stock, and no part of the proceeds of any Advance will be used to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock, or be used for any purpose which
violates, or which is inconsistent with, the provisions of Regulation T, U, or
X.
Section 4.07. Good Title. Purchaser is the legal and beneficial owner of
the Purchased Receivables and their Related Rights and Property, or possesses a
valid and perfected security interest therein, in each case, free and clear of
any Lien, except as created by the Program Documents. There have been duly filed
all financing statement or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect Purchaser's ownership in each Purchased Receivable and their Related
Rights and Property.
Section 4.08. Perfection; No Liens. This Agreement is effective to
create a valid security interest in the Collateral in favor of Lender. There
have been duly filed all financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Lender's security interest in and to the Collateral.
The Collateral is free of any Liens except as created under the Program
Documents.
Section 4.09. Compliance with Laws; Payment of Taxes. Purchaser is in
material compliance with all applicable laws, regulations and similar
requirements of governmental authorities. There have been filed on behalf of
Purchaser all Federal, state and local income, excise, property and other tax
returns which are required to be filed by it and all taxes due pursuant to such
returns or pursuant to any assessment received by or on behalf of Purchaser
have been paid.
Section 4.10. Investment Company and Public Utility Holding Acts.
Purchaser is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. Purchaser is not a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
Section 4.11. No Default. Purchaser is not in default under or with
respect to any agreement, instrument, or undertaking to which it is a party or
by which it or any of its property is bound which could reasonably be expected
to have or cause a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
21
Section 4.12. Insolvency. After giving effect to the execution and
delivery of the Program Documents and the incurrence of the Obligations under
this Agreement (a) Purchaser will not (i) be "insolvent," within the meaning of
such term as used in O.C.G.A. ss. 18-2-22 or as defined in ss. 101 of the
Bankruptcy Code, or Section 2 of either the "UFTA" or the "UFCA", or as defined
or used in any "Other Applicable Law" (as those terms are defined below), or
(ii) be unable to pay its debts generally as such debts become due within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section
6 of the UFCA, or (iii) have an unreasonably small capital to engage in any
business or transaction, whether current or contemplated, within the meaning of
Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section 5 of the
UFCA; and (b) the Obligations of Purchaser under the Program Documents will not
be rendered avoidable under any Other Applicable Law. For purposes of this
Section 4.12, "UFTA" means the Uniform Fraudulent Transfer Act, "UFCA" means the
Uniform Fraudulent Conveyance Act, and "Other Applicable Law" means any other
applicable law pertaining to fraudulent transfers or acts voidable by creditors,
in each case as such law may be amended from time to time.
Section 4.13. Insurance. The Policy has been validly executed and
delivered by Purchaser and Underwriter and all premiums and other fees with
respect thereto have been paid, and the Policy is in full force and effect.
Purchaser has delivered to Lender a true and complete copy of the Policy on or
before the date hereof and such Policy is identical in form and substance to the
form of Policy approved by Lender. All information heretofore furnished by
Purchaser, any of the Sellers, or Servicer to Underwriter for purposes of or in
connection with the Policy or any transaction contemplated by the Program
Documents is, and all such information hereafter furnished by Purchaser, any of
the Sellers, or Servicer to Underwriter will be, true, accurate, and complete in
every material respect on the date such information is stated or certified and
does not and will not contain any material misstatement of fact or omit to state
a material fact or any fact necessary to make the statements contained therein,
taken as a whole, not misleading.
Section 4.14. Capital Structure. All of Purchaser's issued and
outstanding equity securities are legally and beneficially owned by Buckeye
Technologies, free and clear of any Lien; all of such securities have been
validly issued, fully paid, and are nonassessable; and there are no options,
warrants, or other rights to acquire any of Purchaser's securities. Purchaser
has no Subsidiaries.
Section 4.15. Collateral Information. Purchaser's federal taxpayer
identification number is ▇▇-▇▇▇▇▇▇▇ and its organizational identification number
is 3456185 Purchaser is incorporated in the State of Delaware, and its exact
legal name is: BUCKEYE RECEIVABLES INC. Purchaser's chief executive office is
located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. All of
Purchaser's Books and Records relating to the Purchased Receivables are kept,
and at all times will be kept, at the chief executive office of the Servicer,
which is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Section 4.16. Force Majeure. None of Purchaser's or the Sellers'
respective businesses is suffering from effects of fire, accident, strike,
drought, storm, earthquake, embargo, tornado, hurricane, act of God, acts of a
public enemy, or other casualty that could reasonably be expected to have or
cause a Material Adverse Effect.
Section 4.17. Subordinated Notes. Each of the Subordinated Notes is
subordinate in payment and all other respects to the payment and performance of
the Obligations.
22
Section 4.18. Program Documents. Each of the Program Documents,
including without limitation, the Purchase Agreement and the Servicing
Agreement, is in full force and effect and each party to the Program Documents
(other than Lender) is in material compliance with the terms and conditions set
forth in such Program Documents.
Section 4.19. No Outside Collection Agencies. Purchaser has not employed
or used the services of any outside collection agencies or other third parties
for the purposes of collection or enforcement of any of the Purchased
Receivables other than as contemplated in the Servicing Agreement or as may
otherwise be required by Underwriter, so long as Purchaser has notified Lender
of such Underwriter requirements.
Section 4.20. No Bulk Sale. No transaction contemplated hereby or the
other Program Documents requires compliance with any bulk sales act or similar
law.
Section 4.21. Nature of Purchased Receivables. Each Purchased
Receivable constitutes an "account," "chattel paper," or "general intangible,"
as such terms are defined in the UCC.
Section 4.22. Purchaser's Account. The information relating to the
Purchaser's Account on Schedule 4.22, attached hereto and made a part hereof,
is true and correct in all respects.
Section 4.23. Full Disclosure. All information heretofore furnished by
Purchaser, any of the Sellers, or Servicer to Lender for purposes of or in
connection with this Agreement, the other Program Documents, the Program, or any
transaction contemplated hereby or thereby is, and all such information
hereafter furnished by Purchaser, any of the Sellers, or Servicer to Lender will
be, true, accurate, and complete in every material respect on the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein, taken as a whole, not
misleading. Purchaser, each of the Sellers, and Servicer have disclosed to
Lender in writing any and all facts which could reasonably be expected to have
or cause a Material Adverse Effect.
Section 4.24. Survival of Representations and Warranties. Purchaser
covenants, warrants, and represents to Lender that all of Purchaser's
representations and warranties contained in this Agreement or any of the other
Program Documents shall be true at the time of the execution of this Agreement
and the other Program Documents and shall survive the execution, delivery,
and acceptance thereof by Lender and the parties thereto and the closing of the
transactions described therein or related thereto.
Section 4.25. Restating of Representations and Warranties. Each of the
representations and warranties of Purchaser contained herein shall be made as of
the Closing Date and shall be deemed restated and made by Purchaser on the date
each Advance is made.
ARTICLE 5. COVENANTS
Purchaser agrees that, until the Program Termination Date:
23
Section 5.01. Information. Purchaser will deliver, or cause to be
delivered, to Lender:
(a) as soon as available and in any event within ninety days after the
end of each Fiscal Year, audited consolidated financial statements (including
the balance sheet and statements of income and cash flows) of Buckeye
Technologies and its consolidated Subsidiaries (including, without limitation,
each of the Sellers) as of the end of such Fiscal Year, setting forth in each
case in comparative form the figures for the previous fiscal year, all certified
by the Public Accountants, with such certification to be free of exceptions and
qualifications not acceptable to Lender;
(b) as soon as available and in any event within forty-five days after
the end of each Fiscal Quarter, consolidated financial statements (including the
balance sheet and statements of income and cash flows) of Buckeye Technologies
and its consolidated Subsidiaries (including, without limitation, each of the
Sellers) as of the end of such Fiscal Quarter, and for the portion of the Fiscal
Year ending on such date, setting forth in comparative form the figures for the
corresponding Fiscal Quarter and the corresponding portion of the previous
Fiscal Year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP, and consistency by a Senior Officer of Buckeye
Technologies;
(c) simultaneously with the delivery of each set of annual financial
statements referred to in paragraph (a) above, (i) a statement of the Public
Accountants to the effect that (A) such accountants acknowledge and agree that
Lender may rely upon such financial statement in the administration of this
Agreement, and (B)nothing has come to their attention to cause them to believe
that any Default existed on the date of such financial statements, and (ii) a
copy of any management letter furnished to Buckeye Technologies by the Public
Accountants;
(d) simultaneously with the delivery of each set of financial statements
referred to in paragraphs (a) and (b) above, internally prepared, unaudited
financial statements for Purchaser for the same periods and with the same
reporting requirements as required of Buckeye Technologies and its consolidated
Subsidiaries in paragraphs (a) and (b), above, certified as to fairness of
presentation, GAAP, and consistency by a Senior Officer of Purchaser or on
behalf of Purchaser by a Senior Officer of Servicer;
(e) (i) on each Preparation Date, or at such other times as may be
requested by Lender, a fully executed Settlement Report and (ii) as requested by
Lender, an IRPF Receivables Report;
(f) promptly, but in any event within five Business Days after any
Purchaser becomes aware of the occurrence of any Default or Event of Default, a
certificate of a Senior Officer of Purchaser setting forth the details thereof
and the action which Purchaser are taking or propose to take with respect
thereto;
(g) promptly upon the mailing thereof to the shareholders of Buckeye
Technologies generally, copies of all financial statements, reports, and proxy
statements so mailed;
(h) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and annual, quarterly, or monthly reports which
Buckeye Technologies shall have filed with the Securities and Exchange
Commission;
24
(i) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
ERISA ss. 4043) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii)
receives notice from the PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of such notice;
(j) written notice of the following:
(i) promptly after Purchaser's learning thereof, of (A) the
commencement of any litigation affecting the Purchaser or any of its
assets, whether or not the claim is considered by Purchaser to be
covered by insurance, and (B) the institution of any administrative
proceeding against Purchaser;
(ii) at least thirty days prior thereto, of Purchaser's opening
of any new office or place of business or the closing of any of
their existing offices or places of business;
(iii) promptly upon receipt, a copy of any correspondence or
notices received from Underwriter regarding the Policy, to the
extent such notice regards the actual or proposed reduction,
increase, cancellation, or other modification of any buyer or
Account Debtor, Policy, or other credit limit, the actual or
proposed cancellation, suspension, termination, or other
modification of the Policy, or the failure or suspected
failure of a Seller, Servicer, or Purchaser to comply with any
of the Policy's requirements;
(iv) promptly after the occurrence thereof, of any default by
any obligor under any note or other evidence of indebtedness
payable to Purchaser;
(v) promptly after the rendition thereof, of any judgment
rendered against Purchaser; and
(vi) promptly after Purchaser's learning thereof, of any default
by Purchaser under any note, indenture, loan agreement, mortgage,
lease, deed, guaranty, or other similar agreement relating to
any Debt of Purchaser;
(vii) promptly after Purchaser's learning thereof, of any
default by Purchaser, Servicer, any Seller or any of their
Subsidiaries (other than Purchaser) under any Program Documents to
which any of them is a party; and
25
(viii) promptly after Purchaser's learning thereof, of the
occurrence of (A) any Fleet Default, regardless of whether such
Fleet Default is cured or waived, and (B) if the Fleet Agreement has
been terminated, is no longer of any force and effect with respect
to Buckeye Technologies, or Lender is no longer a party thereto,
(1) any default by Buckeye Technologies or any of its Subsidiaries
(other than Purchaser) under any note, indenture, loan agreement,
mortgage, lease, deed, guaranty, or other similar agreement relating
to any Debt of Buckeye Technologies or any of its Subsidiaries
(other than Purchaser) in an aggregate amount greater than
$5,000,000 and (2) any judgment rendered against Buckeye
Technologies or any of its Subsidiaries (other than Purchaser) in an
aggregate amount greater than $5,000,000 (in excess of any
insurance coverage).
Section 5.02. Inspection of Property, Books and Records. Purchaser will,
or will in accordance with the Program Documents, cause Servicer to (a) keep
proper books of record and account in which full, true, and correct entries in
conformity with GAAP shall be made of all dealings and transactions in relation
to its business and activities and (b) permit Lender and Underwriter or
representatives of either of them, without hindrance or delay, to (i) visit and
inspect any of its properties, (ii) call at any place of business of Purchaser,
(iii) verify information with any Person, (iv) examine and make abstracts from
any of its Books and Records, journals, orders, receipts and any correspondence
and other data relating to the Collateral, to Purchaser' business, or to any
other transactions between the parties hereto or under the Program, and (v)
discuss its respective affairs, finances, and accounts with its officers,
employees, and the Public Accountants, Purchaser agreeing to cooperate and
assist in such visits and inspections at such reasonable times and as often as
may reasonably be requested, and during the continuing of any Event of Default
or Default, at any time and without prior notice. At Lender's or Underwriter's
request, Purchaser agrees to exercise its rights of inspection against each of
the Sellers, which rights are granted to Purchaser under the Purchase Agreement,
and to include Lender and Underwriter, at their respective request, in the
conduct of such inspections and to share the results of such inspections with
Lender and Underwriter. Lender may select and engage the services of a
third-party accounting firm to perform field audits of Purchaser's books and
records; provided that that the expense of such fields audits shall be paid by
Lender and shall occur only upon reasonable notice and at reasonable times,
except that, during the continuation of an Event of Default, the costs of such
field audits shall be paid by Purchaser and may be performed at any time without
notice.
Section 5.03. Maintenance of Existence and Management. Purchaser shall
maintain (i) its corporate existence and carry on its business in substantially
the same manner as such business is now carried on and maintained and will not
reincorporate in the State of Delaware or any other state; (ii) its charter
documents and by-laws and not permit any amendment or other modification thereto
with the prior written consent of Lender; and (iii) duly appointed or elected
officers with the requisite authority to effect Purchaser's compliance with the
Program Documents.
Section 5.04. Compliance with Laws; Payment of Taxes. Purchaser will
comply with applicable laws (including but not limited to ERISA and the Fair
Labor Standards Act of 1938, as amended), regulations, and similar requirements
of any Governmental Body (including but not limited to PBGC), except where the
necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued and except where failure to comply
would not have and could not reasonably be expected to cause a Material Adverse
Effect. Purchaser will pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent, and other obligations
which, if unpaid, might become a Lien against Purchaser's property, except
liabilities being contested in good faith and against which, if requested by
Lender, Purchaser will set up reserves in accordance with GAAP. If Purchaser
fails to pay any such tax, assessment, governmental charge, claim for labor,
supplies, rent, or other obligation, Lender may, but shall have no obligation to
do so, pay such item and the amount of such payment shall accrue to the
Obligations.
26
Section 5.05. [Reserved].
Section 5.06. Maintenance of the Policy. Purchaser shall maintain the
Policy in full force and effect at all times, cooperate with Lender, Servicer,
and Underwriter in the administration of the Policy and the submitting of claims
thereunder, and make all premium payments required to be made thereunder.
Purchaser shall deliver the originals or copies (which copies shall be certified
if requested by Lender) of the Policy to Lender with satisfactory lender's loss
payable endorsements naming Lender, as sole loss payee, assignee, and additional
insured, as its interests may appear. Upon the date of this Agreement, and from
time to time thereafter upon Lender's request, Purchaser shall provide Lender
with a statement from Underwriter providing the foregoing coverage,
acknowledging in favor of Lender the continued effectiveness of the foregoing
insurance clauses. If Purchaser fails to provide and pay for the Policy, Lender
may, at its option, but shall not be required to, procure the same and charge
Purchaser therefor as a part of the Obligations.
Section 5.07. Maintenance of Property. Purchaser shall maintain all of
its properties and assets in reasonably good condition, repair, and working
order, ordinary wear and tear excepted.
Section 5.08. Physical Inventories. From time to time upon Lender's
reasonable request, Purchaser shall conduct a physical inventory of any
returned, replevined, repossessed, or reclaimed goods which are or were
represented by a Purchased Receivable and to which Purchaser has title and
deliver a report of such inventory to Lender in form reasonably satisfactory to
Lender.
Section 5.09. Reports Respecting Collateral. Purchaser shall, promptly
upon Lender's request, furnish or cause to be furnished to Lender a status
report, certified by a Senior Officer of Purchaser, showing the aggregate dollar
value and location of any Related Rights and Property which constitutes goods.
Additionally, Lender may, at any time in its sole discretion, require Purchaser
to permit Lender in its own name or any designee of Lender in its own name to
verify the individual account balances of or any other matter relating to the
individual Account Debtors of the Purchased Receivables immediately upon its
request therefor by mail, telephone, telegraph or otherwise. Purchaser shall
cooperate fully with Lender in an effort to facilitate and promptly conclude any
such verification process.
27
Section 5.10. Separate Legal Entity. Purchaser hereby acknowledges that
Lender is entering into the transactions contemplated by this Agreement and the
other Program Documents in reliance upon Purchaser's identity as a legal entity
separate from any other Person. Therefore, from and after the date hereof,
Purchaser shall take all reasonable steps to continue Purchaser's identity as a
separate legal entity and to make it apparent to third Persons that Purchaser is
an entity with assets and liabilities distinct from those of any other Person,
and is not a division of any other Person. Without limiting the generality of
the foregoing and in addition to and consistent with the other covenants set
forth herein, Purchaser shall take such actions as shall be required so that:
(a) Purchaser will be a limited purpose corporation whose primary
activities are restricted in its certificate of incorporation to owning
financial assets and financing the acquisition thereof and conducting such other
activities as it deems necessary or appropriate to carry out its primary
activities;
(b) Not less than one member of Purchaser's Board of Directors (each, an
"Independent Director") shall be an individual who is not, and during the past
five years has not been, a director, officer, employee or five percent
beneficial owner of the outstanding common stock of any Person or entity
beneficially owning any outstanding shares of common stock of any of the Sellers
or any Affiliate thereof. The certificate of incorporation of Purchaser shall
provide that (i) the Board of Directors shall not approve, or take any other
action to cause the filing of, a voluntary bankruptcy petition with respect to
Purchaser unless the Independent Directors shall approve the taking of such
action in writing prior to the taking of such action, and (ii) such provision
cannot be amended without the prior written consent of the Independent
Directors;
(c) Any employee, consultant, or agent of Purchaser will be compensated
from funds of Purchaser, as appropriate, for services provided to Purchaser;
(d) Purchaser will allocate and charge fairly and reasonably overhead
expenses shared with any other Person. To the extent, if any, that Purchaser
and any other Person share items of expenses such as legal, auditing, and other
professional services, such expenses will be allocated to the extent practical
on the basis of actual use or the value of services rendered, and otherwise on a
basis reasonably related to the actual use or the value of services rendered;
Purchaser's operating expenses will not be paid by any other Person except as
permitted under the terms of this Agreement or otherwise consented to by Lender;
(e) Purchaser's Books and Records will be maintained separately from
those of any other Person and clearly marked as pledged to Lender hereunder;
(f) All audited financial statements of any Person that are consolidated
to include Purchaser will contain detailed notes clearly stating that (i) all of
Purchaser's assets are owned by Purchaser, and (ii) Purchaser is a separate
corporate entity;
(g) Purchaser's assets will be maintained in a manner that facilitates
their identification and segregation from those of any other Person;
(h) Purchaser will strictly observe corporate formalities in its
dealings with all other Persons, and funds or other assets of Purchaser will not
be commingled with those of any other Person;
28
(i) Purchaser shall not, directly or indirectly, be named or enter into
an agreement to be named, as a direct or contingent beneficiary or loss payee,
under any insurance policy with respect to any amounts payable due to
occurrences or events related to any other Person;
(j) Any Person that renders or otherwise furnishes services to Purchaser
will be compensated thereby at market rates for such services it renders or
otherwise furnishes thereto; and
(k) Purchaser will not hold itself out to be responsible for the debts
of any other Person or the decisions or actions respecting the daily business
and affairs of any other Person.
Section 5.11. Payment of Taxes On and Use of Collateral. Purchaser
shall timely pay all taxes and other charges against the Collateral, and
Purchaser will not use the Collateral illegally.
Section 5.12. Payment of Fees. Purchaser will timely pay all fees,
premiums, charges, costs, and expenses which it is required to pay under any of
the Program Documents, including, without limitation, Policy premiums and all
fees associated with the establishment and maintenance of the Lockbox and the
Purchaser's Account.
Section 5.13. Additional Negative Covenants. Without Lender's prior
written consent, Purchaser shall not:
(a) enter into any contracts or agreements with any Person other than
the Program Documents or amend, terminate, supplement, or otherwise modify any
contract or agreement to which it is a party;
(b) change the Fiscal Year;
(c) other than as contemplated in the Program Documents, enter into, or
be a party to, any transaction with any Affiliate of Purchaser, Servicer, or
any Seller;
(d) create or acquire any Subsidiary or engage in any business other
than those businesses directly related to the Program;
(e) declare or make any Restricted Payment; provided that Purchaser may
from time to time make a dividend to Buckeye Technologies so long as, at the
time of such dividend is made, (i) no Event of Default or Default shall have
occurred and be continuing; (ii) after giving effect to such dividend, the
Minimum Balance will remain in the Purchaser's Account; (iii) the principal and
interest payable on the Subordinated Notes is, in the aggregate, zero; (iv) the
dividend is made on a Settlement Date; and (v) the Aggregate Advances at such
time are less than or equal to the Borrowing Base;
29
(f) make Investments in any Person except Investments in (i) direct
obligations of the United States Government maturing within ninety days;
(ii) certificates of deposit issued by a commercial bank whose credit is
satisfactory to Lender; (iii) Investments which have been specifically approved
in writing from time to time by Lender and, where necessary, all actions
necessary to preserve Lender's first priority security interest in the
Collateral have been taken, as required by Lender in its discretion; and
(iv) loans evidenced by the Subordinated Notes; provided, however, that
immediately after giving effect to the making of any Investment permitted
hereunder, no Default or Event of Default shall have occurred and be continuing;
(g) create, assume, or suffer to exist any Lien, directly or indirectly,
on any asset now owned or hereafter acquired by it, except Permitted
Encumbrances;
(h) create, assume, or incur any Debt, except (i) Debt to Lender under
this Agreement; (ii) Debt evidenced solely by the Subordinated Notes; (iii) Debt
consisting of deferred taxes; and (iv) Debt resulting from endorsements of
negotiable instruments received in the ordinary course of business;
(i) issue any equity securities other than to Buckeye Technologies or
permit any Person other than Buckeye Technologies to own any of its equity
securities;
(j) relocate its principal place of business or chief executive office,
locate its Books and Records relating to the Purchased Receivables at any
location other than at Servicer's chief executive office, or open or otherwise
acquire actual or beneficial ownership of any deposit, savings, commodities, or
securities account other than the Purchaser's Account or as specifically
permitted in connection with the making of Investments in accordance with this
Agreement;
(k) change its federal taxpayer identification number;
(l) allow or consent to the making or taking of any Deductions
respecting any Purchased Receivable, unless Lender is promptly notified of such
Deductions (which notice requirement may be met by ensuring that such Deduction
is clearly indicated on an IRPF Receivables Report delivered after such
Deduction was made or taken);
(m) contract or enter into any agreement for any trade receivables or
credit insurance or other agreement or transaction to mitigate the risk of
nonpayment of any of Purchaser's Accounts Receivables (including, without
limitation, any agreement, policy, or transaction prohibited by the terms of the
Policy) other than the Policy or purchase any Accounts Receivables other than
under the Program in accordance with the Program Documents;
(n) use the proceeds of the Advances for any purpose other than payment
on the Subordinated Notes and payment of fees, expenses, and costs directly
associated with the maintenance and administration of the Program or except as
permitted under Section 5.13(e);
(o) (i) suffer or permit dissolution or liquidation either in whole or
in part, (ii) redeem or retire any shares of its own stock, (iii) merge or
consolidate with any Person, or (iv) sell, lease, or otherwise transfer all or
any part of its assets (but excluding sales of returned, reclaimed, replevined,
or repossessed goods represented by a Purchased Receivable, the granting of a
security interest to Lender hereunder, and the resale or transfer of Recourse
Receivables in accordance with the Purchase Agreement) to any other Person.
30
ARTICLE 6. DEFAULTS
Section 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) Purchaser shall fail to pay when due (i) any portion or all of the
principal of the Aggregate Advances, (ii) any interest on the Aggregate
Advances, or (iii) any fee or other Obligations owing to Lender hereunder, and,
in any of the foregoing cases, such failure shall continue for more than two
Business Days following the date such payment was due; or
(b) Purchaser shall fail to observe or perform any covenant contained in
Sections 5.01(f), 5.01(j), 5.02(b), 5.03, 5.06, 5.09, 5.10, 5.12, or 5.13; or
(c) Purchaser shall fail to observe or perform any covenant or agreement
herein(other than those covered by paragraph (a) or (b) above) or any Program
Document and such failure shall not have been cured within thirty days after the
earlier to occur of (i) written notice thereof has been given to Purchaser by
Lender or (ii) Purchaser otherwise becomes aware of any such failure; or
(d) any representation, warranty, certification or statement made by
Purchaser in this Agreement or in any certificate, financial statement, or other
document delivered pursuant to this Agreement or any other Program Document
shall prove to have been incorrect or misleading in any material respect
when made (or deemed made); or
(e) any event of default or default occurs under any other Program
Document (however such terms are defined in such other Program Documents) or any
Servicing Agreement Event of Default shall occur, unless, in the case of a
Servicing Agreement Event of Default, a successor Servicer acceptable to Lender
is engaged to provide the Services within ten days of the date Lender receives
written notice of such Servicing Agreement Event of Default; or
(f) the balance in the Purchaser's Account shall be less than the
Minimum Balance for a period in excess of thirty consecutive days or shall at
any time be less than an amount equal to ninety percent of the Minimum Balance;
(g) the Policy shall at any time be cancelled, terminated, suspended,
declared unenforceable or unlawful, or otherwise ineffective, other than by the
natural expiration of the Policy on the date it was initially scheduled to
expire;
(h) Underwriter is at any time rated less than (i) Baa2 by ▇▇▇▇▇'▇ or
(ii) BBB by S and P;
(i) any of Purchaser or any of the Sellers shall commence a voluntary
case or other proceeding seeking liquidation, reorganization, or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally, or shall admit in writing its
inability, to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or
31
(j) an involuntary case or other proceeding shall be commenced against
any of Purchaser or any of the Sellers seeking liquidation, reorganization, or
other relief with respect to it or its debts under any bankruptcy, insolvency,
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property and, only in the case of a Seller, such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of ninety days; or an order for relief shall be entered against any of
Purchaser or any of the Sellers under the federal bankruptcy laws as now or
hereafter in effect; or
(k) Purchaser, or any of the Sellers, or any member of the Controlled
Group shall fail to pay when due any material amount which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans shall be filed under Title IV of ERISA by
Purchaser, any of the Sellers, any member of the Controlled Group, any plan
administrator, or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce Section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed within
thirty days thereafter; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any such Plan or Plans
must be terminated; or
(l) (i) one or more judgments or orders of any Governmental Body for the
payment of money shall be rendered after the Closing Date against Purchaser in
any amount and such judgment or order shall either continue unsatisfied and
unstayed for a period of thirty days or give rise to a Lien on any Collateral at
any time; or (ii) a warrant or writ of attachment or execution or similar
process shall be issued against any property of Purchaser in any amount (in each
case in excess of amounts covered by insurance) and such warrant, writ or
process shall not be discharged, vacated, stayed or bonded for a period of
thirty days; provided, however, that in the event a bond has been issued in
favor of the claimant or other Person obtaining such attachment or writ, the
issuer of such bond shall execute a waiver or subordination agreement in form
and substance satisfactory to Lender pursuant to which the issuer of such bond
subordinates its right of reimbursement, contribution or subrogation to the
Obligations and waives or subordinates any Lien it may have on Purchaser's
assets; or
(m) any Person other than Buckeye Technologies shall own or acquire any
of Purchaser's equity securities; or
(n) if, on any day, Purchaser could not truthfully make the
representations and warranties contained in Section 4.12; or
(o) the occurrence of any event, act, occurrence, or condition which
Lender determines either does or has a reasonable probability of causing a
Material Adverse Effect; or
32
(p) there occurs any Fleet Default, unless such Fleet Default has been
waived or cured in accordance with the terms of the Fleet Agreement and Lender,
as a party to the Fleet Agreement, concurred in the granting of such waiver or,
if applicable, such cure;
then, and in every such event, Lender may (i) by notice to Purchaser
terminate the Commitment; (ii) by notice to Purchaser declare the Note (together
with accrued interest thereon), and all other amounts payable hereunder and
under the other Program Documents, to be, and the same shall thereupon become,
immediately due and payable without presentment, demand, protest, or other
notice of any kind, all of which are hereby waived by Purchaser together with
interest at the Default Rate accruing on the principal amount thereof from and
after the date of such Event of Default; provided that if any Event of Default
specified in paragraph (i) and (j) above occurs with respect to Purchaser,
Servicer, or any Seller, without any notice to Purchaser or any other act by
Lender, the Commitment shall thereupon terminate and the Note (together with
accrued interest thereon) and all other amounts payable hereunder and under the
other Program Documents shall automatically and without notice become
immediately due and payable without presentment, demand, protest, or other
notice of any kind, all of which are hereby waived by Purchaser together with
interest thereon at the Default Rate accruing on the principal amount thereof
from and after the date of such Event of Default; or (iii) exercise any rights,
powers or remedies under this Agreement and the other Program Documents.
Notwithstanding the foregoing, Lender shall have available to it all other
remedies at law or equity.
Section 6.02. Remedies with Respect to Collateral.
(a) Upon the occurrence of an Event of Default, Lender or any
representative of Lender shall have the rights and remedies of a secured party
under the UCC in effect on the date thereof (regardless of whether the same has
been enacted in the jurisdiction where the rights or remedies are asserted),
including, without limitation, the right to require Purchaser to assemble the
Collateral, at Purchaser' expense, and make it available to Lender at a place
designated by Lender which is reasonably convenient to both parties, and enter
any premises where any of the Collateral shall be located and to keep and store
the Collateral on said premises until sold (and if said premises be the property
of any Purchaser, such Purchaser agrees not to charge Lender for storage
thereof), to take possession of any of the Collateral or the proceeds thereof,
to sell or otherwise dispose of the same, and Lender shall have the right to
conduct such sales on the premises of Purchaser, without charge therefor, and
such sales may be adjourned from time to time in accordance with applicable law.
Lender may sell, lease or dispose of Collateral for cash, credit, or any
combination thereof, and shall have the right to appoint a receiver of the
Purchased Receivables and their Related Rights and Goods or any part thereof,
and the right to apply the proceeds therefrom as set forth in Section 6.02(b),
below. Lender shall give Purchaser written notice of the time and place of any
public sale of the Collateral or the time after which any other intended
disposition thereof is to be made. The requirement of sending reasonable notice
shall be met if such notice is given to Purchaser at least ten days before such
disposition. Expenses of retaking, verifying, restoring, holding, insuring,
collecting, preserving, liquidating, protecting, preparing for sale or selling,
or otherwise disposing of or the like with respect to the Collateral shall
include, in any event, reasonable attorneys' fees and other legally recoverable
collection expenses, all of which shall constitute a part of the Obligations.
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(b) Proceeds of any of the Collateral and payments by Purchaser during
the existence of an Event of Default received by Lender or any Lender shall be
applied by Lender in accordance with the provisions of Section 2.08(e). In the
event that the proceeds of the Collateral are not sufficient to pay the
Obligations in full, Purchaser shall remain liable for any deficiency.
(c) Purchaser hereby waive all rights which Purchaser have or may have
under and by virtue of O.C.G.A. CH. 44-14, including, without limitation, the
right of Purchaser to notice and to a judicial hearing prior to seizure of any
Collateral by Lender.
(d) Unless and except to the extent expressly provided for to the
contrary herein, the rights of Lender specified herein shall be in addition to,
and not in limitation of, Lender's or Lender's rights under the UCC, or any
other statute or rule of law or equity, or under any other provision of any of
the Program Documents, or under the provisions of any other document, instrument
or other writing executed by Purchaser or any third party in favor of Lender,
all of which may be exercised successively or concurrently.
(e) To the extent permissible or consented to under the Fleet Agreement
and the documents related thereto, Lender is hereby granted a license or other
right to use, without charge, Purchaser's labels, patents, copyrights, rights of
use of any name, trade secrets, tradenames, trademarks and advertising matter,
or any property of a similar nature, as it pertains to the Collateral, in
advertising for sale and selling any Collateral, and Purchaser' rights under all
licenses and all franchise agreements shall inure to Lender's benefit.
(f) Lender shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto, except
for reasonable care in the custody thereof while any Collateral is in Lender's
actual possession, or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other Person
whomsoever, but the same shall be at Purchaser' sole risk.
(g) Lender shall not be under any obligation to marshal any assets in
favor of Purchaser or any other Person or against or in payment of any or all
of the Obligations.
Section 6.03. Power of Attorney. Purchaser irrevocably designates and
appoints Lender its true and lawful attorney, during the existence of an Event
of Default, either in the name of Lender or in the name of Purchaser to ask for,
demand, ▇▇▇ for, collect, compromise, compound, receive, receipt for, and give
acquittances for any and all sums owing or which may become due upon any items
of the Purchased Receivables, their Related Rights and Goods, and the other
Collateral and, in connection therewith, to take any and all actions as Lender
may deem necessary or desirable in order to realize upon the same, including,
without limitation, power to endorse in the name of Purchaser, any checks,
drafts, notes, or other instruments received in payment of or on account of the
Purchased Receivables, their Related Rights and Goods, and the other Collateral,
but Lender shall not be under any duty to exercise any such authority or power
or in any way be responsible for the collection thereof.
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ARTICLE 7. CHANGE IN CIRCUMSTANCES; COMPENSATION
Section 7.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Settlement Period, LIBOR is not being
offered for such Settlement Period, then Lender shall forthwith give notice
thereof to Purchaser, whereupon until the Aggregate Advances (including any
additional Advances accruing thereto) shall bear interest at the Base Rate until
the Settlement Date next occurring after the circumstances giving rise to such
change in the Interest Rate no longer exist, as evidenced by written notice from
Lender to Purchaser to such effect.
Section 7.02. Illegality. If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein or any existing or
future law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof (any such
agency being referred to as an "Authority" and any such event being referred to
as a "Change of Law"), or compliance by Lender (or its lending office) with any
request or directive (whether or not having the force of law) of any Authority
shall make it unlawful or impossible for Lender (or its lending office) to make,
maintain or fund the Aggregate Advances or any Advance and Lender shall so
notify Purchaser, whereupon the Aggregate Advances (including any additional
Advances accruing thereto) shall bear interest at the Base Rate until the
Settlement Date next occurring after the circumstances giving rise to such
change in the Interest Rate no longer exist, as evidenced by written notice from
Lender to Purchaser to such effect. Before giving any notice to Purchaser
pursuant to this Section, Lender shall designate a different lending office if
such designation will avoid the need for giving such notice and will not, in the
judgment of Lender, be otherwise disadvantageous to Lender.
Section 7.03. Increased Cost and Reduced Return.
(a) If after the date hereof, a Change of Law or compliance by Lender
(or its lending office) with any directive of any Authority:
(i) shall impose, modify, or deem applicable any reserve,
special deposit, or similar requirement (including, without
limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding any
such requirement included in an applicable LIBOR Reserve
Percentage) against assets of, deposits with or for the
account of, or credit or letter of credit extended by, Lender;
or
(ii) shall impose on Lender or on the United States market for
certificates of deposit or the London Interbank market any
other condition affecting the Aggregate Advances, the Note, or
its obligation to make Advances;
and the result of any of the foregoing is to increase the cost
to Lender of making or maintaining any Advance or the Aggregate Advances, or to
reduce the amount of any sum received or receivable by Lender under this
Agreement or under the Note with respect thereto, by an amount reasonably deemed
by Lender to be material, then, within thirty days after demand by Lender,
Purchaser shall pay to Lender such additional amount or amounts as will
compensate Lender for such increased cost or reduction.
35
(b) If Lender shall have determined in good faith that after the date
hereof the adoption of any applicable law, rule, or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by any Lender with any directive regarding
capital adequacy of any Authority, has or would have the effect of reducing the
rate of return on Lender's capital as a consequence of its obligations hereunder
to a level below that which Lender could have achieved but for such adoption,
change, or compliance (taking into consideration Lender's policies with respect
to capital adequacy) by an amount reasonably deemed by Lender to be material,
then from time to time, within thirty days after demand by Lender, Purchaser
shall pay to Lender such additional amount or amounts as will compensate Lender
for such reduction.
(c) Lender will promptly notify Purchaser of any event of which it has
knowledge, occurring after the date hereof, which will entitle Lender to
compensation pursuant to this Section and will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of Lender, be otherwise
disadvantageous to Lender. A certificate of Lender claiming compensation under
this Section and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, Lender may use any reasonable averaging and attribution methods.
(d) The provisions of this Section shall be applicable with respect to
any participant, assignee or other transferee, and any calculations required by
such provisions shall be made based upon the circumstances of such participant,
assignee or other transferee.
Section 7.04. Compensation. Upon Lender's request, Purchaser shall pay
Lender such amount or amounts as shall compensate Lender for any loss, cost, or
expense incurred by Lender as a result of:
(a) any payment or prepayment (pursuant to Article 2 or otherwise) of
any Advance or the Aggregate Advances on a date other than on a Settlement Date;
or
(b) any failure by Purchaser to borrow an Advance on the date for such
Advance specified in the applicable Advance Request delivered pursuant to
Section 2.02;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Settlement Period for such Advance or the Aggregate Advances (or, in the
case of a failure to prepay or borrow, the Settlement Period which would have
commenced on the date of such failure to prepay or borrow) at the Interest Rate
over (y) the amount of interest (as reasonably determined by Lender) Lender
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such Settlement Period placed with it by leading banks in the
London Interbank market.
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ARTICLE 8. CONDITIONS TO MAKING ADVANCES
Section 8.01. Conditions to Making Initial Advance. Lender's obligation
to make the initial Advance is subject to the satisfaction of the conditions set
forth in Section 8.02 and receipt by Lender of the following:
(a) duly executed original counterparts of this Agreement, each other
Program Document, and the Release Agreement, all signed by all parties thereto
other than Lender;
(b) an opinion letter or letters, each in form and substance reasonably
satisfactory to Lender, of Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇ P.C., counsel for
the Sellers, Servicer, and Purchaser, dated as of the Closing Date, which
address each of the following matters and such other matters as Lender may
reasonably request: (i) the due authorization, execution, delivery,
enforceability, and other corporate matters of the Sellers, Servicer, and
Purchaser as to the Program Documents; (ii) the perfection of the Purchaser's
ownership interest in and to the Purchased Receivables and their Related Rights
and Property; (iii) the creation of a perfected security interest in favor of
Lender in all of the Collateral; (iv) the existence of a "true sale" of the
Purchased Receivables from the Sellers to Purchaser under the Purchase
Agreement; and (v) the inapplicability of the doctrine of substantive
consolidation to any of the Sellers, on the one hand, and Purchaser, on the
other, in connection with any bankruptcy proceeding involving either of them;
(c) certificates (each, a "Closing Certificate") substantially in the
form of Exhibit G, attached hereto and made a part hereof, dated as of the
Closing Date, signed by a Senior Officer of each of Purchaser and the Sellers
(including Buckeye Technologies in its capacity as Servicer);
(d) all documents which Lender may reasonably request relating to the
existence of Purchaser, the Servicer, and the Sellers, the corporate authority
for and the validity of this Agreement, the Note, and the other Program
Documents, and any other matters relevant hereto, all in form and substance
satisfactory to Lender, including, without limitation, certificates of such
Persons substantially in the form of Exhibit H (each, an "Officer's
Certificate"), signed by the Secretary or an Assistant Secretary of such Person,
certifying as to the names, true signatures, and incumbency of the officer or
officers of such Persons authorized to execute and deliver the Program
Documents, and certified copies of the following items: (i) such Person's
Certificate of Incorporation or other registered, constitutional document,
(ii) such Person's Bylaws or related agreement, (iii) a certificate of good
standing or valid existence of the Secretary of State of the state of the
jurisdiction of its incorporation and of each state in which it is qualified to
do business as a foreign corporation, and (iv) the action taken by the Board of
Directors or other Persons with management control of such Persons authorizing
the execution, delivery, and performance of this Agreement, the Note, and the
other Program Documents to which such Person is a party;
(e) recorded UCC financing statements (satisfactory in form and content
to Lender in all respects) (i) pertaining to (A) Purchaser's ownership and/or
security interest in the Purchased Receivables and their Related Rights and
Property and (B) Lender's first priority security interest in the Collateral and
(ii) evidencing recordation thereof in all filing offices deemed necessary by
Lender;
37
(f) lien searches reasonably acceptable to Lender, showing no Liens on
any of the Sellers', Servicer's, or Purchaser's Accounts Receivables or Related
Rights and Property other than Permitted Encumbrances;
(g) evidence of the Policy and other insurance as required by this
Agreement;
(h) agreements regarding, and other evidence respecting, the
establishment of the Lockbox and the Purchaser's Account, all in form and
substance reasonably satisfactory to Lender, including, without limitation, the
Lockbox Agreement and Blocked Account Agreement, to the extent applicable;
(i) payment of all fees owed to Lender hereunder;
(j) receipt of an agreement among Underwriter, Purchaser, and Lender in
form satisfactory to all such Persons concerning, inter alia, designation of
Lender as the sole loss payee under the Policy, Underwriter's agreement to
notify Lender of certain events, Underwriter's acknowledgment that the Policy is
effective even though Purchaser is not the originator of the insured Accounts
Receivables, and that certain requirements under the Policy may be met by
Servicer or the Sellers rather than strictly by Purchaser; and
(k) a duly executed Settlement Report.
Section 8.02. Conditions to the Making of All Advances. Lender's
obligation to make any Advance is subject to the satisfaction of the following
conditions:
(a) Lender shall have received originals or copies of all reports,
documents, and certifications which are, in accordance with the terms of the
Program Documents, to be delivered to Lender, including, without limitation,
Bills of Sale evidencing Purchaser's ownership of the Purchased Receivables,
IRPF Receivables Reports, Settlement Reports, reports from the Servicer and
Lockbox administrator, Purchase Notices, and a fully executed Advance Request
pertaining to such Advance;
(b) Lender must be satisfied that the Policy is in full force and
effect, with all premiums due and payable thereon having been paid, and that the
Borrowing Base has been calculated in the manner agreed upon by Lender and
Purchaser;
(c) the Purchaser's Account and Lockbox shall continue to exist in full
force and effect and Lender shall continue to have a first priority perfected
security interest in each of them;
(d) immediately before and after the making of any Advance, there shall
exist no Default or Event of Default; and
(e) each of the representations and warranties of Purchaser contained in
Article 4 shall be true on and as of the date of such Advance.
38
The making of any Advance shall be deemed to be a representation and
warranty by Purchaser on the date of such Advance as to the complete
satisfaction of the conditions specified in paragraphs (a) through (d) of this
Section.
ARTICLE 9. MISCELLANEOUS
Section 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such party at its address or telecopier number
set forth on the signature pages hereof or such other address or telecopier
number as such party may hereafter specify for the purpose by notice to each
other party. Each such notice, request, or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the confirmation is received;
(ii) if given by mail, seventy-two hours after such communication is deposited
in the mail with first class postage prepaid, addressed as aforesaid; or
(iii) if given by any other means, when delivered at the address specified in
this Section; provided that notices to Lender under Article 2 shall not be
effective until received.
Section 9.02. No Waivers. The failure of Purchaser to satisfy, or the
waiver by Lender of, any condition set forth in Article 8 shall not constitute a
waiver of any such condition with respect to any subsequent Advance, unless such
waiver is expressly agreed to in writing as required by Section 9.06. No failure
or delay by Lender in exercising any right, power, or privilege hereunder or
under any other Program Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 9.03. Expenses; Documentary Taxes. Purchaser shall pay (a) all
out-of-pocket expenses (including, without limitation, all reasonable attorney
and paralegal fees and expenses of Lender, recording costs, recording or
intangible taxes, and title insurance, if any) of Lender incurred in connection
with this Agreement and the other Program Documents, including, without
limitation, (i) all costs, fees, and taxes pertaining to the obtaining,
preparation, or filing of all Lien searches and financing statements (including,
without limitation, any release thereof), (ii) all costs and fees incurred in
connection with the preparation, negotiation, administration, and execution and
delivery of this Agreement and the other Program Documents, and any waiver or
consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder, (iii) sums paid or incurred
to pay for any amount or to take any action required of Purchaser hereunder or
under this Agreement that Purchaser fails to pay or take; (iv) costs and
expenses of preserving and protecting the Collateral; and (b) during the
existence of an Event of Default, costs and expenses (including reasonable
attorney and paralegal fees and expenses) paid or incurred to obtain payment of
the Obligations, enforce the Lien in the Collateral, sell or otherwise realize
upon the Collateral, and otherwise enforce the provisions hereof or of any
Program Document or to defend any claim made or threatened against Lender
arising out of the transactions contemplated hereby (including, without
39
limitation, preparations for and consultations concerning any such matters). The
foregoing shall not be construed to limit any other provisions hereof, or of any
Program Document regarding costs and expenses to be paid by Purchaser or any
other Person. In the event Purchaser becomes a debtor under the Bankruptcy Code,
Lender's secured claim in such case shall include interest on the Obligations
and all fees, costs, and charges provided for herein (including, without
limitation, reasonable attorneys' fees actually incurred), all to the extent
allowed by the Bankruptcy Code. Purchaser shall indemnify Lender against any
transfer taxes, documentary taxes, assessments, or charges made by any
Governmental Body or Authority by reason of the execution and delivery of this
Agreement or the other Program Documents. Any of the foregoing to the contrary
notwithstanding, Lender agrees that Purchaser shall have no obligation to
reimburse Lender more than $35,000 for Lender's counsel's legal fees arising
from the negotiation and preparation of the initial Program Documents and the
closing of the Program.
Section 9.04. Indemnification. Purchaser shall indemnify Lender and its
directors, officers, employees, and agents from, and hold each of them harmless
against, any and all Losses to which any of them may become subject, insofar as
such Losses arise out of or result from any actual or proposed use by Purchaser
of the proceeds of any Advance or breach by Purchaser of this Agreement or any
other Program Document or from any investigation, litigation (including, without
limitation, any actions taken by Lender to enforce this Agreement or any of the
other Program Documents), or other proceeding (including, without limitation,
any threatened investigation or proceeding) relating to the foregoing, and
Purchaser shall reimburse such Persons upon demand for any expenses (including,
without limitation, legal fees) incurred in connection with any such
investigation or proceeding; but excluding any such Losses incurred by reason of
the gross negligence or willful misconduct of the Person (or agent thereof) to
be indemnified.
Section 9.05. Setoff; Sharing of Setoffs. Purchaser hereby grants to
Lender a lien to secure the payment and performance of the Obligations upon all
deposits or deposit accounts, of any kind, or any interest in any deposits or
deposit accounts thereof, now or hereafter pledged, mortgaged, transferred, or
assigned to Lender or otherwise in the possession or control of Lender for any
purpose for the account or benefit of Purchaser and including any balance of any
deposit account or of any credit of Purchaser with Lender, whether now existing
or hereafter established, hereby authorizing Lender at any time or times with or
without prior notice to apply such balances or any part thereof to such of the
Obligations owing by Purchaser to Lender then past due and in such amounts as
they may elect, and whether or not the Collateral or other collateral, if any,
or the responsibility of other Persons primarily, secondarily, or otherwise
liable may be deemed adequate. For the purposes of this paragraph, all
remittances and property shall be deemed to be in the possession of Lender as
soon as the same may be put in transit to it by mail or carrier or by other
bailee.
Section 9.06. Amendments and Waivers. No provision of this Agreement,
the Note, or any other Program Documents to which Lender is a party, may be
amended, restated, supplemented, or otherwise modified except by a writing
signed by Lender and all other parties thereto. Purchaser agrees that it will
not amend, restate, supplement, or otherwise modify any Program Document to
which it is, but Lender is not, a party, without Lender's prior written consent
and that it will not permit, allow, or consent to any amendment, restatement,
supplement or modification of the Standard Terms, the Policies and Procedures,
any Underlying Contract, or the Policy without the Prior written consent of
Lender.
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Section 9.07. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided that Purchaser may not assign or otherwise transfer any of its rights
under this Agreement.
Section 9.08. Georgia Law. This Agreement and the Note shall be
construed in accordance with and governed by the law of the State of Georgia.
Section 9.09. Severability. In case any one or more of the provisions
contained in this Agreement, the Note, or any of the other Program Documents to
which Purchaser and Lender are the only parties should be invalid, illegal, or
unenforceable in any respect, the validity, legality, and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby and shall be enforced to the greatest extent
permitted by law.
Section 9.10. Interpretation. No provision of this Agreement or any of
the other Program Documents to which Purchaser and Lender are the only parties
shall be construed against or interpreted to the disadvantage of any party
hereto by any court or other governmental or judicial authority by reason of
such party having or being deemed to have structured or dictated such provision.
Section 9.11. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. PURCHASER
AND LENDER EACH IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THIS
AGREEMENT OR ANY OTHER PROGRAM DOCUMENT; (B) SUBMITS TO THE NONEXCLUSIVE
PERSONAL JURISDICTION IN THE STATE OF GEORGIA, THE COURTS THEREOF AND THE UNITED
STATES DISTRICT COURTS SITTING THEREIN, FOR THE ENFORCEMENT OF THIS AGREEMENT,
THE NOTE, AND THE OTHER PROGRAM DOCUMENTS; (C) WAIVES ANY AND ALL PERSONAL
RIGHTS UNDER THE LAW OF ANY JURISDICTION TO OBJECT ON ANY BASIS (INCLUDING,
WITHOUT LIMITATION, INCONVENIENCE OF FORUM) TO JURISDICTION OR VENUE WITHIN THE
STATE OF GEORGIA FOR THE PURPOSE OF LITIGATION TO ENFORCE THIS AGREEMENT,
THE NOTE, OR THE OTHER PROGRAM DOCUMENTS; AND (D) AGREES THAT SERVICE OF PROCESS
MAY BE MADE UPON IT IN THE MANNER PRESCRIBED IN SECTION 9.01 FOR THE GIVING OF
NOTICE TO PURCHASER. NOTHING HEREIN CONTAINED, HOWEVER, SHALL PREVENT LENDER
FROM BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND
AGAINST PURCHASER PERSONALLY, AND AGAINST ANY ASSETS OF PURCHASER, WITHIN ANY
OTHER STATE OR JURISDICTION.
Section 9.12. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
41
Section 9.13. Consequential Damages. LENDER SHALL NOT BE RESPONSIBLE OR
LIABLE TO PURCHASER OR ANY OTHER PERSON FOR ANY PUNITIVE, EXEMPLARY, OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE
OTHER PROGRAM DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
Section 9.14. Entire Agreement. This Agreement, together with the other
Program Documents, constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof, and supersede and replace any
agreement, written or oral, existing between or among the parties hereto in
respect of such subject matter.
[Signatures are contained on the following pages.]
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, under seal, by their respective authorized officers as of the day
and year first above written.
PURCHASER:
BUCKEYE RECEIVABLES INC. (SEAL)
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: PRESIDENT
Buckeye Receivables Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Confirmation No.: ▇▇▇-▇▇▇-▇▇▇▇
43
LENDER:
WACHOVIA BANK, N.A. (SEAL)
By: /S/ ▇▇▇▇▇ ▇▇▇▇
Title: SENIOR VICE PRESIDENT
Lending Office
Wachovia Bank, N.A.
International Corporate Banking, 29th Floor (GA-31291)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager--Trade Finance
Telecopier number ▇▇▇-▇▇▇-▇▇▇▇
Confirmation number: ▇▇▇-▇▇▇-▇▇▇▇
44
EXHIBIT A ADVANCE REQUEST
EXHIBIT B BLOCKED ACCOUNT AGREEMENT
EXHIBIT C FORM OF SETTLEMENT REPORT
EXHIBIT D FORM OF PROMISSORY NOTE
EXHIBIT E FORM OF SUBORDINATED NOTE
EXHIBIT F FORM OF COUNSEL OPINION
EXHIBIT G FORM OF CLOSING CERTIFICATE
EXHIBIT H FORM OF OFFICER'S CERTIFICATE
EXHIBIT A
FORM OF ADVANCE REQUEST
Settlement Date: _____________________
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
International Corporate Banking, 29th Floor (GA-31291)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager--Trade Finance
Re: Credit and Security Agreement (as amended, restated,
supplement, or otherwise modified from time to time, the
"Credit Agreement") dated as of December 5, 2001, by and
between Buckeye Receivables Inc. ("Purchaser"), and
Wachovia Bank, N.A. ("Lender").
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings attributable thereto in the Credit Agreement. This Advance
Request is delivered to you pursuant to SECTION 2.02 of the Credit Agreement.
Purchaser hereby requests an Advance in the aggregate principal amount
of $[__________] to be made on [___________ __], [20__], which date is the
next-occurring Settlement Date, at the Interest Rate as determined by the Credit
Agreement.
Purchaser hereby represents and warrants that each of the conditions
set forth in Section 8.02 of the Credit Agreement is satisfied as of this date
and will continue to be satisfied as of the date of the Advance described above.
In addition, Purchaser represents and warrants that each of the representations
and warranties made in the Credit Agreement is true and correct in all material
respects as if made on this date.
Purchaser has caused this Advance Request to be executed and delivered
by its duly authorized Senior Officer this ____ day of _____________ , 200___ .
BUCKEYE RECEIVABLES INC.
By: __________________________________________________
Title: _______________________________________________
EXHIBIT B
BLOCKED ACCOUNT AGREEMENT
CONTROL AGREEMENT FOR
NOTIFICATION AND ACKNOWLEDGMENT
OF PLEDGE OR SECURITY INTEREST IN ACCOUNTS
This CONTROL AGREEMENT is made and entered into as of this ____ day of
December, 2001, by and among FIRST UNION NATIONAL BANK ("Depository Bank"),
BUCKEYE RECEIVABLES INC., a Delaware corporation ("Borrower"), and WACHOVIA
BANK, N.A., a national banking association ("Lender").
Statement of Facts
Depository Bank acknowledges that as of this date it maintains a
remittance Lockbox (as such term is defined below) and demand deposit account
number 2000013956482 in the name of Borrower (the "Account"), both being
governed by the terms and conditions of the Deposit Agreement and Disclosures
for Non-Personal Accounts published by the Depository Bank from time to time
("Deposit Agreement"). Borrower has assigned and granted to Lender a pledge and
security interest in the contents of the lockbox and the Account and all funds
on deposit therein from time to time to secure Borrower's obligations to Lender
under that certain Credit and Security Agreement dated as of December 5, 2001,
by and between Lender and Borrower, as the same may be amended, restated,
supplemented, or otherwise modified from time to time.
The parties desire to enter into this Agreement in order to set forth
their relative rights and duties with respect to the Lockbox, the Account and
all contents and amounts on deposit therein from time to time. To the extent
that any conflict may exist between the provisions of the Deposit Agreement and
this Agreement, then this Agreement shall control.
NOW, THEREFORE, in consideration of the mutual covenants herein, as
well as other good and valuable consideration, the parties agree as follows:
Statement of Terms
1. Lender has agreed to extend certain financing arrangements to
Borrower, and, in consideration for credit extended to it by Lender, Borrower
hereby notifies the Depository Bank, and the Depository Bank acknowledges, that
Borrower has pledged to Lender its accounts receivable due from its customers
and has granted Lender a security interest in the lockbox contents and items
deposited in the Account.
2. The Borrower has established the lockbox with Depository Bank (the
"Lockbox")for the collection of checks, evidences of payment and accompanying
documents from Borrower's customers. The Borrower also maintains the Account and
has instructed the Depository Bank to deposit all items from the Lockbox
directly into the Account. By their execution of this Agreement, Borrower and
Lender hereby authorize and direct the Depository Bank, and the Depository Bank
hereby agrees, (i) that only the Lender shall have the ability to withdraw, or
direct the withdrawals of, funds from the Account, (ii) the Borrower shall have
no right to exercise any authority of any kind with respect to the Account and
the funds deposited therein, (iii) so long as this Agreement shall remain in
effect the Account will be maintained in the name of the Borrower, or such other
name as directed from time to time by the Lender, and (iv) by their signature to
this Agreement and upon receipt of the Depository Bank's Wire Transfer Schedule
properly completed by Lender, Borrower and Lender hereby authorize and direct
the Depository Bank to forward funds from the Account by wire transfer at such
times and to the account of such payees as directed by Lender in writing from
time to time. Such transfers will be performed on the same banking day the
Depository Bank receives such written directions, if such directions are
received by the Depository Bank before 12:00 P.M. (on the Depository Bank's
local time) on such banking day. Otherwise, such transfers shall be performed on
the banking day following the Depository Bank's receipt of such directions.
3. At Lender's request, Depository Bank agrees to deliver copies
of all information, other than canceled checks which the Depository Bank is
otherwise obligated to send to the Borrower (by law, agreement or otherwise) to
the Lender by regular U.S. mail at the address specified below.
4. The Depository Bank hereby agrees that, so long as this
Agreement is in effect, it will not exercise or claim any right of set-off or
bankers lien against the Account or any funds on deposit therein, and the
Depository Bank hereby further waives during the term of this Agreement any such
right or lien which it may have against any of the funds deposited in the
Account, except to the extent expressly set forth in paragraph 5 below.
5. Depository Bank may offset and charge Borrower's other
accounts for any items deposited in the Account which are returned for any
reason or otherwise not collected, and may offset and charge such other accounts
for all service charges, fees, expenses and other items normally chargeable to
the Account. If there are not sufficient funds in the other accounts to pay such
amounts, then the Depository Bank may offset and charge the Account for all such
amounts. If there are insufficient funds in the other accounts and the Account
to pay such amounts, or if applicable law prohibits such charges or offsets
against the other accounts and the Account, then Lender agrees to pay Depository
Bank within five (5) business days of written notice of demand (i) all service
charges, fees, expenses (including reasonable attorney fees actually incurred in
connection with enforcement of the obligations of the Lender hereunder) and
other items normally chargeable to the Account, and (ii) the amount of items
deposited in the Account which are returned for any reason, or otherwise not
collected. Borrower and Lender acknowledge that Borrower is obligated to pay all
customary and reasonable Depository Bank charges resulting from operation of the
Account, including a monthly maintenance fee during the existence of this
Agreement. Borrower agrees to reimburse the Lender for any monies that the
Lender forwards to Depository Bank in settlement and satisfaction of any charges
as detailed above. In the absence of gross negligence or willful misconduct on
the part of the Depository Bank, Borrower agrees to bear all risk of loss
associated with the Account.
2
6. This Agreement may not be terminated by the Borrower. This
Agreement may be terminated by the Lender at any time upon its delivery of
written notice of such termination to the Depository Bank. This Agreement may be
terminated by the Depository Bank at any time on not less than thirty (30) days'
prior written notice of such intention delivered by it to each of the Borrower
and the Lender. The Depository Bank's reimbursement and indemnity rights against
the Borrower under paragraph 5 above and paragraph 8 below shall survive the
expiration or any termination of this Agreement. In addition, the Depository
Bank's reimbursement rights against the Lender under paragraph 5 above, and
Lender's indemnification and reimbursement rights against Borrower under
paragraph 5 above, shall survive any termination of this Agreement. Upon any
termination of this Agreement, all net funds remaining in the Account, after
charge-backs and set-offs by the Depository Bank, shall be forwarded by the
Depository Bank directly to the Lender as directed by the Lender in paragraph 3
above.
7. Both Lender and Borrower agree the Depository Bank shall be
entitled to rely conclusively upon and shall have no liability for acting upon
any notice or instruction it receives from the Lender and shall have no
obligation to investigate or verify the authenticity or correctness of any such
notice or instruction.
8. Borrower agrees to indemnify and hold harmless the Depository
Bank from and against any and all claims, actions and suits (whether groundless
or otherwise), losses, damages, costs, expenses and liabilities of every nature
and character arising out of or related to this Agreement or the transactions
contemplated hereby or the Depository Bank's actions taken hereunder, except to
the extent that any of same shall be directly caused by the Depository Bank's
willful misconduct or gross negligence. All such amounts shall be payable on
demand. In no event shall the Depository Bank be liable for special, indirect,
exemplary, consequential or punitive damages.
9. All notices or other communications required or provided under
this Agreement shall be in writing and shall be sent to each party at its
respective address and be issued by and directed to the designated officer (the
"Designated Officer") set forth beneath its signature below (or at such other
address and to or by such other Designated Officer as such party may designate
in writing to the other parties). Such notices or communications shall be
effective on the date actually received by the Designated Officer if received
prior to 12:00 noon ET on any business day of the Depository Bank. If received
by the Designated Officer after 12:00 noon ET or if received by the Designated
Officer on a non-banking day, such notice or communication shall be effective on
the immediately succeeding banking day of the Depository Bank.
10. The Lender hereby appoints the Depository Bank as the Lender's
bailee and pledgee-in-possession for the Account and all receipts, and the
Depository Bank, by its execution and delivery of this Agreement hereby accepts
such appointment and agrees to be bound by the terms of this Agreement.
11. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
12. This Agreement shall be governed by the laws of the State
where the Account is maintained (without giving effect to its conflicts of law
rules).
3
13. This Agreement may be executed in any number of several
counterparts.
14. This Agreement shall only be modified or amended by written
agreement of the parties evidencing such modification or amendment.
[Signatures on following page.]
4
IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement as of the day and year first above set forth.
DEPOSITORY BANK:
FIRST UNION NATIONAL BANK
By: ________________________________________
Name: ______________________________________
Title: ______________________________________
Address:_____________________________________
Attn: _________________________________
Designated Officer
BORROWER
BUCKEYE RECEIVABLES INC.
By: __________________________________________
Name: ________________________________________
Title: _________________________________________
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Designated Officer
LENDER:
WACHOVIA BANK, N.A.
By:
Name: ________________________________________
Title: _________________________________________
Address: Global Corporate Banking, 29th Floor (GA 31291)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Designated Officer
Phone: ▇▇▇-▇▇▇-▇▇▇▇
5
EXHIBIT C
FORM OF SETTLEMENT REPORT
[RECEIVED]
EXHIBIT D
PROMISSORY NOTE
December [____], ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
$30,000,000.00
For value received, BUCKEYE RECEIVABLES INC., a [______________]
corporation (the "Purchaser"), promises to pay to the order of WACHOVIA BANK,
N.A., a national banking association (the "Lender"), the principal sum of THIRTY
MILLION DOLLARS AND NO/100 DOLLARS ($30,000,000.00) or such lesser amount as
shall equal the unpaid principal amount of all Advances made by Lender to
Purchaser pursuant to the Credit Agreement referred to below, on the dates and
in the amounts provided in the Credit Agreement. Purchaser promises to pay
interest on the unpaid principal amount of this Promissory Note on the dates and
at the rate or rates provided for in the Credit Agreement. Interest on any
overdue principal of and, to the extent permitted by law, overdue interest on
the principal amount hereof shall bear interest at the Default Rate, as provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in Federal or other immediately
available funds at the office of Wachovia Bank, N.A., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other address as may be specified
from time to time pursuant to the Credit Agreement.
All Advances made by Lender, the interest rates from time to time
applicable thereto, and all repayments of the principal thereof shall be
recorded by Lender and, prior to any transfer hereof, endorsed by Lender on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; provided that the failure of Lender to make any such
recordation or endorsement shall not affect the obligations of Purchaser
hereunder or under the Credit Agreement.
This Promissory Note is the "Note" referred to in the Credit and
Security Agreement of even date herewith by and between Purchaser and Lender (as
the same may be amended and modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the optional and
mandatory prepayment and the repayment hereof and the acceleration of the
maturity hereof, as well as the obligation of Purchaser to pay all costs of
collection, including reasonable attorneys' fees, in the event this Promissory
Note is collected by law or through an attorney at law.
Purchaser hereby waives presentment, demand, protest, notice of demand
and nonpayment, and any other notice required by law relative hereto, except to
the extent as otherwise may be expressly provided for in the Credit Agreement.
IN WITNESS WHEREOF, Purchaser has caused this Promissory Note to be
duly executed, under seal, by its duly authorized officer as of the day and year
first above written.
BUCKEYE RECEIVABLES INC. (SEAL)
By:
Name:
Title:
EXHIBIT E
FORM OF SUBORDINATED NOTE
[-------------------], [-------------------]
December [____], 2001
$[-------------------]
This SUBORDINATED PROMISSORY NOTE is one of the "Subordinated Notes"
described in that certain Credit and Security Agreement dated as of the date
hereof (the "Credit Agreement") by and between Wachovia Bank, N.A. (the
"Lender"), and BUCKEYE RECEIVABLES INC., a Delaware corporation ("Purchaser").
Unless otherwise defined herein, all terms used in this Subordinated Note shall
have the meanings given such terms in the Credit Agreement or the other Program
Documents.
For value received, Purchaser promises to pay to the order of
[_______________], a [_______________] (the "Holder"), the principal sum of
TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00) or such lesser amount as
shall equal the unpaid principal amount accrued and outstanding from time to
time hereunder, such amount representing the outstanding Deferred Price
component of the Purchase Price for those of Holder's Accounts Receivable
purchased by Purchaser from time to time under the Purchase Agreement. The
Purchaser agrees to pay interest on the aggregate principal amount outstanding
from time to time at an annual rate of interest of 6%. Such interest shall be
calculated on the basis of an assumed year of 360 days for the actual number of
days elapsed. All payments received on payment of this Subordinated Note shall
first be applied to the payment of accrued but unpaid interest and then to
principal. Purchaser agrees to make all payments of principal and interest as
provided in the Credit Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in Federal or other
immediately available funds c/o Buckeye Technologies Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ for the account of the Holder, or at such other address
as the Holder my designate in writing.
Purchaser hereby waives presentment, demand, protest, notice of demand
and nonpayment, and any other notice required by law relative hereto.
Holder hereby subordinates and postpones the payment and the time of
payment of all principal, interest and all other sums payable hereunder (the
"Subordinated Indebtedness") to and in favor of the payment and the time of
payment of all of the Senior Indebtedness. The term "Senior Indebtedness" shall
mean all principal, interest, fees, other costs and expenses, and the
"Obligations" (as defined in the Credit Agreement) owing by Purchaser to Lender
(as such Senior Indebtedness is evidenced by that certain Promissory Note dated
on or about even date herewith payable to the order of Lender). So long as all
or any part of the Senior Indebtedness remains unpaid, Holder shall not, without
the prior written consent of Lender, ask, demand, accelerate, declare a default
under, ▇▇▇ for, set off, accept or receive any payment of all or any part of the
Subordinated Indebtedness; provided, however, that the Holder may receive
payment of that portion of the Subordinated Indebtedness consisting of timely
payments of accrued and unpaid interest in accordance with the Credit Agreement;
provided further that such payments do not cause or result in a default under
the Senior Indebtedness. Holder and the undersigned agree in favor of Lender
that the Subordinated Indebtedness is not secured and shall not be secured by
collateral security in any way directly or indirectly, other than any lien
Holder may have in any Recourse Receivables and their Related Rights and
Property for which Holder has paid the Repurchase Price thereof; provided,
however, Holder hereby subordinates any lien and the priority of any security
interest, lien or encumbrance and other interests of Holder in and to any
collateral security to the lien and security interest of Lender therein
notwithstanding the time of attachment of that interest.
Should any payment or distribution with respect to the Subordinated
Indebtedness not permitted by the provisions hereof be received by Holder prior
to the full payment and satisfaction of the Senior Indebtedness, Holder will
deliver the same to Lender in precisely the form received (except for the
endorsement or assignment of Holder where necessary), for application to the
Senior Indebtedness (whether due or not due and in such order and manner as
Lender may elect), and, until so delivered, the same shall be held in trust by
Holder as property of Lender. In the event of the failure of Holder to make any
such endorsement or assignment, Lender, or any of its officers or employees on
behalf of Lender, is hereby irrevocably authorized in its own name or in the
name of Holder to make the same, and is hereby appointed Holder's
attorney-in-fact for those purposes, that appointment being coupled with an
interest and irrevocable. Lender is a third party beneficiary of the terms of
this instrument.
Holder hereby consents that at any time and from time to time and with
or without consideration, Lender may, without further consent of or notice to
Holder and without in any manner affecting, impairing, lessening or releasing
any of the provisions hereof, renew, extend, amend, supplement, modify, change
the manner, time, place and terms of payment of, sell, exchange, release,
substitute, surrender, realize upon, modify, waive, grant indulgences with
respect to and otherwise deal with in any manner (a) all or any part of the
Senior Indebtedness, the Credit Agreement, and the other Program Documents; (b)
all or any part of any property at any time securing all or any part of the
Senior Indebtedness; and (c) any Person at any time primarily or secondarily
liable for all or any part of the Senior Indebtedness and/or any collateral
security therefor.
IN WITNESS WHEREOF, Purchaser has caused this Subordinated Promissory
Note to be duly executed, under seal, by its duly authorized officer as of the
day and year first above written.
BUCKEYE RECEIVABLES INC., a Delaware
corporation
BY:
TITLE:
2
EXHIBIT F
OPINION OF
COUNSEL FOR PURCHASER, SERVICER, AND SELLERS
1. True Sale and Non-Consolidation Opinion
2. General Corporate Opinions for each of
(together or in separate documents)
Purchaser, each Seller, and Servicer
[EACH TO BE COMPLETED]
EXHIBIT G
CLOSING CERTIFICATE
Reference is made to the Credit and Security Agreement (the "Credit
Agreement") dated as of December [____], 2001, by and between BUCKEYE
RECEIVABLES INC. ("Purchaser"), and Wachovia Bank, N.A., as "Lender."
Capitalized terms used herein have the meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 8.01(c) of the Credit Agreement,
[______________________], the duly authorized [_______________] of Purchaser,
hereby certifies to Lender that (i) no Default has occurred and is continuing as
of the date hereof, and (ii) the representations and warranties contained in
Article 4 of the Credit Agreement are true on and as of the date hereof.
Certified as of this [____] day of December, 2001.
BUCKEYE RECEIVABLES INC.
By:
Title:
EXHIBIT H
[ONE EACH FOR EACH SELLER, SERVICERS, AND PURCHASER]
OFFICER'S CERTIFICATE
The undersigned, [___________________], [___________________] of
[___________________], a [___________________] (the "Certifying Entity"), hereby
certifies that s/he has been duly elected, qualified and is acting in such
capacity and that, as such, s/he is familiar with the facts herein certified and
is duly authorized to certify the same, and hereby further certifies, in
connection with the Credit and Security Agreement dated as of December [____],
2001 (the "Credit Agreement") among Buckeye Receivables Inc. and Wachovia Bank,
N.A. ("Lender"), that:
1. Attached hereto as Exhibit A is a complete and correct copy of the
[Certificate of Incorporation/Certificate of Limited Partnership] of the
Certifying Entity as in full force and effect on the date hereof as certified by
the Secretary of State of the State of [___________________], the Certifying
Entity's state of organization.
2. Attached hereto as Exhibit B is a complete and correct copy of the
[Bylaws/Limited Partnership Agreement] of the Certifying Person as in full force
and effect on the date hereof.
3. Attached hereto as Exhibit C is a complete and correct copy of the
resolutions duly adopted by the [Board of Directors of the Certifying Entity /
Board of Directors of the sole general partner of the Certifying Entity] on
December [____], 2001, approving, and authorizing the execution and delivery of,
the [Credit Agreement, the Note, the Purchase Agreement, the Servicing
Agreement, the Policy, and the other Program Documents (as such terms are
defined in the Credit Agreement) to which Purchaser is a party]. Such
resolutions have not been repealed or amended and are in full force and effect,
and no other resolutions or consents have been adopted by such Board of
Directors in connection therewith.
4. [___________________], who is [___________________] of the Certifying Entity
signed the [Credit Agreement, the Note, the Purchase Agreement, the Servicing
Agreement, the Policy, and the other Program Documents to which Purchaser is a
party], was duly elected, qualified and acting as such at the time s/he signed
the [Credit Agreement, the Notes and other Program Documents to which Purchaser
is a party], and his/her signature appearing on such Program Documents is
his/her genuine signature.
Terms with their initial letters capitalized but not otherwise defined
herein shall have the meanings given such terms in the Credit Agreement and
other Program Documents.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand as of
December [____], 2001.
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Attach the following Exhibits:
Exhibit A--Certificate of Incorporation/Certificate of Limited Partnership
Exhibit B--Bylaws/Limited Partnership Agreement
Exhibit C--Authorizing Resolutions